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Banking on Digital Growth Podcast

Think Less Like a Bank, More Like a Starbucks: Stopping Deposit Fragmentation (with James White)

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Brief Summary of Episode #290

Where are customer deposits going in 2023?

Several regional banks have been devastated by the recent liquidity crisis.

But deposit fragmentation was one of the greatest threats to financial institutions long before the Silicon Valley Bank disaster.

For example, in Q4 2021, Starbucks announced they had $2.4 billion in cash from customer deposits through their mobile app. So how did they do it?

“What they’ve done is fantastic,” said James White, General Manager of Banking at Total Expert. “A lot of retailers are leveraging programs and building points to manufacture loyalty that was difficult to gain.”

Therein lies the problem. Too many banks and credit unions continue to engage in transactional relationships with their customers.

And members are using their digital wallets to show their dissatisfaction.

James brings plenty of practical solutions for gaining and retaining deposits to the table, but his advice on where to start is simple.

“Lead by example,” he said. “Change some small things that are within your control and show that it makes an impact.” 

In this episode of our Game Changer series, we give financial leaders tips on how to get off the couch and facilitate action in stopping deposit leakage at your institution.


Key Insights and Takeaways

  • How Starbucks leverages its loyalty program for deposits (4:00)
  • Retaining customers through ROI forecasting and education (11:45)
  • The deadly fallout from improper customer onboarding (19:54) 

How to Connect With James White