Riding the Wave: The Resurgence of CDs

Sponsored by
Sponsored Breakfast 3 CD Valet Thanks to higher interest rates, CDs are back.  And whether bankers like it or not, consumers are shifting their funds to higher-yielding CDs and the competition is on. 

What you'll learn
  • How the dynamics of the digital marketplace, online advertising and competitive strategies are changing the game of winning consumer time deposits. 
  • Common myths and misperceptions about CDs and new considerations in the current interest rate and regulatory environments.
  • The role of digital account opening in competing for CDs and steps to creating a frictionless online experience.
  • Opportunities to market your CDs in an online CD marketplace, utilizing competitive pricing data, lead generation strategies, and greater national or regional visibility.
Transcription:

Mary Grace Roske (00:09):
Good Morning everybody. Thanks so much for coming up here at 7 45 in the morning to talk about the Resurgence of CDs. It's great to have you here. I'm Mary Grace Roske. I lead marketing for CD Valet. And CD Valet is a new online marketplace that connects consumers to financial institutions to shop and open CDs with the best rates and terms nationwide. And every story or every company, especially startups, have what's affectionately known as the origin story. So how did you get started? What are the roots of this company? And I like to share that about CD Valet because I think it's something that many community bank and credit union and bank executives can understand. CD Valet is the brainchild of John Blizzard, who is the CEO of Seattle Bank. And about five, six years ago, Seattle Bank had the opportunity to buy a very lucrative, potentially very lucrative loan portfolio, and John needed funding for it.

(01:07):
So he said, I'm going to get some CDs and I'm going to run a CD campaign that has some of the highest rates in the country, in fact, the highest rate in the country because I need this funding. And he set out some ads in the Seattle Times, sat back and waited for all the CDs to come in. And sure some came in locally, but he was a little perplexed why these great CD rates at Seattle Bank weren't making the websites that would show up when you Googled best CD rates come to realize there was this thing called pay to play marketing and comparative web ranking websites. And we weren't paying, so we weren't showing up. So the consumer was going to these sites expecting to see the best rates and wasn't seeing the best rates. They were simply seeing advertised rates. And from that, John took a deep dive into the whole world of CDs, this very competitive CD rate shoppers who do it for sport.

(02:08):
Who are these folks? What are their demographics? What's this market like? How do you reach 'em and how do they go about shopping for that product? From that came CD Valet, which began in 2022 as a really consumer website that simply had a lot of CD rates on it. In 2023, it became actionable for financial institutions then who could sign up for lead gen or digital account opening services. And then in 2024, we became a freestanding FinTech company. And in that process of that journey, we brought along Howie Wu, who has joined us as head of product. And I'll let Howie Wu introduce himself.

Howie Wu (02:44):
Yeah, good morning everybody. Thanks for attending on a early morning and hope you're enjoying your breakfast. So I'm Howie Wu. I'm the Head of Product for CD Valet and Seattle Bank as well. Join the bank and CD valet a little over two years ago now. Previously from that I came from a small bank called First Republic Bank, which you may have heard of that that no longer exists. And now part of the JP Morgan family and I led digital there for five years previously on the consumer and private wealth side, building obviously a lot of digital products. And that institution was obviously very focused, very much in deposits. And we will cover some of those strategies in terms of what we did there and some of our later presentation here. Prior to that, I came from Boeing Employees Credit Union, which again, you may have heard of fourth largest credit union in the nation. I was there for 15 years and led their digital strategy pretty much from inception to where they are today. And so certainly lots of experience in the industry, lots of experience with product, and so happy to obviously today share with you guys what CD Valet is all about and have some discussion really just around this new environment, this new rate environment, and obviously as community financial institutions, both banks and credit unions, how we're really sort of competing for deposits today.

