Want more deposits? Put safety first.

TLDR: Smaller banks should prioritize safety in order to attract more deposits, according to an article in BAI Banking Strategies. While higher interest rates may be a simple way to attract new customers, they can also squeeze net interest margins and make a bank less stable. Instead, smaller banks should focus on promoting tech-driven safety measures, such as biometric authentication, artificial intelligence, asset diversification, and encryption. By emphasizing safety, smaller banks can differentiate themselves from larger banks and overcome the perception that they are riskier.