Two pillars of stronger deposits in 2025: Customer retention and intelligent workflow

A version of this article first appeared in the December BAI Executive Report: The 2025 banking landscape. Within, industry peers share the strategies and potential solutions for meeting customer needs, preparing for market uncertainty and streamlining operations to preserve margins.

As we get deeper into another strategic planning season, one critical question should be at the forefront of your conversations: How will your bank or credit union attract and retain more deposits?

This fundamental question has become increasingly urgent as pressures from rising deposit costs, economic shifts and competitive interest rates continue to impact bank operations, lending capacity and profitability.

After consistent deposit growth over several years, financial institutions saw a reversal in 2022 with deposits beginning to decline—a trend that carried into 2023 and 2024. As a result, increasing deposit growth was a top priority for most banks and credit unions this past year and as they eye 2025.

And while recent interest-rate reductions have eased deposit costs, two-thirds of banking executives still expect relatively high rates to persist. This means deposit growth will likely remain an ongoing challenge. Consumers will seek the most competitive yields available, creating a dynamic in which banks must carefully balance cost control with growth efforts.

A significant opportunity lies in leveraging emerging technology and shifting customer expectations to drive deposit growth and loyalty. By prioritizing innovation and focusing on deepening relationships with existing customers, banks can build resilience and create a foundation for sustainable growth.

Here are two actionable ways you can strengthen your bank’s strategy and drive results in the year ahead.

Assess and improve the entire customer journey

In 2024, customer acquisition and digital experience ranked among the top challenges for banks, just behind deposit growth concerns. As you plan for 2025, focusing on existing customer relationships will be crucial. While new customers are always valuable, nurturing relationships with current customers can improve retention, lower the cost of funds, and strengthen liquidity.

Start by examining how customers engage with your bank at every touchpoint and identify areas where technology can make interactions smoother and more rewarding. For instance:

Optimize the application and onboarding experience. If you want customers to keep their money with your bank, make it easy for them. Are there steps in your workflow that create friction or lead to application abandonment? Consider enhancing digital account opening with mobile-friendly features, simplified steps, and pre-filled forms for returning customers. A smooth start can encourage more customers to choose and stick with your bank for their deposit needs, boosting initial and long-term engagement.

Deepen customer relationships through consistent, personalized communication. Regularly updating customers on account information, potential savings opportunities, and new benefits can help them feel valued and informed. Automated and personalized notifications can reassure customers about their financial progress and provide timely nudges for relevant products or deposit accounts. This approach can help reinforce loyalty and reduce the likelihood of customers moving funds elsewhere.

Provide a seamless omnichannel experience. The number of consumers actively using mobile banking has surged by 18%, yet only 65% of banks provide a mobile application experience. To meet this growing demand, your bank should prioritize delivering consistent experience across all touchpoints—whether customers are interacting online, via mobile, in a branch, through a call center, at an interactive teller machine (ITM), or using a self-service kiosk. Seamless handoffs between these channels can minimize disruptions and create a cohesive banking experience that enhances accessibility for all depositors by making it easier for them to manage their finances in a way that suits their preferences.

Use hyper-personalization to enhance deposit offers. Roughly three out of four consumers report feeling frustrated when the website content of the brands they frequently interact with is not personalized, highlighting the fact that generic product offers are ineffective and costly. Leveraging data to understand individual financial behaviors can allow you to create and promote deposit offers, such as targeted CDs or high-yield savings rates, that meet their unique needs. By anticipating and responding to customer expectations with well-timed offers, your bank can increase deposit retention and attract new deposits from customers seeking personalized value.

Create a loyalty program to reward long-term deposit growth. Offering rewards or incentives for customers who maintain or increase their deposit balances can be an effective way to encourage loyalty and deepen relationships. Programs that reward deposit growth, such as bonus interest rates, cash rewards, or exclusive perks for long-standing customers, can strengthen deposit retention and increase the appeal of banking with your institution.

Finally, develop a feedback loop that allows you to continually monitor and adapt these strategies, ensuring they align with customer needs, market shifts, and your bank’s growth goals. This approach helps foster lasting relationships, encouraging existing customers to deepen their commitments while attracting new ones seeking a reliable, customer-centric institution.

Tap intelligent innovation to improve efficiency and productivity

Another effective strategy for enhancing your deposit growth in the upcoming year is to concentrate on streamlining the operational processes involved in attracting and maintaining account-holder relationships. By reflecting on your current workflows, you can identify areas for improvement that will boost efficiency and productivity, allowing staff to dedicate more time to impactful interactions rather than things like data entry.

Reflecting on the past year, 44% of U.S. CEOs expected generative AI to boost profits, primarily through improvements in product innovation and employee efficiency. As we continue to grapple with declining deposit levels, the pressure on net interest income (NII) and net interest margin (NIM) will continue to turn up the pressure for smarter efficiency.

Here are a few ways that artificial intelligence (AI) can help with that.

Turn data into action. AI can be used to analyze transaction histories and behavioral patterns, providing a comprehensive understanding of individual customer needs. By harnessing this data, banks can identify cross-selling and upselling opportunities—such as tailored offers for high-yield savings accounts or personalized financial products. This targeted approach not only enhances customer experience but also drives loyalty, leading to increased deposit retention.

Identify opportunities for workflow automation. AI can help pinpoint operational bottlenecks by analyzing existing processes and identifying repetitive tasks that hinder efficiency. By automating workflows such as identity verification, compliance checks, and customer communications, your bank can enhance efficiency and accuracy. This frees staff to focus on higher-value activities, such as relationship management, while reducing the potential for human error.

Enhance fraud detection. Fraud isn’t slowing down, and neither should your defenses. AI can play a role in real-time monitoring and analysis across vast transaction data, flagging unusual patterns or anomalies that signal potential fraud. This enables you to respond quicker, keeping your customers’ accounts safe and mitigating the potential for costly losses and reputational damage.

Automate compliance management. Regulatory changes can come quickly, especially with a new administration coming into office. AI can serve to streamline compliance by automating the tracking and analysis of regulatory requirements, helping you adapt quickly to policy and stay aligned with changes. This efficiency can minimize regulatory risk and free up your team to focus on delivering exceptional customer experiences.

If your bank is just beginning with AI, remember that it’s not about making a sweeping transformation all at once. Start small by focusing on a department where a pilot project can test use cases to help optimize and refine your approach. As you demonstrate the technology’s value, you can gradually scale its implementation across other areas. This phased approach helps control costs and risks, while also making it easier to gain buy-in from employees and leadership by showcasing early, tangible results.

So, how will your bank attract and retain more deposits? As you shape your strategy for 2025, consider these insights to spark some valuable discussions and help set your bank on the right path.

Devesh Khare is Chief Product Officer at MeridianLink.