NEWARK, DE — Prismm estimates that about $1.5 trillion in deposits could leave U.S. banks and credit unions over the next decade as account holders die, prompting the Newark-based fintech company to launch a new index aimed at measuring how exposed individual institutions are to mortality-driven deposit runoff.
The Deposit Mortality Index assigns scores to all 8,429 federally insured U.S. banks and credit unions, according to Prismm. The company developed the measure to help institutions assess whether deposits are likely to remain after ownership changes through inheritance and estate settlement.
Prismm built the index using public data that include FDIC branch deposits, Census demographics, Federal Reserve holdings data and Social Security Administration life tables.
The model produces a composite score, national tier and national rank for each institution, along with measures intended to show how demographic and portfolio factors could affect future deposit stability.
The product is designed around a broader wealth-transfer risk for banks. Prismm cited an estimate that $124 trillion in U.S. household wealth will change hands through 2048 and that roughly 70% of inherited balances leave the incumbent financial institution.
“Banks and credit unions have never had a way to measure the future health of their deposits until now,” Prismm founder and CEO Martha Sylla Underwood said.
Underwood argued that institutions able to identify aging deposit bases and likely inheritance-driven runoff could have more time to strengthen relationships with account holders and beneficiaries before assets move elsewhere.
Unlike conventional deposit reports that emphasize balances and historical trends, the index focuses on the probability that deposits remain with an institution as account ownership changes.
Prismm said the scoring system was calibrated against the full national distribution and then frozen, allowing institutions to compare scores across peers and over time.
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