Mary Grace Roske (04:14):
The first thing we want to do is kind of know our audience. Want to read the room a little bit and ask you to bring out your phones and help us get a sense of what your feeling is around the pressure to raise deposits in this current market. For us, we really see knowing that this CD valet was founded by a community bank or really a boutique bank, we see deposits as one of the biggest problems in community banking. Certainly a big barrier to growth and serving your community given that community banks and credit unions do so much of that small business lending, ag lending at et cetera. So tell us what you think by scanning that QR code and we'll have a couple opportunities to do this today, including one at the end which can give you access to our, what are we calling it? Market intelligence tool. CD Valet collects 30,000 rates from 4,000 financial institutions. And we have an analytics tool that's available to financial institutions to use to price your CDs, price deposits, look at trends in your competitive set, et cetera. So right Howie, what do we know? Alright,

Howie Wu (05:21):
Everybody get a chance to scan? Yeah, just scan the QR code and it should bring up mentee for you automatically. And then you can basically vote on one of the three and let's see what we're looking at at this point.

Mary Grace Roske (05:34):
Okay, it looks like we're you got in the right room with the right people here because it's something that's on everybody's mind as we expected. We see that lots of folks agree the deposits are a big issue. My colleague Josh Williams likes to use the quote from Warren Buffet, which is only when the tide goes out do you see who was swimming naked. So from that, when interest rates go up, you find out who may have not really had a deposit strategy to deal with this scenario. Many financial institutions maybe including that one. How I used to work for kind of assumed that clients would be okay with not being paid on their deposits. And we learned that that as interest rates went up, that certainly is not the case, leaving financial institutions looking for deposits and leaving financial institutions competing for them. So when we look at the scenario over here, we've got financial institutions feeling the pressure.

(06:24):
Lots of talk about heis. It's interesting, you see a lot of hear a of talk about heis. Those seem to be a millennial thing, whereas CDs are definitely a little on the older side. High cost of raising funds. Again, CD valet, we've saw some pretty amazing interest rates and promotional campaigns last year we saw CDs with sevens in front of them. So people are doing some pretty amazing things to try to raise funds. The long relied on wholesale funding and broker deposits, not necessarily seen as favorably as they once were. Creating more pressure for financial institutions to be able to find funding sources, a need for deposits to meet loan demand, satisfy your customers critically important. And of course regulators taking a harder look at contingency funding plans and wanting financial institutions to have access to a variety of sources available in adverse conditions. So all of these things really create a lot of pressure around deposits.

(07:23):
Now, meanwhile, while all this is going on and there's pressure for deposits, we have the four largest financial institutions holding 40% of the CDs in the country. And we know that those institutions aren't necessarily, in fact aren't very rarely the highest rate payers. So we know folks who are opening CDs, we know that many of them are what we call sleepy savers who are just keeping CDs at large institutions passively letting them roll over. And then you've got another, so you've got 20% of your CDs with those top four institutions. You've got 20% of your CDs with the largest kind of credit card funders, capital One, Goldman Sachs. They are the high rate payers. They've gotten this down because of their digital account opening systems and how easy they make it for people to open CDs. So 40% of your CDs are with those eight institutions. 60% of the market then is left for all the rest of the financial institutions out there in the country. So that is part of where CD Valet comes in and understanding the market and looking and seeing where we see a really great opportunity for community FIS to get a better share of the market.

(08:38):
So now I'll turn it over to Howie's. Going to talk a little bit about the tech side.

Howie Wu (08:41):
Yeah, it's an interesting space obviously now when you really think about it as we've been talking about the deposit side and the new competitive landscape for deposits. If you kind of go back to historically what most of, I would say all fis have generally been focused on really in the last 15 plus years, I'll call it even pre iPhone for the most part it's been very much an asset generation sort of focused business because deposits have generally come very easy. Cost of funds obviously have been relatively cheap if not free. And so with many institutions focused on lending, that's where as most of us as community bankers so to speak, we've been focused on driving that loan portfolio and driving our tech stack related to driving that loan portfolio. And so one of the myths that I think that we're now trying to play a little bit of catch up is that really on a deposit side, if you build it, they will kind of come.

