As the last few weeks have unfolded and the aftermath of Silicon Valley Bank (SVB) and Signature Bank’s collapses have settled, deposits have changed hands at an unprecedented pace. While this rate of change is unlikely to persist long-term, it’s clear from our data that financial institutions with robust digital banking offerings are set up for success.
One Narmi customer experienced a +172% average daily deposit increase during the week following the SVB collapse.
These gains weren’t isolated to this specific customer. Here’s a look at some of our other customers who saw significant average increases in daily deposits during the week of March 13, 2023.
This deposit growth affirms the importance of providing a seamless access point for consumers and businesses and then continuing to foster a sticky relationship through a digital banking platform adaptable to the needs of consumers. Narmi’s end-to-end platform creates a seamless experience from account opening through digital banking, equipped with functionalities like flexible funding options, seamless money movement, bill-pay, automatic savings, and more. This all works to amplify the deposit growth and product engagement opportunity available to financial institutions.
This growth is also a testament to the role that community and regional financial institutions play in the U.S. economy. They not only offer high-quality and secure financial services but also reinvest in their communities to build trust – something seldom found with “too big to fail” institutions.
Jill Castilla, president and CEO of Citizens Bank of Edmond in Oklahoma, affirms that community banks are seeing an influx of deposits as a result of their tight-knit connections to their communities. She says, “At Citizens, we are seeing deposits grow because people know we are safe and secure while accountable and accessible.”
According to a Morning Consult poll, nearly one in six U.S. adults moved some or all of their money as a result of the collapses, affirming that Americans are actively moving money to trustworthy financial institutions. The poll also found that 23% of American adults are considering starting a new relationship with a bank in the next six months. This makes strong account opening tools even more critical.
Diversification of funds and the power of relationship-based community banking in an uncertain banking environment is an untapped opportunity for community financial institutions.
At our recent Innovators Retreat speaking on the topic of the SVB collapse, Stash CEO Liza Landsman framed diversification this way: “Like in almost every aspect of your life, both personal and professional – other than your marriage – diversification matters and is important.” This sentiment holds true for consumers aiming to be risk-averse in changing market conditions. Consumers are now looking to entrust deposits to financial institutions that deliver a sense of community and trust.
With the deposit growth opportunity at the fingertips of small and mid-sized financial institutions, the bar is now higher. All onboarding and digital banking experiences – across small, medium, and large financial institutions – will be put to the test as consumers evaluate their options. Even megabanks are being judged on criteria like convenience, exposing gaps in their account opening systems and leveling the playing field for community and mid-sized financial institutions.
Readily available best-in-class technology can equip community and mid-sized financial institutions with a digital experience that will make them competitive in the fight for deposits. As the battle for deposits wages on, there is increased pressure on community and mid-sized financial institutions to be the very best they can be, starting with digital. Consumers are currently evaluating where and how to allocate funds, and financial institutions with best-in-class banking technology and seamless account-opening experiences will be prepared to seize this opportunity.
All financial institutions should evaluate their digital solutions and ask themselves if they are truly offering a solution that will win potential customers and members.