profitability
Whitepapers
Deposit strategy is no longer a game of chasing balances — it's about building resilience. CFIs best positioned for long-term success are those that look beyond rates and volume to assess how, where, and why deposits contribute to profitability. This insights paper provides a comprehensive perspective on how CFIs can navigate the structural shifts reshaping deposit strategy.
Effective customer profitability analysis — covering both current profitability and lifetime value — lets you target profitable customers, cross-sell effectively to existing ones, and migrate customers to more profitable products.
How community financial institutions can maximize their relationships and compete in the deposit rate environment using profitability analysis and relationship modeling.
Case Studies
Discover how Lexicon Bank gained deeper client insights and improved portfolio management by adopting a purpose-built tool for account-level profitability data, empowering relationship managers to better serve businesses, entrepreneurs, and individuals across Southern Nevada.
Traditions Bank selected PCBB and Profitability FIT as they faced many business challenges including not pricing business loans competitively.
OceanFirst Bank leveraged Profitability FIT to drive growth, optimize profitability, and enhance customer engagement. This powerful tool enabled data-driven insights and real-time decision-making to support their evolving strategy.
Podcasts
We sit down with a former regulator to explore the keys to success for CFIs. Hear insights on the importance of proactive risk management, strong communication, why involving regulators early in risk discussions is crucial, the significance of corporate governance, and more.
Webinars
Virtual roundtable led by PCBB's profitability expert, Janet Leung, to discuss proven and peer-tested strategies to improve profitability. The event showcased a panel of community financial institution executives that have championed customer profitability.
Amid continued competition for deposits, CFIs should aim to balance volume and profitability, using data-driven customer segmentation, tailored offerings, and relationship excellence.
CFIs are facing deposit pressure — but raising rates isn’t the only option. We highlight five creative, cost-efficient strategies to attract and retain deposits by leveraging relationships, digital tools, and community ties.
Commercial deposits are gaining ground again. We outline five practical, relationship-based strategies to help CFIs strengthen their business deposit base, without over-relying on rate to stay competitive.
When it comes to pricing deposits and loans in a competitive market, CFIs must correctly strike a delicate balance between each customer’s needs and their own profitability. Relationship pricing, based on customer profitability, can play a critical role in determining the best loan structure and deposit rates to maximize a customer’s lifetime value to your CFI. We provide insights on what factors to consider as you price products based on customer relationships, as well as the impact of adopting relationship pricing on your institution.
CFIs would do well to collect and analyze data on customer behaviors and spending habits — not only from their own systems, but also online portals and apps, as well as their partners’ APIs in an open banking model. We discuss some opportunities.
Could a subscription model take the place of à la carte bank fees? We explain the pluses and minuses of that business strategy, as well as different options to bring the subscription model experience to your customers.
With interest rates set to rise in the coming months, some banking customers may be tempted to shop around for the best deals. Effective customer profitability analysis allows community financial institutions to better retain and target new customers, while increasing overall customer profitability. We share some lessons from institutions that have successfully implemented these models along with three ways to increase customer profitability.
Businesses are opening up countrywide. But, with the ongoing supply chain issues and price pressures, many small businesses are struggling. There are several opportunities for community financial institutions to assist these businesses in their community, including the Restaurant Revitalization Fund, short-term funding, and advisory expertise.
Community financial institutions have used customer referral programs successfully for years. But now that things are starting to feel more normalized, maybe it is time to take it up a notch. We address how to do that by automating your referral program and testing rewards.
It appears that we are nearing the tail-end of the pandemic and so it is an important time to review customer profitability. To guide you through this assessment, we cover three key areas that impact customer profitability: interest income, noninterest income and expenses, and credit costs.
Digital disbursements give businesses a smooth and immediate payment process. With global digital payments expected to hit $7.64T by 2024, opportunities for businesses to seamlessly make payments is ramping up. Community financial institutions can help them while finding benefits, such as reducing expenses, increasing transparency, generating fee income, and assisting with customer profitability.
Customer profitability is even more important these days as CFIs are squeezed on margins. Knowing what your customers want and providing them with creative offerings to help will cement their relationships with your institution. Taking a holistic view of your customers will then allow you to more effectively value price the relationship for the greatest customer profitability.
By segmenting your PPP customers based on their needs for the funds, you can better determine customer profitability. We explore the different approaches for 3 customer segments, based on the intended use for PPP funds.
Not every community financial institution counts wealth management services among its offerings. Yet, if you do, now may be the right time to review this service for greater fee income.
A risk-based pricing strategy can give community financial institutions a chance to improve market share without also increasing risk.
Small businesses are the mainstay for community banks. So today, we provide you with an updated small business snapshot.
The NY Fed's most recent survey on nonemployer firms shows 43% have unmet funding needs. This could be an opportunity for your institution.
It doesn't appear that environmental investing and initiatives are going away any time soon. We show some interesting ways banks are going green.
Community bankers support medical professional customers already. However, many in this group need special attention, since their education did not include how to grow their practices, let alone just run a business.
