Takeaways from American Banker’s Retail Banking conference

QuickLook Blog

Visiting beautiful Colorado Springs for the first time during crisp April weather was truly enjoyable, but American Banker’s Retail Banking 2018 conference held in that city was no less immersive. After witnessing the exchange of ideas among executives of large, mid-sized, and community banks, here are some of my takeaways of what banks should focus on in the near future.

May 24, 2018

A blog post by Richa Wadhwani, assistant manager, Banking and Capital Markets, Deloitte Support Services India Pvt. Ltd.

Accelerate retail deposit growth amid pricing pressure

The conference reinforced my belief that deposits will be a big theme this year and next. Several speakers hinted that a gap between the “haves” and “have-nots” of a strong deposit base will widen, and will likely align along size. Consider that banks with more than $250 billion in assets grew their deposits by 4 percent year-over-year (YoY) in 20171 due to technology spending (e.g., mobile banking)2 and a wider branch footprint. Meanwhile, banks with less than $10 billion in assets lost 2 percent of their deposits in 20173, reversing growth from the prior year.

The consensus among participants was that 2018 will see banks raising deposit rates further—some more so than others—as they compete to win and retain sticky retail deposits. (See my earlier blog Winning the competition for bank deposits and the Deloitte Center for Financial Services 2018 Banking Outlook report for more on this topic). While a few large banks have launched or acquired digital-only banks to attract deposits from committed tech-savvy savers4, I believe smaller banks could increase their deposits by targeting passive, relationship-driven customers.

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Bundle the checking account with a value customers can’t resist

Some customers have been dissatisfied with large banks that no longer offer free checking accounts.5 It is understandable—they now have no choice but to pay for the most basic product that had been free.

At the same time, conference participants noted that some customers are becoming open to the idea of paying a fee for a checking account with Amazon.6 What is driving their willingness to pay? Perhaps the value they perceive in the bundled features, such as protection for cell phone damage or ID theft, is compelling enough to pay for.

As I noted earlier, banks not only are competing with each other for retail deposits, but also with nonbanks that are displacing deposits from the banking system. Consider, for instance, the number of customers who are transferring money from their checking accounts to retailers’ wallets. In my view, this is a wake-up call for the industry. Banks need to reinvent the checking account with a strong and irresistible value proposition if they want to keep business within the banking family.


Use data to humanize the experience

Conference participants discussed their ongoing experiments with branch layouts, proof that physical locations are not going away. My takeaway was that, even as voice-based digital assistants and high-tech robo-advisors become the new normal, customers will still desire the human touch, particularly with more challenging episodes in their banking lifecycle.

A bank’s future success—at least in part—will depend on how well it uses data to inform its knowledge of the customer, both to design branch layouts and to offer financial solutions. Ironically, data will humanize the customer experience. Consider Umpqua Bank’s flagship branch, which was designed as part café, part library, part community center, and part bank.7 How about a cup of coffee at the branch?

Rebrand banking as the workplace of the future for millennial talent—and Gen Z

Conference participants generally agreed that banks were late to the party in attracting millennial talent as potential employees.8 My sense is that banks are not even thinking of Gen Z, a majority of which will enter the workforce in the coming years.

In my view, attracting the younger workforce is a challenge as daunting as climbing the 14,000-foot summit of Colorado Springs’ Pikes Peak. Banks are approaching that challenge in different ways. Some are luring talent by offering something as unconventional-yet-logical as student loans.9 While a couple of conference presenters discussed their banks’ transformation journeys to revamp the culture and workspace to appeal to younger generations’ preferences, I believe the industry has miles to go before it reaches the summit. It remains important for banks to promote their brands as growth-oriented, purpose-driven, and innovative places to work via promotion on social media (where millennials and Gen Z seek information) and with late baby boomers and Gen Xers, the parents of these new generations, on whom they rely for advice.

My take

My take is that retail banks need to address the pressing needs of today to reshape their tomorrow, by:

  1. Accelerating deposit growth amid pricing pressures
  2. Reinventing the checking account
  3. Customizing the face of bank branches
  4. Rebranding banking to lure younger talent

What do you think?

I would love to know your thoughts on whether and how these ideas can reshape retail banking.
Join the conversation on Twitter: @DeloitteFinSvcs.

FDIC Quarterly Banking Profile, FDIC , Fourth Quarter of 2017 and 2016, and, accessed on May 16, 2018.
“Bank of America Beats 1Q Estimates, Mobile Makes Double-Digit Gains,”, April 16, 2018.
FDIC Quarterly Banking Profile, FDIC, Fourth Quarter of 2017 and 2016, and, accessed on May 16, 2018.
Bryan Yurcan,” Digital Bank in a Box: Fintech Offers Branding Tool,” American Banker, April 25, 2018.
Maria Lamagna, “It Just Got More Difficult for Bank Customers to Find a Free Checking Account,”, January 23, 2018.
Ron Shevlin, Reinventing Checking Account, Cornerstone Advisors, January, 2018.
Jeffry Picher, “14 Breakthrough Branch Designs from Banks & Credit Unions,” The Financial Brand, November 20, 2017.
“Banks are Finding it Harder to Attract Young Recruits,” The Economist, May 4, 2017.
Bryan Yurcan, “Banks Compete for Tech Talent by Helping on Student Loans,” American Banker, January 3, 2018.

QuickLook is a weekly blog from the Deloitte Center for Financial Services about technology, innovation, growth, regulation, and other challenges facing the industry. The views expressed in this blog are those of the blogger and not official statements by Deloitte or any of its affiliates or member firms.

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