A new path for banks in digital marketing
Radius Bank, a Boston community bank that has enthusiastically embraced fintech partnerships over the past few years, has struck a deal with the personal finance site NerdWallet.
Under the agreement, NerdWallet readers will be able to directly open Radius savings accounts through NerdWallet’s mobile app.
It is the latest of Radius’s banking-as-a-service initiatives, in which it makes banking services available through third parties — “digital marketing 2.0,” as Radius executives like to call it. And it may be the path forward for banks that are starting to look beyond search engine marketing for new customers.
And it is a first for NerdWallet — Radius is the only bank partner that has integrated account opening directly with its technology.
This year alone, Radius Bank, which has $1.4 billion in assets, has partnered with about a dozen finechs, including Brex, MaxMyInterest, Wallit, NorthOne, Stackin’ and now NerdWallet.
The integrations with all of these companies were handled with help from Radius’s partner in application-programming-interface technology, Treasury Prime. Another company making similar API connections between banks, fintechs and third parties is Even Financial in New York.
Radius has used NerdWallet for years as a digital marketing channel, according to Chris Tremont, executive vice president of virtual banking at Radius Bank. The site’s writers cover the bank’s checking and savings accounts, and the bank runs paid advertisements on NerdWallet.
A year ago, when NerdWallet read about Radius Bank’s agreement with the cash management solution provider MaxMyInterest, it wanted to do something similar. Radius and MaxMyInterest collaborated on Max Checking, a digital checking account from Radius that Max clients can use to move money between savings accounts. It comes with a branded debit card, automated-teller-machine rebates and fee rebates when minimum balance requirements are met. The two companies also offer a digital savings account.
The bank is taking advantage of the banking-as-a-service capability it built and usually offers to fintech partners and applying it to its own digital marketing efforts.
“We’re moving past the traditional ‘pay per click’ marketing where we pay sites like NerdWallet every time somebody clicks on a link and comes to our web properties,” Tremont said. “NerdWallet saw this as a way to deepen relationships with their readers and the banks they work with.”
To be sure, this will not replace search engine marketing any time soon.
“Search engine marketing using companies like Google is always going to be part of ours and probably other banks’ acquisition strategies,” Tremont said. “But this is a way to diversify and probably target a little bit better.”
Kyle Ramsey, senior director of product at NerdWallet, declined to say whether his company expects to sign up other banks to do something similar.
“We continue to look for ways to empower our users to more easily make smart moves with their money, whether that means getting prequalified for a loan or navigating a more streamlined experience to open and fund savings accounts,” Ramsey said. “The Radius integration is a great example of that effort.”
Many banks and online lenders have built their loan application right into a news or rate site, but few have incorporated deposit accounts. Radius Bank is open to working with other aggregation sites.
“We've had conversations with a few others,” Tremont said. “Not everybody has been as progressive in their thinking as NerdWallet, and we love that about them.”
Overall, Tremont said, the bank is happy with the fintech partnerships it has forged.
“It's probably too early to wave the success flag, but we launched a lot of these in the second half of this year, so some of them are still in what we call a project mode, where we're still working on a few tweaks to bring to general production,” he said. “But by and large, it has at the very least met our expectations. And as we look out into 2020, I think it's going to exceed what we had planned.”