Quantifying Inertia in Retail Deposit Markets

Deuflhard, Florian

doi:10.2139/ssrn.3237355

Cited by 3 publications

(2 citation statements)

References 27 publications

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“…Second, a large literature has documented switching costs in banking. One strand of the literature focuses on switching costs within the market for specific products, for instance US deposit markets (Sharpe 1997), Dutch deposit markets (Deuflhard 2018), Finnish deposit markets (Shy 2002), US loan markets ( Kim, Kliger, and Vale 2003), Spanish deposit markets (Carbo-Valverde, Hannan, and Rodriguez-Fernandez 2011) or European corporate loan markets (Liaudinskas and Grigaite 2021). 1 Another strand of this literature focuses on the relationship aspect of switching costs and the role of asymmetric information.…”

Section: Contributions To the Existing Literaturementioning

confidence: 99%

Cross-Selling in Bank Household Relationships. Implications for Deposit Pricing, Loan Pricing, and Monetary Policy.

Basten

Juelsrud²

2022

SSRN Journal

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Section: Contributions To the Existing Literaturementioning

confidence: 99%

Cross-Selling in Bank Household Relationships. Implications for Deposit Pricing, Loan Pricing, and Monetary Policy.

Basten

Juelsrud²

2022

SSRN Journal

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“…a 100% increase in switching rates from 1% to 2%), regulators cannot expect them to alter consumer behaviour to the extent that it would lead to a major change in the competitive landscape. As an example of potential effects, a counterfactual simulation on the Dutch retail deposit market shows that a 25% reduction in consumer inertia leads to a few percentage point increase in the combined market share of the small banks over 4 years (Deuflhard, 2018). Notwithstanding this, nudge interventions may still increase consumer surplus as theoretical modelling suggests that reducing the proportion of consumers that are affected by inertia can put a downward pressure on prices (see, e.g., MacKay & Remer, 2019).…”

Section: Introductionmentioning

confidence: 99%

Do nudges increase consumer search and switching? Evidence from financial markets

Vasas

2022

Behav. Public Policy

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As nudge interventions have become more popular, academic research is developing that assesses to what extent these interventions are effective. My paper contributes to this stream of research: collating and synthesising evidence on the effectiveness of nudge interventions that aim to increase consumer search and switching in retail financial markets. Following a systematic search strategy, I identify 35 relevant papers, including qualitative studies, laboratory experiments, field experiments and ex post analyses, covering a range of retail financial products and different types of nudges. The review results in two main contributions. First, it demonstrates that different study designs serve different purposes in evidence accumulation. Second, based on over 400 estimates extracted from these papers, it establishes that the currently available evidence shows that nudges increase consumer search and switching in retail financial markets by 2–3 percentage points on average. Structural nudges that change the choice architecture more profoundly have a higher impact on search and switching than nudges that provide, simplify or highlight information. While nudge interventions may be efficient on a cost–benefit basis and can lead to a large increase in relative terms (e.g. doubling switching rates from 1% to 2%), regulators cannot expect them to significantly alter consumer behaviour.

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Deposit policy of Ukrainian banks: current realities and prospects

Kneysler

Spasiv

Marynchak

et al. 2019

Banks and Bank Systems

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Deposit policy of banks is defined as an important component of the banking strategy, since banks operate mainly with attracted resources. Therefore, volume and quality of the resource base of banks determine their opportunities for lending and investment activity. An important component of the study is the impact of the National Bank of Ukraine on the deposit policy of commercial banking institutions in terms of interest rate policy and deposit insurance system, which needs to be improved. The author’s definition of the term “deposit program” is proposed, and a determining factor in a bank’s deposit program is that it is developed individually and is aimed at providing the required amount of attracted resources in order to maximally meet the needs of customers and taking into account the priorities of the bank. The prospects for improving the deposit policy of the banks are highlighted as providing marketing innovations is a prerequisite for ensuring competitiveness. They need to be implemented systematically and interconnected with other business processes, including introducing new types of accounts and modern channels for selling banking products. In particular, due to the pension reform in Ukraine, the non-state pension insurance system is developing, and opening of IRA for clients is a promising direction for attracting funds by commercial banks.

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Quantifying Inertia in Retail Deposit Markets

Cited by 3 publications

References 27 publications

Cross-Selling in Bank Household Relationships. Implications for Deposit Pricing, Loan Pricing, and Monetary Policy.

Cross-Selling in Bank Household Relationships. Implications for Deposit Pricing, Loan Pricing, and Monetary Policy.

Do nudges increase consumer search and switching? Evidence from financial markets

Deposit policy of Ukrainian banks: current realities and prospects

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