AMP has often been guilty of treating its banking operation as an afterthought, but not lately. It has been investing in AMP Banking, with new products hitting the market in recent months, and it plans to keep building the business with some online initiatives planned for the December half.Those new products, a cash account for AMP superannuation fund members and a high-yield online transaction account, plus a revamped cash management account, helped the bank increase deposit inflow by 30 per cent in the June half.AMP Banking has been heavily dependent on the securitisation market for funding. Forty two per cent of its $9.7 billion residential mortgage portfolio is funded off-balance sheet.A priority will be to keep the deposits flowing in. AMP Banking did a $535 million AOFM backed RMBS deal but is not prepared to price a deal for real money investors.AMP Banking contributed $18 million to AMP earnings in the June half, a three-fold increase over the previous corresponding period.The bank's managing director, Michael Lawrence, said the big improvement was due to higher lending margins.He said: "The big banks were raising rates outside changes to official rates and we were part of that."But competition for deposits will whittle those margins back in the December half.Lending growth was only two per cent, as the bank used most of the cash it raised to increase liquidity.Arrears on the book (payments overdue 90 days or more) were down from 0.57 to 0.49. Lawrence said the bank put a lot more effort into getting to customers early.Over the next few months the bank will launch some enhancements to its online systems, including an online 100 point identity check and maybe a mobile banking capability.Investment in AMP Banking is a result of the increased synergy between the bank and its wealth management parent. AMP planners are putting more of their clients' money into cash accounts and the bank is able to provide a good return on that cash by putting it into mortgages.