GRANDMASTER OF DEPOSITS

If you want to be really good at something, experts suggest you must engage in "effortful learning." That term was coined when a 1938 study by Dutch psychologist Adriaan de Groot found that the difference between chess masters and ordinary players is not intelligence, analytical ability or creativity; but rather "structured knowledge." Better chess players analyze the same number of moves and to the same extent as ordinary players, they just analyze a higher number of winning moves. In other words, experts focus on tactics and strategies that matter. Experience counts, but higher quality experience counts more. This helps explains why there are a greater number of chess masters today than at any time in the past and that their level of play is higher. The advent of computer chess programs and online databases has taught quality experience at a faster rate. In the world of banking, we have found the difference between an average deposit manager and a great deposit manager is the latter has created and implemented many more products. Part marketer, part statistician and part financial analyst, a successful deposit manager usually strives to evaluate 3 new products or promotions at any given time in an attempt to figure out what works and what doesn't. Since the DDA & MMDA market is not the same as it was 5Ys ago, deposit managers must reevaluate their current positions and continue to test penetration, price elasticities, cannibalization, conversion, volume increase and competitive reaction. Banks that have deposit managers may have to consider giving them more freedom to make mistakes and try new creative products. For banks that don't have deposit managers, they may want to consider our Liability Coach service that handles product structure, pricing, tiering and competitive positioning. Regardless of who handles the work, the important point is to keep challenging the bank to gain enhanced structured knowledge of deposits. In interviewing more than 200 deposit managers over the last several years, evidence indicates that no one is born with the natural ability to place non-rate sensitive deposits. The skills and talent derived in this field are made, not born. For 2007, banks will have to apply a greater amount of resources to deposit gathering if they want to maintain margins. To obtain a Grand Master status in deposits, make sure your deposit manager has the freedom and the resources required to experiment and continually learn from experience.