(09:48):
And what we really mean by that is number one, when you think about it, and if you look at the data today, over 50% of financial institutions don't have digital account opening on the depository side, right? Many of them can obviously do lending. As I mentioned, they focused their tech stack on the lending side. But now when you look at deposit gathering and being able to actually fund and open an account, it's challenging for many institutions. And that comes with a variety of different challenges. I think one of the biggest ones is obviously technology. Many of us obviously live with legacy platforms. If you look at core banking solutions, there's obviously a vast array of different core banking platforms that are out there at the same time, even those that are on the same core banking platforms, there's so many different customizations that each institution has done.

(10:44):
And so the complexity that we've added into our technology stack to be able to integrate into those core platforms makes it relatively challenging for a lot of institutions to be able to integrate, to be able to build solutions. And not only that, but even just the appetite or even just the resources and capital spend in order to do so. So that's a challenge for many institutions. At the same time, if you think about the branching model, and this happened a lot at First Republic when I was there, the institution was very much focused on a brick and mortar foundation. That's really what the institution was built on from the onset and the model and the thought process was like, Hey, if you build a branch, they will come, right? Many institutions felt like those were money centers. If you put 'em in the right places, people would just kind of come off the streets and deposits would come and it did work.

(11:43):
I mean, it did in theory work to some extent, especially when rates were not competitive. If you're competing for arguably 30 basis points, it is hard for people to move. And there's really not a lot of motivation for consumers to move their deposits elsewhere for that minimal gain. And so the cost of switching just wasn't there. But now if you look at it and how competitive it is when you're talking about an extra 5%, an extra 4%, people are a lot more motivated and people are much more savvy and are willing to actually make that move to switch. And at First Republic, when you look at the branch model, even when you stood one up, it was always relatively in the red for the most part, for pretty significant time before it became relatively positive. And that was in a really a no rate environment type of space.

(12:40):
And then on top of that, as Mary Grace alluded to at the beginning in terms of our sort of onset and how we came about with the CD valet solution, larger fis, it's very easy for them in terms of their spend capability, their ability to market when they can spread it across hundreds of thousands, if not sometimes even millions of customers. It's easy to raise that capital in order to put your investments towards marketing, put your investments towards technology. And that's not obviously a model that works very well for community institutions. And so getting visibility on solutions, for example, when Seattle Bank was trying to do it at the time, we couldn't get out of our way in terms of getting our rate passed, just getting it listed on Seattle Times, even though we were one of the highest rate payers, if not the highest rate payer in the industry at that time, as we were trying to raise funds for that asset acquisition, it was super, super challenging.

(13:49):
And even for us to be able to participate with bank rate at that time, you had to be a national institution, which we weren't at that point in time. We were very much a Washington based community institution and just the pure cost of doing that for us at that time for Seattle Bank, it averaged about $1,100 per cd. So that just didn't pencil financially for you to even participate in a bank rate type solution to just get visibility out there. And so these are the things that obviously are many of the headwinds that we are now challenged with and we'll continue to obviously as we go through the slides for the remainder of the morning, we'll certainly show you how CE Valet can help you tackle some of these challenges.

Mary Grace Roske (14:38):
So the Wall Street Journal called CDs, America's Dullest Investment, and they did that in an article last fall when they were talking about the Resurgence of CDs. So consumers are rediscovering them, certainly some discovering them they weren't around 20 years ago when they were popular, but financial institutions have their own attitudes about CDs. And so if you want to break out your phone, again, we're going to look at some of these myths around CDs and let us know what you think about them when you think about them as a funding tool for your institution.

Howie Wu (15:14):
And you shouldn't have to scan again if you have the previous one still open, but if you do, QL code is there as well.

Mary Grace Roske (15:47):
So survey says

Howie Wu (15:48):
It's not running. You guys are seeing this? No.

