The landscape of business banking deposit pricing has dramatically changed. The era of stable, low interest rates is over, replaced by frequent rate changes. This volatile environment demands a sophisticated, data-driven approach to rate setting.
The shifting sands of deposit pricing
From 2012 to 2022, interest rates were low and stable. Since the pandemic, however, the macro environment has grown increasingly volatile, driven by inflation, shifting monetary policy, and global trade tensions. In the UK alone, the base rate has changed 17 times between January 2022 and July 2025, with more changes likely.
In this context, a dynamic, data-driven approach to deposit pricing is essential. Banks must go beyond tracking base rate moves to actively managing rates—steering deposit flows, meeting funding needs, and safeguarding margins. Rising volatility makes this harder and heightens the need for deep customer insight and the ability to act on it.
The Need for a Data-Driven Approach
Traditional, anecdotal approaches to deposit pricing (e.g. “follow the leader” or “best buy” are insufficient as they often result in giving away more than is required. What’s needed is a structured, data-led pricing strategy built on three core elements:
KPMG surveyed 500 UK business banking customers and uncovered some key insights on the deposit pricing.
KPMG is helping businesses like yours to build and incorporate these strategic pricing tools and capabilities into your business-as-usual activities. Our team of banking / financial services experts combine their deep sector knowledge with our technology and analytical specialists to create and deliver future proof solutions that deliver fast outcomes and lasting value for our clients.