In this competitive market, it is clear that banks need to focus more intently on customer engagement. We provide you with the top four ways to do this.
Forty percent of new entrepreneurs in the US are now women. Yet, they often don't apply for loans. Are there ways to help these business owners grow?
The popularity of HSAs has exploded and roughly 30% of people within the workforce now have them. They can be an attractive line of business for community banks.
Improving customer retention can also enhance customer profitability. You may want to consider some of these ways to boost both.
In an era of rising costs, it can be tempting to look at an underused branch and consider reducing hours. However, you may want to consider these things before you do.
Wondering how to keep your deposit customers happy while interest rates rise? Companion deposit accounts may be the answer.
Farmers are struggling these days with low market prices. Some advice to help you with your agricultural business customers.
It’s important for CFIs to benchmark their performance against other institutions to gauge their CFI’s standing. We discuss criteria for selecting peers, tools for research, and what metrics to compare.
Without the right tools and analytical approach, customer data is unlikely to have any significant impact on CFIs’ overall profitability. But when artificial intelligence is used to help segment data into meaningful information, there are multiple ways it can be used to help organizations enhance their relationships with existing customers and boost their overall profitability.
Is getting into an interest-rate war the only way for CFIs to compete for deposits at higher interest rates? We review alternative strategies for keeping up with aggressive offers from online banks and other competitors.
Cost management can be an effective way to boost revenue, but it needs to be done with a comprehensive approach. If organizations fail to look at all the ways cuts could impact employees and the customer experience, cost-cutting measures could ultimately prove costly. We provide tips on how to evaluate costs and their impact on your CFI’s cost reduction goals.
Data mining isn’t new, but financial institutions are finding new ways of using it to provide retailers with more effective marketing options and an added revenue source for themselves. We review one such high-profile service and what it could mean for data usage in the future.
The ever-increasing amount of data CFIs collect offers huge opportunities — along with sizable challenges. We look at how institutions can efficiently utilize this information to make smart business decisions and achieve positive results for all stakeholders.
Cross-selling isn’t a new tactic, but as competition from non-banks grows, it has become increasingly important. Thoughtfully approaching the way your organization uses cross-selling tactics can boost both revenue and customer satisfaction.
After the first interest-rate cut in over a year, we look at the outlook for deposit costs and offer five strategies for CFIs to maximize the opportunities in this uncertain environment.
Following tradition, we're taking a look back at your favorite articles from this year as we BID adieu to 2024. In the scramble for liquidity, attracting deposits was a top priority for CFIs, and this was one of our most-read articles. Is getting into an interest-rate war the only way for CFIs to compete for deposits at higher interest rates? We review alternative strategies for keeping up with aggressive offers from online banks and other competitors.
Ongoing economic and operating pressures are squeezing margins, requiring CFIs to find new and innovative ways to remain profitable. We explore some of the ways that CFIs can navigate these profitability challenges while continuing to provide a high-quality service.
Digital banking and fintech innovation have transformed depositor behavior, creating challenges for CFIs. Learn strategies to optimize deposit management, control funding costs, and build sustainable, relationship-based financial practices.
As regulators seek to rein in unnecessary risks within the banking industry they are looking to overhaul the rules regarding incentive-based compensation.
Autorenewals and hidden language within contracts aren’t just a headache for consumers — they exist within the third-party relationships that CFIs have as well. Taking the time to review outdated contracts and redundancies within all aspects of your organization can lead to significant savings and a better overall service experience for your customers.
Business loan automation isn’t just convenient for customers — it’s beneficial to CFIs, too. From increasing efficiency to strengthening borrower and employee relationships, we review how adopting a digital loan application process can do so much more than just speed up the approval process.
Bank bottom lines have started to slip. The challenge going forward is to maintain favorable results by actively managing risks. We unveil four threats to your profit in the current market and how they’re already impacting the banking industry.
2024 looks to be another challenging year. We discuss ways that CFIs can continue to grow and sustain profitability in an uncertain world by optimizing the value of their tech spend and data, pursuing key growth areas and revenue streams, and focusing on leadership and talent.
As financial institutions strive to identify deposit rates to help them remain competitive and profitable, customer profitability modeling offers greater transparency regarding when higher deposit rates do and do not make sense for banks’ bottom lines.
CFIs have a treasure trove of customer data, including payment data. By analyzing such information, you can more effectively offer personalized marketing messages that customers have come to expect. We explore how you can better leverage your customers’ payment data.
As CFIs seek to maintain active lending portfolios within an environment where they must deal with both rising interest rates and competition, risk-based pricing has become increasingly important, particularly for commercial lending. We discuss best practices for implementing risk-based loan pricing with commercial lenders at your CFI.
Deposit drains, rising interest rates, and tougher times for business loans put pressure on CFIs’ bottom lines. Profits promise to be tougher to generate in 2023. We review the current state of deposit growth.
Due to inflation and rising interest rates, liquidity is tight, and is expected to get tighter this year. Effective liquidity management strategies can help CFIs take advantage of a more attractive rate environment. Here are a few ideas that may help.
