Event Description

Non-Maturing Deposits (NMDs) are an important part of a bank’s balance sheet, traditionally forming a stable source of funding. These products are of relevance for liquidity/funding risk as well as interest rate risk management. The latter, in particular, has become increasingly significant given the recent three and half years of rapid transition from more than a decade of low and broadly flat interest rates, into a new and very different environment of high interest rates. Understanding the impact of drivers such as interest rates on NMD balances is of ever greater importance for effective risk management. We discuss how to design models to predict the behaviour of non-maturing deposits balances and the critical role such models can play. We also touch on key design principles to develop multi use NMD models that can support different business areas across the bank.