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How banks attract new deposits in a competitive landscape

Kate Randazzo
February 26, 2025
Read Time: 0 min

Banks & credit unions recognize the importance of new deposits

After years of consistent deposit growth, financial institutions have faced a shift recently, with deposits declining since 2022. How can they attract and retain new depositors?

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Strategies to help banks attract new deposits

Banks and credit unions planning for 2025 agree that attracting and retaining deposits remains a top priority. While recent interest rate reductions have eased deposit costs, many banking executives expect rates to stay elevated, increasing competition for funds. To succeed, banks must carefully balance competitive offerings with cost control while leveraging technology and relationship-building strategies to attract new deposits.

Community banks have a unique opportunity to strengthen their deposit base by embracing digital transformation, optimizing customer engagement, and enhancing their product offerings. Here’s how financial institutions can position themselves for success:

Understand the real sources of deposit growth.

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Embrace digital banking solutions

Modern consumers expect seamless, convenient banking experiences, and the benefits of online/digital account opening are clear. Banks and credit unions can attract new deposits by offering:

  • User-friendly digital account opening with intuitive navigation, fast load times, and strong security features.
  • Integrated loan and deposit services, such as online loan applications with deposit account openings for cross-selling opportunities.
  • Data-driven personalization, using customer insights to offer relevant financial products at the right time.

Investing in digital solutions not only improves the customer experience but also positions community banks as forward-thinking financial partners.

Leverage customer insights for targeted marketing

Understanding the needs of different customer segments allows banks to tailor deposit products and marketing strategies effectively. For instance, if a significant portion of your customer base is retirees seeking stable investments, promoting retirement savings accounts or certificates of deposit (CDs) can be effective. Financial institutions can use data analytics to:

  • Identify customers who may be likely to move deposits due to rate shopping.
  • Offer targeted promotions, such as high-yield savings accounts for retirees or automated savings tools for younger consumers.
  • Build stronger relationships by recommending deposit products based on customer transaction behaviors.

With access to analytics and reporting about a borrower or accountholder, financial institutions can connect the dots and better qualify customers for additional bank products. Banks that use customer data effectively can drive engagement and loyalty while increasing deposits from their most valuable segments.

Strengthen community engagement

Community banks thrive on relationships, and strengthening ties within local communities can enhance brand trust and attract new deposits. Effective strategies include:

  • Sponsoring local events and partnering with small businesses to cultivate a sense of community.
  • Offering financial literacy programs to educate consumers on savings and investment strategies.
  • Encouraging bank employees to engage in community initiatives, reinforcing the institution’s role as a trusted financial partner.

Positioning your financial institution as a community champion can help create goodwill and encourage new deposit relationships.

Offer competitive and transparent products

In a high-rate environment, customers are increasingly selective about where they place their deposits. Banks can attract new deposits by:

  • Providing competitive interest rates on savings, money market accounts, and certificates of deposit (CDs).
  • Clearly communicating terms and conditions to build trust.
  • Introducing loyalty rewards or incentives for long-term deposit customers.

Transparent, well-structured deposit products can differentiate community banks from larger competitors and fintechs.

Focus on small business relationships

Small businesses are a valuable source of deposits. By offering tailored solutions, community banks can strengthen relationships with local businesses while growing deposits. Consider:

  • Cash management services that help businesses optimize their working capital.
  • Business checking and savings accounts with incentives for maintaining higher balances.
  • Loan products bundled with deposit accounts to deepen banking relationships.

Prioritizing small businesses can increase deposits while supporting economic growth in the community. And financial institutions that embrace automation of the small business lending process can better compete with larger rivals and online-only lenders while still maintaining the relationship focus of a local lender.

Conclusion

As banks continue to navigate shifting economic conditions, attracting and retaining deposits requires a strategic approach. By leveraging digital banking, data insights, community engagement, and competitive deposit products, financial institutions can position themselves for sustainable growth. In a competitive market, banks that proactively adapt to changing customer expectations will be best positioned to thrive in the years ahead.

This blog was written with the assistance of ChatGPT, an AI large language model, and was reviewed and revised by the subject-matter expert.

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About the Author

Kate Randazzo

Content Marketing Manager
Kate Randazzo is a Content Marketing Manager at Abrigo, where she works with industry thought leaders to create digital content that helps financial institutions better serve their customers. Before joining Abrigo, Kate managed social media and produced articles for Campbell University’s quarterly magazine and other university content initiatives. She earned

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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