Pub. 8 2019 Issue 1

9 S P R I N G | 2019 • Think long-term. There are no shortcuts to build- ing core deposits, so avoid chasing customers who’ll move their money to another bank when a better rate comes along. Concentrate instead on deepening relationships through cross-selling with longtime customers and catering to those who value service over interest rates. • Enhance convenience. In the not-so-distant past, convenience was dictated by the number and proximity of bank branches and ATMs to where customers lived and worked. Both are still impor- tant, but in an era in which time is one of the most precious commodities, digital defines convenience for many people. Mobile apps and online banking provide customers with the freedom to make trans- actions whenever and wherever they want. Banks that create a way for account holders to sign up for their full range of products digitally are particu- larly attractive to time-pressed customers. • Emphasize service. While technology is allow- ing clients to take greater control of their banking experience, it’s also removing the personal touch. A recent study by J.D. Power showed that digital-only bank customers were the least satisfied. Meanwhile, “branch-dependent digital customers”—those who use online or mobile banking but also visit a branch two or more times during a three-month period—proved to be the most content. To bridge that gap and tap the deposit potential represented by both groups, try improving your communica- tions and offering more personalized advice and services. Also be sure to make these enhancements across both digital and branch channels. • Consider reciprocal deposits. Last May, President Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018. One provision of the regulation creates a potential opportunity for community banks to increase deposits by taking advantage of recipro- cal deposits—those that a bank receives through a deposit placement network in exchange for placing matching funds at other banks in the group. • Set goals. Many banks face core deposit issues because their lending departments and business development teams aren’t focused on funding. Giving these employees deposit-focused goals may seem like a relatively small adjustment, but it can pay big dividends by training key sales people to concentrate on the entire customer experience, not just the loan relationship. BHC restructurings and deposit competition are by no means the only trends that will impact the community banking industry in the months ahead, but they are repre- sentative of the challenges banks face in the current market. To thrive in this climate, organizations must develop in- novative strategies to address these and other disruptions instead of relying on old ways of doing business. Anything less positions your institution for mediocrity rather than structuring it for sustainable success. Josh White is a shareholder in Elliott Davis’s Financial Services Group. He can be reached at josh.white@elliottdavis.com . F E A T U R E