Welcome to the Winter 2018 issue of the Novantas Review.
As we enter 2019, we believe that the industry faces a new set of challenges and opportunities. We have been through two different stages of the economic recovery since the financial crisis: a period of low rates, followed by initial rate increases that benefited assets and allowed deposit rates to lag. Now we are in a third stage in which deposit betas exceed loan betas.
This latest phase demands precision pricing for both assets and liabilities because the current state of deposit betas is unsustainable. Banks also must look beyond pure price to drive deposit growth. It will require a focus on de-commoditizing banking and ensuring that bank offerings fit with customer demand.
To that end, this issue of the Novantas Review includes articles on the changing nature of primacy and how to make better decisions about branch closures. We also offer a fresh approach to thinking about how your customer channels can work together seamlessly to provide a better experience. And be sure to look at the infographics in this issue that dig into rate and shopping trends from our proprietary industry data.
The Novantas Review is launching another new column in this issue called “Commercial Calling” that provides insights for bankers from the perspective of corporate treasurers and CFOs. It joins our regular “Deep Dive” column that is devoted to financial analysis for the banking industry.
As always, we welcome your feedback on the Novantas Review. Please feel free to send questions or comments to Robin Sidel at email@example.com.
We send you our very best for a warm and happy holiday season.
Businesses now hold more than $4 trillion of liquidity in the U.S. With rates rising and the slope of the yield curve shifting, stakes are high for banks.
Most bank executives weren’t making much of a fuss about alternative lenders in the middle-market lending business at the start of the year. Oh, how times have changed.
As the chief economist of the American Bankers Association, James Chessen keeps an eagle eye on bank earnings, credit-card delinquencies and other metrics that provide insight into the state of the industry.
Bankers have long considered the active checking account to be the most important factor in forming a lasting customer relationship.
Bankers already know that they are paying more to acquire new customers, but the pace of change is particularly dramatic when compared with just two years ago.
Most of the consumers who have opened a new checking account over the past three years are young and embrace technology.
Most banks still operate in channel silos despite vast amounts of research that show this structure leads to lost revenue, undue credit risk and widespread inefficiency.
The role of marketing in customer acquisition is becoming increasingly important as banks navigate rising rates, competition from fintechs and the digital migration.
Most consumers are keeping their money in low-yielding savings accounts even as rates climb ever higher and competitors try to woo them with sweeter deals.
Stop taking those off-premise ATMs for granted.
The banking industry appears to be in a good place as we head into 2019. The economy is strong, regulatory pressures have eased, credit losses are low and consumer confidence is high.
Don’t be so quick to close that branch.