How to Enhance Digital Banking Experiences to Boost Deposits

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In today’s competitive world of banking, financial institutions such as banks, credit unions and large fintechs have been under mounting pressure to both draw in and boost deposits. The sudden surge in interest rates has caused a shift in the deposit landscape, with more funds flowing out. This is in stark contrast to previous years when the primary challenge was figuring out how to effectively deploy substantial liquidity.

At this critical juncture, boosting deposits has become a top priority for banks. It’s not just a smart move for now; it creates a strong foundation of stability and competitiveness for the future too.

In order to thrive in this new environment, successful banks will need to develop strategies aimed at attracting a broad spectrum of deposits with a particular focus on retail bank accounts and those associated with small business. This diversification of deposits can help financial institutions to navigate through challenging times, reducing the risk of relying too heavily on one source of funding.

In this article, we’ll explore why growing deposits is important in today’s environment and offer some practical strategies that banks can implement to achieve this goal.

Why are deposits so important for financial institutions?

  1. Keeping the financial institution running

Deposits are a bank’s financial lifeline. They are crucial for ensuring that the financial institution has got enough cash on hand to cover customer withdrawals and other financial commitments.

  1. Protecting the financial institution from economic uncertainty

More deposits mean a sturdier financial safety net for banks with a hefty deposit stash, banks are better prepared to handle tough economic times and deal with unexpected financial surprises.

  1. Strengthening lending potential

The lending capacity of a financial institution is dependent on the amount of customer deposits the bank has. Deposits are the fuel that keeps the bank’s lending engine running smoothly. By increasing deposits, financial institutions have more liquidity to lend to retail customers and small businesses. In order to lend out more, financial institutions must secure more deposits.

How can banks increase deposits?

  1. Make saving money easy

If banks want to see their deposits grow, nurturing a culture of savings through digital tools and financial literacy tips is key. Arming customers with tools like savings goals or pots, makes saving easier to do and simpler to track. Additionally, financial institutions can make saving more enjoyable by creating challenges and games and keep customers on track by offering personalised incentives when goals are hit.

  1. Attract new customers

Another important option for increasing deposits is by acquiring new customers. Using personalised and contextual referral programs, banks can quickly increase the number of customers they have and hence, the number of deposits they draw in.

  1. Increase customer loyalty

Boosting bank deposits can be impacted by the level of loyalty customers have to the financial institution. When customers are loyal to their bank, they’re more inclined to centralise their financial activities, including saving more money within that institution. Add to that, they are less likely to churn and move over to a competitor.

In today’s financial landscape, loyalty programs and rewards campaigns have evolved beyond mere promotional tools to attract newcomers. They’ve taken on a central role in financial institutions’ relationships with their customers. Delivering robust loyalty campaigns has become a must for financial institutions to retain and keep their valuable customers engaged in an ever increasingly competitive market.

How can Moneythor help?

Banks can elevate their digital offerings by providing their customers with the tools they need to achieve their savings goals and enhance their budgeting skills. Moneythor’s platform and orchestration engine makes it possible to offer personalised insights, actionable recommendations, and helpful nudges that empower customers to make sound financial decisions, boost customer engagement, reduce churn, and foster customer advocacy.

With Moneythor you can personalise campaigns and seamlessly deploy gamification features and interactive content within your digital banking channels.

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