The Fed has gone years without increasing interest rates. But when a rate increase happens, it will trigger a significant sales opportunity for banks and credit unions. Taking advantage of this opportunity, however, is far different than when rates last moved.
In the webinar, Solving the ‘Buy’ Problem for Digital Sales of Financial Products, Forrester Research shared that life events are the #1 trigger of bank sales opportunities, and that the impending Fed interest rate increase may represent one of the most significant events in a decade. As Chris Nichols, Chief Strategy Officer at Centerstate Bank stated in a recent blog post:
“Rate changes are a huge sales event trigger and are not used enough in banking. Any time rates do, or are poised to move up or down, that event can prompt a customer to move cash, increase debt levels, or refinance.”
The question is – is your organization ready? And what does ‘ready’ really mean?
Despite not needing the plan for several years, most banks and credit unions probably already have an action plan in place to adjust interest rates and communicate the impact to your customer base. You probably also have the content for your website ready to go. But are you ready to capitalize on the new product sales opportunities that may be available?
Your historical data on new account openings, loan origination and card issuing can be the foundation of developing a proactive, highly personalized sales strategy. Simply correlate these customer and member activities with previous interest rate changes.
Even though some of the most recent economic news (including the disappointing new jobs report) may encourage the Fed to continue a “wait-and-see” approach on interest rate targets, financial institutions should plan for a higher rate environment in the near-to-intermediate term. Consequently, it is a good time for FIs to analyze their historic customer data to determine the best approaches to retain and acquire customers and members in a rising interest rate environment.
One of the most promising approaches to consider would be to assess how quickly and easily their banking customers and prospects can review and open accounts via online and mobile banking channels, which is where many consumers go when considering new banking products. For more information on observations on online and mobile account opening processes, Mercator Advisory Group’s Banking Channels service has published several research pieces on this topic, with further research expected from its Credit service soon as well.
Overview by Ed O’ Brien, Director, Banking Channels Advisory Service at Mercator Advisory Group
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