But what if we challenged the traditional perception of a treasurer’s role? What if treasurers didn’t just react to market changes but actively shaped strategic decisions through a nuanced understanding of customer behavior? The question is no longer just about compliance or optimization — it’s about rethinking the very nature of risk management and value creation.

The goal is to build resilience and enhance response capabilities to exceptional events. To do so effectively, treasurers must gain a deep understanding of customer behavior and track how it impacts their financial resources. By doing so, they can help optimize profitability for their banks or credit unions.

Challenges to the Treasury Transformation

However, treasurers face a significant challenge. Many Asset and Liability Management (ALM) and other financial reporting tools have limitations, making it difficult to fully understand the drivers behind portfolio-level results. Key issues include:

• Over-reliance on transformed data compromises the accuracy and reliability of information.
• Analysis and reporting are often macro-level, missing the granular customer-level insights such as:
  • Shifting term preferences
  • ‘Hot’ money inflows and outflows
  • Measuring product substitution to gauge the effectiveness of marketing, sales, and expansion efforts

Imagine if treasurers could pierce the veil of aggregated data and see the motivations behind customer actions in real-time. How might that level of insight transform the approach to risk management, product development, or marketing strategies? Would it change how the institution perceives customer loyalty or price sensitivity?

Even with their existing A&L management solutions, many treasury functions cannot pinpoint what, when, where, and who drives growth within their portfolio. This lack of visibility can mean the difference between reacting to market changes and proactively navigating them.

The Deposit Edge Solution: Uncovering the Dynamics of Customer Behavior

Our solution empowers treasurers by providing a clearer understanding of the dynamics driving their portfolios. Using a patented method to measure product substitution and track money accurately flows at the account level, we help treasurers improve their decision-making. Our FlowTracker’s Deposit Edge reporting suite is designed to allow financial institutions to discover and understand customer behaviors that shape their results. Unlike traditional macro-level risk analysis tools, the Deposit Edge solution offers insights at the individual account level, revealing what customers are actually doing with their money.

Imagine a world where treasurers mitigate risks and actively influence customer behavior through data-driven strategies. What if the role of a treasurer evolved from a behind-the-scenes guardian to a strategic leader driving innovation?

For treasurers seeking to be a valuable partner to business functions, CEOs, and boards, having the ability to provide actionable, precise information is essential. This data helps drive decisions that create enterprise value at the appropriate level of risk while assessing the impact on the balance sheet.

The Expected Outcome: Enhanced Decision Making and Cost Savings

FlowTracker provides deep insight into fund flows, allowing treasurers to:

• Identify pricing, product design, and distribution issues on which management teams can act.
• Complement traditional A&L scenario analysis with actionable insights that lead to better decisions.
• Improve the quality of information, increasing the certainty of decision-making, particularly when assessing liquidity, funding, capital, and interest rate risk.
• View metrics dynamically against targets set by the bank or credit union’s risk appetite and quickly dive deeper to understand the drivers behind changes in these metrics.

If better customer insights can reduce the cost of funds by up to 10 basis points, what could deeper, more predictive insights achieve? Could this intelligence redefine how financial institutions approach growth, deposit stability, and customer loyalty?

Ready to Experience the Difference?

At FlowTracker, we believe your data should work as hard as you do. With our solution, you can gain deeper insights into your customer behavior with minimal risk. We offer a trial using your data in just six weeks at a nominal cost, providing valuable answers to your business questions based on your unique demographics, organization, product hierarchy, and actual customer behavior.

Contact us today to begin the conversation and see how FlowTracker can help you optimize decision-making and enhance the profitability of your bank or credit union.

The post Unlocking Profitability: How Customer Behavior Can Empower Treasurers appeared first on Flowtracker Analytics.

Bank and credit union customers are now accustomed to high-yield products, from higher deposit rates to money market funds alternatives. And that, combined with the stickiness of the higher cost of funds, will continue to make each internal funding dollar much more valuable. Therefore, financial institutions must continue focusing on growing deposits that do not increase their net interest expenses proportionally. In other words, understanding:

• where the funding is coming from,
• what you are giving away to get it and keep it, plus
• how long it is expected to stick around

has become mission-critical.

Do you know how FlowTracker helps other financial institutions with those tasks? It is time to manage your deposits actively as if your profitability depended on them.

The post Internal funding dollars are significantly more valuable appeared first on Flowtracker Analytics.

• Actively optimize deposit-gathering tactics,
• Manage fund costs and
• Improve deposit portfolio quality for sustained growth.

Meet Neil Stanley, CEO of The Corepoint, a catalyst for transforming pricing conversations into strategic relationship-building opportunities.

