Raisin helps banks raise retail deposits

As an online deposit marketplace, we broker billions of euros of deposits to banks, saving them from having to invest in expensive infrastructure and marketing, writes Michael Stephan.

Temenos – Company

The total value of retail savings deposits in Europe is estimated to be more than €10 trillion, or just over half of EU GDP. That money is critical to ensuring banks’ security in terms of liquidity and meeting regulatory capital requirements. But for mid-tier banks, attracting and retaining those deposits can be hard work – and then only customers maintaining large deposit volumes are profitable.

This is because the infrastructure banks need to get and service savings customers is pretty extensive – from marketing and branch staff, online banking systems and customer service agents to regulatory reporting, risk analysis and more. Banks also need knowledge of local markets to be able to offer the right kind of product – what goes down well in Sweden might not be popular in the UK.

This is where Raisin comes in. We are the only pan-European deposit marketplace, helping our partner banks attract retail deposits effortlessly – from within the bank’s home market or from any other European markets. We attract customers to Raisin and the cost of acquisition sits with us. We do the marketing and our website presents the different banks, their accounts and the interest rates they offer along with maturities. We also do the due diligence on customers – KYC, for example – when they open a Raisin account.

Once that’s completed, the customer can transfer Raisin deposits to any of our partner banks. It’s quick and easy for individuals to find the offers that match their goals/needs and then manage their accounts through one single online portal. It’s so simple that on average a Raisin customer has deposit accounts with three different banks. All deposits are protected up to €100,000 per customer per bank under the European Deposit Guarantee Scheme.

Since we went live five years ago, we’ve signed up with a large number of banks and 160,000+ customers from over 30 European countries, with more banks in the process of joining. They get access to stable and long-term retail and corporate deposit funding (the majority of our deposits comes from escrow accounts), can improve their liquid capital and net stable funding ratios, and have full control over volumes and maturities.

There is no set-up fee; banks just pay Raisin a very small percentage of every deposit they receive that originates from our customer base. It’s completely pay-as-you-go. The upshot is that Raisin is by far the cheapest way for banks to get those vital deposits – something they’re increasingly catching on to.

Since signing up our first customer in 2013, we have brokered more than €10bn equivalent of deposits and we’re growing at a phenomenal rate – more than doubling our annual brokerage rate year-on-year with no sign of that growth slowing. What is more, Raisin customers are loyal – our churn rate is very low at just 5 per cent a year – and our net promoter score is 73 per cent, unheard of in banking.

Raisin implementation takes between two and four months, but banks using the Temenos core banking system will soon be able to cut that down to just four weeks thanks to a new standard adaptor set to be launched early in 2019, significantly cutting the cost and risk.

For banks that don’t have deposits as part of their core business model, why should they continue to tie up investment in the infrastructure needed to attract them? With backers including PayPal, Index Ventures, Ribbit Capital and Thrive Capital, Raisin offers a safe, effective and cost efficient alternative.

Michael Stephan is one of three Raisin founders and is the Chief Operating Officer

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Temenos – Company