Name: CD Valet at FinovateSpring 2024 – The future of CDs and the challenges in today’s deposit marketplace
Uploaded: 2024-06-12T15:25:59.085Z
Duration: 513.51

FF.SP.04_Josh Williams-_1.mp4

FF.SP.04_Josh Williams-_1.vtt

ENGLISH

{{00:00:05}}
Hi, I'm Cameron Emanuel Burns
reporting for FinTech Futures here

{{00:00:08}}
at Finovate Spring in San Francisco.

{{00:00:10}}
And I'm delighted to say that
I'm joined by Josh Williams,

{{00:00:13}}
head of partnership at CD Valet.

{{00:00:15}}
How are you enjoying
the conference so far?

{{00:00:17}}
It's been great.

{{00:00:17}}
It's good to be here and great
to see another strong turnout.

{{00:00:20}}
Awesome.

{{00:00:21}}
And so let's start off with what
are the competitive challenges

{{00:00:24}}
financial institutions face today
in today's deposit marketplace?

{{00:00:28}}
Yeah deposits are definitely the largest
challenge facing community banking.

{{00:00:33}}
There are a number of things.

{{00:00:34}}
With higher rates, essentially, there
are new incentives for consumers

{{00:00:38}}
to shop and at the same time that
technology is making it easier

{{00:00:42}}
than ever for them to move quickly.

{{00:00:44}}
And now they're paying attention to rates.

{{00:00:46}}
So there's one more thing that that banks
and credit unions have to think about.

{{00:00:50}}
Plus overall deposits in the market
are shrinking, especially off of

{{00:00:53}}
the peaks that we saw during COVID.

{{00:00:55}}
And so FIs.

{{00:00:56}}
Broadly, you're having to not
just think about how to grow

{{00:00:59}}
deposits, but how to retain them.

{{00:01:01}}
And then finally after this awakening
of this change of higher interest rates,

{{00:01:06}}
after rates having been long for so long
or low for so long FIs are realizing that

{{00:01:12}}
the digital deposit marketplace is really
distorted in a handful, or in the favor of

{{00:01:17}}
a handful of small FIs, and that's making
it very difficult for FIs to compete.

{{00:01:21}}
That's great, thank you.

{{00:01:22}}
And can you tell us about
Seedy Valley's beginnings?

{{00:01:25}}
And where you are today,
and where's it going?

{{00:01:27}}
Sure.

{{00:01:28}}
Yeah, CD Valet was started
by a bank, a Seattle bank.

{{00:01:31}}
At the time, it was roughly a half a
billion dollar bank based in Seattle.

{{00:01:34}}
It's always been a high growth
bank and a competitive rate payer.

{{00:01:37}}
And our experience was very
much what I just alluded to.

{{00:01:42}}
We went out and ran a CD campaign
using traditional print media.

{{00:01:46}}
went to go expand beyond that using
digital and found that even though

{{00:01:49}}
we had one of the best rates in the
country, it wasn't showing up on

{{00:01:52}}
the largest pay to play rate sites.

{{00:01:55}}
And so our CEO John Blizzard said
if we're having this challenge every

{{00:01:59}}
other bank and community credit union
must be having the same challenge.

{{00:02:04}}
Not long after that, we essentially
hired a company to prototype up a site,

{{00:02:08}}
we tracked all of the state, all of
the rates in Washington, and then we

{{00:02:12}}
took that link and sent it to all of
our heaviest CD customers to ask them

{{00:02:17}}
for their feedback, and they loved it.

{{00:02:18}}
They loved the fact that they got
that transparency and that ease of

{{00:02:21}}
seeing what the highest rates were.

{{00:02:23}}
So today, it's a separate
entity, it's been spun out of

{{00:02:26}}
the bank, it's its own FinTech.

{{00:02:28}}
We have roughly 3, 000 banks.

{{00:02:30}}
Rates are featured on the site.

{{00:02:32}}
It's over 30, 000 rates.

{{00:02:33}}
And we have over a million
and a half unique visitors.

{{00:02:38}}
Probably 10 percent of that, 15 percent
of that are recurring users at any time.

{{00:02:41}}
And we run MAU of about 100, 000 a month.

