5 Steps to More Core Deposits

Regulators and bankers have one common concern right now—get and keep deposits as interest rates go up. Sounds easy, but it hasn’t been all that easy just to get deposits when rates have been low, and so getting better at this immediately is important.

I’m going to cover five must-do-now strategies that you need to have happen pronto to make sure that you get and keep those deposits to weather this upcoming storm.

Step 1:

Make sure that your commercial bankers understand how to bring in million-dollar checking accounts. Extreme differentiation is necessary. An extreme sales process that works is necessary because no one gets up in the morning thinking that they want to change banking relationships. It is hard on business, so your ability to make a massive difference in their world, such that they can’t imagine sticking with the incumbent bank but instead they must come with you is absolutely imperative for this to work.

Step 2:

Make massive shifts now, to change the deposit mix to grow your core deposits. Easier said than done, but I’ve seen banks go from 40 to 70 in just a matter of 6 to 9 to 12 months. If they can do it, you can do it. Extreme intentionality about how you can pull in those kinds of accounts without having to do the fancy rewards programs where you’re paying somebody else to get it done when instead knowing who are the best people to go after it and how do you pull all of them in, and what is the right process. Only by getting fundamentals right does this begin to work.

Step 3:

Make sure that your newest deposit accounts are not rate-sensitive. So, when a customer comes to you and they’re rate-sensitive that’s a problem—because in the future everything they buy from you will be rate-sensitive. Since only 13% of your customers make money for you, and 87% actually lose money for you, the reality is that you can’t spend any time going after that 87 %, and you can’t miss on the 13%. Having the right system in place that integrates marketing and sales is imperative.

Step 4:

Segment your team into specialists. The bank of the future will require specialists who can call on business accounts and regularly pop million-dollar checking accounts one after another. To do that, they must be specialists in having a huge understanding of things from financial planning to adding extreme value. We call it the 15 point check list where you go in and you transform their business, and as a result of that they think, “Gee, can we do business with you?” It has nothing to do with your pricing and nothing to do with the basics. To do that though, make sure that you’re calling on the right people because 10% of the population will always pay the most, 80% need a reason to pay more, and 10% will always go with the cheapest no matter how much value you add additionally. Making sure you’re covering those top 10% and getting all of those is imperative, and having some value to add for that 80 % is also important.

Step 5:

Go to war to address the upcoming ravages of mobile banking. Mobile banking sounds like a good thing and it is a good thing—but not for banks that have not already achieved mastery of 6 to 7 cross-sales on a new account, and being able to do outbound calls to people to make sure you have 6 to 7 to even 16 of their pieces of business, which is how many they have, will be imperative because those banks who don’t figure out how to do the basics first will not know how to be calling on people when people stop coming into your branches. Most banks, quite frankly, just won’t get there and the dark clouds are above their head, and it will never stop raining…until you have mastery and you can get 6 to 7 cross-sales on every new account for everyone on average in your organization, this plain isn’t going to work.

The good news is, if some people can master it, you can master it, too. Plain old sales training won’t get it done. It’s an integrated process of mastery of the psychology, the marketing processes, the extreme differentiation, and a sales process that never feels like sales. All great transformations happen with a decision and the decision is: get started now to be ahead of the dark clouds.