Mary Grace Roske (15:53):
Alright, so well, we'll just go on. Myth number one, CD clients are Rate Chasers probably yes. To be transparent around that, it's a commodity product and rate is the number one thing consumers care about, but I could tell you through our experience on CD Valet, it's by far not the only thing they care about. Our CD valet provides a shopping experience based on geography, a choice between credit unions and commercial banks if somebody has a charter preference. And so yeah, rate drives people, location drives people as an active participant in the CD market, Seattle Bank, we've got a lot of folks who say, yeah, I want the best rate at the financial institution I can drive to because I still want to know that I can see somebody and talk to somebody if I need to. The digital account opening experience or lack thereof is another big driver in conversion rates and how much we see financial institutions opening or consumers opening.

(16:54):
So yes, they are rate chasers. We don't necessarily always think that that is a bad thing as it creates an opportunity. And there are other factors, location and digital account opening or account opening experience, client experience that are big indicators as well. Myth number two is that CDs are too expensive. I think that's another yes, but kind of an answer. Expensive relative to what? Considering the opportunity cost of something that inability to grow, inability to make loans. Another thing we like to point out in sort of helping people rethink CDs is simply the size of the deposits. CDs. Our experience at Seattle Bank, our CD average size is a hundred thousand dollars for commercial banks. I believe it's in the high seventies credit unions, it's in the mid forties. These are large deposits that come in with one transaction, not a lot of additional costs with it.

(17:52):
So the relative unit cost is lower. So yes, while they are more expensive, there are other factors to consider in looking at the cost of these deposits. There are quick way to move the needle also if you're looking for immediate funding because it comes in that bulk. Myth number three, CDs are hot money. So if another way to look at that is are they rate sensitive to? The answer to that of course is yes. But again, looking at our experience, the CDs that renew generally renewiture rate of about 70% if you remain having a competitive rate. So it's not like that. This idea that they will all get up and go right away isn't what's been proven out in our experience or many other financial institutions in the market. And I think the idea that this relationship banking based deposits are solid has also sort of been debunked over the last couple years as well as we've seen deposits really flee out of financial institutions in adverse circumstances or when things weren't great.

(18:57):
So our position is really that they are no hotter than other deposits. In fact, they give you this opportunity to build a relationship over time, 18 months, three years, whatever the length of the CD is. We see that people rarely break CDs even when it's in their best interest to break CDs, reinvest in another CD at a higher rate, still won't do it. So it's a different way to think about this concept that CDs are in this hot money product. And this one is really the most interesting to me as a marketer. And that is this myth that it is impossible for community fis to compete digitally. And we do hear from community financial institutions often. I don't know if my digital marketing is working. I don't know. It's complicated. It's different than what I used to do before. And indeed, yes, digital marketing is more complicated and it has a lot more moving parts to track requires a level of expertise that a lot of folks maybe don't have in-house or don't feel the combination of content marketing plus digital marketing, paid search plus SEO, all of these things together that are required to be successful.

(20:10):
It's more complex, it's more expensive. And that's really where I think having a partner like CD Valley comes in handy because it becomes our job to drive the viewers, the potential customers to you. So in the case of the CD product, we're the ones who are driving the qualified leads. We're the ones who understand the serious saver, who's out there, who is your retired individual who invests a couple hundred thousand in CDs every year, has multiple bank relationships with CDs. Our job to find those serious savers and the ones we call the Sleepy Savers, who are the ones that are sitting with a whole bunch of money at a earning 30 basis points on their CDs to wake them up. We've taken over that marketing to drive the traffic. And I think that is an important distinction in especially if you feel like the combination of everything required for digital marketing of this product is complex.

(21:06):
That becomes our job. And I like to say that one of my favorite kind of examples of CD valets success happened a couple of weeks ago, and it was a consumer in Florida who had $950,000 to invest in a cd, went to CD valet, found a community bank in Utah because that had the best rates and terms for what that particular client was looking for and opened it. So you have a bank across the country that this institution or this consumer was able to find and put nearly a million dollars in, and that institution was not the one responsible for finding that client. It was us. We did the marketing, we found that saver and facilitated that transaction on the marketplace. So that's really that idea that community financial institutions are challenged to compete digitally, yes, because the larger institutions have a lot more money to spend, but that then becomes the job of CD valet to drive that client or drive that traffic to your site. So those are some of the myths that we often hear about financial institutions or about CD marketing. So now I'm going to let how we show you how CD valet actually works from a FI standpoint.

