Two Digital Banking Models for Targeting Doctors and Nurses

Being a bank for physicians, nurses and medical technicians can present unusual challenges. Here's how two players — a startup neobank operating inside a banking company and a specialized KeyBank division — are working past the barriers.

The U.S. health care industry was booming even before Covid hit. The Census Bureau indicates that over 22 million people in America are part of the health care business in some way, representing 14% of all U.S. workers. Even a casual look around your community will show how the number and types of treatment facilities keeps growing, from sports medicine to rehab to imaging and urgent care centers.

While everyone needs banking services, doctors, nurses and other healthcare workers often face different circumstances than other Americans, ranging from uneven income flow to education debt to the cost of equipment.

Various banking models have evolved for serving the needs of healthcare workers, including specialized credit unions and nonbank financial firms. This report concerns two new approaches, both of them national in scope, and delivered digitally.

1. Two Doctors and a Banker Prescribe a Panacea

The slogan of Panacea Financial is “By Doctors, For Doctors,” and that is how the neobank started.

“Startup life is 150%,” says Dr. Ned Palmer, one of the founders and COO. The neobank operates out of Little Rock, Ark., but Palmer continues to do his clinical shifts at Boston Children’s Hospital and maintain his schedule as an instructor at Harvard Medical School. He logs a lot of air miles.

Panacea Financial operates as a division of Primis Bank and is owned in part by Palmer and his partners through an LLC and by Primis. (Based in Virginia, the bank has offices in that state and Maryland and Washington, D.C.) The genesis of Panacea came from Palmer and Dr. Michael Jerkins, now President and Co-Founder.

“The idea for Panacea started in our first year of residency, when we recognized that physicians have a unique financial lifecycle that traditional banks don’t understand.”

— Dr. Ned Palmer, Panacea Financial

“Normal” for physicians is starting out with $300,000 in education debt and little to no historical income, says Palmer. “That doesn’t make them bad borrowers, but it makes them uninterpretable by traditional credit metrics.”

Doctors often become strong customers for banks once they become established. At the beginning, not so much.

“Our products allow fair access to doctors at all stages in their careers — in school, in training and once they are in practice,” explains Palmer in an interview with The Financial Brand. He says one difference between Panacea’s credit viewpoint and the mainstream is that the neobank “respects the investment doctors have made in student loans, instead of demonizing them for it.”

Panacea began operations in late 2020. Palmer describes the core target market as “young, tech-driven and tech-focused,” working towards or having medical degrees. The neobank also serves dentists and veterinarians.

Read More: Can Banks Beat Neobanks at Their Own Game?

How the ‘Hybrid Bank’ Operates

Panacea represent a hybrid approach to banking. It maintains its own website and app and has its own tech, marketing and sales functions. It uses the Primis core and deposit insurance in a banking as a service relationship. Panacea also uses some of the parent bank’s credit, risk management and regulatory expertise, while maintaining its own credit and underwriting policies and consumer and medical business lending staff.

“In some ways it’s quite a blurred line in terms of how we have integrated with Primis,” says Palmer. “We’ve leveraged the functions where it makes sense to share the load.”

Palmer and Jerkins had tried to start what became Panacea but it didn’t take off, which Palmer blames on being busy with training and the two doctors’ lack of banking background.

“We made some laughable mistakes back then,” says Palmer. At one point they had the idea of a doctor-to-doctor peer lending program, where older, established physicians would participate in credits for those starting out. Other alternatives were explored but ultimately the pair realized that to accomplish the scope of what they wanted to do — business credit, payments, mobile banking and student loan refinance — they needed a traditional banking backbone.

Things came together when Tyler Stafford, a banker and investment banker by background, began working with them. Today Stafford is CEO and Co-Founder.

Given that many of Panacea’s customers are starting out, its operations are focused on lending currently, with some emphasis on commercial deposits, rather than personal deposits. Personal loans for doctors, however, is a key business for them. Palmer says these loans help doctors bridge gaps in employment and other challenges. As rates have risen, more of the bank’s lending program has become refis of private education loans. All loans are portfolioed.

To get the word out about Panacea, “we have used basically every kind of modern marketing channel that’s out there, from social media and paid social to organic and paid search to digital ads.” Panacea also has relationships with some professional societies.

