On Deposit Solutions’ launch in the U.S. with CEO Philipp von Girsewald

The path toward fintech

Previously, I was an executive at Deutsche Bank for 20 years. I was responsible for the global corporate M&A businesses. I also ran venture capital and private equity. Around the end of 2015, I switched roles along with some others and started developing a blueprint digital bank for Deutsche Bank in the U.S. The idea was it would be a new way for DB to run its banking operations and as the bank got into trouble, the bank decided to focus on its core activities. I decided I loved the digital banking world very much and decided eventually to go over to the fintech side of things.

Having worked twenty years at Deutsche Bank, I understand how a bank works, locally and globally. I was also on the board of various subsidiaries, so I know what the local demands are and how regulators think. This experience provides me the ability to understand what banks need and what they want.

Gathering deposits for banks

Fintechs are often associated as competing with banks. There are two kinds of fintechs. One kind competes with banks and has been successful gaining customers away from banks by offering better products or the right customer experience. And then, there are fintechs that collaborate with banks and offer their services to banks so that banks can focus on what they do best. The rest they can basically insource.

With Deposit Solutions, they do exactly that. Deposit Solutions is a fintech that works with banks and cooperates with them, providing a platform for banks to get deposits.

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Open architecture

Open banking can be confusing when you talk about it in the U.S. It's often associated with fintechs getting access to bank data and customer data. Open architecture is something different. Banks can use established standards as a product that they insource. It's the opposite of outsourcing. Banks insource services to give customers better quality in the end. We give banks an alternative way to gather deposits.

Growth

In Europe, we work with over 100 banks and have transmitted over €25 billion in deposits. In the U.S., we're about to start. We're positioning ourselves as a new way for banks to gather deposits. We give banks a digital way to connect with consumers through our platform. Banks have the ability to raise deposits with wholesale simplicity by offering deposits and CDs to customers with the characteristics of retail banking relationships, like stickiness and granularity.

One of our distribution channels is Savebetter, our U.S. distribution front-end website. Customers can go there to see the offerings of our participating banks. Then, they can sign on within a few minutes to open an account. Once the account is ready, they can deposit money and withdraw money through that account with participating banks. it's a single account that treats cash as an asset class.

Launch strategy

We are signing up banks to be on the platform. We're talking to a handful of banks, some which have already signed up. That's our shelf inventory we bring to market. On the other side, we're marketing through Savebetter and through digital marketing, affiliates, and influencers. In the end, we're going to do a product-lead marketing campaign for participating banks and for consumers to provide choice, safety and convenience.

Our launch campaign is a full array of digital distribution. We'll be testing the U.S. What we've seen using our European experience in digital marketing, we can adjust our strategy to the U.S. to see where we're successful. Savebetter is one distribution channel and we're working on adding others. At the end, Savebetter is there to show everyone how it all works. It's a little bit of solving the chicken or the egg problem.

How banks compete in the future

Banks that have restrictive technology budgets or are working with old ledgers have a problem competing. They need to partner and work with fintechs. It can help them accelerate by insourcing many of the products they'd otherwise need to build themselves.

With our partners, Deposit Solutions makes the distribution less systemic because we go off the beaten track. Banks have more control because you don't have an institutional deposit broker in the middle. And we help banks to flexibly manage their deposit costs.

Pricing the service

Deposit Solutions doesn't touch money -- it facilitates the instructions and the platform, while the actual money is moved by a bank. We charge banks a fee on the deposits they gather. It's a free option -- if they offer a product at certain terms and they don't get deposits, they don't pay. If they do, they know exactly what they pay for it, so they can manage their cost base very effectively.