Deposits

The Alabama bank's executives said commercial borrowers remain cautious amid high rates and economic uncertainty. During the fourth quarter, flat lending and higher deposit costs weighed down the company's net interest income.

The new service will allow financial institutions to streamline the process for moving accounts and verifying income.

After being undercapitalized for decades, some minority-led banks finally got large capital infusions in the wake of George Floyd's murder. But higher interest rates have made it harder for them to gather the deposits they need to boost lending substantially.

Heading into the year, U.S. banks were facing pressure to pay higher rates to their depositors. But they could not have anticipated just how important deposits would soon become.

The $225 billion-asset Citizens Financial Group has partnered with the fintech Pinwheel to streamline the process for new account holders to switch the direct deposit of their paychecks from their old banks.

The Connecticut bank agreed to pay $350 million to acquire Ametros Financial, a custodian and administrator of medical funds from insurance claim settlements. Some analysts see the deal as a signal that Webster does not plan to sell its health savings account business, which has been the subject of recent speculation.

Mobile banking features that encourage customers to set savings goals can supercharge customer loyalty and attract new primary banking customers. A renewed focus on consumer savings may also help banks offset the decline in deposits reported at many banks in 2023.

Bank CEOs are eyeing a near-term peak in deposit costs as the Fed perhaps moves closer to cutting interest rates. But the pressures they've faced this year as depositors ask for more compensation may not die down right away.