But one of the most effective marketing efforts has been financial literacy training for doctors. “We go out and teach for free,” says Palmer. “It’s a great way to engage directly with our communities.”

Read More: Four Strategic Lessons from Digital-Only Banks and Neobanks

2. Laurel Road Expands to Be the Bank for Nurses

Laurel Road was a student loan refinancing specialist bank that KeyBank acquired in 2019. A strategic shift in early 2021 led to the launch of Laurel Road for Doctors as the company set out to be a national digital full-service bank serving the healthcare market. In 2022 Laurel Road took its next bite out of the healthcare apple when it launched a specialized digital banking program for nurses.

Nurses have been under incredible pressure through much of the pandemic period and their roles have evolved to incorporate greater responsibilities. Many nurses have erratic schedules demanding convenience in their banking. And many have significant government and private student loan debt, with 70% of the nation’s nurses carrying some education loan.

Kaitlin Walsh-Epstein, Chief Marketing Officer at Laurel Road, explains in an interview with The Financial Brand that the company created Laurel Road for Nurses with an eye to perks that would mean something to them.

The centerpiece of the effort is Laurel Road Loyalty Checking, which offers multiple cash rewards. On top of a $300 bonus for opening the accounts, in the first year customers receive a $20 monthly bonus if they make qualifying ACH deposits. The accounts carry no monthly fee nor any monthly minimum balance.

“Something we found is that nurses feel kind of guilty about treating themselves to something extra,” says Walsh-Epstein. “That $20 bonus each month is us trying to say, ‘Instead of getting that black coffee today, splurge on yourself and get a frappuccino.”

The program also features access to Laurel Road’s Perks! Partner network, which provides deals on products and services of interest to nurses and other customers of Laurel Road. Among them are deals on Clove footwear designed for healthcare personnel, errand-running services from TaskRabbit, and coffee and tea from Rise Brewing Co.

Another checking option is designed for nurses using Laurel Road to refinance student debt. If they open a Laurel Road Linked Checking account they may qualify for a reduced interest rate on their student loan.

Helping Nurses Steer Through the Maze of Debt Forgiveness

An important tie-in here, beyond student loan refinancing, concerns KeyBank’s acquisition in May 2022 of GradFin. This consulting firm helps doctors and nurses navigate the highly complex federal Public Service Loan Forgiveness Program. Put simply, the program can wipe out student debt for people serving in medical roles in government or nonprofit organization facilities.

Walsh-Epstein says that understanding the ramifications of the program are important when determining whether it makes sense to refi or to attempt to use the forgiveness program. Ten years worth of payments must typically have been made. An additional complicating factor was the pandemic-era student loan payment moratorium.

Initial consultations with GradFin are free, with an annual fee applicable if the customer accepts the firm’s help. Walsh-Epstein says the service takes all debt into account to see what other alternatives, such as refinancing credit card debt with a Laurel Road personal loan, may help. This may result in a lower student loan refi rate when it reduces the consumer’s debt-to-income ratio.

TikTok Dancing Gets Laurel Road Effort Off on Good Foot

To launch the nurse banking program Laurel Road took advantage of a pandemic-era trend: nurses filming dancing videos on TikTok.

Walsh-Epstein says the company hired Kala Baker, a nurse influencer known for her TikTok dances, to help convince nurses to upload their own dance videos with the hashtag #LaurelRoad4Nurses. A large cash prize helped encourage entries and resulted in over 7 billion views. The publicity and the contest resulted in 7,000 signups for the Laurel Road for Nurses waitlist. (Walsh-Epstein notes that the 7 billion figure does not reflect unique views.)

One of the ongoing points of Laurel Road’s outreach to nurses will be affiliations with industry membership groups. In terms of media, the company is producing an ongoing series of content marketing pieces dealing with financial literacy subjects tailored for nurses. Users can navigate through the educational resources based on their nursing specialty and degree of training and education. For example, a detailed article on, “How to Budget as a Nurse,” gets into nitty-gritty issues and includes a built in budget calculator.

“We think that a big part of your financial journey is the education component, understanding your finances in light of factors that are unique to your profession,” says Walsh-Epstein. She says most content is handled in-house but that it is frequently based on interviews with doctors and nurses with experience in the subjects.

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