Bank Leverages Customer Segmentation to Retain Promotional Deposits
Even though promotional pricing can attract deposits, it can sometimes be counter-productive to the stable, sustainable growth needed to sustain capital liquidity. That was becoming the case at one Canadian bank. Well-known for offering promotional rates much higher than the rest of the market, the bank began to face ever more aggressive competition that encouraged customers to move money opportunistically. This deposit volatility made it difficult to realize reliable portfolio growth and was an inefficient use of internal interest expense.
Learn how a targeted customer segmentation approach coupled with price optimization helped the bank re-focus its promotional campaigns. By offering the relevant promotions to the right customers, the bank was able to:
Increase NIM on new balances by 20%
Reduce expensive promotional offers by 50% while still attracting comparable balances
Create strategies to shift balances away from customer segments identified as more volatile and toward those deemed more stable.