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    Choosing the Right Funding Strategy

    How effectively a bank manages its cost of funds plays a big role in determining its financial performance and, ultimately, its value. Fortunately, most banks have been quite successful thus far in pulling back on the reins of funding costs as interest rates have risen, due primarily to deposit pricing discipline.

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    Community Banking in a Digital World

    It’s easy to blame all of the banking ecosystem’s problems on increased regulatory scrutiny and capital requirements, but there is another profound shift occurring that can’t be ignored: the availability of data and the power of automation are putting more and more power in the hands of consumers.

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    What to Think About When Working with a Fintech

    Today, the pressure on banks and other financial institutions to use better technology to compete in an increasingly digital economy is enormous. Many financial institutions, therefore, are asking themselves if they should partner with fintech companies..

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    Banks Remain Cautious About Road Ahead Despite Positive Economic News

    There has been a lot of good economic news over the past 12 months. But despite a low unemployment rate and the longest bull market on record, bankers (who are generally a cautious bunch) remain fairly reserved in their optimism about the future, according to latest quarterly Bank Executive Business Outlook Survey.

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    New Law Offers Banks a Way to Accelerate Deposit Growth

    For a long time, it seemed as if the deck was stacked against community banks. Since the financial crisis, the nation’s largest banks have gobbled up some $2.4 trillion in new deposits. Big banks have deep pockets to spend on technology—money that smaller banks don’t have. And because of their concerns about safety, customers with more than $250,000 to deposit often shy away from community banks, thinking they are risky places to park deposits given the potential for a bank failure.

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    A Powerful Weapon in the War for Deposits

    If you look at financial news headlines or results from Promontory Interfinancial Network’s latest Banking Executive Business Outlook Survey, it has become clear that the competition for deposits is reaching highly competitive levels, forcing banks of all sizes to consider new strategies that position them favorably as interest rates continue to rise and the regulatory environment transitions.

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    A New View for Deposit Strategies

    As rates continue to rise, now is the time for bank boards and management teams to consider deposit strategies for the future. In this video, Barbara Rehm of Promontory Interfinancial Network sits down with H.D. Barkett, senior managing director at Promontory Interfinancial Network, who shares his thoughts on what banks should consider in today’s environment.

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    The Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018: A Game Changer for Banks and Local Communities

    On May 24, 2018, President Donald Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act, which provides relief from certain rules and regulations for community banks. Among the law’s many provisions, one stands out in importance—most reciprocal deposits are no longer considered “brokered deposits.”

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    Wary of Amazon?

    Amazon has been in the news a lot in recent months—from stories on where the tech/retail giant might locate it’s new, second headquarters to President Trump’s tweets about its business practices. One story that did not garner quite as much attention (but did catch our eye) was the recent announcement that Amazon is in talks with a number of financial institutions to offer “checking-account-like” products.

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    What Community Banks Are Doing to Increase Deposits

    In the most recent Bank Executive Business Outlook Survey, 63 percent of survey respondents indicated that deposit competition had increased over the last 12 months. Compared to the survey results from a year ago, that was a jump of almost 25 percentage points, underscoring that deposit competition is on the rise. And banks don’t expect competition to cool down any time soon—77 percent projected it will get tougher in 2018.

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    The World Is Changing: Are You Asking The Right Questions?

    Over the next year, some significant changes are expected for the financial sector. Many are predicting one more rate increase before the end of 2017 and more in the years following should the economy stay on its current track.

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    Banking on Technology

    As a fintech firm, we are always interested in what technologies banks are investing in. Recently, we surveyed financial institutions about where they allocate budgetary resources for technology.

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    The Regulatory Prognosis

    Since the financial crisis, a significant effort has been made to put in new safeguards to prevent a recurrence of the events that led to the Great Recession. The result has been a host of new regulatory requirements ranging from lending restrictions to liquidity requirements.

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    Rule Changes Create New Value Opportunity for Banks

    Now that the Security and Exchange Commission’s (SEC) new rules on money market funds (MMFs) have been in effect for approximately six months, institutional money managers are looking at how to adjust their investment strategies. Many investors are looking for the exits, at least from prime funds. For most of these money managers, safety is the key.

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    Big Banks Are Taking A Bigger Bite Out Of The Deposit Market

    Big banks are gaining a bigger and bigger piece of the deposit market, and as American Banker recently noted, this is "no one time blip."

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    Why the Impact of MMF Reform is Likely to Benefit Community Banks

    Now that the SEC’s new rules on money market funds (MMFs) have gone into effect, institutional cash managers are taking a new look at community banks.