{{00:02:44}}
And those are those aggressive CD
shoppers that know if they go to CD

{{00:02:47}}
Valet, they'll find the highest rate.

{{00:02:49}}
So We've got FIs that are joining every
week in terms of taking advantage of

{{00:02:54}}
that visibility and some of the account
opening and data offers that we have.

{{00:02:58}}
And we expect to be rolling out some
additional products this summer.

{{00:03:01}}
We'll probably start with IRA CDs as well.

{{00:03:03}}
Awesome.

{{00:03:04}}
And what are the advantages that CD Valet
bring to the financial institutions trying

{{00:03:08}}
to build their deposit deposit portfolios?

{{00:03:12}}
Yeah I think it really solves
for two broad problems.

{{00:03:14}}
The first is getting
that visibility, right?

{{00:03:17}}
As we referenced today, if somebody goes
out and searches best CD rates, you'll

{{00:03:22}}
probably end up at bank rate, and when
you go to bank rate, you'll see a handful

{{00:03:25}}
of the very large national online brands,
Ally, Capital One, Discover, Marcus,

{{00:03:30}}
but you won't see the fact that there
are rates that are often as good or

{{00:03:33}}
better from community or regional FIs,
and that's might be serving those big

{{00:03:39}}
banks and capital and bank rate well,
but it's at the expense of consumers that

{{00:03:44}}
could be earning more on their savings.

{{00:03:46}}
And those FIs that really make up
the bank of Main Street, right?

{{00:03:49}}
That's where most of the small
business lending, commercial real

{{00:03:52}}
estate lending, ag lending happens.

{{00:03:55}}
So those banks not being able
to compete effectively for those

{{00:03:57}}
deposits is hurting their ability
to reinvest back in the community.

{{00:04:01}}
So we're giving that visibility
first and foremost, so FIs that have

{{00:04:04}}
good rates can get that visibility.

{{00:04:06}}
But secondly, we're also providing
the ability for FIs to convert

{{00:04:11}}
those leads into new accounts.

{{00:04:14}}
We recognize that over half of
banks and credit unions don't have

{{00:04:17}}
digital account opening today.

{{00:04:19}}
For those that do, we can ascend the lead
right into their existing account opening.

{{00:04:23}}
And for those that don't, we also
offer an account opening solution

{{00:04:26}}
that allows a consumer to write from
the site do all of their KYC, all of

{{00:04:31}}
the system checks, disclosures, etc.

{{00:04:33}}
And at the end of that, they've signed
their account agreement and authorised

{{00:04:36}}
the ACH debit to fund the account.

{{00:04:39}}
And so that's something that an FI
can use to get into market quickly,

{{00:04:42}}
even if they didn't previously
have digital account opening.

{{00:04:44}}
Ah, super.

{{00:04:45}}
And what should financial
institutions know about consumer

{{00:04:48}}
behaviour and their views on CDs?

{{00:04:50}}
Yeah, I think the most important thing
to think about with CD customers, and

{{00:04:54}}
if we're talking about those active
shoppers that have the higher balances,

{{00:04:57}}
is to think of them somewhat the way
that FIs have successfully thought

{{00:05:00}}
about mortgage refinance, right?

{{00:05:02}}
That is a primarily rate driven decision.

{{00:05:04}}
It's not to say that people don't
want relationship or great service,

{{00:05:07}}
but at the end of the day, it's a
significant financial transaction,

{{00:05:10}}
and rate really has to drive that.

{{00:05:13}}
What we know, though, within that
group of people is we tend to see CD

{{00:05:16}}
customers break into four broad buckets.

{{00:05:19}}
The first are those very
serious savers who almost look

{{00:05:22}}
for rates like it's a sport.

{{00:05:23}}
They're looking every, all the
time to know what's the best rate.

{{00:05:26}}
The second are these more
sleepy savers, right?

{{00:05:28}}
They might have significant savings in
CDs, but they've been, up at this point,

{{00:05:32}}
they've been somewhat asleep, right?

{{00:05:34}}
Letting those just roll
over into low yielding CDs.

{{00:05:38}}
Of course, we're seeing less
of those now, and more and more

{{00:05:40}}
people are waking up to that.

