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Banks can’t solely compete on pricing when it comes to securing deposits. Instead, institutions need to tailor their products to meet the needs of the business owners they are hoping to reach.
After a turbulent period for liquidity, community banks are placing renewed focus on the durability of their funding base. For banks looking to attract and retain core deposits, the challenge is no longer just about rates — it’s about relevance.
In today’s competitive environment, “sticky deposits” are not the byproduct of customer inertia or a business owner living near a branch. Instead, they’re increasingly the result of a bank’s strategic segmentation and digital capabilities. Customers are looking for smarter banking experiences, and banks need to step up to meet these expectations.
That requires rethinking the one-size-fits-all model banks have traditionally offered. Community banks need to take what they already do well — providing high-touch relationship management — and incorporate more customer insights to better tailor products and services for their clients.
“Banks need to stop chasing deposits broadly and instead build products for the segments they’re best positioned to serve,” says Kirk Coleman, president of Q2, a digital banking provider.
To achieve this, banks must know the types of businesses they want to reach — such as title companies, logistics firms or homeowners associations — and tailor their operational strategy, not just their product catalog, to fit the individual needs of each segment.
“The banks that win are the ones that build their own” community, Coleman says, “They don’t just add a product; they build a full-service ecosystem for a specific customer set.”
To learn more about gathering and keeping core deposits, download the report, sponsored by Q2, here.