Howie Wu (22:21):
Yeah, so thank you. Yeah, so this is our main CD valet site, so cd valet.com. We also have an app and obviously this is mobile optimized as well, so we do see a lot of traffic coming from mobile devices, but obviously many of the consumers come to the site primarily just by going to the.com webpage and going through the experience, we've basically built this to be very, very user-friendly, really focused on a customized shopping experience. When the user typically lands on the page, they actually get a popup. That really just helps them establish some fundamental basics around what they're actually looking for. If they're shopping for a particular bank, they can certainly search. If they're looking, they just want to see the credit union industry and the credit union market, they can do that as well. This is also very much geo located. So we've built it so that if a consumer comes in and they don't choose any of these settings, at minimum, we know exactly where they're at typically based on their IP address.

(23:27):
And so it gives them and starts kind of focused on their geographic location, which again, as Mary Grace alluded to, has become. We're seeing in the data that it is still very much important for people to try to find that local institution that's close enough to them that obviously is still offering that high rate. And so once they customize their shopping experience, as you can see here, we've listed all of the featured CDs. So in this particular page, what you see here is these are fis that are current clients and customers of ours. They've partnered with CD Valet, and what you're seeing is an open now page. As Mary Grace mentioned, we're tracking over 33,000 rates across the entire industry today. It's an ever growing market. When we first kicked this off, initially we were only tracking about 18,000. So it shows you how many institutions have woken up and said, Hey, we actually need to make our rates more readily available.

(24:31):
There are still obviously quite a few institutions that don't make their rates public. And so for us, if the rates aren't publicly published on their website, we're obviously not able to capture that particular rate and we aren't able to necessarily display it. But as I mentioned, we are seeing that mix continuing to grow pretty rapidly. And so if a shopper just wanted to see all the market, the way that this is positioned is on a top down highest to lowest, we always show obviously if there's a promo special on this one that you're seeing at the top from Evermore bank, it's a 21 month special. We try to explain to people like, Hey, these are kind of the standard terms and here are the products that have, I'll call it some sort of special term or some sort of special feature that basically is part of the product.

(25:23):
And so those without the open now buttons, what you'll see is a consumer will actually have to action that relatively differently because they're going to have to actually take it upon themselves to go out to that particular fi because that FI is obviously not partnered with CD valet. And so that actionable effort of having that open now button is just not there. So that's relatively a high level explanation of the consumer sort of shopping experience. What I'll do is I'll jump to how we get exposure. So if you look at our site today, we have over 1.5 million visitors. We've driven a ton of traffic. We're averaging over a hundred thousand monthly active users and we have over 150,000 returning users. It's been a tremendous effort to drive this traffic. As you can see, some of these brands that we've partnered on here, including American Banker, who are our kind hosts for this particular event, what we've done is really focused on targeting the appropriate demographic in this case, what we call the savers, the Sleepy Savers, those that are obviously wanting to invest their cash but still have access to liquidity.

(26:43):
We've also partnered with solutions like Morning Brew for example, to really just even drive awareness of certificates and deposits. If you were to ask my two young children what a CD was, they probably would give you all sorts of random answers. I mean, they don't even really know what a compact disc is, let alone what a certificate of deposit is, right? So we're trying to again, drive that awareness. This is a product. It's not to say that this is a product that has come back to life, even at the low rate environment, it was a 1.5 trillion business, now it's a $3 trillion business. Again, with the raising rate environment, we just want obviously people to understand that this is a really smart and relatively good investment tool, both for consumers and then obviously for fis if they're looking to drive liquidity. So with that, I'm going to actually go into how this works for the financial institutions.

