Competitive Rate Analysis: How Banks & Credit Unions Can Stay Ahead

yellow toy bank against black toy banks

Our bank and credit union market research company knows customers care about two things when it comes to choosing a financial institution (FI). These two factors have been uncovered time and time again in past bank and credit union surveys.

When choosing a (FI), customers and members care more about:

  1. Convenience. This must-have is driven by proximity. Customers want to do business with a bank or credit union which is near their home or work. They want it to be convenient for them if they need to stop by in person to place a deposit, open a loan, or use an ATM.
  2. Rate fees. Customers want a bank and credit union to offer strong rates which translates to high return on savings products or no/low fees on loan products.

While you don't have much control over the location of your financial institution, you can provide better rates. But, we have some good news and some bad news.

The good news 🎉

Banks and credit unions can conduct a competitor rate analysis to understand competitor rate offerings in their market.

The bad news 🤦‍♂️

It involves a lot of time and desk research to review competitor websites, terms, keep the numbers updated, and understand new promotions being run.

Learn how partnering with a market research company can help from a real-world example below.

Benefits of Conducting a Competitive Rate Analysis

While there are many market research options for banks and credit unions, there may not be one that is more superior to a competitive rate analysis.

Strong rates can be a door opener and make the difference between a loyal customer base and one that switches to other financial institutions in the area.

Convenience and rates are very consistently the number one and two factors in choice in all of our financial surveys across the country.

No matter the state or the geography, these two themes emerge at the top.

Therefore it points to banks and credit unions staying competitive on rates for products such as:

  • Money market accounts
  • Savings accounts
  • Certificates (CDs)
  • Auto loans
  • Home loans

Unfortunately, understanding competitive rate offerings at banks and credit unions in your market area can be a monumental task to stay on top of.

This is why banks and credit unions work with Drive Research to complete competitive rate analysis market research.

Our market research company takes this off of your shoulders and conducts this competitive rate market research for your bank or credit union on a regular and ongoing basis to keep you in the know.

💡 The Key Takeaway: Offering competitive rates for money market accounts, CDs, and other accounts is a top factor for customers and members looking for a financial institution. Therefore, staying in the know with competitor offerings is key is growing your customer base.

Recommended Reading: Strategies to Grow Customers at a Bank or Credit Union

Objectives of a Competitive Rate Analysis

Drive Research was recently hired by a large credit union in the Upstate New York geography to conduct a market research project.

The market intelligence (MI) or competitive intelligence (CI) project involved reviewing competitive bank and credit union rates, promotions, trends, and conditions.

The intention of the competitive rate analysis market research was to focus on money market accounts and certificates of deposit (CDs) initially. However, after the trial, this analysis will be rolled out to a regular monthly program for several other products as well.

This bank and credit union competitive rate analysis saves the credit union team countless amount of hours each week, month, and quarter collecting and reporting on this information.

💡 The Key Takeaway: As a business decision-maker, you wear many hats. It is close to impossible to find the time each month to find the new rates each of your competitors are offering. Let a third-party market research company carry that burden.

Approach to Conducting a Competitive Rate Analysis

The rate analysis conducted by the credit union used a secondary market research approach.

A pre-determined list of relevant competitors was provided to Drive Research. This included a list of about 20 to 25 banks and credit unions.

This was a mix of local, regional, and national institutions to establish benchmarks for comparisons of rates (i.e., we are the highest local money market rate but below the national institutions).

Each month, Drive Research delivers the reports to the credit union leading up to the monthly management meeting.

As part of the meeting the team reviews the reports and adjusts strategies moving forward with rates.

The reporting frequency for this credit union is monthly, however, the competitor rate analysis can be customized to any term (i.e., bi-weekly, quarterly, etc.).

💡 The Key Takeaway: Sure, conducting ad-hoc market research is acceptable -- but conducting it on a regular basis will make a world of difference. A competitor rate analysis allows FIs to make data-driven decisions based on extremely relevant information.

Outcomes of the Competitive Rate Analysis

The reports are accessible in real-time online with a summary of key highlights and interpretations, product charts and historical graphs, and well as individualized competitor charts and historical graphs.

A competitive dashboard was also created to help the credit union understand relative comparisons at a glance.

The monthly report for each product is prepared in an Excel sheet with several informative tabs to help the reader navigate the data.

As a result of this ongoing study, our client is able to adjust rates quickly if a competitor makes a large change to product rates to minimize any churn where members leave the credit union to take advantage of more attractive rates.

It allows the credit union to be much more flexible and adjust on the fly to competitive strategies.

💡 The Key Takeaway: The competitive rate analysis creates a competitive advantage for the credit union. Through the use of historical tracking and trending, the credit union can predict competitive moves and adjustments to rates.

Interested in learning more services for a financial institution. Watch this video as we discuss 4 critical surveys for all banks and credit unions.

Contact Our Bank and Credit Union Market Research Firm

Competitive rate analysis for banks and credit unions is just one of the many services our market research company offers to financial institutions.

Our bank and credit union market research company helps our clients with surveys, focus groups, intercepts, and much more.

Questions about a competitive rate analysis project? Need a quote or a proposal? Contact us!

  1. Message us on our website
  2. Email us at [email protected]
  3. Call us at 888-725-DATA
  4. Text us at 315-303-2040

Author Bio George Kuhn

George Kuhn

George is the Owner & President of Drive Research. He has consulted for hundreds of regional, national, and global organizations over the past 15 years. He is a CX certified VoC professional with a focus on innovation and new product management.

Learn more about George, here.

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