leveraging consumer capture to grow banking relationships ...€¦ · leveraging consumer rdc to...

Leveraging Consumer RDC to Grow Banking Relationships

How Sallie Mae Expanded Beyond Student Loans

Mark Moroz, Sallie Mae Jon Reneslacis, VSoft Corporation

John Leekley, RemoteDepositCapture.com

September 29, 2011

RDC as a Consumer Tool

Influences: • The industry • The users • The technology • The demand

Results: • Revenue * • Retention * • Net New Customers * • Personalities

* largely To Be Determined 2

What Creates Your Personality?

• Genes • Experiences • Learning from others’

mistakes • Traits you are forced to

adopt • Technology shifts • Attitude

3 Leveraging Consumer Capture...

The Industry Personalities

Leader • Willing • Understood by users • Often most highly

compensated and most error-prone

• Capable of making corrections as they go

• “LET’S GO!”



Back Draft Follower • Along for the ride • Understood to be a

“ME, TOO” provider but won’t use that term

• Will feel the heat but likely won’t be burned

• Expect benefits (revenue, retention) to be realized



Eventual Follower • Not a close follower • Barely recognizable that

they are on the same path as the early adopters

• Pressured to play • Begrudging participant • “WE REALIZE WE

NEED TO…”


We can all just get along…

• Convenience at workstations

• Cost-effective scanners • Web-based software • Support for multiple

operating systems

• Mobility • Elimination of

workstation and scanner dependency

• “On Demand” • Progressive, developing

path


The Target is the Same

• Customers (existing and net new)

• Check Deposits to Make

• Convenience is Important

• Retention is a Goal • Competition is Fierce


About Sallie Mae

• Sallie Mae is the nation’s No. 1 financial services company specializing in education. Our mission is helping students Plan, Pay, and Save for college.

• Prior to 2010, Sallie Mae had three main profit centers: – Origination of federally guaranteed student loans – Origination of private (non-guaranteed) student loans – Servicing student loans of all types


Sallie Mae Bank

• Chartered by Sallie Mae in 2005 to deliver brokered deposits for use in funding core student lending business

• Retail Banking (online direct model) launched in February 2010 with savings & CDs

• The original Retail Banking goal was to reduce Cost of Funds for our consumer lines of credit


Sallie Mae Retail Banking expansion

• In 2010, Congress eliminated the student loan industry’s ability to originate federally-guaranteed student loans, and took that business in-house

• As a result, Sallie Mae has had to create new business opportunities, such as expanding Retail Banking – Current product offering includes CD’s, checking and two

savings accounts, with plans for several other deposit/transactional products in the future

– Sallie Mae No Fee Student Checking launched 6/2011 – Sallie Mae also offers credit cards and 529 plans


Retail Banking benefits

Retail Banking creates opportunities for Sallie Mae: • Borrowers can have customer relationships beyond

the life of the loan, can save with Sallie Mae, and develop smart financial habits

• Sallie Mae can engage new customers – College students, through Sallie Mae No Fee Student

Checking – Savvy savers, through online marketing

• Retail Banking reduces the cost of funds for loans originated by Sallie Mae


Sallie Mae Customers are younger

• Our customers are primarily students, so they are generally younger: – Community College students are 18-40 – University students are 18-30

• Our customer relationships have historically ended when their loan is repaid

• To create lifelong relationships with our customers, we need them to adopt our non-loan products

• This means that our non-loan products have to have the cutting edge features that our younger demographic expects and demands


Younger Customers use new features

• To adopt us as their bank, our demographic expects that we will understand the tools that they use everyday, and use the latest technology and features to make those tools useful for banking:

– Smart phones/iPhones: mobile banking and apps – PCs: online banking – Scanners and camera-enabled phones: RDC


Sallie Mae needs RDC

• RDC is integral to our adoption & growth: for our demographic, RDC is a requirement for entry into the banking market. Customers will not adopt us without it.

• We’re new, so we’re able to use RDC as a building block for growth rather than adding RDC as a feature to our established products – Instead of a retention tool, it’s an acquisition tool to show

customers that they can bank anywhere, anytime – The bottom line: ease of access to funds & banking


Sallie Mae has limited RDC expertise

• The Sallie Mae Retail Banking team has extensive industry experience: – Marcy Schwab, Vice President, Retail Deposits Marketing: formerly of Capital

One – Greg Spadea, Senior Director, Customer Loyalty: formerly of Discover – Mark Moroz, Senior Director, Customer Acquisition: formerly of ING Direct – Other team members have previously worked at Chase and ING Direct

• But the team had no direct RDC experience, so Sallie

Mae needed help to begin the RDC partnership process


RDC Marketplace

• Since the team had no RDC contacts, we used the RDC Marketplace at RemoteDepositCapture.com to identify the four best prospects to meet our RDC needs

• We conducted an RFP that invited many prospects identified by the RDC Marketplace, and used the RFP process as a learning/teaching experience

• This process resulted in our selection of VSoft as our RDC provider


How we use RDC

• We offer both scanner- and mobile-based capture • We offer RDC on our checking & savings products

– Other deposit options include ACH and US mail

• RDC is expected to be the prime deposit channel for our No Fee Student Checking product – No Fee Student Checking is a full-featured checking account

that colleges & universities adopt to refund excess funds to students

• Other features are no minimums/fees, free ATMs (35,000), Debit MasterCard®, online Bill Pay, Mobile access

• We want students to use this account as their primary banking relationship


Sallie Mae’s Retail Banking future

• To continue to hit our adoption/deposit goals we are counting on a huge adoption rate for RDC: – No Fee Student Checking- with the Gen Y demographic we

are forecasting 30%-35% of deposits will come from RDC (virtually all paper check deposits)

– High Yield Savings and Money Market- we look for our core depositors to use RDC to deposit 15%- 20% of our portfolio balance

– Future Transactional Accounts- new transactional accounts rolling out in 2012 will rely heavily on RDC technology to drive deposits. We are forecasting 30% of the portfolio deposits to come through RDC


Questions?


About The Presenters Mark Moroz • Sallie Mae • Contact Info : [email protected] • URL: www.salliemae.com

Jon Reneslacis • VSoft Corporation • Contact Info: [email protected] • URL: www.vsoftcorp.com


mailto:[email protected]

http://www.salliemae.com/

mailto:[email protected]

http://www.vsoftcorp.com/

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