By offering wealth management services, CFIs find they can provide a one-stop shop to handle more of their customers’ financial needs, ultimately building loyalty. Institutions can develop their offering by building their own teams or through partnerships/outsourcing. We give you some examples of organizations that have succeeded with these different models.
Data mining has become increasingly important for tailoring products and services to the needs and desires of customers. But not all data is created equal and CFIs should take steps to utilize customer information that others do not have access to.
History shows that recessions lead to higher default rates among consumers. By predicting and managing delinquency before it occurs, a CFI can increase the lifetime value of existing customers by helping them avoid becoming delinquent.
We interviewed PCBB’s President, Mike Dohren about the key trends he expects CFIs will need to look out for in 2023, including the impact of a slowing economy, the continued rise of disruptive tech, and key regulatory changes.
Data analytics offer community financial institutions an opportunity to increase customer engagement, improve profitability, and grow revenue. We take a look at some of the analytics capabilities that can deliver on this promise and give you some tips on how to build them.
The next great boom in refinancing will likely be in CDs and other deposits, which are vulnerable to customers who decide to pay penalties and reinvest at higher interest rates. A rising-rate environment is also a potentially fruitful hunting ground for fintechs and neobanks, which already offer higher rates than traditional institutions. We discuss three strategies to help CFIs hold their best customers and stress test for CD and deposit losses.
While the BID takes a rest for the holidays, we revisit some of the year's most popular articles.
Despite consumer confidence remaining subdued, consumer spending is up 8.1% in 2021 and is forecasted to grow by 3% in 2022. Recently, there has been a shift in consumer spending from durable goods to services, which could lead to strong growth among these business customer segments for community financial institutions. We provide three strategies to strengthen relationships with those customers through the recovery.
The S&P 500 bank index rose 2.6% in October, in large part due to the increase in bank profits. Yet, these profits may be short-lived in the current low NIM, low lending environment. We discuss the challenges that financial institutions are facing and explain how some are generating revenue despite these challenges.
Financial institutions are flush with cash and looking for opportunities to turn it into long-term assets. With loan activity still mixed and PPP forgiveness leading to more cash, community financial institutions are looking for ways to manage their balance sheets. We give you two steps that you can take today.
With the continuing low-interest rate environment, community financial institutions will need to maximize opportunities for customer profitability beyond interest income. Here are three strategies to do that: take a holistic view of customer relationships; evaluate low balance accounts, and reassess low utilization lines of credit.
Financial institution profitability does not just depend on the customer, but on your officers too. Ensuring that officer incentive plans are tied to your institution’s goals will facilitate overall performance and profitability. We give you the steps to take including designing and reviewing incentive plans, making adjustments as necessary, and using officer feedback.
Subscription banking is still not widespread. However, there are many customers who subscribe to other services, such as Netflix, and are familiar with this business model. Subscription banking may make sense for some community financial institutions to increase fees in a way that many customers could accept. We discuss how customers view fees, how this model could promote loyalty, and provide a few examples of financial institutions that are doing it.
Rising inflation is a hot topic these days. Bankers are watching it closely to see its effects on certain market sectors, and subsequently, on its influence on their margins. Join us as we delve into what economists are saying and how interest rates could be affected. What are the implications of these trends for community financial institutions?
Chase Bank found that 80% of surveyed respondents between 18 and 65 years of age prefer digital banking to banking in-person. As the digital age continues and community financial institutions look for digital solutions, effective vendor management will be critical for bank profitability. We bring you five vendor management strategies to help.
In 2020, 2,563 branches were lost. Branch closures seem to have accelerated with the pandemic. But, does that mean the branch is doomed? We look for the answers to this question through continuing digital engagement, bank mergers, and needed cost reductions.
Most bankers are looking to cut costs these days. We cover two big areas that can help.
Our readers asked us about rethinking security plans, attracting Gen Z customers, and customer profitability. We provide our insight on these topics.
While you may not be thinking of customer profitability during this crisis, customer relationships are always important. Here are three steps to consider, especially as you interact with customers through the PPP.
While financial institutions usually focus on new customers to enhance profitability, overall profitability is a multi-dimensional process and existing customers can definitely help too.
To understand the potential impact of the yield curve these days, we took a look at some results from our relationship profitability model used by hundreds of bankers nationwide.
Can Marie Kondo, the Queen of Tidying-up, provide bankers with important lessons on efficiency, performance and profitability?
Since a merger might not be the best strategy for every community bank, we provide a brief overview of the current situation and offer a few ways you can grow without it.
Banks are switching from product-centric pricing to customer-centric pricing to help attract and retain profitable customers. We tell you how that works.
FDIC's first quarter 2018 banking profile includes a breakout on community bank performance. We provide you with the highlights.
LIBOR is the largest floating rate index in the world and underpins an estimated $200T in financial instruments. Today, we look at how banks can leverage its increase.
With technology and financial literacy outreach, several community banks are finding it easier than ever before to attract the underbanked and unbanked. We show you ways to do this.
With the new tax plan, there are changes in tax rates and deductions. Is a C corporation or Subchapter S corporation structure best for your bank now?