In this 20-minute video, Neil explains the impact and value created by some of their use cases, highlighting the benefits experienced by various banks and credit unions.

Let this conversation inspire and empower you. We invite you to comment, share it, and reach out to discover how DEPOSIT EDGE insights can revolutionize your institution’s deposit management strategies. Unlock the full potential and strategic value of your deposits today.

The post The Role of Pricing Conversations in Deposit Strategy appeared first on Flowtracker Analytics.

A co-founder of the company, Mr. Masip gained extensive experience in the Financial Services industry, working for major institutions around the world and as a Senior Managing Consultant focused on Change Management at IBM Global Business Services. In his previous role as CMO, Boris managed communications, PR and brand development at FlowTracker Analytics working extensively with Credit Unions, Banks and their Industry Organizations throughout North America.

“Boris brings a fresh outlook to FlowTracker Analytics’ leadership, with an increased focus on ecosystem development and expansion of market share”, says McNab. “I am also delighted to focus on my new role as DEPOSIT EDGE SME, helping our clients discover and exploit business value from our industry leading DEPOSIT EDGE analytics solution“, he continues.

FlowTracker Analytics Inc. provides analytics as a service to Credit Unions and Banks, helping them understand the dynamics of depositor behavior by revealing the changes in money flows that result from decisions consumers and business make to meet their changing needs. The DEPOSIT EDGE solution uses patented technology to derive new information essential to successfully implementing active deposit management strategies affecting pricing, promotion and product design.

The post Boris Masip appointed CEO appeared first on Flowtracker Analytics.

1. While credit union core deposits continued to grow in 2023, that growth came at a cost. Passione highlighted the rising cost of funds across the industry, averaging approximately 218 basis points. Additionally, he pointed out the changing deposit mix, emphasizing the need for credit unions to adapt to evolving consumer preferences.
2. Passione emphasized the importance of proactive measures in response to shifting deposit dynamics. He warned against complacency, citing the increasing popularity of apps like Venmo and Square and the dominance of major banks, which now hold 60% of deposits. Credit unions and community banks must recognize the challenges posed by these trends and implement strategic adjustments.

Passione introduced the concept of the “new deposit normal,” which aligns with our Active Deposit Management approach. Key considerations include accurately measuring cannibalization, enhancing operating efficiency, and prioritizing deposit retention through continuous vigilance and innovation.

The New Deposit Normal and your lending

According to Passione, the “new normal” environment coincides with what we present to credit unions and community banks as the rationale for Active Deposit Management:

• The cost of funds will be much higher.  Yes, you need to accurately measure, not estimate, your cannibalization and understand how it relates to your portfolio’s various geos and demographics.
• Increasing operating efficiency will be paramount. Banking is going back to normal. 
• Deposit retention will require constant vigilance and new strategies. As we always say, stop tracking deposit loss by closed accounts. When the funds disappear, and the account remains open, it costs you even more.
• New member acquisition and relationship-building strategies are critical.  Better relationships demand you understand the behavior of your members.

Banking is an industry in which deposits are the raw material, and lending is a by-product.  Paying attention to your deposits will lead to more lending opportunities.

Effective deposit management is foundational to banking success

Some final thoughts:

• Nobody can control the future, but you can take steps in the present to be more ready for it.  Better deposit management is an excellent place to start.
• Good deposit management creates lending opportunities. Understand the financial behavior of your members/customers and uncover untapped opportunities. That is use your deposit to fuel your lending.
• Partnership with compatible Fintech enables you to increase speed to market and efficiency.

Contact us to discover how DEPOSIT EDGE insights can empower your institution to revamp deposit management strategies and thrive in today’s competitive landscape. Don’t miss out on the opportunity to stay ahead in the war for deposits.

The post DEPOSITS CAN FUEL YOUR LENDING appeared first on Flowtracker Analytics.

The post The Deposit Roundtable appeared first on Flowtracker Analytics.

By bringing deposit analytics from finance and marketing executives and analysts to the front-line staffers, you empower your sales officers to have meaningful conversations with your customers and increase their contribution to your financial institution. Advanced analytics are crucial to staying relevant to your customers and your staff, especially when attracting and retaining new money.

