Banks Stop Competing for Deposits on Price

New York City - 24 September 2010

Ideon to unveil its Choice Savings solution at BAI Retail Delivery, giving banks the ability to lower cost of funds by competing on value – not price

For years banks have struggled to find ways to compete for deposits on a basis other than price. At BAI Retail Delivery in Las Vegas, Ideon will unveil its Choice Savings solution that will give leading US banks the ability to sell value-added savings products while lower funding costs.

“Historically rate was the key driver leading customers to choose one bank over another when it came to opening a deposit account,” says Matt Murphy, Managing Director, “Banks have struggled for years to find other bases for competition – with limited success. Choice Savings changes the game for banks by changing the conversation from rate to one about value.”

Choice Savings allows banks to “sell value”, including client customized products, pre-planned liquidity, and interest from contingent “reward” rates. Choice Savings offers power and flexibility for bank product managers and the treasury with its product design module. “When compared to European and Canadian markets, there has been only incremental innovation in deposit products in the United States. Compared to other countries, it is as if depository institutions are content to cede innovation to brokers and investment banks. Choice Savings changes the playing field and equips banks to design and deploy innovative deposit products in safe and fundamental ways. Equally important Choice Savings automates the complete life cycle of these products,” asserts Jose Llado, Global Managing Director.

However, it is not only the flexibility of creating new products that allow banks to differentiate from their peers. Above all, it is the “build your own” technology that will alter the dynamics of deposit price wars. Thanks to Choice Savings, customers can build their own savings product by selecting from a set of simple options including, term, regular payments prior to maturity, and the source of the return (be it the traditional fixed rate or a market index such as the S&P500). Each customer can have a different savings product; the one that best fits their needs. Thus the products are not comparable between customers and most importantly between banks. “It is extremely important that banks have simple and intuitive front line sales tools that assist sales reps and customers to construct the savings product that is best suited to their needs. For this purpose Ideon creates tools that make the creation of a deposit product an easy – and even amusing – task. Choice Savings is changing the game for deposits,” said Matt Murphy, Managing Director.

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