2025 is shaping up to be an interesting year. The yield curve has a bit of positive slope again, loan portfolio yields continue to climb, bond purchases make sense for a lot of risk profiles, but a distinct challenge still remains for nearly every institution: deposit growth.
Tried-and-true approaches like cross-selling new loan deals and remaining active and visible in the community still prove valuable for some, but the magnitude of needed deposit growth typically far exceeds the limits of these efforts. Aside from going to market with a high-rate special that may cannibalize existing depositors – and unnecessarily squeeze margin – what can you do? The answer may lie in your existing data.
Deposit Growth: Where to Start
At the risk of parroting one of the hottest buzzwords in the banking industry, data analytics can provide meaningful insight not only into which deposit gathering strategies work or don’t work, but also into where to start.
Consider an institution that encourages its deposit gatherers to focus on cross-selling deposit products at account opening. This approach has worked for years and is ingrained during the onboarding process. The exercise, however, often ends once the new depositor is integrated into the system. Could a potential hidden opportunity exist if no follow-up occurs throughout the first 6-12 months of the relationship?
Illustrated below is a compelling example. The institution could be missing out on follow-up opportunities to cross-sell its products to over 8,000 depositors controlling more than $68 million who still only have one account in their overall relationship.
Source: DCG Deposits360°®
Or consider another scenario. Over the last year, a team grew deposits by over 4% – a notable accomplishment during a challenging year. But considering the data only in the aggregate creates a potential blind spot. The 4% growth number reflects only the starting balance versus the ending balance. What about existing depositors who reduced their wallet share during that time period? Based on the analysis below, nearly 50,000 unique relationships reduced their wallet share by a combined $600M+.
Source: DCG Deposits360°®
A valuable tactic to further grow these deposits could be to dive deeper into the outflows to uncover opportunities to “win back” the funds – remembering that the relationships still have balances on deposit at the organization. If attrition is slowed or “won back,” the initial 4% deposit growth could be much higher.
Many bankers doubt their ability to leverage their own data for strategic insights. Their reasons are varied and many: switched core processors, data isn’t clean, negative experience trying to extract data in the past, etc. Yet at DCG, we have never run into a situation where an institution was not able to extract strategic value from information already at their fingertips. Whether you decide to integrate an analytics platform or roll up your sleeves with raw data files, insights await. Make leveraging your data a priority in 2025 and set yourself up for success for years to come.
To learn more about Darling Consulting Group’s Deposits360°® solution for deposit analysis or to discuss leveraging your institution’s data, contact DCG.
ABOUT THE AUTHOR
Eric Poulin is a Director at Darling Consulting Group, where he assists community financial institutions with the delicate balance of optimizing earnings while managing risk. Eric strives to distill complex concepts into actionable intelligence and delights in bringing education to the industry – speaking at numerous industry associations annually, reaching thousands of bankers nationwide.
Contact Eric Poulin at epoulin@darlingconsulting.com or 978-499-8010 to discuss how to solve the deposit growth challenge with existing data.
© 2025 Darling Consulting Group, Inc.
