Deposits matter-now more than ever
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For a while during the boom years, relationship banking seemed like it was out of vogue. Attracting, managing, and nurturing traditional deposits just didn't seem as lucrative and thrilling as, say, issuing sub-prime mortgages to people without any money and credit scores in the single digits.
But now deposit accounts are looking really good. Even Goldman Sachs and Morgan Stanley are bank holding companies now. Why? Because deposit accounts are low-risk. Cash from consumers increases the asset base and reduces leverage. They offer inherently slower growth, but they're less risky. And deposit accounts look like an island of stability in an ocean of uncertainty.
So deposits, once downplayed in some circles, matter a lot. And lots of decision-makers in our industry are turning back toward the everyday, traditional work of building deposits-an activity that would have seemed shockingly routine and boring a year ago. Major conferences and industry groups are exploring new deposit-only strategies-and how best to drive growth. Retail banks are focusing on the customer, providing great service, and focusing on deposits over loans.
Unfortunately, financial services professionals aren't the only ones with their eyes fixed on deposit accounts. More deposits, higher customer churn, motivated fraudsters it all points toward deposit accounts becoming more vulnerable to fraud. After all, for fraudsters, all roads lead to the deposit account. If deposits are the pot of gold, there are plenty of fraud channels leading to itonline, check, debit, ACH, and more. And all are potential targets for fraudsters.
So while building an institutional base of deposits is less risky, it's important to ensure that they all stay that way. For everyone. Yes, deposits are insured . . . up to a point. But they also need powerful fraud-detection solutions to avoid becoming easy pickings for fraudsters.
How is your bank re-invigorating its efforts to attract deposits? Have deposits become a clear priority? How are you protecting your growing deposit baseand customers from fraudsters? Let me know.