Deposit Solutions’ open banking platform targets the $50 trillion market for savings deposits. It offers its own direct-to-consumer services but also proposes a white-label solution to banks that want to offer deposits from third-party banks to their clients without them having to open additional accounts. The seven-year-old Hamburg, Germany-based company, which raised a €100 million funding round in August, partners with 80 banks — including Deutsche Bank. It operates in 16 European countries, including the newly added Switzerland, and is about to target America’s $12 trillion domestic deposit market.
Roughly half of Deposit Solutions’ existing bank customers use its plug and play technology as a way to accept deposits from customers in multiple European countries without having to build out their own retail infrastructure. The other 40 banks use it to offer their customers the ability to access competing deposit offers without having to open a new account at another bank.
« Every bank in Europe needs deposits on their balance sheet to fund their activities, » says Max von Bismarck, the company’s chief business officer and managing director. « Tons of banks don’t have retail infrastructure. Thanks to our plug and play technology they can for the first time connect to our platform and receive the funding. It is a huge step for banks to help them gain more efficient funding, lower the funding costs and diversify their funding as well. »
As part of its service, Deposit Solutions also operates its own proprietary points-of-sale under the Zinspilot and Savedo brands, which market the deposit offers of its partner banks directly to savers.
The company created Zinspilot to conquer a chicken and egg problem, says von Bismarck. When it first launched, banks like Deutsche Bank said it they were interested but told the startup to come back when it had deposit banks as customers, he says. The deposit banks told it to come back when it had signed up Deutsche Bank. So Deposit Solutions bootstrapped and launched Zinspilot in September 2015, courting savers whose home banks haven’t implemented its open banking solution yet. Today over 170,000 retail savers use Zinspilot and Savedo to access a broad universe of deposit products through Deposit Solutions’ platform. The startup acquired Savedo in 2017 to strengthen its international B2C offering. « Our B2C business — comprising of Zinspilot and Savedo — is one of the fastest growing fintech businesses globally, » says von Bismarck, with more than €10 billion euros in transmitted deposits to date..
The draw for consumers ? Open one bank account and get access to a large range of attractive cash savings products for lots of different banks in different countries.
« For the first time consumers can build and manage cash savings like an equity portfolio and they never have to open another bank account, » says von Bismarck. « As a saver it is now possible to access multiple offers to earn a higher interest rate and diversify your risk. »
Deposit Solutions is betting that its proposition will prove popular in the U.S., where the population is tech-savvy and willing to embrace new digital banking technology. What’s more, the market is highly fragmented. There are some 9000 banks in the U.S., many of which serve a local or regional customer-base, and cannot afford to run their own deposit gathering operation. Deposit Solutions will offer these banks the opportunity to increase their reach nationally by gaining access to more deposits without having to physically build-out across the U.S.
« There is a trend towards open architecture, » says von Bismarck. « This has been going on for 25–35 years with investment funds, mortgages and structured products. Where it has not happened is in the deposits space. When it comes to savings deposits there has been no innovation since online banking up until we started this platform. I think it is exciting, as a European who has lived and worked in the U.S., to be taking a European digital innovation into the U.S. rather than vice-versa. »