Case Study - Deposit Product Analytics

HOME WHAT WE DO SERVICES AFFILIATIONS & RESOURCES ABOUT US CAREERS CONTACT US

CASE STUDY - DEPOSIT PRODUCT ANALYTICS

This is a 2 branch financial institution with total assets of $225 million. One branch is located in a mid-market city with numerous well established competitors. The second branch is situated in a small community some distance away. The challenge was to enhance retail deposit gathering activities while remaining profitable.

Client Need

The institution had been very successful growing business deposits, but not as successful in growing retail deposits. In order to better diversity its base and expand deposits, it needed to focus on growing retail deposits, with a clear consideration of the impact these new deposits would have on the income statement and on the development of long term relationships. Due to a well established competitor base, the institution also needed to identify actions to increase market penetration and recognition.

Client Objectives

The institution wanted to have positive deposit growth with a product that would provide meaningful profitability, while at the same time engender deep and durable consumer relationships. The institution wanted to avoid "hot money" and other products that tend to attract single product relationships. Based on DMA’s recommendation, the client chose to launch their deposit goal with a money market product, upon which they set two goals. First, to grow money market deposits by 100% following six months of a strategic marketing campaign, and second, to improve money market account profitability by 25% by attracting large average account balances with competitive interest rates.

DMA Strategic Recommendation

DMA recommended that the institution execute a money market product strategy, based on DMA’s thorough analysis and evaluation of the institution’s existing money market account activity and product structure, including rate, balances, ownership, and profitability.

DMA Direct Activities

DMA provided a series of recommendations for a money market account promotion which were supported by DMA’s in depth analysis. The analysis identified key characteristics of the institution’s existing relationship base that had a money market account, and details concerning the structure of the money market product, which included money market deposit balance stratification behavior over time, margin, non-interest income, and non-interest expense. The analysis also considered the money market products and rates of local competitors.

Outcome of Fulfilling the Client Objectives

The institution executed a money market product promotion based on the DMA recommendation for 6 months. Both goals for the deposit strategy were exceeded. In the case of balances, the promotion generated money market balances of over $10 million, for increase of 218%. Regarding the profitability goal, money market profitability improved by over 4,000%.

12655 SW Center Street, 100 Cascade Plaza West, Beaverton, Oregon 97005-1600 | 503.597.0088 | 888.DMA.MKTG