The document discusses the evolving landscape of retail banking, emphasizing the shift from branch-centric to communication-driven strategies focused on customer experience and personalization. It highlights the challenges banks face in acquiring deposits and the need for effective customer engagement through targeted marketing and offers. Case studies illustrate successful strategies that improve deposit growth while reducing costs and maintaining customer relationships.

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Retail Banking:
How to Optimize the
Customer Deposit Lifecycle

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#emailpros
Chat Box Recording
Speakers:
Tom Mairs
Director of Customer Success
SparkPost
Hank Israel
Director,
Novantas
.
Join the conversation:
#emailpros
@SparkPost
@NovantasInc

3. 3@SparkPost
Agenda
● Introductions
● Background
● Sample Use Cases
● Best Practices
● Q & A
● Upcoming Events

4. 4@SparkPost
Introductions
● 20 years of email infrastructure history
● Data driven global company
● 37% of global commercial email volume
● Touching 1.8 Billion unique devices
● 50 Billion events/month in data model
● Supporting both SaaS cloud and
On-Premises
● 20 years of exclusive banking focus
● Industry expertise meets data + solutions
● FinTech 100 company for 8 years
● Track more than $3 trillion in deposits
● Supported 80% of the largest global
banks and other financial institutions

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The retail banking landscape is shifting from branch-centric strategies to those
based on effective communication and convenience
Source: Novantas analytics and other industry & case study insights
OLD WORLD NEW WORLD
Local branch network scale and sales execution drives growth,
allowing local regionals to compete with large national banks
‘Perceived convenience’ drives growth, driven by brand and digital capabilities,
offering advantage to large national players
Branch visibility Local Sales Execution Branch Scale
Focus on
Deepening Core
Relationships
Marketing and
Brand
Distinctive
Omni-Channel
Experience
Analytic Scale
Perceived
Convenience
Attracting Talent
Marketing was
primarily branch
visibility and
word-of-mouth
Customers shopped
based on which banks
were in proximity and
sales were originated
in the branch
Distribution
dominance remains an
important buying
factor, although
“Perceived
Convenience”
becoming even more
important
Driven by LCR
requirements and
other factors,
national banks are
motivated to grow
deposits
Wells Fargo, BAC
and Chase
combined
represent ~$650
MM of marketing
spend
National banks investing
heavily in digital
capabilities and
marketing; effectively
creating the perception
of leading online/mobile
capabilities despite
some regional banks
nearing parity
Greater focus and
capacity to utilize
data (e.g., Chase
launched a global
think-tank to read
the US Economy)
Is becoming
increasingly the
most important
consideration
for all
customers,
regardless of
age or income
High competition
for top-notch
customer facing
and analytical
digital talent
Drivers of Purchase

6. 6@SparkPost
A Better Way Forward to a Brighter Future
Today’s consumer has many more options and they
will migrate toward a better experience
● 79% of Financial Services consumers have said
they feel their bank is transactional, not
consultative.
● 40% would stay with their current bank if it
provided a more personal experience
Source: Accenture study on the Financial Services landscape
Consumers want a more personalized experience
• They want a conversation
• They want consultation

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An example of this challenge is gathering deposits…
• Most regional banks have to acquire 20-25% new balances annually to cover outflows
and industry growth
• While broad based campaigns can raise this with a competitive rate:
o It raises the marginal cost of deposits by as much as 2X
(eg. a rate of 2.25% can cost as much as 4.5% when accounting for repriced existing
balances and rapid balance decay)
o It is expensive – it can be as much as $3-5 per $100 acquired for ineffective offers
and campaigns
o 70-85% of the balances acquired come from existing customers

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An example of this challenge is gathering deposits…
• If banks can effectively engage their customers in
deposit augmentation they can:
o Improve their margins by reducing the
amount of promotional rate required
o Reduce their marketing costs per $100
acquired through marketing efficiency with
their existing base
o Engage customers in their brand with relevant
and effective offers

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Once an objective is identified, orchestrating customer engagement
effectively requires coordination across six leversCostRevenue
IMPACTS OF CAMPAIGN IMPROVEMENT
Offer
Structure
Initial Targeting Pricing Messaging /
Presentation
Delivery
Channel
Customer
Planning
Improved

10. POLL QUESTION
Which of these Levers is the Most
Challenging for You?
❑ Targeting
❑ Offer Structure
❑ Pricing
❑ Delivery Channel
❑ Customer Planning
10

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Effective targeting matches preferences, behaviors and organizational
value to prioritize customer treatment priorities
Ag
e
Wealt
h
Motivatio
ns
DEMAND SEGMENTS BEHAVIOR SEGMENTS POTENTIAL VALUE ASSESSMENT
Understanding customer
motivations by life stage (age &
wealth) supports development of
more targeted/ relevant
treatments for customers
Understanding the value of
different groups of customers with
specific needs will determine
necessary incentives to drive
conversion
Combining the comprehensive
view of the customer (needs, value
to the bank, and responsiveness at
different pricing levels), results in a
net contribution of the targeted
treatment cell

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With targets identified, developing effective offers requires balancing
benefits and conditions with organizational objectives
BENEFIT
The incentive or awareness of core product/service benefits
the bank provides
CONDITION
Optionally the minimums required to receive the benefit (in
many cases it may simply be provided)
MESSAGE
The positioning of the offer that establishes relevancy to the
target audience
FULFILLMENT
EXPERIENCE
The timeframe and process by which the benefit will be
provided

