Why Most Deposit Pricing Meetings Fail – and How Data Can Fix Them

Deposits | Analytics

In an environment where every basis point counts, deposit pricing meetings have taken on heightened importance.

To nobody’s surprise, DCG has observed deposit pricing meetings that are not all that fruitful; in fact, some deposit pricing decisions essentially get made by “who yells the loudest.” In most committees, there are competing agendas, with Retail looking to drive growth while Finance and Treasury want stability and lower rates – and both might be right.

The question becomes: how to turn these contrasting goals into conversations that optimize both deposit growth and stability at the margin?

Data, Data, Data

Pricing meetings often fail because they lack a single source of truth that Retail, Treasury, and Finance can rely on. Instead of being grounded in robust data, meetings often rely on out-of-date competitor offerings, instinct, and anecdotes.

But a new structure is emerging, driven by reliable data, predictive analytics, and cross-functional alignment. Decisions aren’t dictated by volume goals or risk thresholds alone. Instead, data drives the conversation, enabling pricing committees to better understand the situation and use their expertise.

Where to Start?

Most banks and credit unions use publicly available rate data to position themselves in the market. This data helps them answer basic but important questions:

• How do we compare with competitors in our market?

• Are we over- or under-pricing relative to similar institutions?

  
  

But posted rates only tell part of the story. They don’t capture negotiated pricing or the strategic intent behind a competitor’s rates, such as liquidity needs, loan growth targets, or market share.

For example, a peer’s posted MMDA rates may appear competitive, even beatable, but deeper analysis often reveals much higher booked rates. This discrepancy is critical. Competing on posted rates alone leaves institutions blind to the actual pricing landscape.

The right approach? Use both: public rates as a baseline for positioning, negotiated deals to understand real world competitiveness. Then compare with internal data to contextualize where your institution stands today.

Anecdotes Aren’t Strategy

Frontline teams often share stories of customers demanding better rates, especially when competitors are aggressive. While helpful, relying on anecdotes alone leads to reactive decisions.

Instead, institutions need a consistent, data-driven way to monitor actual customer pricing both internally (to understand the true cost/profitability of relationships) and across competitors. By integrating actual booked rate data with benchmarks and customer behavior insights, institutions can separate one-off exceptions from emerging pricing trends.

This allows the team to answer a better set of questions:

• Are exception rates becoming the norm?

• What is the weighted average rate customers are actually accepting?

• How does this vary by customer segment, geography, or product type?

  
  

Armed with this, pricing meeting decisions move beyond guesswork and into informed strategy.

The Power of Predictive Analytics

While rear-view data provides essential context, predictive analytics such as deposit forecasts can simulate how rate changes may affect balances and funding costs. These models, based on price elasticity, help quantify how sensitive deposits may be to pricing shifts.

Simulating different rate scenarios can reveal their impact on balances and cost of funds. This enables teams to align pricing strategies with both growth objectives and profitability, ensuring decisions are competitive, data-informed, and sustainable.

The following example from DCG’s Deposits360°® solution depicts forecasted rate and balance changes for a sample MMDA product over the next year.

Source: Darling Consulting Group Deposits360°®

In the “Base” case scenario, Deposits360° predicts a total funding cost increase of 0.05% to 2.47%, with expected growth in the 9% range. Based on these two data points, a more productive starting point may be:

• Is 9% growth too much, too little, or right in line with budget for this product?

• Does the projected rate enable competitiveness with industry peers? How does it compare to publicly available data and negotiated pricing?

• What happens if interest rates move up or down, and how does this impact the current strategic plan?

What If???

If the answer to any of these questions gives you pause, consider adjusting the rate or balance assumptions within the predictive model to quantify the various consequences.

This exercise may be done on the entire deposit base, a specific portfolio, or even a singular product. Institutions should continuously conduct “What If” analyses on their current deposit offerings, evaluating them against internal objectives, public data, and negotiated pricing benchmarks.

Forecasts are not crystal balls, but they do help enable more informed, judicious decisions. The goal isn’t to predict the future; it’s to be prepared for it. Building pricing meetings around this idea can help ensure that every strategic move is grounded in data while remaining flexible to adapt as market realities evolve.

Not All Growth Is Good Growth

Just as important as forecasting future behavior, institutions must also understand how past decisions have shaped the present. Trends in balance growth/contraction can be misleading without deeper context.

Consider another example from Deposits360°:

Source: Darling Consulting Group Deposits360°®

A bank sees 8% growth in its CD portfolio – seemingly a success. But migration data tells a different story: 97% of the new CD balances came from internal transfers out of lower-cost non-maturity deposits. In effect, the bank cannibalized its own deposit base, trading cheap funds for more expensive ones. A costly shift for no true growth.

Continuously monitoring these trends becomes critical. By regularly assessing where balances are coming from – and why – Treasury and Retail teams can collaborate on strategies that drive net new growth. Without this visibility, teams risk celebrating wins that actually undermine the balance sheet.

Better Data = Better Performance

Ultimately, this isn’t just about better pricing meetings. It’s about building a more agile, competitive institution.

When pricing discussions are grounded in data, aligned across teams, and oriented toward strategic outcomes, institutions make smarter decisions. They adapt faster to changing market conditions. They avoid costly missteps. And they unlock sustainable, measurable growth.

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To learn more about how DCG's Deposits360° Cross-Institution Analytics can help you have smarter, more productive deposit pricing conversations, click here.

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