KeyBank’s Digital Physician Bank Gets Nationwide Launch

KeyBank Tuesday launched Laurel Road for Doctors, a digital bank that offers tailor-made financial services to healthcare professionals.

The launch, that the regional bank said was coming in its fourth quarter earnings call in January, comes nearly two years after KeyBank bought student loan refinancing startup Laurel Road for an undisclosed amount.

KeyBank began work on its digital banking launch plans for Laurel Road customers 15 months ago, with the goal of expanding the platform nationwide, said Jamie warder, executive vice president and head of digital banking for the Cleveland-based bank.

“Our goal is, for the first time, to expand KeyBank’s consumer banking beyond our footprint,” he said. “So we’re providing these banking services to physicians and dentists, and potentially healthcare more broadly, in all 50 states.”

The bank said it had studied demographics closely so it could tailor its banking services to consumers in the medical field.

“They have an interesting income and debt profile, different from many professions, and like a lot of us, they’re short on time,” Warder said. “They are also used to having good tools that help them in their work.”

Features of the digital account include a credit card with 2% cash back to pay off student loans, discounts to bundle savings accounts with student loan refinancing, and a financial information feature that allows doctors to compare with those in similar specialties on salary and debt.

The account also provides customers with educational content and access to personalized information for budgeting, in addition to perks such as discounts on meal and exercise programs and scrubs.

“We have created a top-of-the-line health center for them that will allow them to get live service whenever they need it very quickly. We will take care of the work of busy doctors and dentists, and there is certainly a portfolio of digital tools that allow them to self-serve if that is how they choose to interact with us, ”he said. Warder said.

KeyBank plans to add controlling and retail investments to the platform this year.

The bank plans to eventually expand digital banking services to a market that includes pharmacists, physician assistants, nurses and therapists, Warder said.

Greater ambitions

Laurel Road’s existing partnerships with some of the nation’s largest medical associations and hospitals have brought high-quality loans to KeyBank after the 2019 acquisition, Warder said.

The subsidiary made more than $ 2.3 billion in loans last year, including $ 590 million in loans last quarter, Chris Gorman, chief executive officer of KeyBank, said at the press conference. Fourth Quarter Results Call.

But the bank’s ambitions for Laurel Road have always extended beyond providing student loans, Warder said.

“We actually identified early on that the biggest opportunity was how Laurel Road intersected with our strategy,” Warder said.

Warder said the bank is positioning Laurel Road for Doctors to succeed in three key areas: Focused Scale, Digital, and Primacy.

“We want to choose specific areas in which we want to compete. Those will be a little more restricted, but we just know that if we can choose those narrow places, we can compete to win,” Warder said.

Other areas in which KeyBank has succeeded with limited focus include low-income housing and commercial real estate finance, Warder said.

“When we have chosen our places we are doing really well and we can hit well above our weight,” he said. “I think there’s a long way to go to expand our focus on healthcare. Does that mean we would pick another segment to focus on? Sure, we could, but the Focused ladder strategy says, “Stay narrow, stay focused. “”

The launch of the platform also matches the bank’s aspiration to be “digital progressive,” Warder said.

“We really believe our customers want us to be increasingly digital,” he said. “We have an obligation to them to make Key a digital bank for them and to provide them with all the digital tools and capabilities they need.”

The bank also aims to be the primary bank for its customers, Warder said, and the launch of a full-service digital platform for existing Laurel Road users aligns with this strategy.

More offers to come

Warder said KeyBank will continue to pursue additional acquisitions similar to its deal with Laurel Road, deals that help it reach a targeted scale as it appears to remain competitive.

KeyBank purchased the HelloWallet financial management app in 2017 and this month closed the takeover of McLean, Virginia-based analytics and data science company AQN.

“Not that we would never consider a traditional bank [as an acquisition target]”Says Warder.” OOur eyes are always open, but we’re also looking for those non-traditional pieces that fit our focused scale strategy. “

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