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Effective Pricing Balances Reference Rates at the Customer/Segment/
Market/Product Level to Efficiently Use Rate
Rate Offered
PRICE ELASTICITYCustomer Context
• Segment Functional Needs
• Emotional Resonance (Motivation)
Market Context
• Reference Price
• Brand Perception/Quality/Preference
• Awareness of the treatment
Bank Objective
• Customer vs. Product Alignment
• Demand for Revenue/Liquidity
• Short vs. Long Time Horizon DepositBalances

14. 14@SparkPost
c
It’s About Relationships
• SparkPost processes nearly 40% of the world’s B2C and B2B email
• That provides us with a HUGE data footprint that we can use to help you gauge your
effectiveness with your customer interactions
• Our Health Score is like a “Check Engine Light” for your relationship with your customer

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cc
Understanding Your Customer is Key
• SparkPost technology is all about delivering effective messaging and understanding the data
that falls out of that delivery process
• We help you leverage that data to build better, more effective relationships with customers

16. 16@SparkPost
Case Studies

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Improved targeting enabled one institution to prioritize customers with
less price sensitivity to meet its deposit goals
Client US Network Bank
Problem/
Objective
Experiencing a decline in consumer deposits, the bank sought to
identify balance acquisition opportunities through targeted
marketing to existing customers
Project
▪ Developed predictive customer scores based on attractiveness
of balances for both term and liquid balances
▪ Evaluated the bank’s deposit base for opportunities to acquire
new to bank balances from high value, low cost (e.g. low
marginal costs of funds) customers
Results
▪ Rank ordered mCOF identified growth of $2 MM per billion of
acquisition at half the average mCOF of broad based
campaigns.
▪ 0.5 % deposit growth in direct campaigns at 15bp lower mCOF
Cost Decile
Elasticity
based
Propensity
New Money
Response for
100 bps/%
New
mCOF
1 5% $75K – 85% 1.50%
2 7% $70K – 80% 2.25%
3 10% $65K – 70% 2.75%
4 12% $60 K – 60% 2.90%
5 15% $ 50k – 50% 3.15%
6 17% $40k – 40% 3.60%
7 20% $35k – 30% 4.50%
8 22% $ 30k- 25% 5.00%
9 27% $ 60k – 15% 5.75%
10 40% $ 100k – 10% 7.75%
Prioritizing Growth
Focusing on quality can save up to 15 bps in
mCOF from not overpricing existing deposits
and acquiring longer persistence deposits

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Client Large Regional Bank
Problem/
Objective
Promotional MMDA rate strategy introduced to increase growth of
deposits grew interest expense faster than balances – bank sought
program to reduce promo reliance.
Project
▪ Novantas developed customized deposit quality scores and
focused the analysis on the customer’s rate sensitivity to
re-evaluate the bank’s up-pricing and down-pricing strategy
Results
▪ Identified customers who demonstrate high rate-sensitivity via
their promotional re-upping frequency, thereby pulling them
off the “re-upping treadmill” through down pricing to reduce
acquisition costs
▪ Experienced $100,000 per billion in total retail deposit margin
savings with post promotional down pricing, while maintaining
balances (with 30% churn and 60% of balances coming from
low-price sensitivity customers)
One bank leveraged effective offers to at key points in deposit lifecycles
to recapture rate sensitive balances
CostPer$100
%Retained
Post Promo Retention Dilemma
$100 K/ Billion in interest expense savings

19. 19@SparkPost
Case Studies
Sending less can be better
○ May seem counter-intuitive, but not if
you really think about it
○ Wouldn't you rather have one quality
conversation than ten boring meetings?
○ In one particular case we reduced a
customer’s sending volume by 70%
○ had them focus on quality, personalized
engagement
○ Raised their open rate by 4x and of
course that translated to revenue as well

20. 20@SparkPost
Case Studies
Understanding the data feeds a better experience
o Monitoring the feedback data with Sparkpost
alerting tools reveals unseen problems
o Customers have been able to isolate problems
with signups using engagement data
o Others have been able to predict delivery
outages predictively - days in advance
o Yet others have increased growth and reach
by leveraging conditional content fed by
customer data

21. 21@SparkPost
Case Studies
One Consumer Bank with branches in the US and UK:
● Treats every message as individual communication even though they send
millions per day
● Nothing is batched, all communications are personal and individual
● Leverage real-time feedback to make game-time decisions on delivery routing
● Saved $$$ by leading with email and falling back automatically to paper using
our data
Results: improved deliverability and visibility while building better customer
relationships and growing reach

22. 22@SparkPost
Summary
▪ Old school batch & blast = BAD
▪ New world transactional conversation = GOOD
▪ There are tools and experts available to help you
build better relationships with your customers

23. 23@SparkPost
Questions?

24. 24
#emailpros
CONTACT DETAILS
Tom Mairs
Director of Customer Success
SparkPost
Hank Israel
Director,
Novantas
.
Join the conversation:
#emailpros
@SparkPost
@NovantasInc
tom.mairs@sparkpost.com hisrael@novantas.com

25. 25@SparkPost
Upcoming events
OptIn - The Email Intelligence Conference
October 29-30, Carmel Valley, CA
https://events.sparkpost.com/optin19
[Webinar] Maximizing Deposit Margin and
Growth as Rates Decline
July 16, 2019
2 pm Eastern/ 11 am Pacific
https://www.novantas.com/events/maximizing-deposit-margin-webinar/

26. 26@SparkPost
Thank You!