{{00:05:41}}
Then you have the event based
savers who are maybe saving for a

{{00:05:44}}
tax payment or some other event.

{{00:05:46}}
They want to get a good return, but keep
their funds safe for that time frame.

{{00:05:50}}
And now you have the newer savers.

{{00:05:52}}
Of those four groups, the first three
tend to have pretty significant balances.

{{00:05:56}}
Average bank CD sizes are around
100, 000, where credit unions

{{00:06:01}}
tend to be around 50, 000.

{{00:06:03}}
And many of those savers have
multiple accounts at multiple banks,

{{00:06:06}}
so it could be a significant amount.

{{00:06:08}}
And in the case of those new, early
savers, the reality is, while the

{{00:06:12}}
dollars might not be as high, it's a good
opportunity for community FIs that are

{{00:06:15}}
looking at how they can start those new
relationships by providing a good solution

{{00:06:20}}
to their problem and building from there.

{{00:06:23}}
I think those tend to be
something about the CD shopper.

{{00:06:26}}
I think it might be somewhat restraining
for people to know that we do see that

{{00:06:29}}
if you have competitive rates, you don't
necessarily have to have the highest rate.

{{00:06:33}}
People will accept a lower rate
if they can open now, and they

{{00:06:36}}
will accept a lower rate if it's
an FI that they know and trust.

{{00:06:39}}
And that's really the goal of CD Valet.

{{00:06:41}}
We're trying to make it so that
community banks and credit unions don't

{{00:06:44}}
have to overpay for their deposits.

{{00:06:46}}
They can essentially just pay a
competitive rate and still get

{{00:06:49}}
the funding that they need to take
care of their communities and their

{{00:06:52}}
customers on the lending side.

{{00:06:54}}
That's great.

{{00:06:54}}
And so finally What's the
profile of financial institutions

{{00:06:58}}
that you believe would really
benefit from being on CD Valet?

{{00:07:01}}
Yeah, the FIs that will benefit most are
those that already have competitive rates.

{{00:07:05}}
They're willing to pay that
rate but they can't get the

{{00:07:08}}
visibility or the conversion.

{{00:07:10}}
So we can solve for that visibility by
making sure that those serious savers

{{00:07:14}}
that I talked about before are gonna
see their rates, and we can help them

{{00:07:18}}
with conversion by saying, we can
either deliver this to their existing

{{00:07:21}}
account opening and make that process
as smooth as possible, Or provide

{{00:07:25}}
that digital account opening solution
if they don't have it so they can

{{00:07:28}}
capture that lead once they get it.

{{00:07:31}}
Now some FIs might be always in that
space of being aggressive on rates.

{{00:07:35}}
Those tend to be the FIs that have
really strong lending businesses.

{{00:07:38}}
Maybe they're in credit card
or auto or home improvement.

{{00:07:42}}
Most FIs, that's going
to be more occasional.

{{00:07:44}}
Maybe they'll run a CD campaign
or once or twice a year.

{{00:07:47}}
Maybe it's every other year when they
want to rebalance their portfolio.

{{00:07:50}}
But at that point in time, when they're
ready to raise rates, they want to make

{{00:07:53}}
sure that they can be efficient about it.

{{00:07:54}}
And some don't plan to ever have
higher rates, but they still want to

{{00:07:57}}
be active on the site, have that open
now capability set up and ready to go.

{{00:08:01}}
because it's one more source
of contingency funding.

{{00:08:04}}
If they find that they need deposits in
an unexpected fashion, they can increase

{{00:08:08}}
rates, get that volume quickly, if needed.

{{00:08:11}}
And a lot of those FIs still subscribe
to our market intelligence tool

{{00:08:15}}
just so they can keep an eye on
rates overall, and it can help them

{{00:08:18}}
thinking about pricing other deposit
products or their lending products.

{{00:08:22}}
Thank you so much for your time, Josh.

{{00:08:23}}
That was really, interesting, and I hope
you enjoy the rest of the conference.

{{00:08:26}}
Oh, you're welcome.

{{00:08:27}}
Thanks so much for having me.

Hi, I'm Cameron Emanuel Burns
reporting for FinTech Futures here

And I'm delighted to say that
I'm joined by Josh Williams,

How are you enjoying
the conference so far?

