Why go online to get deposits?
The Internet offers your bank significantly lower costs to acquire deposits.
The cost to acquire deposits online is much lower than traditional ways -- we estimate 100 - 200 basis points lower. The low cost to acquire permits you to offer a better-than-average rate to grow significant deposits quickly. Remember, customers open the account online and you have very little cost to process the paperwork. All transactions take place online or by mail, significantly reducing the personnel costs to handle customer work.
Internet deposits tend to be "sticky" and not super-price-sensitive.
A popular Internet account is a savings account. Customers are often attracted by a high initial rate, then stick with you, even if your rate trends down. As long as your are competitive, you can usually count on keeping the funds.
Gather deposits out of your traditional market; avoid "cannibalizing" existing customers.
One problem with attracting core deposits in your traditional market is that more than half of the participants turn out to be your own customers who have "traded-up" to your new promotion. When you extend your new promotion to a geography that is far away from your existing customers, you minimize disintermediation.
Advertise with very precise budget control, down to the hour of the day.
Internet advertising can be controlled not only by geography, but by days of the week and even by time of day. You can set a daily, weekly or monthly budget, based upon results, and know that you will spend only the money you have budgeted in advance. Internet advertising offers maximum budget control.
Good alternative to brokered CDs.
As you know, regulations have strict controls over brokered deposits. Internet deposit gathering is exempt from those issues. You have the opportunity to have reasonable, prudent and affordable core deposit growth. The Internet offers your bank a sensible way to increase a portion of your core deposit portfolio.
Consumers routinely conduct banking transactions online and expect to be able to open and fund new accounts at will, quickly and easily, within a single session.
Data shows that 15% of households attempted to open a checking account online in 2008 and another 30% attempted in previous years.
Marketing problems? Give us a call and tell us what you need. It's that simple.