This Month in Retail Banking
Amid a month of market disruption during which wealth and commercial deposits saw material outflows post-Silicon Valley Bank (SVB), retail deposits remained remarkably stable and largely on a consistent trajectory. In the two weeks immediately following SVB’s failure, wealth deposits declined nearly 3% and commercial deposits declined nearly 2% above YTD trajectory while consumer deposits remained flat overall and within 0.5% of their YTD trajectory. Digging deeper, we see that customers with high balances – above the $250k insurance limit – saw modestly higher outflows, but these were offset by inflows among smaller-dollar deposits, as consumers in some cases diversified among banks.
From the perspective of consumer deposits, four factors over the last month characterized winners:
As we look ahead, the value of retail deposits – particularly those anchored by a checking relationship – has never been higher. That value, however, may very well come with a cost in the form of increased competition, as more banks look to defend and grow in a market where there are many attackers. Standing out and winning fair share in an expense–constrained environment will be more important than ever.