Asia's Banks Miss A Trick In Revenues From Deposits, Loans - Survey

Tom Burroughes

15 June 2015

Banks in the Asia-Pacific region are missing out on a large opportunity to earn more revenue from their deposits and overdrafts, at least if a survey conducted in the region recently fully reflects how these firms operate.

The survey, conducted at a conference in Thailand by analytic software company FICO, was drawn from 34 senior risk officers and banking executives at 23 institutions. It found that 60 per cent of respondents said they did not have a strategy to use analytics to shape their pricing policy on term deposits and overdrafts.

Some 20 per cent of those polled thought they could deliver more than 20 per cent added revenue by using analytics; 26 per cent said they could add 10 to 20 per cent, and 48 per cent said they could achieve up to 10 per cent more revenue.

The ability to sweat more revenues from deposits and overdrafts comes at a time when deposit growth in Asia-Pacific has been decelerating; FICO cited a recent piece of research from HSBC showing that year-on-year growth in Asian bank deposits has declined from more than 12 per cent to 10 per cent.

(Editor’s note: It is perhaps unsurprising that a firm such as FICO operating in this sort of analytics space should have a survey showing the benefits of such services, but the results are – assuming they could be reflected in a much wider survey – striking. Asia’s rapid growth is not linear, and if deposit growth rates do decelerate further, pressure on firms to get more out of what they have will increase. The results of this survey are as important for wealth management as they are for financial services as a whole.)