How an Online-Only Bank Powers Its Platform

If Radius Bank was going to succeed as a digital-only bank, it needed to offer customers an incredible digital experience.

By 2016, the Boston-based bank had closed most of its branches to focus solely on digital channels – a strategy that hinged on offering consumers and small business customers a superior experience without needing physical locations to resolve problems or open new accounts. Part of a suite of financial technology partners that powered this strategy was Narmi, a digital banking platform provider. Radius found success with its strategy, so much so that it became a natural acquisition for another online lender: In February 2021, LendingClub Corp., a San Francisco-based marketplace lender, closed its acquisition of Radius Bank and renamed the company LendingClub Bank.

Radius has been a long-time adopter of Narmi’s platform, and success stories like theirs helped Narmi secure the top spot in both the customer experience category and as the “Best of Connect” – the best overall among the category winners – in Bank Director’s 2021 Best of FinXTech Awards. Finalists included NCR’s open-technology-based Digital Banking Platform and Velocity Solutions’ Account Revenue Solution, which offers customers rewards to increase engagement. You can read more about Bank Director’s award methodology and judging panel here.

Radius partnered with Narmi about three years ago to refresh its online and mobile platforms, says Mike Butler, the former CEO of Radius Bancorp. Narmi offered “a drastic change” in the look, feel and functionality of the consumer banking platform. The platform also helps banks reduce both fraudulent account openings and account opening abandonment.

“Three years ago, if you visited the site, you’d see a traditional bank. Today, you’d see a more user-friendly experience,” he says. “[Narmi is] more than just technology people who say, ‘Tell me what you want and I’ll do it.’ From a fintech perspective, they give us their views of how they think the customer experience should operate. It’s like an added management team to us.”

Change can be jarring to customers used to the previous layout of a site. Butler acknowledges some initial dips in the bank’s net promoter score, which it uses to measure the platform’s success via the willingness of a customer to recommend the product. But Radius Bank’s score rebounded to above 50 within three months – a level that is considered to be “very good” for a bank, he says.

The platform features a “marketplace” where Radius introduces clients and customers to other products and services outside of banking that can improve their financial health. The implementation went so well, and subsequent customer reaction was so positive, that Radius decided to use Narmi again to launch a small business digital banking platform in 2020 – a product launch that helped the bank address a segment under intense pressure because of the coronavirus pandemic, and whose needs are often left out of bank offerings. Butler says Narmi was able to meet the bank’s implementation deadlines, clearly communicating the work required to make adjustments, and laying out options and alternatives in cases where the bank risked missing its timeline.

“Having our small business launch in 2020 in the middle of the pandemic was a big boost to our small business clients,” Butler says. “We’ve had a huge uptick in our acquisitions of small business clients – you have to throw Narmi into the mix of reasons why.”