John Rosenfeld is used to taking risks.
The former Green Beret turned Citizens Bank executive once led the A-Team of a free-fall parachute unit. Now he’s taking a different kind of leap, spearheading the creation of the institution’s first digital-only bank.
Citizens Access went live last summer, and has quickly gathered nearly $5 billion in deposits from roughly 50,000 customers. The endeavor is meant to reverse inroads made by challenger banks, which offer more consumer-friendly fee structures and apps.
Citizens created the digital bank because it wanted a better way to gather deposits as its loan volumes increased.
“We came up with the idea that if we created a second bank that we operated nationally, we could raise deposits more aggressively,” Rosenfeld, the president of Citizens Access, said in an interview.
The early success of Citizens Access and Rosenfeld’s role in shaping it is why he is a finalist for American Banker’s 2019 Digital Banker of the Year.
Rosenfeld is no stranger to digital innovation. He previously worked at Bank of America, where under his watch it became the first to offer online check images, free online bill-pay and mobile banking.
"John was one of the early pioneers of digital banking at Bank of America,” said Brad Conner, vice chairman at Citizens Bank. “He has a lot of experience creating online and digital experiences and in the last several years of his career, he was running deposit products for us. So if you think about his background, he was an absolutely perfect fit."
Rosenfeld runs Citizens Access like a bank within a bank. It has its own office, balance sheet, chief marketing officer, chief operating officer and core system. It doesn’t charge fees, eliminating disclosure requirements and complaints about fees. The account opening process takes less than five minutes.
Rosenfeld and his team started developing the idea in mid-2017. The main goal was to gather deposits. Citizens Bank makes loans nationally but only offers checking and savings accounts in 11 states. As loan volumes grew, it was hard for the bank to increase deposits at the same rate, and it became expensive.
To link the digital-only offering to the parent bank, they came up with the name Citizens Access. In October 2017, they selected FIS to provide core banking technology.
The digital bank launched last July and has 75,000 active accounts (from about 50,000 actual customers). The average account size is $70,000, “huge compared to the industry,” Rosenfeld said.
So far, at least, it only offers savings and CD accounts. Its current savings rate is 2.35%; CDs range from a one-year at 2.85% and a five-year at 3%.
Attracting 'optimizers'
The people who are coming to Citizens Access, Rosenfeld said, are “optimizers.” They’re web savvy and they want simple self-service.
“It’s not all about price,” Rosenfeld said. “They also want to make sure one of their most valuable resources, time, is not wasted. Creating an experience that aligns well to your customers' needs and desires drives them to consider you even when you may not have the best price in town.”
These customers also like the fact that Citizens Bank has been around a long time and has a ballpark named after it, he said.
About 12% of Citizens Access customers are also Citizens Bank customers, but only 4% of deposits come out of Citizens Bank accounts.
The top state is California — about 16% of deposits come from there, “where we probably have the least brand recognition of anywhere else in the country,” Rosenfeld said.
Californians find out about the Providence, R.I.-based company by going to
“We know which of these aggregators have the most traffic and we know which aggregators end up producing the best quality customers for us,” Rosenfeld said. “And that's where we choose to spend our advertising money.”
An analytics team monitors the cost per click and cost per dollar raised at each aggregator and Google.
“We shift our marketing spend on a day-by-day basis based on where we're driving the most efficient acquisition levels,” Rosenfeld said.
The average age of Citizens Access customers is 45, younger than the rest of the bank's customers. They have higher incomes, larger homes and larger credit availability. Few revolve the balance on their credit cards.
“The idea of paying a credit card company interest is disgusting to them,” Rosenfeld said.
A circuitous route
Rosenfeld took a different path to banking than most. He was a second lieutenant in the Army during Desert Storm. He earned a Green Beret and joined Army Special Forces as an A-Team commander of the free-fall parachute team.
“I was jumping out of perfectly good airplanes,” he recalled. “I didn't carry a lot of that experience forward, but it taught me leadership and adaptability.”
He left the military in 1996 after his third son was born and got a job at GE running production of refrigerators. At night, he took engineering classes and taught himself to code.In 1998, he left GE to become e-commerce leader at Lexmark.
A year and a half later, Jack Welch decided GE needed to have e-commerce leaders in every major business. Rosenfeld was hired to run e-commerce for the aircraft engine business. In 2000, Rosenfeld launched GE’s first customer web center for GE aircraft engines.
A year later, shortly after Welch retired, Rosenfeld left GE to run online banking for Bank of America and manage the online teams from the recently merged Bank of America and Nations Bank. The following year, he made online bill pay a free service, realizing that once customers start paying bills at a given bank online, they don’t easily leave — they make that bank their primary institution and give it more business.
Also at BofA, Rosenfeld launched the ability to view check images and aggregate accounts from different banks online. In 2002, he launched and then killed a mobile banking initiative.
“We thought we had this great idea called mobile banking,” Rosenfeld said. “You could look at your accounts and pay bills all from the device in your hand. And the initiative failed miserably.”
The reason? They tried to do it on the BlackBerry and Palm Pilot. The devices weren’t ready for it.
In 2003, he was put in charge of credit card sales, military banking, and student lending at BofA. After BofA acquired Fleet in 2004, Rosenfeld became overseer of more than 500 branches in 10 states. He later ran checking and consumer fees and international treasury services.
In 2009, he joined TD Ameritrade and managed online engagement. He launched a virtual agent named Ted and developed an analytics engine that targets customers based on online activity. The next year, he moved over to TD Bank to run deposits and payments. In 2013, he left TD Bank to run Everyday Banking for Citizens Bank.
Next steps
Rosenfeld and his team are thinking about letting customers link savings accounts with trust accounts.
“People with large accounts and large balances often establish trusts to protect their interests over time,” Rosenfeld said. “And we want to be able to support that.”
Rosenfeld also plans to add the ability to manage beneficiaries online. In the future, he may introduce voice or facial recognition for account authorization.
”When we see people implement great ideas, we'll take that idea into the lab and brainstorm within the team about, how could we be even better?” he said.
The bank hopes Citizens Access will build a new deposit-gathering base, reaching customers it normally would not.
“I don’t think we’ve determined everything it can be,” Conner said. “This gave us an ability to build something completely new from scratch. It also gives us a platform to launch other potential national capabilities."