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    Innovative Thinking to Solve Both Long-Standing Business Problems and Short-Term Needs of Community Banks

    When Eugene Ludwig, the former head of the Office of Comptroller of the Currency (OCC), and Mark Jacobsen, former Chief of Staff of the Federal Deposit Insurance Corporation (FDIC) and the OCC, first discussed founding Promontory Interfinancial Network, the conversation began with Ludwig’s simple yet powerful question: “What can we do to help community banks be more competitive?”

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    "The Power of Many” Helps Main Street Banks Offer Services Too Costly to Offer on Their Own

    Promontory Interfinancial Network was founded on a novel concept in 2002: to help community banks to create “synthetic size” to compete better against much bigger rivals. By joining the Promontory Network, banks benefit from "The Power of Many"—a network of financial institutions that allows each bank to offer services that otherwise might be too difficult or too costly to offer on its own, such as various financial technologies.

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    Opportunity Knocks for Community Banks

    At first glance, it may appear that new regulations are making public fund deposits less attractive to banks. But as is often the case in the banking sector, what applies to some banks, doesn't generally apply to all.

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    Banker Confidence Index

    In our travels across the country, many of us at Promontory get the chance to meet with bank executives at institutions of all sizes. Often the first question we are asked is “what do senior executives at other financial institutions think about the future of the industry?” To help answer that question, we are pleased to share with you our Banker Confidence Index (“Index”) – aggregated data based on responses from bank C-level executives about overall expectations for the future.

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    See Public Fund ICS and CDARS Deposits by State: Infographic

    Across the United States, local and state governmental entities use Promontory’s reciprocal deposit services to access multi-million-dollar FDIC insurance through a single banking relationship. In this way, they are able to safeguard taxpayer money, keep funds local, and eliminate the burden of ongoing collateral tracking.

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    Banking on Technology

    The banking sector is fundamentally different than it was before the 2008 financial crisis. And maybe the biggest change is the growing role of technology in banking. Banks have invested heavily in technology in recent years, and the primary reason is customer demand.

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    White Paper: The New Value of Public Funds

    Shifting factors in the banking industry are making public fund deposits more available to community banks. Now is a time when many government finance officers are considering shifting investments out of money market funds into bank deposits.

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    Why Money Market Fund Reform Helps Banks

    The Securities and Exchange Commission finally did it. It changed the rules governing money market mutual funds. And the financial world will never be the same. But is it really that big a change? Here we are, nearly six months after SEC enacted changes to the rules governing MMMFs, and it doesn’t appear that much has happened.

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    ICS Makes It Easy to Court and Retain Valuable Customers

    Recently, there have been a number of reports indicating that the days of cheap funding may be coming to an end. For example, a recent American Banker article stated, “JPMorgan Chase expects the bank could experience outflows of $100 billion, or about 7.8% of its deposit base.

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    Make Banking an Information Service

    While the pace of change has accelerated since the credit crisis, community banks have been feeling the pressure to follow a rigid, formulaic approach to banking. Tighter regulation and oversight make it even harder for banks to differentiate themselves from their competition and provide value for their customers. For community banks to succeed and remain relevant to customers, they need to actively seek ways to expand their opportunities within the boundaries.

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    Take Time Now to Sweat the Details

    After five years of managing economic stagnation, bankers keep waiting for bank growth and profitability to return to pre-recession levels. Rather than wait for a change that may be a long time coming, bank leaders should be looking at ways to optimize their balance sheets so that when the winds change, they’re ready to set sail.

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    5 Things to Know About Supporting Communities with Large-Dollar Deposits

    Socially responsible money management has become a hot concept in recent years. The idea of managing funds and helping our community at the same time strikes a chord with our better selves. But for many individuals and institutions, putting socially responsible investing into practice has often seemed out of reach given other important considerations, such as safety and return.

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    Community Bank Profile: City First Bank

    On November 7, 2013, City First Bank of Washington, DC held its inaugural Finance Summit, which brought together businesses and representatives of the district’s government to talk about the work that is being done to finance economic development in the city while supporting the community at all levels.

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    Beyond the Static Rate Sheet

    As interest rates begin to rise, bankers trying to sell retail time deposits will face competitors deploying an array of new terms and options. Neil Stanley from BAI writes, “When the surplus of local deposits is gone, replacing a retail deposit with wholesale funding such as FHLB advances will be painful!” He suggests that strategic banks are preparing for the possibility of rising interest rates by working with their retail bankers on a dynamic approach to deposit funding.

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