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There’s High Repricing Risk In Those Low-Rate Balances

With past rate cycles as a guide, Curinos believes deposit rates will continue to increase modestly this year for some segments even as the Fed gradually winds down its benchmark interest rate. The intensity of rate-seeking behavior has declined from peak levels, but Curinos data show continued rotation from lower-rate and back-book checking and savings deposits into high-rate savings, MMDA and CDs. 

Even in this higher-for-longer environment, close to half of savings and MMDA deposits are still priced under 25 bp, so the impact of any repricing could be highly significant (see chart). And deposits that run off, regardless of whether to a higher rate or from natural attrition, need to be replaced at higher prevailing rates.  

This runoff and repricing risk makes acquiring valuable customer relationships as important as ever, through targeting, personalization, customer-level treatments and total relationship solutions. 

For more on mCOF trends, see my article “2024: Year of the Liquidity Manager” in the latest Curinos Review. 

Average Consumer Savings Balance By Rate

Just under half of branch savings balances were under 25 bp in Q4, even as the percentage at 400+ bp continues to grow​

Source(s): Curinos Consumer Deposit Analyzer | Note(s): Simple averages displayed | Includes Branch and Consumer balances only

June 13, 2024

Deposit Update: Nominal Growth In 2024 If Fed Can Cut

Earlier this year, Curinos estimated that retail deposits would be flat for branch banks in 2024, so many were no doubt encouraged to see 1Q deposit volumes up 1.5%.
READ TIME: 1 MIN

June 11, 2024

Price Is Driving Changing Dynamics In Portfolio Lending

Mortgage lenders generally seek to make as many loans as they can profitably sell into the secondary market, but for the loans banks and credit unions choose to retain in portfolio,
READ TIME: 1 MIN

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
  • Author
    • Adam Stockton

      Adam is a Managing Director who leads the Retail Deposit & Lending businesses at Curinos. He has spent more than 18 years advising financial services companies on growth and profitability strategies, focused on product management, growth, profitability and pricing. Clients include a majority of the top 25 US banks, a number of the largest banks in Canada and Australia, brokerages, Credit Unions, direct banks and fintechs.​ Adam’s work leads to actionable, sustainable strategies that help clients grow economically through the application of granular analytics, purpose-built tools and proprietary benchmark data. He regularly publishes and speaks, particularly topics relating to product profitability and growth.​ His teams are responsible for Curinos’ Retail Deposit Optimizer product management and price optimization platform; Deposit Analyzer benchmarking products for Consumer, Wealth and Small Business deposits; LendersBenchmark Analyzers for Small Business Unsecured Lending; rate and fee data for Consumer and Small Business; and strategic consulting practices across the Retail areas. ​

      View all posts Managing Director, Retail Deposits and Lending
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