The uncertainty associated with funds transfer pricing (FTP) deposit crediting rates is now a thing of the past. MPS Indeterminate Maturity Deposit Analysis Reports enable higher performance FTP and profitability analyses by providing quantitative and defensible answers to key crediting rate questions.
With these MPS solutions for FTP, your institution is empowered to:
- Precisely measure term (run off) dimensions of indeterminate maturity deposits
- Precisely differentiate repricing sensitive balances from non-sensitive balances
- Assign FTP crediting rates and profitability attributions to deposits based on defensible, quantitative information
- Link Treasury and Retail FTP views via empirically based deposit term dimensions
- Optionally differentiate crediting rates and profitability attributions based on account or category level attributes
- Update, maintain, and document deposit modeling inputs on a regular basis
MPS Indeterminate Maturity Deposit Analysis Report
This report empowers institution management with the ability to fully understand and profit from correct FTP crediting rates and profitability attributions for indeterminate maturity deposits. Standard deliverables include an easy to use Executive Summary, detailed estimates of repricing, run off, and duration, and full documentation. FTP and profitability model inputs are provided in hard copy and electronic formats.
Optional report deliverables provide added insights needed for more advanced decision making. Examples of current optional deliverables include the following:
- Specialized category assessments, e.g. unique deposit products by detailed tier break down
- Quantification of longer than contractual retention behaviors (roll over) in short term CD’s
- Analog type crediting rates and profitability attributes for proposed, unseasoned or unusual products (based on MPS client experience)
- Micro-level modeling adjustments associated with account or customer level
MPS Analog Indeterminate Maturity Deposit Analysis Reports
Where data is not available to analyze historic term related behaviors, e.g. for recently launched or proposed deposit products, analog type crediting rate FTP and profitability attribution values can be created from MPS client experience. Average behaviors seen in recent data are the basis for repricing and term related model inputs.
MPS Indeterminate Maturity Deposit Analysis Update Report
The underlying influences on indeterminate maturity deposit repricing and term related behaviors change over time. To maintain FTP crediting rate and profitability attribution inputs in top form, updates to previously provided analyses are available. Frequency is determined by the client.
Indeterminate Maturity Deposit Analysis Reports are produced using the MPS Advanced Assessment Methodology. This patent pending, advanced econometrics-based approach statistically analyzes institution specific total balances supplied, rates paid, and account-level historic deposit data in a simultaneous equations system that reflects many potential behavior influences. Because of its advanced analysis level, high precision and defensible measures of all indeterminate deposit behaviors are produced. Further, the direct audit links that underlie all estimated crediting rate inputs ensure a strong basis for acceptance by Treasury and Retail.