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Have Your Margins Peaked?

Welcome to the Curinos Review

Welcome to the Spring 2023 issue of the Curinos Review.

Net interest margins (NIM) are at the very root of banking. Everything flows from NIM — decisions on which products to offer, what rate to charge, what asset mix to pursue and how expenses should be managed.

That’s why virtually every article in this issue is tied to NIM. Curinos believes NIM may have peaked late last year, setting the stage for a new period of focus that will be required to drive profitability. That is especially true amid the recent events that rattled the industry.

We start out with a broad look at the implications for NIM amid growing expectations that the Fed’s rate rises will plateau this year. (That said, there’s still plenty of uncertainty about the pace of increases in coming months.) It will be critical to manage deposit costs, loan growth, expenses, the securities portfolio and fee expansion as we move into this new phase.

The prospect of NIM stagnation or compression has significant implications for financial institutions with fewer than $20 billion in assets. Although these providers experienced lower deposit betas and fewer balance outflows than their larger brethren in 2022, they will likely need to take a more granular approach to deposit management as betas rise in coming months.

The NIM pressure also means new products and services will be especially critical as financial providers seek to meet the needs of current and prospective customers. We examine the potential of green banking, which is quickly evolving from a theoretical concept to real programs that go far beyond reducing paper in the office. We also explore the potential for new ways to connect with customers in the mobile channel; providers in the U.K. and U.S. are making headway, but there’s more opportunity as mobile grows in popularity. Marketing will also play a role as digital channels and a resurgence in direct mail challenge the branch’s traditional role as the primary way to attract new customers.

Because the pace of loan growth will be critical to NIM going forward, we dive into the latest trends in home equity and unsecured lending — and the need for analytics and technology to make those products more efficient. Speaking of efficiency, this issue makes it clear that expense reduction will be a critical part of managing NIM this year.

Finally, we highlight our recent research about Canadian small businesses that examines views on banking relationships, financial attitudes and motivations and product usage and capabilities.

We thank you for your business and look forward to speaking with you soon.

Craig Woodward, CEO

The Challenge Of Managing Net Interest Margins

Net interest income can drive as much as 75% of a bank’s revenue. Because of that, the recent rise in interest rates has helped banks maintain revenue momentum despite ongoing pressures on fees. Indeed, both components of net interest income – net interest margin (NIM) and volume – have grown significantly over the last
six months. The looming challenge, however, is that NIM may be peaking.

March 21, 2023

Preserve Margins By Managing Expenses

A wide swatch of U.S. consumers began to take notice of the Fed’s hikes last year, prompting them to switch to higher-yielding CDs, demand higher rates or vote with their feet.

March 21, 2023

How To Create A Green Future

Over the past decade, interest in green and ESG financial services has exploded. By some estimates, a third of all investment vehicles now fall under an ESG umbrella, and green bond issuance and green loans have soared.

March 21, 2023

Advanced Deposit Pricing Is Critical For Smaller Institutions

When it comes to deposits, financial institutions with assets below $20 billion have been a recent bright spot in the industry.

March 21, 2023

The Abundant Opportunities To Serve Canada’s Small Businesses

Just like consumers, small businesses in Canada are moving away from bank branches and embracing digital tools when it comes to their finances.

March 21, 2023

Advanced Features Help Drive Mobile Engagement

Global retail banking markets have become a hotbed of agile fintechs and digitally progressive incumbents, driven by market forces and a regulatory ethos that supports competition in the name of better consumer services.

March 21, 2023

A Look At Home Equity

There’s no doubt that the resurgence in home equity is continuing, but there are opportunities for lenders to make improvements as the digital channel becomes even more important.

March 21, 2023

Letter To Lenders: Don’t Overlook Unsecured Lending

Mortgage loans are down, home equity loans and lines are up. In today’s consumer credit market, these are the products in the spotlight.

March 21, 2023

Marketing (Digital And Mail-Based) Is Making Its Mark

Attention, bank CEOs: You might want to think twice about slashing that marketing budget.

At the Podium with Curinos

We are always delighted to share our insights at industry conferences or our own events. Here is a sampling of them. Please reach out to the session leaders or Curinos Review Editor Robin Sidel if you missed any of these events and would like to know more about the content that was presented.


John Sayre, vice president of client success for real estate, was back on Rob Chrisman’s podcast on Jan. 24 to talk about mortgage trends in 2023.


Rich Martin, director of real estate lending solutions, and Ken Flaherty, senior consumer lending market analyst, participated in a Mortgage Bankers Association webinar called “Home Equity Lending: An Assessment of Today’s Market Landscape & Cash-out Opportunities” on Feb. 9.

Bob Warnock, senior client manager, and Pete Gilchrist, executive vice president, delivered a presentation titled “Decoding Deposit Trends: What is Working” at the Mid-Sized Bank Coalition of America (MBCA) CFO Round Table in Boca Raton, Fla. on Feb. 15.

Managing Director Sarah Welch and Director Olivia Lui presented “The Customer Deepening Imperative,” a webinar hosted by the Consumer Bankers Association, on Feb. 23.


Suraya Randawa, head of omnichannel experience, participated in the “Breakfast and Networking” Q&A session with fintech experts on March 15 at FinovateEurope in London.

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