Hartford Business Journal

8 Hartford Business Journal • October 19, 2020 • www.HartfordBusiness.com One hypothetical example: "Pets- Digital.com powered by Liberty," offer- ing digital bank accounts and custom debit cards featuring a picture of the member's own furry friend and net- ting users discounts on purchases at partnering pet retailers. It might sound simple, but co- branded cards and custom-tailored product offerings are already big business in the financial services world. Last year, consumers made $990 billion worth of purchases with co-branded cards offered by airlines, hotel chains, and big retail- ers in partnership with financial institutions, up nearly 8% from 2016, according to a recent report from ResearchAndMarkets.com. New brick-and-mortar branches are not out of play for Liberty by any means, but launching digital banks could limit how many it opens moving forward. "Maybe instead of launching six new branches that less people are go- ing to walk into, we launch six digital banks," Mitchell said. "Some may do well, some won't, just like branches." The idea is to get new customers from other states to open online checking and savings accounts and take out loans with Liberty, generat- ing interest and fee revenue. "We can go to all 50 states, we can turn the marketing spigot on or off depending on how it's growing or not growing, and doing it without the cost structure of a branch," Mitchell said. CT leader Mid-sized banks in other states have launched successful digital banks through partnerships with fintech providers, and in the process a few have even transformed them- selves entirely from legacy institu- tions into truly digital lenders, but Mitchell's effort at Liberty is unique among Connecticut banks. "No, it's not that common for banks to create a separate digital brand," said Charles Potts, senior vice president and chief innovation officer at the Independent Com- munity Bankers Association (ICBA), a national industry group based in Atlanta, which claims to be the fin- tech capital of the U.S. "If there were a lot of banks doing this, it would be readily apparent." Not every bank is ready to take on digital banking, Mitchell contends. Banks are often handcuffed by legacy technology and systems. It's also hard to turn a big ship — upper management must buy in. "Regarding our competitors, this type of strategy is not for everyone especially if it is not top down part of their culture," Mitchell said. "In my view, the culture is a major com- ponent of success." Liberty CEO David Glidden appears to be fully on board, saying the bank is aiming to do more than simply keep pace with digital trends. "Our goal is to make our digital platform and product offerings key differentiators in the industry, satisfy our customers' rapidly changing expectations while continuing to enhance our traditional banking ser- vices and position us for great suc- cess in what is now the 'new normal' in banking," Glidden said. There are, of course, risks to launching any kind of new venture. "In essence, you're launching a new business," ICBA's Potts said. "Think of all the different types of risks a new business might face." Potts has worked in the banking and financial technology industries for about 40 years, and has known Mitch- ell for at least half that time. He says it will be worth watching how Liberty's new strategy plays out. "He's one of the good guys in the industry and he's got a very good reputation," Potts said. "He's stepped into a really cool challenge that I think he's equipped to take on." >> Digital Future continued • Eastern is the top-ranked public regional university in New England (U.S. News and World Report, 2020) • Eastern graduates have the ethics, problem- solving and communication skills, and ability to work in teams that you need in your organization. • 41 majors — including Accounting, Data Science, Economics, Business Information Systems, Finance, Health Sciences and more. Eastern Grads . . . www.easternct.edu Job Ready! HBJ Ad 20.indd 1 HBJ Ad 20.indd 1 10/13/20 2:47 PM 10/13/20 2:47 PM You can count on us! Our flexible lending solutions and experienced team may be just what your business needs. Visit chelseagroton.com/growthatbusiness or call 860-448-4203 Bank deposit market share leaders in CT No. of Deposits Market Bank Offices ($000) Share Bank Of America 113 $40,429,756 24.82% People's United Bank 174 $27,481,773 16.87% Webster Bank 112 $23,296,865 14.30% Wells Fargo Bank 66 $9,088,286 5.58% TD Bank 62 $8,009,374 4.92% Source: Federal Deposit Insurance Corp.

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