Following the latest round of deposit interest rate cuts, the banking industry has rolled out various strategies to attract deposits, with marketing activities like giving away blind boxes and offering gifts becoming increasingly common.
Recently, reporters from the Shanghai Securities News learned from industry insiders that banks in the eastern region have received self – inspection notices from regulatory authorities. These notices instruct banks not to absorb deposits through methods such as giving away physical items or distributing interest increase coupons. From the perspective of front – line banking operations, the practice of using physical item giveaways to attract deposits has a long history and has continuously evolved in form. Although it is a marketing activity, it is likely to increase a bank’s liability – side costs and can easily lead to unfair competition in the deposit market.
In recent years, regulators have taken multiple measures to regulate the market order of deposit competition. For example, they put a stop to the “manual interest compensation” practice last year. Respondents believe that the banking industry should end the “gift war” in deposit attraction and shift from “price competition” to “service competition”.
The Inner Drive Behind “Creative Deposit – Gathering Methods”
On one hand, banks face pressure on their interest margins, and on the other hand, they are under the pressure of deposit – attracting assessment indicators. After several rounds of interest rate cuts, the phenomenon of “deposit migration” has become more prominent. In response, many bank branches have launched a variety of marketing strategies to relieve the pressure of attracting deposits.
Recently, reporters visited several bank retail branches and found that banks are actively promoting savings through various means. These include launching limited – edition customized gifts, offering large – point exchange cash coupons, holding exclusive holiday lottery activities, and providing discounts on precious metal purchases, among other marketing campaigns.
A customer manager from a joint – stock bank branch explained, “If you deposit 50,000 yuan now, purchase a three – month fixed deposit, and apply for a credit card with lifetime free annual fees, you can get a trendy toy box as a gift. You can also choose a bicycle or a complete set of camping equipment.”
The emergence of various innovative marketing strategies reflects banks’ anxiety about attracting deposits. Du Yang, a researcher at the China Banking Research Institute, analyzed that, first, due to the decline in deposit interest rates, the “deposit migration” phenomenon has occurred. Some customers have transferred their funds to bank wealth management products, funds, etc., increasing the pressure on banks to attract deposits. Therefore, banks use welfare activities to enhance the attractiveness of deposit products; second, competition among banks has intensified. By launching gift and welfare activities, the main goal is to attract more customers, stabilize the deposit scale, consolidate the customer base, and maintain market competitiveness.
Ban on Physical Gift – Based Deposit Attraction
Some of the banks’ deposit – attracting practices have caught the attention of regulators. Regulators have required banks to stop absorbing deposits by giving away physical items or collaborating with internet platforms to offer membership benefits.
A person from a bank in East China told reporters, “Each branch is conducting self – inspections and sorting out issues. They have found problems such as ‘giving away physical goods’ to attract deposits. According to the rectification requirements, related products with such problems have been suspended from sale, and promotional displays have been removed. In addition, the practice of maintaining customers through high – interest methods such as issuing or selling ‘fake structured deposits’ or ‘pseudo structured deposits’ has also been explicitly prohibited.”
Supervision also stipulates that banks must not absorb deposits through manual interest compensation or by issuing interest increase coupons. Relevant products should be immediately suspended from sale, promotional displays should be removed simultaneously, and existing business should be phased out safely and orderly by the end of 2025. The ban on “manual interest compensation” is not new. In April last year, the Market Interest Rate Pricing Self – discipline Mechanism issued a proposal, requiring banking financial institutions to prohibit high – interest deposit collection through manual interest compensation methods.
“Deposits obtained through非正常手段 such as providing food and oil, offering interest subsidies, or giving gifts are unlikely to be ‘loyal’,” said Dong Ximiao, Chief Researcher of Chaolian. He believes that banks should attract and retain customers by providing better products and more comprehensive services.
Competition Based on Financial Service Capabilities
As deposit interest rates continue to decline, major banks still have advantages such as a nationwide network of branches, while regional banks will face greater pressure in attracting deposits. A retail finance manager of a city commercial bank revealed, “The cost of acquiring customers is getting higher and higher. Now we have to think of other ways.”
“The future competition in the deposit business is no longer just about competing on interest rates or offering gifts; it’s about comparing overall financial service capabilities,” admitted a senior executive from the asset – liability department of a joint – stock bank.
Experts suggest that banks should establish a new customer acquisition system: First, deepen their focus on basic businesses such as payment and settlement and accumulate deposits through a closed – loop of funds; second, strengthen value – added services such as wealth management to enhance the comprehensive contribution of customers; third, innovate digital service scenarios to create a differentiated competitive advantage.
Luo Feipeng, a researcher at Postal Savings Bank (5.400, 0.04, 0.75%), said, “Banks need to break away from traditional thinking and increase their deposit sources by doing well in payment and settlement and providing agency financial services. This will enable a fundamental shift from ‘price competition’ to ‘value competition’.”
Dong Ximiao suggests that banks can attract customers and retain funds through salary disbursement services, efficient and convenient settlement networks, and the sale of asset management products. Banks should abandon the pursuit of scale and speed, refrain from simply seeking growth in scale and market share. They should not only maintain stable growth in the deposit business but also keep liability costs within a reasonable range.
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