‘Our sweet spot is healthcare’: Laurel Road for Doctors takes niching down one step forward
- The demand for personalized digital banking products is booming.
- And with that, companies like Laurel Road and KeyBank may need to figure out a way to become niche ninjas.
The demand for digital personalized banking products is rising. And with that, we’re continuing to see digital banks that are niching down.
End of March, Laurel Road, a brand of KeyBank, released a new digital bank for doctors, called ‘Laurel Road for Doctors.”
The new digital bank is an expansion of the companies’ previous services. Both Laurel Road and KeyBank have connections within the healthcare space. Before being acquired by KeyBank in 2019, Laurel Road functioned as an online lender for student loan refinancing and mortgages. Even then it had some products geared for dentists, doctors, and residents. KeyBank meanwhile offers varied medical profession loans.
Laurel Road for Doctors is designed specifically for physicians and dentists. It aims to match users’ needs at each stage of their careers. According to Alyssa Schaefer, chief marketing officer at Laurel Road, that’s a gap that financial service providers aren’t really filling at the moment.
“This group told us that many financial institutions are only interested in them once they unload much of their debt or begin earning larger salaries. They’re not interested in them as customers when they’re [just] residents,” said Schaefer. “This has led to an inherent distrust of financial services providers. [What people in this industry want] is a personalized experience, including earlier on in their careers, that’s built on mutual benefits that empowers them to make good decisions.”
The digital bank includes a student loan cashback credit card, savings tools with lower interest rates, and personalized data about their financial habits, among other things. It also incorporates features with specific appeal to people in the medical profession. For example, there’s the Financial Insights feature, which helps doctors understand how their salary and debt compares to people in the same profession as them. The feature also incorporates custom insights to help them budget better.
The digital bank also includes perks and discounts that could have special appeal to those in the medical profession. Sakara, which provides ready-made healthy meals, is included among the perks and discounts section, for example. That might appeal to doctors and residents, who may be too crunched for time to do that much cooking on their own. Then there’s Laurel Road’s partnership with the White Coat Investor, which could be more specific to the niche. The White Coat Investor is a content site for people working in the medical field to help them better manage and invest their money.
One thing Laurel Road for Doctors aims to address is the large level of student debt that medical students face.
“Doctors and dentists spend so much time on their careers, they obviously invest a tremendous amount of money on their education,” said Schaefer. “And so they have a delayed start, if you will, when it comes to their earning potential.”
What ends up happening, said Schaefer, is that doctors and dentists come out of med school with little knowledge of how to manage their debts.
“We get asked these types of questions a lot,” said Schaefer. “Like, ‘should I be paying my debt faster, or should I be saving?’ or, ‘where should I be putting my money?’ It’s a huge pain point for them.”
Then there’s the goal to incorporate services in a form that’s more digestible for people in this field, fitting their sporadic schedules. Generally, that means online and fast.
“We do have a great premium care team that has extended hours if any of our customers want to talk about and work through things on the phone,” said Schaefer. “But typically they don't want that. Typically what they want are easy, efficient online experiences. And that's what we're giving them.”
Of course, the demand for a fast, online experience is pretty ubiquitous at this point. Schaefer acknowledges this, but she says that in regards to doctors and dentists, it’s even more important, which means it has to be spot-on.
“It's even more critical for doctors and dentists that are so time-starved,” said Schaefer. “They don't want to spend a lot of time picking up the phone. And when they do pick up the phone, it may be 10pm at night. It may not be during regular hours, given their schedule. So we thought about all of that. And those are some of the things that we're delivering for them."
Then there’s the lack in financial knowledge a lot of Laurel's core customers have. 71% of physicians under 40 said they lack financial knowledge, according to a survey by The American Medical Association, a partner of Laurel Road. Meanwhile two thirds of doctors say they plan on being more financially focused this year, according to research by Laurel Road and The White Coat Investor, a content site for doctors.
According to Schaefer, doctors are ready to investigate and learn more about financial factors within their fields. Things like how their salaries compare to their peers, or how they ought to proceed in terms of savings are becoming more important topics.
“There's a real gap of financial knowledge because they just don't have the time to invest in it that way. But yet they want to, and they plan to. And we are going to be there when they're looking at searching and wondering,” said Schaefer. “We have the tools now, and we'll continue to build on them.”
Laurel Road’s next steps aren't to expand into other industries, but to further drill down on this one.
“Our sweet spot is healthcare,” said Schaefer. “Our focus is very much on physicians and dentists. We'll probably expand, but really only within healthcare. I think there's plenty of opportunity within that space, and it is certainly a space right now that deserves a lot of recognition and appreciation.”
Laurel Road for Doctors could be an example of not only niching down on a specific consumer segment, but niching forward -- figuring out stages within this group’s life, and matching the digital bank’s services in a way that is as detailed as possible.
“I want to speak with financial service representatives who at least make an attempt to get what I'm doing and where I'm coming from,” said Will Peach, a fourth-year medical student and medical education influencer. “We don't want financial services to offer us products or talk to us like we're 10 years down the path and private business owners.”
“We want them to talk to us, knowing and understanding the journey,” he said.