2/6/2009
In the Business Outlook section of BusinessWeek, Consumer Spending Has Further to Fall talks mostly about the scary implications of the sudden shift on the part of consumers from spending to saving. This will put a damper on the recovery of consumer spending.
SEDONA's take: Community banks, mid-tier banks, and credit unions have an opportunity to acquire new customers and build the loyalty and deposits of existing ones with a message of financial stability and competitive rates.
- Community and mid-tier banks can reach out to retail households with a message of financial stability and safety as they look for the best account to put their savings. There are cross-selling opportunities for various deposit accounts.
- For credit unions, this is a golden opportunity for member acquisition. Thrifty consumers are looking for every way possible to cut their costs and boost their savings. The competitive advantage of higher interest rates on deposits, plus lower interest rates on loans, makes for a message that will hit home with more people.
- Next, an increase in loyal depositors provides you a follow-on ability to make consumer and commercial loans, helping with customer retention, member retention, and further customer acquisition.
