How to Stimulate Deposit Growth for Banks

March 18, 2024   -  

Stimulate Deposit Growth for Banks

Baby Boomers are going to transfer over $70 trillion dollars to Millennials in the next 25 years. That capital doesn’t just represent the legacy their kids will use to build their lives—it’s the foundation of tomorrow’s banking industry. 

This transition represents an incredible growth opportunity for banks, but there’s just one problem: today’s older clients and tomorrow’s new depositors don’t share the same mentality about wealth-building and institutional loyalty. 

According to the Millennial Disruption Index, younger banking clients are increasingly less concerned about centralized finances and may not understand the value that institutional loyalty can deliver. They are 2-3 times more likely to switch banks than their parents, and 1 in 3 would switch banks with less than 90 days’ notice. In fact, nearly 70% aren’t thinking long-term at all—they believe that, in 5 years, the financial landscape will be entirely different. 

The result is that financial institutions are facing an unprecedented opportunity to grow deposits and boost profits, but they’ll have to work harder than ever to make the case that their clients should care about planning for the future. They will need to harness technologies and strategies to build multi-generational relationships that lead to long-term deposit growth for banks if they want to compete.  

The Path to Deeper Relationships and Deposits

A basic understanding of the relationship between interest rates and operating costs is enough to make any bank manager realize that deposit growth isn’t going to be about just numbers. In fact, 53% of younger clients think there’s no difference between banks at all! 

If all your institution offers is a little online convenience and an extra tenth on the interest rate, you’re never going to create the kind of security, stability, and value that will make your brand synonymous with long-term wealth creation. 

One of the most critical areas banks need to focus on when it comes to The Great Wealth Transfer is helping their clients prepare for the moment. Just 33% of 250 million U.S. adults have started the process of legacy and estate planning. That means that very few people—including those leaving a legacy and their beneficiaries—are thinking carefully about what those assets might be and how they can be used. 

Banks need to be proactive about stepping into the legacy planning void and connecting their clients with software platforms and business services that make organizing their lives as easy and intuitive as possible. 

Being the Right Partner for the Future

There are several ways banks can use technology to help people plan for the future. By being a trusted partner for their families and delivering the best products and services on the market, they’ll enjoy the customer loyalty they’ve earned. That means greater deposit growth for banks. 

Here are some of the best ways businesses can guide their clients to valuable legacy planning services that foster greater engagement in multi-generational banking habits. 

Life Organization Services

Digital platforms are making it easier than ever for parents and children to share information about family assets and plan for the future together. Banks should offer easy-to-use SaaS products that keep legacy and estate planning content like the following all in one place:

  • Docs and Data. This includes wills, passwords, account numbers, online services, and insurance policies that loved ones might need.
  • Estate Details. Deeds, inventories, broker information, insurance details, and any other important information about clients’ assets can all be securely preserved and managed by your institution. 
  • Messages and Memories. Digital vaults can be used to preserve all of your clients’ most important pictures, videos, and other valuable content. The best platforms allow them to timestamp these important memories so they’re easy for family members to find and share.

Business Services

Legacies aren’t just about private accounts. Smooth succession planning can be the difference between carrying on a family’s financial success from generation to generation to losing it all from one month to the next. 

Being a trusted partner for succession planning in the following areas—especially for small and medium-sized businesses (SMBs) is one of the best ways to ensure deposit growth for banks. 

  • Details and Assets. Running a business can involve a lot of small but crucial details. Digital legacy planning services can help owners organize all the bits and pieces and open conversations for loved ones who will need to take over one day.
  • Vital Documents: Every business has important documents that spell out its protections, processes, and plans for the future. 
  • Succession Strategy. Who will be taking over and how that process should take place ensures businesses experience the fewest number of bumps in the road when the time comes. 

The Effects on Deposit Growth

Embracing these strategies and services will experience both short and long-term benefits that will boost deposit growth for banks. Developing a vision of finance as a family activity will promote multi-generational customer loyalty that will lead to more new accounts. 

It also produces greater customer engagement with other services like mortgages, college funds, and investment counseling which all promote deposit increases. Business succession services also enhance SMB acquisition and retention, which ups deposit growth for banks and leads to more business loans and financial services. 

Of course, offering SaaS platforms for legacy and estate planning represents an investment, and some institutions may view this as a risk with uncertain deposit levels on the horizon. Fortunately, institutions that leverage these solutions typically see 300%+ ROI, which is much higher than other strategies. 

Building Deposit Growth for Banks with The Postage

Legacy and estate planning services are the future of deposit growth for banks, and The Postage is leading the way for families to communicate about their finances and organize their wealth from one generation to the next. Its robust planning features and user-friendly interface make it easy to use and explore, and it’s fast and simple for banks to onboard. 

Make your bank the right place for your customers to secure their plans, businesses, and memories that matter most. Book a demo of The Postage today and start delivering your customers the peace of mind they deserve from their financial partner.