Magazine article American Banker

Don't Ignore Your Customers' Own Surging Liquidity

Magazine article American Banker

Don't Ignore Your Customers' Own Surging Liquidity

Article excerpt

Byline: Isio Nelson

Despite the rebound in housing prices and employment, a more dramatic piece of evidence of the post-recession recovery is perhaps the sharp increase in our nation's deposit base.

Household wealth is up considerably since December 2008, rising 66% to $32 trillion. But not surprisingly, the recession left its mark on how consumers invest their savings. Despite the steadily climbing stock market, they have been reluctant to jump with both feet into the investing pool. Deposits are the new safe haven, having increased nearly 50% between June 2007 and December 2014 to over $8 trillion, according to data compiled for a report by IXI Services.

The boost in deposits obviously presents banks with greater retail and investment opportunities, such as in their lending book. But the growth in consumer wealth that has not been deployed yet also presents an opening for financial institutions to expand their wealth advisory businesses. By identifying and seeking out customers with a high percentage of assets in deposits and offering them investment services, banks may be able to help existing clients and find new ones. A closer look at the wealth data shows that just about any bank may have more of these customers than it may think.

Our data show that the number of affluent households -- those with investable assets of $1 million or more -- has doubled to nearly 6 million since the end of the recession. This group's assets rose from just under $11 trillion to approximately $21. …

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