(27:45):
And don't hesitate for any of you if you want to jump in, ask questions. We obviously want you guys to have your questions answered, so don't hesitate to raise your hand anytime during this presentation as well. So our product set is pretty straightforward and it's pretty simple. It really comes in three flavors, is the way that I would sort of position it. It starts most simplistically as what we call lead generation. And what this means is if you're an FI and you just want us to actually drive leads to you without a ton of technology integration, without a lot of operational overhead, we can very much do that. So in this example, now what we've done is with the open now button, we have a tech platform with an admin tool that's behind the scenes that as a user fires up a consumer, let's say clicks on this particular institution, we'll use Keystone Bank as an example.

(28:41):
What we actually do is we'll actually qualify the user, and this is where it's really important to differentiate how we're unique from the bank rates of the world. This isn't a pay per click type of solution. This is a pay per lead type of solution. So we charge on a per lead basis, and most importantly, it's on a qualified lead. So in this example, Keystone Bank wants to make sure that that consumer is eligible for their product, which is obviously very important for many credit unions in the room as well, because there are definitely qualification requirements typically for most credit union institutions. And in this example, they want to ensure that that customer or that consumer is a Texas resident. So we'll do all of that on the front end. In this example, if let's just say the consumer doesn't qualify, we'll obviously redirect 'em to a different product, and that lead would never even end up showing to Keystone Bank, and Keystone would never even pay for that particular lead.

(29:37):
So that's kind of how the lead gen example works. The way that we built it is completely customizable. There's a form we can work with your teams, your tech teams, your product teams, your marketing teams to make sure the experience is exactly how you want it. We can brand it, we can put different criteria in there. Some institutions, again, if you're qualifying for eligibility, you can do it in terms of your field of membership, however you want to define that form. And we keep it very, very simple. And the way that it works at this point, once a user basically submits it, you can do it in two different ways. And this is where I would say the second flavor comes into play. The first flavor most implicitly, as I said, is we just send you the lead. So once the form is completed, we can send you that consumer's information, and we can do it either dynamically via email, via alerting, or the FI can actually use the admin tool log into it on a regular basis, and they can actually pull all of that data for that consumer and actually action that, right?

(30:40):
And so we have institutions today that are doing that leveraging call center staff, leveraging branch staff, and they do that particular outreach and they're helping that consumer originate that cd, I would say, arguably over the phone. So it really is left up to the institution to operationalize what they actually want to do with that lead. In this particular example, this is where the second flavor of our product comes in, Keystone. What they've done is they've actually integrated this into their digital account opening, which they actually have. So for us, we love that, right? We want you guys, those of you in the room that do have a digital account or operating, we want you to be successful leveraging your current technology stack, your current technology solution. And so what we've done here is we've actually dropped the user dynamically into that flow for that particular product, and they can actually go through the application digitally through the FI's existing platform.

(31:35):
And so we love this, and this is an easy, easy path. There's no price difference on this. It's again, cost per lead, cost per qualified lead, and we'll actually send them through and with the hopes that obviously they actually originate and open up the particular CD. The third, and what I would say the most dynamic and what we've seen quite a few institutions take us up on is what we call the full origination solution. What we've done here essentially is we've white labeled an origination platform that we can basically completely design, customize, brand it to your institution. And so that if a shopper then clicks on the open now, they'll actually go through an entire origination flow, everything from KYC doc generation, digital signature capabilities, and we even have integration into most of the major cores already existing. So we can actually fully build it so that it's fully automated and really minimizing the level of human intervention for that origination of that cd.

(32:40):
So in this example, we're using the Seattle Bank example here. What we've done, again, we've got the product, it goes into the exact product that the user is shopping for. We put docs in here so that they can put any disclosures, any truth and savings disclosures. This particular example forms are there. User can dynamically select it, they can download it, they can expand it, they can go through the flow simplistically. CDs, as most of you know, are relatively simple deposit product, right? It's not very complex. And so we've kept this as seamlessly from an experience standpoint, as easy as possible for a user to actually action and complete. In this particular one, the flow leads the user to basically fill out some simple information. We've actually got ID verification as part of this, which is backed by our partner persona. We also have a suite of different integrations with many other different IDV and KYC solutions.