It's good to be here and great
to see another strong turnout.

And so let's start off with what
are the competitive challenges

financial institutions face today
in today's deposit marketplace?

Yeah deposits are definitely the largest
challenge facing community banking.

With higher rates, essentially, there
are new incentives for consumers

to shop and at the same time that
technology is making it easier

And now they're paying attention to rates.

So there's one more thing that that banks
and credit unions have to think about.

Plus overall deposits in the market
are shrinking, especially off of

Broadly, you're having to not
just think about how to grow

And then finally after this awakening
of this change of higher interest rates,

after rates having been long for so long
or low for so long FIs are realizing that

the digital deposit marketplace is really
distorted in a handful, or in the favor of

a handful of small FIs, and that's making
it very difficult for FIs to compete.

And can you tell us about
Seedy Valley's beginnings?

And where you are today,
and where's it going?

Yeah, CD Valet was started
by a bank, a Seattle bank.

At the time, it was roughly a half a
billion dollar bank based in Seattle.

It's always been a high growth
bank and a competitive rate payer.

And our experience was very
much what I just alluded to.

We went out and ran a CD campaign
using traditional print media.

went to go expand beyond that using
digital and found that even though

we had one of the best rates in the
country, it wasn't showing up on

And so our CEO John Blizzard said
if we're having this challenge every

other bank and community credit union
must be having the same challenge.

Not long after that, we essentially
hired a company to prototype up a site,

we tracked all of the state, all of
the rates in Washington, and then we

took that link and sent it to all of
our heaviest CD customers to ask them

They loved the fact that they got
that transparency and that ease of

So today, it's a separate
entity, it's been spun out of

And we have over a million
and a half unique visitors.

Probably 10 percent of that, 15 percent
of that are recurring users at any time.

And we run MAU of about 100, 000 a month.

And those are those aggressive CD
shoppers that know if they go to CD

So We've got FIs that are joining every
week in terms of taking advantage of

that visibility and some of the account
opening and data offers that we have.

And we expect to be rolling out some
additional products this summer.

We'll probably start with IRA CDs as well.

And what are the advantages that CD Valet
bring to the financial institutions trying

to build their deposit deposit portfolios?

Yeah I think it really solves
for two broad problems.

The first is getting
that visibility, right?

As we referenced today, if somebody goes
out and searches best CD rates, you'll

probably end up at bank rate, and when
you go to bank rate, you'll see a handful

of the very large national online brands,
Ally, Capital One, Discover, Marcus,

but you won't see the fact that there
are rates that are often as good or

better from community or regional FIs,
and that's might be serving those big

banks and capital and bank rate well,
but it's at the expense of consumers that

And those FIs that really make up
the bank of Main Street, right?

That's where most of the small
business lending, commercial real

So those banks not being able
to compete effectively for those

deposits is hurting their ability
to reinvest back in the community.

So we're giving that visibility
first and foremost, so FIs that have

But secondly, we're also providing
the ability for FIs to convert

We recognize that over half of
banks and credit unions don't have

For those that do, we can ascend the lead
right into their existing account opening.

And for those that don't, we also
offer an account opening solution

that allows a consumer to write from
the site do all of their KYC, all of

And at the end of that, they've signed
their account agreement and authorised

And so that's something that an FI
can use to get into market quickly,

even if they didn't previously
have digital account opening.

And what should financial
institutions know about consumer

Yeah, I think the most important thing
to think about with CD customers, and

if we're talking about those active
shoppers that have the higher balances,

is to think of them somewhat the way
that FIs have successfully thought

That is a primarily rate driven decision.

It's not to say that people don't
want relationship or great service,

FinTech Futures

Expert Insight

At the FinovateSpring 2024 conference in San Francisco, FinTech Futures sat down with Josh Williams, Head of Partnerships at CD Valet, to discuss the difficulties financial institutions face when building their deposit portfolios and how CD Valet assists them in achieving their deposit goals.
 
Watch the video to discover:
• The competitive challenges financial institutions face in today’s deposit marketplace.
• CD Valet’s origins and plans going forward.
• What financial institutions should know about consumer behaviour.
• How CD Valet are looking to help financial institutions build their deposit portfolios.