Here are some recommendations to help transform your deposit management strategy:  

• Include activity-based planning in your performance management processes. By analyzing new money patterns at the branch level, you can precisely determine the outreach required to accomplish your targets and effectively measure your officers’ activities. And that is something you can influence instead of looking only at their results.
• Integrate the insights on your customers’/members’ behavior into data-driven personas and segment accordingly. Such an approach will better inform the design of your products and the marketing to current customers/members to attract more new money. Remember that attracting new money – not opening accounts – is your actual business goal. That should also guide your prospecting efforts.
• Think of the battle for deposits as a battle for relevance. Offering relevant advice and being relationship-focused is very likely in your mission statements. Remember that deposits (not loans) drive the relationship with your customers/members. It’s time to adjust some paradigms and focus on growing deposits to fuel your lending rather than borrowing to lend.
• Focus on the value you can deliver rather than the rates you offer. Focusing solely on promotional rates, tiering of large deposits, and new customer-only rates exposes you to higher costs and short-term money inflows. You can do much better than that.

With the total number of federally insured credit unions and community banks decreasing over the past decade, those merged institutions’ assets under management have grown. With that comes the need for repeatable processes and controls and leveraging advanced analytics to offer competitive services. By leveraging the insights from your enriched data and putting it in front of your officers, you can make their lives easier and strengthen relationships with your customers/members.

Join the active deposit management movement to shape deposit management for today’s realities. Don’t get left behind in the war for deposits.

The post Revolutionize your Deposit Management appeared first on Flowtracker Analytics.

For decades, bankers have struggled to tell the difference between “new” money and money flowing between products because core systems and transactions don’t record data that way. Consequently, most Financial Institutions (FIs) cannot and do not know how much Cannibalization costs them. 

Why does deposit cannibalization matter?

Cannibalization can significantly impact the profitability of the deposit portfolio. When a customer/member moves money out of one deposit product into another deposit product with a higher price, the profitability of those deposit funds decreases. Although financial institutions are experiencing it today in their money market portfolios, cannibalization is a constant occurrence that needs continuous monitoring. For context, consider that approximately 30% of all account-level deposit balance increases and decreases are caused by money moving between a consumer’s/member’s accounts. Managing this cost is a strategic imperative when setting deposit prices.

The DEPOSIT EDGE SaaS Solution for deposit analytics solves that problem

Once you can measure and “see” cannibalization, you can do something about it.

• The first step is understanding the flows between products in fine detail – by product, demographic segment, and location.
• The second step is to determine which customers/members are vulnerable to cannibalization when you change the pricing of products they hold. Then, you understand who is susceptible and how much cannibalization risk you have exposure to.

That said, cannibalization does not always have a negative outcome. For example, you could decide that to support your growth strategy, you need to increase your 2-year CDs. And reducing your Money Market balances will satisfy the risk management priorities of your balance sheet. In that instance, encouraging the Money Market’s cannibalization in favor of your 2-year CD may be a good strategy. But you must understand how it is happening – which balance tiers, what relationship tenor groups, and other demographics of the accounts where it is happening so you can remain in control of the process and deliver value to your members/customers and your bank/credit union.

Focus on mitigating deposit cannibalization.

To be clear, eliminating cannibalization is not possible or desirable. Always bear in mind the primary mission of your Credit Union or Bank is to meet your customer’s needs! Products satisfy specific needs, and people’s preferences and needs change over time, so shifts driven by changing needs should be welcomed.

Mitigating excessive cannibalization, that is, the cannibalization driven primarily by pricing differentials between your products that do not align with your portfolio projections, is what you need to do. Mitigation strategies focus on adjusting product prices relative to each other within your portfolio or using targeted marketing to offer premium pricing to your customers selectively.

Adjusting product prices relative to each other is a preventive step that can and should be managed actively by Deposit Product Managers. Avoiding large differentials between products that have high amounts of cannibalization money flows is easy to implement and highly effective.

The second strategy is to offer premium pricing selectively. Most of your new deposit money (typically 80-90%) will come from existing customers, so you need to market primarily to your current base to meet your goals. But are all your relationships the same? An emphatic No. Some customers/members have deep relationships with you, while some are only there because of a loan, and some are there because they liked a premium deposit rate offer. You must differentiate amongst those depositor behaviors and know which is which. You then may be selective in targeting offers and use the same concepts for managing rewards and renewals.

Mitigating deposit cannibalization matters. It can make the difference between positive and negative ROI (return on investment) on your deposit campaigns.   

Contact us to learn more about how DEPOSIT EDGE insights can fuel your transition to best practices in Active Deposit Management.

The post Managing Deposit Cannibalization  appeared first on Flowtracker Analytics.

This article explores three banking industry shifting priorities and ideas on how to respond to them.

Renewing the focus on resiliency

Inflation has been more stubborn than anticipated, and while fears of recession have receded, consumers and bankers are still cautious.

