Maximizing Deposit Growth Requires an Effective Relationship Pricing Platform

McKinsey & Company's recent article, "U.S. Banks: Commercial Deposits Are Back on a Path to Growth," outlines critical strategies banks should adopt to retain and grow deposits while improving margins in today's challenging environment. To successfully execute these strategies, Q2 PrecisionLender offers the tools and insights that commercial banking teams need to thrive.

1. Enhance and Deploy Deposit Pricing Strategies at Scale

As McKinsey points out, capturing deposit growth requires precise and competitive pricing. Q2 PrecisionLender's platform enables banks to dynamically adjust deposit pricing based on changing economics and market conditions. With the ability to tailor strategies for different markets and segments, and deploy them at scale via in-the-moment insights and coaching during pricing and structuring, banks can confidently align their pricing decisions with their broader strategic objectives.

2. Optimize Relationship-Level Pricing

In today’s competitive landscape, winning and growing relationships requires a holistic pricing approach. Q2 PrecisionLender’s collaborative relationship-level pricing considers the entire client relationship, including credit, deposits, and treasury management services. By providing relationship teams with scenario modeling and sensitivity analysis, including both opportunity and relationship value, Q2 PrecisionLender ensures that each deal is structured to optimize profitability and client value while remaining competitive — exactly what McKinsey identifies as key to maintaining growth.

3. Leverage ML and AI-Driven Insights for Strategic Agility

McKinsey emphasizes the importance of agility in responding to market shifts. Q2 PrecisionLender’s ML and AI-driven virtual coach, Andi, delivers contextual, actionable insights directly to relationship teams during the deal process. Whether it's identifying optimal ROE targets, recommending product opportunities, or flagging potential risk considerations, Andi equips relationship teams with the intelligence needed to make informed, strategic decisions in real-time, and in context with opportunity and relationship economics.

4. Boost Fee-Based Income

As the McKinsey article notes, narrowing net interest margins (NIM) are pushing banks to enhance their fee-based income. Q2 PrecisionLender’s platform helps banks identify and capture fee opportunities while remaining competitive through tailored recommendations and alerts, including portfolio and market perspective.

And by integrating with existing CRM and LOS systems, Q2 PrecisionLender streamlines the workflow, ensuring that relationship teams can efficiently execute these strategies without missing a beat.

Q2 PrecisionLender directly supports the strategies McKinsey outlines, providing banks with the strategic flexibility, portfolio and market intelligence, and real-time insights necessary to capitalize on the commercial deposit growth opportunity, as part of winning and growing better overall commercial banking relationships. It’s not just about keeping pace with the market—it’s about leading it.

Please reach out to learn more about how Q2 PrecisionLender can empower your financial institution to execute on these critical strategies.?

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Other recent posts that may be of interest:

• Commercial Loan and Deposit Pricing Market Update June 2024
• Observations re: Jean-Manuel Izaret (JMI)'s article: Commercial Banking’s Untapped Pricing Opportunities
• Are Banks Undervaluing a Crucial Piece on the Commercial Banking Chessboard?
• Are Banks Overlooking One of the Biggest Bangs for Their Investment Buck?