(33:43):
So if your bank or institution currently has an existing solution that you want to integrate, we can absolutely do that. We probably already have them integrated as part of our marketplace suite. And so we have several different solutions here. In this example, as I mentioned, it is persona. And so once the user does a quick sort of biometric capture, an ID upload, we'll verify that they're obviously an authentic authenticated user, and then we'll actually bring them now to the account verification for the funding aspect of it, and we can actually complete the full funding of the CD through the platform as well. And again, if you're using different solutions or you have existing solutions that you use, maybe for your branch, we can certainly integrate it into the platform as well. So with that, I'm going to actually hand it over to Mary Grace to continue some of our strategic thoughts around how to continue to drive deposits. Yeah,

Audience Member 1 (34:39):
Absolutely. Yeah, so I love the solution, small, medium, large.

Howie Wu (34:43):
Yeah.

Audience Member 1 (34:44):
Of that, of all your open now partners that you have signed up, what's the rough distribution?

Howie Wu (34:50):
Yeah, great question. So the question was around what are we seeing as far as the distribution on the three product sets? I would say right now, if you look at all of our clients, we have about, I would say about roughly 30 institutions that are signed up with us today, which we're very happy to see given that we've been live with the actionable solutions about six months right now, I would say we're probably seeing about 60% in that, what I call the lead link. So dropping them directly into an FI's existing digital account origination platform, which is fantastic. Like I said, we love that. I would say. And then really the distribution is probably 2020 on the other side. So 20% on that lead pure lead, just send me the lead. We will deal with it in a more obviously very manual fashion and then another 20% for the full origination stack. Yep, that's great question.

Mary Grace Roske (35:52):
So a number of ways that people are financial institutions are rethinking CDs and how they can use them. The first example, it was similar to what Seattle Bank's story of how we came up with this in the first place was simply a campaign, special campaign to fund targeted asset growth. Really looking at I need to generate X amount of deposits in X amount of timeline and I'm going to do it. So we see definitely that's some of the 30 institutions that are come to us are in for a specific need and a specific timeline. So they go aggressive and to fund an asset purchase. Another CD trend that we see with some of these institutions is looking at how can I use this tool to leverage the transfer of generational wealth and use it as a bridge for my clients who are older through account ownership, through beneficiaries as a marketing strategy.

(36:47):
So they're pushing CDs in that area, gifting CDs, they're saying, Hey, let's use a gift, a CD as a gift from a grandparent to a child. And that opens up that financial institution and the opportunity to cultivate and develop a relationship with that potential client. Child strategy three, playing the CD rate game to win. These are folks who are really, again, going out there with an aggressive rate doing a special promo. One thing that I think is important for people to know about CD Valet is that we do allow you to say, Hey, I'm only interested in clients in the states of Iowa, North Dakota and South Dakota, or I want to go nationwide or in my own market, I don't really want anybody else to know that I'm running this campaign for other parts of the nation where I have a higher rate. So there is the ability to geotarget who we're advertising to and where that rate goes.

(37:46):
So that is a thing to think about when you're looking about playing the CD rate game. Another thing we're seeing in terms of how financial institutions are growing CDs is really leveraging their knowledge of FDIC insurance. Again, Seattle Bank, longtime player in the CD market. This is a true area of expertise we have is helping our clients maximize their coverage partner with inify to really work with those who have really large deposits they want to make sure are remain insured. So that is proving, that's a marketing, a client service angle that we see people using to grow their deposits. And then another thing that we have got, I think a couple fis working with are those that have sub-brands for their out of market campaigns. They have digital only brands, and I'm surprised at how much we're seeing this, but they're using CD valet for those CD promotions.

