Do you know of a bank or credit union that doesn’t have a chief lending officer (CLO)? Not likely. How about one with a CDO (Chief Deposit Officer)? This is so rare we only know of one institution with a member of a senior management team with this title. Even without someone carrying this title, in many cases, this role belongs to the leader of the branch operations, marketing, or finance group. However, the functions of this position are not the main focus of these roles. In fact, it may not be in those job descriptions at all.

Given the value of deposits, specifically core deposits, in supporting the value or profitability of a financial institution, this is rather a surprise. Marc, the President of KAG, performed this role during is years at Arizona Federal Credit Unions in positions including that of CFO. However, few of the functions that should be part of this role were part of his job description.

What does a CDO do? Most importantly they ensure that the deposit products provided to the customer/member are the best they can be for the individual and the institution as a whole. It’s the mirror image of what a CLO does. Since this is the CDO’s entire function, not operating branches, supporting marketing campaigns, or doing finance stuff, they can focus on the following:

    • Product positioning – Does the product meet the needs of its target consumer market(s)?
    • How does the offering compare to alternatives available locally and nationally?
    • Do customers/members use the product in a way that supports the cost of delivery including rewards and ancillary services like shared branching? If not, why?
    • What existing or new deposit products are currently needed to support the lending operations?
    • Regulatory – Keeping abreast of pending regulations and being involved with regulators and legislators. Understanding how upcoming changes in regulations and laws could impact their institution’s deposit operations.
    • Market trends – How are delivery channels like PayPal, Google Pay, Zelle, Aspiration, Chime, Wise and Capital One impacting your transaction volume? What are the risks from alternative transaction vendors stealing your customers/members and how can they be addressed?
  • Does your institution have a CDO? Is it you? What is preventing focus on the above items at your bank or credit union? Changes in the market and new delivery channels are showing up constantly. Competitors are eager to take away your core deposit members so they can get their hands on interchange and other fee income streams. It is now more important than ever that every depository institution have a Chief Deposit Officer.