The art of pricing: Growing loans and deposits by optimizing rates
Every consumer wants lower interest rates on loans and higher interest rates on deposits. But just how much wiggle room does your bank or credit union have with pricing? By using segmentation and optimization, financial institutions can strike the ideal balance between offering customers attractive rates and realizing their own goals for growth and profitability.
Does your bank or credit union have a tried-and-true formula for pricing that it has used for years? Does it rely on basic inputs like loan-to-value and debt-to-income ratios? It may be time to rethink pricing and its impact on business results.
Just as the financial services industry isn’t the same as it was just a few years (or months) ago, your pricing models shouldn’t be either.
To stay competitive in today’s dynamic market, your pricing team should look beyond the typical statistical models and risk-based pricing inputs.
A more holistic approach to setting rates on loans and deposits will allow you to increase business from existing customers and attract more of the types of customers you want.
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