Something has been missed in all the fuss about big banks’ deposit juggernauts: Some regionals have carved out a surprising edge when it comes to interest-free checking accounts, the crème de la crème of retail deposit-taking.
BB&T and Citizens Financial Group added non-interest-bearing deposits in the first quarter, going against the grain of industrywide results. Most large banks reported a gradual and predictable decline as customers began transferring cash into savings and other higher-yielding accounts. Regions Financial, meanwhile, reported a smaller decline than many competitors.
Non-interest-bearing deposits are important for a number of reasons, not least of which because, as a source of no-cost funds, they provide a much-needed boost to margins. They also typically are held in a customer’s primary bank account — the one that consumers regularly use to deposit checks or pay bills.
The opportunistic increases highlight the investments some banks have made in data analytics and elsewhere to protect their stockpiles of cheap deposits. More important, they underscore the fact that the war for deposits is multifaceted and that there are niche battles more regionals could win.
Regional banks, more broadly, are “rethinking the mix” between how much they spend on analytics versus more traditional deposit-gathering channels, such as opening branches, according to Leo Rinaldi, director of marketing and distribution at Novantas.