A profound point from Steve Williams today:
When rates finally rise, it could be a whole different ball game. Smart phones will be in more than 75% of all U.S. adult hands, and downloading another digital banking app to grab a better rate on a money market account will be as easy as ordering with Amazon OneClick or playing a new version of Candy Crush. When that time comes, all traditional players may be surprised that their bountiful deposit liquidity is seeping out in an alarming way. Whatever anyone says at industry conferences, this will not be primarily a battle of customer experience; it will be a hard-nosed rate war.
I’ve lost count of the number of economists I’ve heard during ALM meetings, conferences, and planning sessions say annually for about seven straight years now, “Toward the end of this next year, we’ll see rates start to rise.”
Steve’s point – there’s a silver lining for the brick-and-mortars during this unprecedented period: you’re still standing – is similar to another one I’ve heard recently about those pesky regulators: that traditional financial institutions should be thankful for the highly regulated environment that keeps those, ahem, “disruptors” and “fintech startups” away by making it too painful/unattractive/downright impossible to get into the space.