Pub. 4 2015 Issue 2

The CommunityBanker 10 irtually all economists are in agreement that interest rates are on the rise. In response, bank deposit pric- ing, acquisition, and account management strategies need to evolve and become more flexible. But there is still the question of when this will come to fruition. Some financial experts predict that rates will rise later this year, while others insist that the Federal Reserve won’t raise rates until 2016. That may seem far away for retail bank market- ers, especially since consumer prices are at a six-year low, inflation is seemingly under control and oil and gas prices are relatively stagnant. But according to Alvin Green, vice president for Finance and Bank- ing Services at Equifax’s IXI Services division, being proactive about building bank deposit pricing strategies and customer service plans before rates rise is no luxury — it’s a necessity. “Bank customers may react to rising rates differently,” explains Green. “Bank deposit customers will welcome the added interest on accounts, but mortgage, credit card and auto loan customers may not see it that way. Consequently, you need to hone in on specific customer groups, with specific strategies, and always keep the end goal — getting new rev- enue in the door and keeping revenue at the bank — [in mind] all the time.” Green offers Equifax Retail Banking clients some key ways to help keep their net interest margin steadily growing in the face of increased interest. The moment of truth. When a customer calls and says they are withdrawing all of their deposits and investments for a better rate, what do you do? Do you offer a more competi- tive rate or let them go? Green advises you might want to know more about the customer: “How likely is it that they could grow their balances V Deposit Pricing, Acquisition, and Account Management in the Face of Rising Rate By Steve Izurieta, Senior Vice President, Product Management, IXI Services, a division of Equifax, Inc.