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For CD Renewals, Job 1 Is “Don’t Overpay”

Of the $1.5 trillion in CDs at branch banks, 90% will mature in the next 12 months – 10% of them this month alone and that monthly percentages will climb even higher later this summer (see chart).  

Curinos’ Deposit Analyzer estimates that interest rates on maturing CDs will be 4%+ on average for most of 2024 before sloping down to 3% in the first quarter of next year. This downward rate trend creates significant attrition risk, especially among first-time renewers. Those shopping around will find plenty of offers above 5%. 

Banking institutions haven’t dealt with a meaningful volume of renewals in more than 15 years, so institutional memory on how to compete on levers other than rate may be in short supply. Insights derived from data can help bridge that knowledge gap, be it by identifying desirable CD term offers at the right moment in time to keep rate-sensitive customers in the fold or by finding opportunities to lower auto-renewal rates while minimizing the risk of attrition. 

Even more importantly, analytics may keep an FI from overpaying for these deposits. In a falling rate environment, they may prefer to shift the emphasis from renewal at all costs to moving CD balances to liquid savings that can be down-priced faster. 

% Of CD Balances Maturing In The Next 12M By Renewal Profile​
First vs. Multi-renewal* | Branch Banks | May ‘24 – Apr ‘25​

Regardless of the Fed’s actions this year, CDs are here to stay.​
Source: Curinos Optimizer, SNL Data | Note(s): *CD Renewal profile is tagged at customer level, such that first-renewal CDs originate from CD customers reaching maturity for the first-time. Simple averages displayed. Online banks excluded.​

June 6, 2024

AI’s Value Prop: A Cheaper Path To Customer Primacy

The various product lines at banks are in constant competition for customer attention. But uncoordinated messaging comes with a high cost: Curinos analysis shows that the typical FI leaves $70 per customer on the table because relationship nurturing is poorly orchestrated across channels.
READ TIME: 1 MIN

June 4, 2024

DAF Levels Are Down. What Can Be Done?

As commercial deposits shift away from DDA, the loss of deposit administration fees (DAF) is a key impact. DAF are the largest single charge in treasury management, totaling more than 15% of fees at most TM banks.
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May 30, 2024

Defining Personalization Is The First Step Toward Greater Adoption

There’s a lot of talk about personalization in banking these days and a lot less action. In Curinos’ new Personalization Benchmarking Study, most of the responding FIs say less than 25% of their marketing is personalized.
READ TIME: 1 MIN
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