Payments strategy 2009: The importance of core deposits to the payments business

Abstract

Banks have recently begun to realise the financial, competitive and strategic benefits of enterprise payments strategy. Experience with large financial institutions suggests that banks have generally agreed on a strategy, defined an organisational model that works in their culture, and created a reporting environment to turn strategy into execution. The strategies and structures are as varied as the banks themselves, but the common theme among them is the importance of core deposits to the payments business. This paper looks at the data that led banks to this conclusion and how those banks have organised to implement their strategies successfully, and explores the link between payments strategy and deposit growth, as reflected in product design, pricing, technology and service delivery.