Welcome to the Winter issue of the Novantas Review.
There is no debate that 2019 brought seismic developments to banking: three interest-rate cuts, one of the largest mergers in years and a slew of new non-banks seeking to displace industry titans with products and features that are eagerly sought by consumers.
The new year will be full of new challenges. Net interest margins will be pressured by lower rates, resulting in continued cost-cutting and tighter investment budgets. It will be more important than ever for management to identify which strategies are critical for near-term growth.
Old principles need to be reexamined. For example, branches may be less valuable as a way to acquire customers, but digital banking elevates the importance of marketing. Tomorrow’s fintech competitors and their strategies will be unlike those of local competitors in the past. And alternative performance measures, such as deposit duration, may increasingly influence product design and servicing strategies.
Overall, tight budgets will continue to challenge the ability to achieve required performance and management will need meaningful information to make tough decisions.
The next year, and indeed the new decade, will present some difficult and unfamiliar choices. That’s why we lead off this issue of the Novantas Review with five questions that management should think about in the new year. This checklist can provide executives with an opportunity to pause momentarily and consider what priorities should guide the bank’s investments — from digital transformation to new capabilities to potential M&A initiatives.
Speaking of M&A, this issue also dives into the importance of deposit valuation in deal due diligence. The upshot: regulatory guidelines for deposits mightn’t be the most appropriate metric to determine how much they’re worth.
We also dig into the prospects for disruption in the Canadian banking market and provide a sneak peek into our upcoming U.S. Shopper research. And we provide fresh insights about marketing spend from Acquisition IQ, our cross-bank data set.
J.D. Power’s Bob Neuhaus sits down with the Novantas Review to talk about customer satisfaction in the banking industry. Not surprisingly, banks don’t rank very highly compared with other industries, he says.
Do you have any ideas about what you would like to see covered in the Novantas Review? Please feel free to send questions or comments to Robin Sidel at firstname.lastname@example.org. We welcome your thoughts.
All of us at Novantas send warmest wishes for a happy holiday season.
Do you have the right vision for your bank? Novantas poses five questions to help guide bank executives through 2020.
How do you find new bank customers when they’re not going to branches? The most successful digital banks are using geo-location and other tools to target new customers.
Funnel Focus: A look at where banks are spending their precious marketing dollars.
Canadian banks haven’t seen as much disruption as other banks around the globe. That may change soon.
The yield curve’s fluctuations kept our heads spinning in 2019. What does it portend for 2020?
Move over, banks. A growing number of consumers are interacting with non-bank brands for their financial transactions. A sneak peek at the latest Novantas research.
Novantas sits down with Bob Neuhaus of J.D. Power to chat about customer satisfaction in the banking industry. Hint: it’s not great.
Are bank buyers paying too much for deposits? There may be a difference between core deposits and true low-cost, sticky deposits.
All the marketing models in the world can’t magically optimize spending on their own. Novantas offers tips on the traps that may be lurking.