For banks and credit unions, an essential aspect of improving resiliency is controlling deposit outflows to stabilize funding costs. That goes beyond knowing if a product’s balances are up or down. It requires a dynamic understanding of how the balances happened. E.g., sources of New/Lost Money in your portfolio with enough granularity that you do not need to guess and can make informed decisions.

For consumers, that is increasingly not just using banks and credit unions as custodians of funds but as trusted advisors. At all levels, they expect advice and product innovation to help them achieve their financial goals. Every financial institution claims that is something they will strive to do for clients because they understand that their client’s financial health can add benefits to their bottom line. 

At FlowTracker, we help financial institutions deliver on both fronts consistently and methodically. They are first uncovering how money flows through their customers’ accounts – see Fig. 1. In other words, we help them understand how customers use the funds they keep at their institutions. That is a stark contrast with the typical analysis based on transactions that reflect primarily how financial institutions account for what they do.

Addressing the talent shortfall

During a session – at an important Credit Union industry event in Washington, DC, early this year – when the topic of the need to improve deposit management in the industry, someone asked who in the panel was an expert in deposits. The answer – nobody. Everyone had agreed on the need to do better, yet no one had done much about it.  

This scenario is repeated at many banks and credit unions. Because, to date, priorities were different, it is easy to find experts in AML, digital, lending, and other credit products. But when it comes to deposits, skilled bankers are harder to find, and their skills inside the institutions have atrophied over the years. Since 2008, rates have only declined, and deposit management has been quite different. Furthermore, incumbents work with models and paradigms that do not fit a rising rate environment.

Due to demographic changes, the industry is increasingly transient. Even if an employee remains at your institution, only expect them to retain a role briefly. Therefore, the need to harden deposit management to the point that regardless of who is tasked, they will be able to understand what is happening, design products, or make decisions is today more important than ever. And not just because of the interest rate hikes, but because it makes for better banking and the dutiful compliance with fiduciary responsibilities. The FlowTracker Solution helps clients become more proficient at doing what they want. We help them become Deposit Champions.

Making better use of the available Data and adopting more Analytics

We remember that just a few years ago, all the talk was about Big Data. Many messiahs talked about leveraging technology to scan sentiment and influence buying decisions. Privacy regulations and ethics around using some information collected dampen many of those efforts. One positive in this is that today, most bankers see data as a raw material that needs mining to take their activities to the next level.

But consistently, we asked bankers – How are you taking advantage of the data you already have?

FlowTracker processes a few data fields using advanced analytics and generates account-level insights on New/Loss Money and Product Substitution. Information bankers can act directly or use it to address their members’/customers’ needs and improve their predictive models. At times of economic turbulence, this capability will become more valuable.

The only two significant roadblocks we observe to achieving the benefit from adoption arise from the following:

Some Institutions have a predilection for in-house-built solutions.

Said in-house solutions tend to be spreadsheet models that require significant data manipulation, need to be more scalable, burden internal resources, and are not enterprise-level solutions. They are resulting in different areas having their version of the truth. This roadblock persists even when it is understood that collaboration with third-party solution providers can help the institution accelerate value creation.

Information silos:

More than having the data and the insights available to an institution is required. The architecture of most financial institutions sometimes needs to be more conducive to sharing information and even best practices. To maximize value realization, data and insights need to be democratized throughout the bank/credit union departments and, hopefully, all the way to customer-facing employees who can use it to improve member/customer experiences and engagement.

In fairness, the lack of analytical skills in some areas of the organization can hinder, at times, the democratization of information. Creating centers of excellence that serve multiple functional areas can be an interim solution. At the same time, the bench strength of said skills must be allowed to grow. But make no mistake, the same way that understanding Excel was considered a skill years ago, analytical skills will be increasingly common as technology takes hold of the industry. The board and senior management must determine how they want this to play inside their organizations.

We recommend organizational culture evaluation and change management work to eliminate this roadblock.

The post Banking Shifting Priorities in 2H 2023 appeared first on Flowtracker Analytics.

The Money Market Savings dilemma currently impacts regionals, community banks, and credit unions with under $150 billion in assets. With the rise of interest rates, their clients have started to look for better yields by migrating to more costly products and shopping for opportunities elsewhere. In other words, inexpensive balances are migrating to more costly product options and leaving the institutions.

Financial institutions are faced with the need to do what is right for their customers while also maintaining their financial viability. And those that do not address it timely and properly will see their lending capacity and profitability greatly impacted.

What could those financial institutions do?

Watch this video to explore this topic. We also invite you to share this content with others, comment, and reach out to us. Let us all be part of the conversation.

This webinar is part of our Deposit Champion Series. Visit this page to explore other topics in the series.

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