Template-Type: ReDIF-Paper 1.0
Author-Name: Giulio Cornelli
Author-X-Name-First: Giulio
Author-X-Name-Last: Cornelli
Author-Name: Leonardo Gambacorta
Author-X-Name-First: Leonardo
Author-X-Name-Last: Gambacorta
Author-Name: Boris Hofmann
Author-X-Name-First: Boris
Author-X-Name-Last: Hofmann
Author-Name: Michael Brei
Author-X-Name-First: Michael
Author-X-Name-Last: Brei
Title: The digitalisation of banking and social media: implications for deposit pricing
Abstract: This paper examines the implications of two coincident digital trends - the digitalisation of banking and the widespread adoption of social media - for the pricing of deposits in the United States. Using branch-level data, we analyse how both trends interact to influence the level of deposit rates as well as their adjustment to changes in the policy rate. Our analysis distinguishes between traditional banks with physical branch networks and digital banks. Using panel regression analysis and local projections, we find that digital banks' deposit rates are higher and more reactive to changes in policy rates, consistent with the view that their customers are more price sensitive. We further find that digital banks offer higher deposit rates and react more sharply to policy rate changes in counties with higher social media activity, as measured by Twitter usage, supporting the notion that high social media use further increases price sensitivity.
Creation-Date: 2026-06
File-URL: https://www.bis.org/publ/work1357.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work1357.htm
File-Format: text/html
Number: 1357
Keywords: deposit rate pass-through, digital banking, monetary policy transmission, social media activity, branch-level data, policy rate
Classification-JEL: E43, E52, G21, O33
Handle: RePEc:bis:biswps:1357