We’ve made some improvements to the way we calculate deposit Interest Expense for clients with Relationship Awareness. If your bank does not have Relationship Awareness, you will not see any changes.
Previously, we calculated an average rate being paid to the deposit account. This trailing average rate was used to calculate the Interest Expense in Relationship Awareness. While the average rate helped smooth the effects of a volatile rate environment, we want to provide a more forward-looking picture of profitability for the bank.
Moving forward, deposit Interest Expense will be calculated using the most recent interest rate passed in your data files. There will be no changes to the Interest Income calculations. The change in Interest Expense will provide a picture of what the profitability of deposit accounts looks like today. The move to current interest rate for Interest Expense will impact your margin calculations, so you may see changes in the profitability of deposits. This update will be released next week for clients with Relationship Awareness and changes will take place after your next RA upload. If you have any questions about this change, please feel free to reach out to us! You can call us at 1-877-506-2744 or email us at firstname.lastname@example.org.