Frontline staff at branches across the country are getting a lot more ad hoc pricing requests than in the past. Decisionmakers, in turn, are spending more of their day approving exceptions for depositors bargaining for a better deal.
Seeking respite, financial institutions tend to consider a host of “creative” strategies to retain or attract deposits. But they should wade in carefully.
These tactics are not silver bullets. Many, including implementing relationship pricing, providing depositors a rate based on the size of an account, or offering odd-term maturity specials, can be counterproductive, depending on the situation. Others, such as ad hoc pricing, are problematic.
And two tactics — new-money-only rate specials and brokered deposits — can be outright destructive to future profitability.
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