How To Plan For Success In 2025

With 2024 half over, planning for 2025 has begun. That’s why we’ve titled this issue of the Curinos Review How to Plan for Success in 2025 and have dedicated each article to ways to anticipate and plan for what’s to come next year. The backdrop for all our insights and hands-on how-to advice is the stubbornly higher-for-longer interest rate environment, which has frustrated any attempt at planning for pricing, volumes and margin. Perhaps more than ever, thoughtful strategic planning will benefit from, if not require, near-real-time data on markets and competition to inform analysis and optimize decisions.  

Our Retail Deposit Analyzer, for example, shows that rates have continued to climb since the Fed’s last rate hike by 54 basis points – because of higher-rate CDs, back book repricing and the ongoing higher expectations of consumers. That’s $54 million not dropping to the bottom line for every billion dollars of deposits. We present levers financial institutions can pull to manage the persistent increase in the cost of deposit funding and its resultant pressure on net interest margin. 

On the home lending front, our LendersBenchmark Analyzer reveals that the average funded rate in April 2024 was 370 bp higher than in April 2021, which has helped drive mortgage demand down fully 78% from 2021’s peak. We offer strategies for lenders to diversify their product offerings to help them better cater to evolving demand and to mitigate the trials of a contracted market. 

A pillar of commercial banking profitability in the past several years has been non-interest-bearing deposits, but Curinos’ Commercial Analyzer shows that higher rates are driving more and more of them into interest-bearing alternatives. To respond, we suggest that banks may want to shore up existing tiered pricing for clients who “pay with deposits” and radically rethink their pricing for payments services. 

No matter where rates are headed, growing new banking relationships and adding to the ones on the books is always in season, so this how-to issue also prescribes ways to do just that. Our Amplero Personalization Optimizer delivers customer engagement that’s not humanly possible, but it doesn’t try to emulate the model used by online retailers, and we discuss why. To improve the flagging economics of serving the mass market, we suggest ways that FIs can expand the wallet, reduce the cost of service and otherwise improve margin. We also draw on data from our Wealth Analyzer to propose ways that the current wealth-advisor model might be adapted to a digital-first future.  

Finally, we bring an open mind to open banking. In many ways, it’s already here in the U.S. – even though regulation hasn’t caught up with current consumer behavior – and it could mean big opportunity for FIs in competitive advantage and revenue growth. The huge storage of data banks currently have of their customers might even be used commercially for permissioned identity sharing, if done with sufficient controls around personal privacy.  

We hope you enjoy reading our insights on these developing matters as much as we enjoy bringing them to you. As ever, we greatly appreciate the trust you’ve placed in us and thank you for your continuing support.  

Respectfully, 

Craig Woodward, CEO