The nation’s banks and credit unions will continue to face dual pressures to gather deposits and grow non-interest income in the coming months. The days of swelling deposit balances are behind us. Between 2021 and 2023, core deposits in FDIC insured institutions declined 12%, before increasing slightly during 2024.
Uncertainty around interest rates will mean that financial institutions will put a premium on non-interest income. Bank-based investment services have an important role to play in helping their institutions achieve both goals.
Previous Kehrer-BISA research demonstrated that investment services drive deposit growth, rather than disintermediating deposits, as households that engage with the bank’s investment unit tend to consolidate their assets with the institution as more of their core needs are met. A one percent increase in customer penetration of investment services drives a 14% increase in banking
Financial services are also an important source of non-interest income for the bank, even more so as advisory fees on managed accounts have grown as a share of total revenue.
But the investment services unit can only help in these areas if it has a seat at the decision-making table. Directors of investment services should be proactive about engaging their institution’s leadership and connecting the dots between the institution’s goals and the activities of the institution’s advisors— using data, analytics, and reporting to bolster their case.
In today’s banking environment, data is a critical strategic asset, according to Kristefor Lysne, President of Terrapin Technologies. As banks and credit unions face increasing pressure to grow non-interest income and attract deposits, wealth management leaders have a unique opportunity to demonstrate their team’s strategic value.
Using data automation to align advisor performance with key institutional objectives—such as deepening client relationships and boosting advisory fee revenue—enables investment units to clearly illustrate their impact on revenue and retention, Lysne noted.
Firms that integrate automated analytics into compensation management and sales processes gain clarity, enhance accountability, and achieve measurable strategic results, Lysne emphasized. “Terrapin Technologies helps bridge communication gaps between bank and wealth management teams, translating data insights into actionable strategies,” he added. “It’s not enough to collect data; firms must actively leverage it to produce measurable strategic value.”
About the Kehrer Group Annual Industry Checkup
Since 2012 Kehrer Group has combined proprietary and industry data to provide an annual review of the health of investment services in banks and credit unions. The data for this year’s Checkup cover 2,343 of the banks and credit unions that provide investment services, which collectively manage 8,892 advisors. Terrapin Technologies and Financial Resources Group sponsored the 2024/2025 Annual Industry Checkup.
About Terrapin Technologies
In wealth management, outdated processes and siloed data create inefficiencies and prevent firms from fully leveraging their data for strategic growth. Terrapin Technologies’ data automation technology simplifies your most critical tasks—compensation calculations, compliance checks, and performance reporting—into a single, user-friendly system. By centralizing your data, you’ll eliminate operational inefficiencies, unlock meaningful insights, and stay competitive in a rapidly evolving industry. To learn more about Terrapin Technologies, visit www.terrapintech.com.