Published On: May 20th, 2022


Why Current Conditions Present the Best Opportunity in Over a Decade for Capturing Market Share

The year started off promisingly, with investment pundits predicting that the economic growth seen in 2021 would continue. In an early 2022 message to clients, David Donabedian, Chief Investment Officer of CIBC Private Wealth Management, was optimistic: “we expect solid growth for the year as a whole.” However, rising interest rates, inflation, ongoing health concerns and global conflict have certainly dimmed that view. Like a pinot noir that has been open for too long, our outlook for 2022 is suffering from oxidation – losing its vibrancy in both color and flavor.

Similar to Miles Raymond, Paul Giamatti’s character in the movie Sideways, we seem to be stuck mid-cycle and seeking inspiration. Savvy bank marketers, however, have recognized that current conditions present the best opportunity in over a decade for capturing market share. Here’s where they are focused.

The Immediate Opportunity in Savings and Wealth Management

Household wealth has surged, the result of three years of outsized stock market gains, significant increases in home equity, and several trillion dollars in extra savings from government stimulus payments.

This has created a significant opportunity for banks and credits unions as customers seek higher returns for deposit accounts that are overstocked with cash. As we noted in our “Generation I” article last year, this represents a tailor-made opportunity for FI’s to introduce investors to advisory services and other savings vehicles: CDs, IRAs, 529 plans and HSA accounts. Improving the digital channel experience in these areas for novice and self-directed investors – via financial education and engagement tools – has become a top priority for many bank marketers.

Take Market Share in Home Equity – Now

The second area that presents a significant opportunity is in home equity. With three of the largest banks in the U.S. having temporarily exited the HELOC market, there remains an unprecedented green field opening for regional banks and credit unions to take share. Solutions that speak to member needs – debt consolidation, student lending, retirement of credit card debt, and home improvement – as avenues for leveraging home equity are a keen focus for our clients.

Position for Growth by Capturing the Household

While some may view the current conditions as sideways at best, now is actually the best time in over a decade to capture the household. The near-term opportunities presented in wealth management and home equity present unprecedented opportunities for gaining wallet share and becoming the primary FI for customers. Aside from mortgage, investment and home improvement are two of the most high-value and critically important relationships that a financial institution can establish with customers.

Unlike Miles Raymond in Sideways, who seems resigned to allowing his current condition to define his future, experienced bank marketers have recognized that the short-term economic conditions are certainly a glass half full. They are investing aggressively in these current areas to position their FI’s for growth.

Let us know how Leadfusion can support your efforts. And pass the merlot.

Sideways Bottle of Wine