Demand Deposit Account (DDA) Solution


The Foundation of Customer Relationships
Retail demand deposit accounts (DDAs) are the foundation of retail banking relationships. DDAs are low-cost accounts that:

  • Fund loan growth with low-cost deposits at a time when investor backed securities are limited;
  • Improve profitability through cross-selling because customers with multiple products are more profitable and less likely to attrite than single-product customers; and
  • Fulfill consumers’ desire to focus on savings due to economic uncertainty.

Challenges to Retail Banking Profitability
The Great Recession had many significant implications to the U.S. and worldwide economies. New regulations, one of the outcomes of the economic crisis, have had a profound impact on the revenue model that formally supported DDA profitability.   Restrictions on overdraft fees and debit interchange can potentially reduce a typical top-tier bank's income by hundreds of millions of dollars per year.

Renewed Focus
Executives responsible for deposits need a revised strategy to remain competitive and profitable. Change is inevitable, but FIs that have the ability to adjust products, pricing, and processes as the market changes will thrive as the industry continues to evolve. Evaluating consumers to better predict future behaviors, finding new ways to increase profits in the DDA portfolio, and retaining current customers by adding value are all part of a renewed focus in retail banking.

To learn more about solutions available to help solve the profitability challenges facing DDA, explore Zoot’s comprehensive account opening solution—zInitiate®