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Fintech Raisin launched first private-banking experience to U.S. retail deposits market

May 20, 2020 / Nilesh Kumbharkar
SHARESHARESHARE

  • Raisin software brings first private-banking experience to U.S. retail deposits market.

  • New solution enables banks to control costs while attracting deposits.

  • American deposits market grew by $1.5 trillion in first 6 weeks of pandemic.


The fintech Raisin U.S. (www.raisin.com/us) has launched a tailored business solution for banks and credit unions looking for cost-effective new deposits. Raisin’s software enables financial institutions quickly and easily to offer customized time-deposit products with a range of flexible features. The ‘Savings as a Service’ software arrives on the market just as banks are taking on a massive increase in cash from Americans wary of the market. Banks rapidly deploy the Raisin software across their existing branch network or online channels, retaining control of their desired cost of funds. Goldman Sachs- and PayPal-backed Raisin is one the most established European fintechs. It has placed around $25 billion in deposit products for over 260,000 customers with more than 90 partner banks across Europe through the fintech’s savings platforms. Additionally dozens of banks, personal finance managers and financial services providers, including n26, Commerzbank, Scalable Capital and Legal & General, integrate the Raisin marketplace into their own platforms and offer it to their customers.


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Savings as a Service: A private banking experience for retail customers

Until now, customizing deposit products with this degree of flexibility was technologically and financially out of reach for many retail banks. Only private banking clients had access to the level of customer service required to create personalized CDs. With Raisin’s software banks can quickly create custom retail deposits, including market-linked products that allow customers to participate in a potential economic recovery, with 100% of their deposit covered by the FDIC up to $250,000 and all or part of the interest earned linked to a market index. Deposit products built by the Raisin software can also include dynamic features such as automated ladder strategies, and optimize for profitability and individual liquidity needs. Now retail banks and credit unions of any size can, for the first time, offer their customers a private banking experience at no extra cost.


Given the prospect of a serious economic slump, financial institutions want a share of the big increase in deposits, but many don’t have the technological tools to optimize or meet customers’ current needs, banks and credit unions are positioned to play a huge part in restarting the American economy, and they want to be prepared to offer a range of options. Products that enable customers to stabilize their assets now – and then also grow with a recovery. Ideally affordably, for the bank and its customers. Our software meets exactly this nexus of needs.

- Paul Knodel, CEO Raisin U.S.


COVID-19 leads to immense deposit market growth

The volatility in the market caused by the pandemic has resulted in growing interest in deposits. Since the beginning of the year, commercial banks’ deposit market volume has grown more than 10 percent, with a sharp incline starting the second week of March from $13.5 trillion to almost $15 trillion by the third week of April, according to Federal Reserve Economic Data. Financial institutions – especially regional banks and credit unions – have a paramount role in reviving the U.S. economy after the crisis.
 

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Deposits’ role as refinancing instrument in U.S. economic recovery

Deposits are emerging as an attractive instrument for banks in the refinancing mix – especially as bonds have become more cost-intensive within the last two months. At the same time the cost of deposits presents a challenge, given the huge spread on the market – including aggressive deposit product offers with high interest rates by some of the largest financial institutions, which can absorb the high costs. Thus while banks shift their focus to collecting a greater share of deposits, they tend to remain highly conscious of the need to control costs. This is again where Raisin’s software offers relief: it gives banks a unique new tool to both attract high-quality retail funding while also flexibly and easily adjusting the costs to their precise needs.


About Raisin

A trailblazer for open banking and the leading pan-European one-stop shop for online savings and investments, Berlin-based fintech Raisin was founded in 2012 by Dr. Tamaz Georgadze (CEO), Dr. Frank Freund (CFO) and Michael Stephan (COO). Raisin’s platforms — under the brand WeltSparen in the German-speaking world — are breaking down barriers to better savings for European consumers and SMEs: Raisin’s marketplace offers simple access at no charge to attractive and guaranteed deposit products from all over Europe, as well as globally diversified, cost-effective ETF portfolios and pension products (currently available in Germany). With one online registration, customers can choose from all available investments and subsequently manage their accounts. Since launch in 2013, Raisin has placed 23 billion EUR for more than 260,000 customers in 28+ European countries and 91 partner banks. Raisin was named to Europe’s top 5 fintechs by the renowned FinTech50 awards and is backed by prestigious European and American investors such as btov Ventures, Goldman Sachs, PayPal Ventures, Thrive Capital, Index Ventures, Orange Digital Ventures and Ribbit Capital. Raisin UK in Manchester, banking-as-a-service provider Raisin Bank in Frankfurt, pensions specialist fairr, and Raisin Technology (formerly Choice Financial Solutions) all belong to Raisin.