At the highest level, the Deposits Manager’s core business problem is managing an efficient value exchange with deposits customers over time. This value exchange between banks and deposits customers isn’t one of customers simply placing incremental savings within deposits products in exchange for rate; the bank’s deposits businesses play deeper, more nuanced roles depending on the conditions surrounding why customers save. Deposits Managers’ use of value levers such as rate should be aligned with the reasons savings flow in and out of their portfolios; otherwise they are using rate to solve a problem that doesn’t revolve around financial value. When viewed across many customers in a deposit portfolio or market, the reasons for shifts in savings behaviors may be linked to broader macroeconomic conditions affecting saving behaviors, with different elements of the macroeconomy potentially having distinct roles on saving. If deposits customers’ value to banks is affected by these conditions, then the problem of managing the value exchange takes on a broader, deeper nature than is commonly considered.
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