As interest rates rise and financial institutions seek more deposits, many are turning to online deposit marketplaces for a portion of their funding.
One of those marketplaces is SaveBetter, the U.S. platform of the German fintech Raisin.
Since going live in 2021, SaveBetter has expanded to work with more than 20 banks and credit unions and helped them raise more than $1 billion in deposits overall.
“It’s like a spigot. You turn it on or off and control what you pay, depending on the deposits you need,” says Carlos Naudon, the president and chief executive of Ponce Bank in Bronx, N.Y., one of SaveBetter’s partner banks. “We can pick up significant funding in hours if we need to.”
A Strategic Tool for Raising Deposits
SaveBetter allows consumers to access competitive rates for their deposits, and to manage their deposits across multiple institutions in one place, without having to pay any fees for the service. Banks and credit unions benefit from the ability to grow deposits quickly, with the platform taking care of all the work involved from know-your-customer compliance to customer service.
Naudon describes the marketplace as “a great tool” that Ponce can use whenever the spread is right or deposits are needed. His savings bank has raised more than $250 million on the platform, using several different products, including a savings account, a money market account and a certificate of deposit. It can instantly raise or lower rates on the offerings, depending on its needs at any given time.
“If we have significant loan demand arise and need additional funding, we can get it quickly,” says Naudon.
The lack of back-office expenses enables Ponce to offer a higher rate than it would otherwise, he says.
However, because it must compete at the highest margins to attract deposits through the platform, Ponce uses the deposit marketplace sparingly and strategically. “It’s one of many arrows in our quiver,” says Naudon.
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SaveBetter Is ‘Like Wholesale Funding’
Raisin, which is based in Berlin, has operated a deposit marketplace in its home country since 2013. It has expanded since then to serve financial institutions several dozen countries.
Its platforms act as a “digital branch” for banks and credit unions with the benefit of outsourcing all aspects of deposits, says Tamas Giorgadse, Raisin’s co-founder and CEO.
Using its propriety consumer platform and marketing channels, the fintech manages customer acquisition, along with handling the entire account-opening process.
Its value proposition is how it benefits both sides — financial institutions and consumers. “Banks get funding in a very simplistic way, and we’re giving consumers access to institutions they may be unaware of with strong rates,” says Ben McLaughlin, head of U.S. marketing at Raisin and president of SaveBetter.
When SaveBetter customers open an account and place a deposit with one of its partner banks or credit unions, the platform deposits the money in an omnibus custodial account that its service partner, Lewis and Clark Bank in Oregon City, Ore., holds at the selected institution. This allows the SaveBetter deposits for each institution to be kept in a single account.
“It’s essentially like wholesale funding,” McLaughlin says. “The simplicity is the bank has one account, which makes it very easy. Every day we provide the reporting to them on how much funding was raised and how much money was withdrawn.”
SaveBetter’s Dashboard Makes Juggling Deposits Easier
The concept has seen a faster growth rate in the U.S. than in Germany, Giorgadse says. While a larger portion of Germans have savings accounts, Americans who do save typically have a larger amount of money and are more likely to move it around chasing yields, he says.
U.S. consumers can go to SaveBetter, open a single account, and access products from any of the partner banks or credit unions.
Like a Matchmaker:
The SaveBetter platform showcases a variety of high-yield savings accounts and CDs at competitive rates. Consumers can access these for free, and banks and credit unions can raise deposits as needed.
Interest in the platform, from both financial institutions and consumers, has grown as yields have risen, according to McLaughlin. “Many of our partners are offering market-leading interest rates, which has helped consumers save better and has helped banks raise deposits in this environment,” he says.
Through the SaveBetter dashboard, depositors can shop rates quickly across all of the partner institutions. The dashboard also lets them track their deposits across multiple institutions in one place.
“It is the first of its kind where you open one account and then have access to all the products at all institutions,” says McLaughlin. “We continue to invest a lot into improving the experience in the reporting dashboards, and we’re excited to continue growing in the United States.”
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Seeking Banks and Credit Unions as Partners
A bank or credit union can go through the onboarding process in as little as two weeks. Then, the institution sets a fundraising goal and SaveBetter designs and manages a product to reach that goal. Once the goal is achieved, the institution can lower rates to slow down funding, or stop marketing altogether, says McLaughlin.
“A lot of banks look at us essentially as their digital branch. They’re getting all the benefits at a fraction of the cost,” he says.
SaveBetter markets each of its partner institutions through organic search and a network of partners, including affiliates, search engines, and social media. Each brand is marketed separately and independently through these external channels — that way, it can attract deposits without having to compete against the entire partner network.
Given that many of the SaveBetter partners are community banks and credit unions, this also gives them the additional benefit of brand exposure to a larger audience.
Raisin doesn’t charge any royalties, monthly fees, or listing fees; it earns revenue by charging “a small basis point fee based on the deposits raised through the platform,” McLaughlin says. This ensures what banks and credit unions pay for the service is linked to the deposits they attract, he says. As of January 2023, Raisin had raised more than $1 billion in deposits across all of its U.S. partner institutions.
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Raisin’s Growth: From Europe to the U.S.
After launching in Germany, which has one of the world’s highest savings rates in terms of share of household income, Raisin expanded into other European countries. It began operating in Austria, France, Spain and Ireland in 2016, and added the United Kingdom in 2017.
Raisin then set its sights on the United States. “We saw a very large market, just in sheer number of banking licenses, with different and diverse banking sectors,” says Giorgadse.
The fintech hired a U.S. CEO, Paul Knodel, in 2019 and spent the next couple of years adapting its software for conditions specific to the U.S. market. In 2021, it secured a patent, integrated with U.S. core banking provider Jack Henry, and took SaveBetter live with its first partner bank, MapleMark Bank in Dallas, Texas.
That same year, Raisin merged with a competitor, the German open banking platform Deposit Solutions, to form Raisin D.S. The fintech now collaborates with more than 400 financial institutions in 30 countries and services 550,000 direct customers.
Raisin announced in March that it raised $64.7 million in a series E funding round from existing and new investors such as M&G Catalyst. The announcement said it plans to use the money to add features to the SaveBetter platform and accelerate its U.S. growth.