OptimaFi Insights 2026 Digital - Flipbook - Page 2
CORE DEPOSITS
INSIGHTS
K EY ME TR ICS
61%
61% of bank leaders say that
deposit pricing is a top obstacle
to profitability for their bank.
Source: Bank Director’s 2026
Bank M&A Survey
WHY?
Banks have faced intense competition for deposits in a changing rate
environment, and broadly advertising high yield products can make it
challenging to manage margins. But tapping into customer behavioral data —
including from peer institutions — can give banks fresh insight into where they
can use rates to more effectively drive deposit growth.
Household-level benchmarking
can reveal the “why” behind the
metrics — such as how one bank
achieved 10% higher checking
penetration and 14% lower cost
of funds than its peers.
Source: Opt imaFI
Around mid-2023, BancPlus Corp. in Belzoni, Mississippi, found itself in a po-
KEY TAKEAWAYS
• Banks have faced stiff competition
for core deposits amid a changing
rate environment and encroachment
by nonbank fintech firms.
• Broadly advertising market-beating
rates may initially draw in fresh
deposits but can quickly compress
net interest margins and put
pressure on downstream retention.
• Instead, banks can tap into peer
benchmarking and behavioral data
from their existing customer base
to understand where they can
strategically use rates to grow
relationships.
• Banks can keep and grow these
relationships without paying the
highest deposit rates in their
markets.
sition familiar to many of its peers. Competition for core deposits was stiff, with
the federal funds rate hovering around 5% or higher for most of that year. In the
wake of Silicon Valley Bank’s failure that spring, examiners were scrutinizing
banks’ liquidity more closely.
That’s when Rob Armour, chief marketing and product development officer
with the $8.1 billion company’s subsidiary BankPlus, reconnected with a longtime industry friend who had once pitched some different ideas about deposit
pricing. Rather than pricing deposit products to keep up with local competitors,
many banks would be better served by identifying customer segments most
likely to grow their relationships with the institution and then selectively marketing more modest price points to those customers.
Working with OptimaFI, previously known as Infusion Marketing Group,
BankPlus got strategic about how it reached out to customers to grow core
deposits. The bank’s deposit pricing philosophy has historically depended upon
wholesale funding rates, its current need for core deposits and what its competition is doing, Armour says. BankPlus still sticks to essentially that philosophy, but
through its work with the analytics firm OptimaFI, it refined its marketing to its
depositor base.
“You have to be careful about shouting high-rate products from the mountaintop or you reprice everything you’ve just put on the books, and it creates an
unending cycle of repricing,” Armour says. “You get some new money, but you’re
shooting yourself in the foot from an earnings standpoint; even though you’re
solving a liquidity problem, you’re causing an earnings problem because you’re
repricing existing deposits.”
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