Deposit Pricing: Case Studies

Optimization

Problem: A $15 billion bank with an overdependence on CD funding relative to MMDA.

Solution: Analyzed their current deposit book to develop a more customer demand driven pricing process. Deployed deposit pricing analytics to measure market and customer segment price elasticity. Applied elasticity based pricing tools to change the pricing and mix of the deposit portfolio.

Result: Shifted the mix of CDs down five percentage points in the first year. Generated an additional $6 million in spread income through mix shifts as well as lower funding costs.