Two years after launching a national digital banking platform, Cambridge Savings Bank says the venture is resulting in better-than-expected deposit growth.
Since its debut in July 2021, Ivy Bank has surpassed $530 million in deposits and added over 6,600 customers nationally, the Cambridge, Massachusetts-based bank said.
The bank said the digital-only platform’s deposit numbers exceeded the bank’s annual goal for 2022 by 64%. Ivy’s deposit growth is nearly six times greater than that of Cambridge Savings Bank’s 19 branch locations, according to the firm.
“Our goal was to really learn and understand how to be a digital-only bank,” said Katie Catlender, executive vice president and chief customer officer at Cambridge Savings Bank, on the firm’s strategy when it first launched Ivy.
The $6.7 billion-asset bank initially set fairly conservative targets for Ivy, with a goal of hitting $90 million deposits within the first year, Catlender said.
“We quickly learned, as well as acknowledged, that we had a really good thing going,” Catlender said.
Catlender attributes Ivy’s success to its fast account opening process – less than five minutes – and its ability to offer high-yield products on a digital-only platform, a feature she says has increased in demand amid the recent banking turmoil.
“I think we were a little bit ahead of our time in knowing that the opportunity to offer higher yielding products on a digital channel was really important, and that's proven to be the case over the last couple of years,” she said.
Ivy offers a 4.80% annual percentage yield for accounts with a minimum balance of $2,500.
The digital banking platform is powered by NCR, while fintech MANTL handles Ivy's account opening experience. The platform also uses data aggregator Plaid to enable customers to link accounts.
The 189-year-old Cambridge Savings launched Ivy with the goal of expanding beyond its Boston-area footprint, Catlender said.
Using social media and digital advertising, Ivy garnered customers in 49 states, Catlender said.
“With digital, what you learn really quickly is where you're effective and where you're not, and how often you're converting someone into a customer. And that's the benefit of a digital channel,” she said.
Catlender touted the platform’s return on advertising spend, adding the bank has been able to apply what it has learned from Ivy to its brick-and-mortar marketing efforts.
As for how the bank is viewing its physical branch strategy in light of Ivy’s success, Catlender said the firm recognizes the importance of serving customers in a physical space.
“We believe physical locations and the ability to meet people in person are always going to be a philosophy of ours as a bank,” she said. “But if people want the convenience of being able to transact through their phone or their tablet or computer, we want to make that as easy as possible.”
Cambridge Savings Bank is not the only bank to target growth through the launch of a national digital brand.
Meanwhile, Honolulu-based Central Pacific Bank is utilizing its relationship with Swell Financial, the digital bank it incubated during the pandemic and spun out last year, to capture mainland deposits.
“In a digital environment, you constantly have to evolve, prevent, predict and anticipate where the market is going,” Catlender said. “That's what banking is becoming and that's the approach we're taking for both Ivy and CSB moving forward.”