“Agile” may be the the trendy word in banking, but “balance” — being prepared to move or react decisively in whatever way circumstances demand — makes an even better attribute.
In sports, staying balanced —”on the balls of your feet” literally or figuratively — enables seemingly overmatched opponents to topple the favorites.
It’s much the same in banking. With the right combination of people, training, vision, technology — and desire — the small can outmaneuver the big, and the traditional can outpace the disruptor.
Such is the situation with Cambridge Savings Bank, based in the Boston suburb of Cambridge, Mass. You can’t get much more “traditional” than a 187-year-old mutual savings bank. Yet for the past several years Cambridge Savings, with just over $5 billion in assets, has been preparing itself to compete in a very different world, yet without walking away from its existing markets. One clear step was the launch in July 2021 of its national, digital-only brand — Ivy Bank.
Some may question whether a community bank could succeed where major players have failed. Chase, after all, folded its digital brand Finn after less than a year, and BBVA USA (now part of PNC) shut down the Simple neobank brand it had acquired.
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It’s important to note that Ivy Bank isn’t a bet-the-bank dice roll. It’s just one part of a larger strategy, according to Wayne Patenaude, Cambridge Savings CEO.. The institution is confident its digital-brand strategy will succeedbut it recognizes that retail banking will likely keep changing rapidly for the foreseeable future. So it is keeping its options open and continuing to build the long-term strengths that will enable it to pivot, if necessary. Patenaude says that could even include hooking up with Google with its Plex offering, if that made sense.
What Ivy Bank Is All About
To begin with, “Ivy Bank” not actually a bank. It’s a digital-only brand that operates as a division of Cambridge Savings Bank, existing as a website and a mobile app. At its launch it had two primary features:
- High-rate savings (including a savings account and CDs).
- Money management tools.
Patenaude says in an interview with The Financial Brand that they wanted to keep the product set simple as they launched a new nationwide channel. Saving is a priority for millions of consumers, he points out, and so is having a simple way to manage their money. Both contribute to financial well being, a topic of increasing interest among consumers, Patenaude believes. The Ivy Bank app allows customers to view their spending by category, set budgets and view all of their bank accounts — including those held in other institutions — on a simple dashboard.
As important — perhaps more important — than the specific features of Ivy Bank are two other capabilities that CSB has developed over several years: fast and simple digital account opening and easy access to human support.
There were two main reasons for creating a digital-only brand, according to Patenaude. First, to better enable the institution to meet people where they want to do their banking — on digital channels. Second, to expand their deposit gathering reach. Deposits are plentiful now, but that won’t always be the case.
The Ivy Bank name was chosen, says Patenaude, because the plant “represents strength, growth and stability,” which, he believes, reflects the underlying institution.
Making ‘Digital + Human’ More than a Catch Phrase
For any digital banking venture, separate brand or not, it’s critical for the account opening experience to be quick an simple.
“One of the first things that customers do with an institution is open some type of relationship, and that has to be a good experience,” says Patenaude. About two years before launching Ivy Bank, Cambridge invested considerable time and effort to find the right account opening platform for what it needed. They settled on a solution from MANTL. It was first used for CSB customers and now for Ivy Bank customers as well. Patenaude says they have data showing they take consistently just under five minutes to open an account completely digitally.
A lot has been said about the power of “human plus digital” in banking — combining state-of-the-art digital with a human connection for dealing with the inevitable issues that the best app can’t handle. Few get the balance right.
Cambridge Savings Bank’s approach is to make a “real, live person” available by chat, email or phone. This is not outsourced. Bank employees based in Massachusetts handle these queries. Patenaude says they trained people long before the launch of the digital bank so they would fully understand its features. Although call center employees share some duties, three CSB employees are largely dedicated to Ivy Bank.
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Analytics Provides an Edge
The other capability Cambridge Savings has been building over several years is data analytics. The bank works with MX on these capabilities, as well as other vendors, but Patenaude says most of the work is done within the bank with its own talent.
“It’s well known that about 70% of what you want to know about your customers comes from your internal data,” Patenaude observes. “And that’s what our analytics team has largely been set up to do: Mine that data, understand it, see how it relates to customer behaviors and experiences and be able to translate that into actionable strategies.”
This capability is equally important for the legacy institution as well as Ivy Bank. With the latter, however, this data powers much of the insights offered through the mobile app’s money management tools, for which MX provides the technology.
But Can Ivy Bank Match What BofA, Chime, Ally et al Offer?
Bank of America not only has millions of consumers using its mobile banking app, but has a money management app called Digital Life Planning. Goldman Sachs has similar capabilities and American Express is ramping them up. Not to mention the 13 million consumers who are users of the Chime mobile banking app.
Can a bank the size of Cambridge Savings compete with those players?
Wayne Patenaude’s response to that question is both quick and direct: “Absolutely we can compete at that level.”
Here’s why he believes that: “We’ve positioned ourselves as a strong, vibrant, innovative community bank. We think that will resonate with many people because community banks are one of the more trusted financial providers out there, according to our research.”
“We’re very clear that Ivy Bank is backed by the strength of Cambridge Savings Bank,” Patenaude continues. He says a few Ivy Bank customers have said they were attracted by that fact, setting the app apart from those of fintechs.
Clearly having superior digital capabilities is a must, but Patenaude notes that technology available to community institutions is improving rapidly in terms of the digital experience. And when that is combined with the ability for consumers to have live engagement with bank staff, that sets the offering apart, the CEO believes.
“Our brand promise is to treat every customer like our only customer,” Patenaude states.” And we really mean that. That drives the kind of people we hire. And competing on that basis is a real differentiator.”
Impact of the Google Plex Option
While Cambridge Savings was developing its plans for Ivy Bank, Google announced that a handful of banks and credit unions were participating in the development of its planned Google Plex banking product, offered in partnership with financial institutions. Though not yet officially launched, Patenaude says that CSB is certainly aware of the product and looking at the option.
“With the Ivy Bank channel we’re certainly going to learn a lot,” Patenaude states. “We’re going to promote that channel and build it out. But we’re also going to make sure we understand what other options are evolving out there as time goes on.
“I think banking institutions need to take opportunities like Google Plex seriously,” the CEO continues, “because the customer now — and certainly into the future — is going to want to bank with institutions that can provide the right values and understand them and understand their needs. And Google, as we know, is very good at understanding individuals’ needs on several fronts.”
With the speed at which new technology is being introduced, he adds, a financial institution shouldn’t ignore different ways of enhancing customer service.