(38:44):
And again, really effective cost-effective way to get out there and market CDs to a broader national audience. Now, one of the things I think that in looking at this us as a comparison site and a digital platform for CDs, is there other players out there? Obviously Bankrate, NerdWallet, lots of other folks who've been out there. We are definitely the challenger brand in this place. We've been working hard to build the brand through earned media, paid growth, lots of earned media strategies, et cetera. And when we started this process, we were on page 16 of Google search results. When you put in best CD rates as a marketer, you're not super excited to be on page 16. I can tell you that we hit page one last week. We were at the bottom of page one. So we know we're making some progress here In building that visibility and building that traffic.

(39:36):
We are the site that also is accessible to community financial institutions and credit unions. Given the pricing model that we use pay per lead versus saying you need to spend a minimum of a hundred thousand dollars a month to do business with us. That's not our model and that's how we work. That's not how we work. So we have really opened up that field of rate comparison and digital marketplace marketing for FIs, a larger number, much larger number of FIs who truly are the ones who are paying the best rates. So from our perspective, a solution that benefits the FIS from a marketing perspective and truly serves the consumers in allowing them to find the CDs that truly work for them versus only finding advertised rates and advertised ones. So in closing, when thinking about your CDs and thinking about sort of your philosophy about CDs, we work with clients to think about or financial institutions to think in sort of three different buckets.

(40:31):
Which one are you are going to be an aggressive deposit growth pricing to win? There's a place on CD valet for those strategies. And those financial institutions, those are those that are opportunistic. Seattle Bank has been there when we've been in campaign mode and we've been wanting to raise a lot. Now we are there in a more passive mode, but we see a steady stream come our way of CDs. And so it's not necessarily a place only if you're in a, I need to rally, I need to raise a bunch of money, just sort of a passive state of a competitive rate, also generates deposits. And then finally contingency funding. Again, looking back to regulators saying, Hey, you need to be able to demonstrate that you have a variety of contingency funding sources available in adverse circumstances. Just being here signed up, ready to go and turn on the spigot when that time may arrive, is also a great option to have set up for the future.

(41:29):
So when we talk with folks about CDs, we say, Hey, where are you in this marketplace? Where are you in this setup of three? And then ask you to consider how can CD valet fit into that based on your approach. So with that, we have one more poll here just if, I don't know if our poll is working, but when you collect 30,000 rates from 4,000 financial institutions every day, you end up with a lot of data. And that data is super useful to financial institutions in looking at how they price their CDs, historical rate comparisons, looking at, you can establish your own competitive set and say, I want to watch how these 10 institutions are doing their rates. What's their history, how often are they changing rates? All those types of things. And it's a great analytical tool. So this QR code gives you the access to that for two weeks, so you can play around with it and see if that's useful for your ALCO committee, for your marketing teams, et cetera, in looking at how they price and manage their CD portfolios. So thanks so much for coming. We're happy to take any questions that you have about CDs in general, the market, the clients or the product. Thank you.

(42:43):
Any questions?

(42:46):
Yeah.

Audience Member 2 (42:46):
You said earlier that you also allow terms to be displayed, for example, if you allow additional deposits during the course of the CD term or other kinds of terms like that. You didn't display anything, but can you explain what you might have for germs?

Mary Grace Roske (43:07):
You're talking about if it was a bump up CD or something that Yeah, so we do allow for those definitions of add-on CDs or bump up CDs, so not a lot of detail on that. One of our product enhancements though, that's in Howie's roadmap, right Howie, is to be able to build out greater details on the financial institution itself, any marketing language, any more information about the FI itself and also then more details, but we can label them as bump up, add on variable rate specials. Yeah,

Howie Wu (43:40):
Yeah, it's completely customizable in terms of how you want to display that CD or whatever promo that you're trying to run. We are trying to again, separate and make it very clear to the consumer. Here are the ones with promos, here are the ones without promos. And then even on the origination side, if you're an origination client of ours, we can build that origination flow to actually have that bump up feature within the application flow. So if you want additional funding post CD opening, we can facilitate that through the origination experience as well.

Mary Grace Roske (44:14):
Any other questions? Alright. Thanks so much for coming.

Howie Wu (44:17):
Thanks everyone. Don't hesitate to find us or hit us up on LinkedIn if you have questions.