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In today’s inflationary environment, we again find ourselves in the highly competitive position of trying to increase deposits.

The simple truth we all know too well is that we fuel our loan growth through deposits. According to CUNA Mutual’s latest Trends Report, the average loan-to-share ratio for credit unions is expected to reach 80.5% by year end 2023. A 14.3% increase since September 2021, this trend is leaving many credit unions handcuffed to make loans by a combination of policy limits and their inability to gain new deposits. The latter problem is compounded by the fact that while we are scrambling to capture deposit dollars from other institutions, they are working just as hard to steal ours!

So, how do we both keep our member’s current deposit business AND get those who have money elsewhere to bring more of it to us? Well as with loans, data is the key!

You may have heard the words propensity model or predictive analytics. This is the process of using historical patterns of behavior to predict a future result. In this case, using what we know about our member’s past transactions to predict who will respond to deposit offers.

Why is this important? In a world where we have limited opportunities to capture people’s attention and engage, we must be specific, compelling, and on target. A data-driven approach offers the greatest potential for optimizing your deposit growth strategy.

Because whether you call it disintermediation, cannibalization, or something different… the net effect is the same. When rates are rising, you risk having to pay a higher dividend yield on deposits that you already hold. Sure, it says “new money” on all of your marketing collateral. But do you really have the mechanisms in place to safeguard this objective? In the end, are you spending more time “tracking it” than you are preventing it from happening? Isn’t it far more effective to put your efforts into targeting on the front end?

Let’s not forget, not all disintermediation is bad. Selectively paying more on existing deposits should be part of any proactive deposit retention strategy!

Propensity models work for both keeping what you already have and getting more of what you need.  Money!  The recipe for deposit growth is knowing Who, When, and How much? Who has money to move? When are they likely to move it? And how much (dividend yield) will it take? Done right… predictive analytics can help you decide.


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