As the overnight bank funding rate climbs above 4.5%, and funding competition begins to come home to financial institutions, leadership teams are under pressure to retain and grow core deposits.

Fortunately, there are strategies leaders can turn to when it comes to deposits, strategies that make rates matter less for the organization’s overall performance. Far more of the cost – and waste – of gathering new deposits comes from inefficiencies in the account origination process.

At MANTL, we commonly speak with institutions that are seeing only 10% of their online account opening applications completed. That’s the same as 10 customers walking into a branch, and nine of them walking out the door and taking their business elsewhere.

It takes about $10 in marketing to get one application, so what would it take to obtain 10,000 new accounts at a conversion rate of 10%? Since the institution needs 100,000 applications to obtain 10,000 accounts, it will cost $1 million – just on marketing! Now take into consideration the operational expenditures, technology cost and salaries on top of the marketing spend. That 10% conversion rate is a significant problem.

So, how do organizations scale deposit gathering without blowing up the marketing budget? It starts with the conversion rate from lead to application to funded account.

Improving Conversion Rate
It’s counterintuitive, but success at deposit gathering online is closely tied to branch banking for many institutions. Consumers are willing to try a remote relationship with an institution so long as banking digitally works. If the process doesn’t work, however, they want to be near a branch.

That is why many online deposit-raising strategies are often limited or unsuccessful: Most online account opening ends up requiring the new depositor to go to a branch. And the consumer isn’t going to bank with an institution with no branches nearby when the process requires in-person contact.

In that case, what reason does a consumer have to change institutions or open new accounts? No one likes an online account opening process – especially when it’s marketed as “online” – that forces them into a branch. An organization can market a new interest rate, but if there’s no change in convenience, the rate offered almost does not matter.

Looking at it another way, a new deposit campaign for online account opening doesn’t move a family any closer to a branch. If getting the account open online requires in-person, why change where you bank, or why add a new place to bank? Nothing has changed in terms of convenience. Consider why a prospect doesn’t already have an account with the institution. Is it really that they don’t know the branch is there? Branches are usually positioned very well.

Deposit campaigns, then, are being used as an awareness band-aid for an operational problem. People knew you were there before and didn’t bank with you. Solve the operational problem, and the institution’s deposit growth will respond.

Improving Experience, Reach
To improve convenience, institutions must deliver ease, access, and success at digitally opening an account.

For example, LendingClub Bank, in Lehi, Utah, reduced the time to apply for a new account by 75% – to 2:30 minutes from more than 10 minutes. Midwest BankCentre, in St. Louis, Missouri, reduced application time to less than three minutes.

Midwest BankCentre raised $100 million in net new deposits powered by a 48% average conversion rate from application to funded account. Both LendingClub and Midwest BankCentre achieved both faster application times and significantly reduced fraud – and eliminated the need for most new depositors to visit the branch in person.

For Midwest BankCentre, the account opening experience created conversions and added miles to its branch service areas, which we call the “halo effect.” When online account opening was unavailable or ineffective, branches serviced about three to five miles; afterward using online accounting opening, they saw the radius increase to seven or even 10 miles.

Doing the Math
Assuming a banking organization wants to grow by 10,000 accounts, a 40%+ conversion rate has a massive effect, especially when leaders factor in lower dependency on branches.

Just looking at a marketing cost of $10 per application, with a 40% conversion rate, an institution only needs 25,000 applications to get 10,000 accounts. That’s a savings of $750,000 on the marketing costs.

New branches cost millions to build. Looking at branch salaries saved from the halo effect, cost reductions would start in the range of $250,000, and that’s probably very conservative.

While others focus on deposit costs, you can protect profitability and remain competitive on rates because you can use a high-performing account origination solution that controls what deposit gathering costs you.


Nathaniel Harley

CEO & Co-Founder

Nathaniel Harley is the CEO and co-founder of MANTL, an enterprise SaaS company helping traditional financial institutions modernize and grow.  Founded in 2016, MANTL’s mission is to expand access to financial services. 


MANTL believes that the strategic deployment of technology will define the banking landscape for decades to come.  Its whitelabeled software helps community institutions raise billions of dollars in core deposits each year and is up to 10x more cost-effective than building a brick-and-mortar branch. 


Mr. Harley is a serial entrepreneur.  Before founding MANTL, he founded and invested in several startups and began his career in investment banking at Goldman Sachs.