While Middletown’s Liberty Bank plans to launch its first online-only or “digital bank” in 2021, that strategy isn’t for everyone, including one of Liberty’s largest local competitors.
Bridgeport-based People’s United Bank, which has become the top Connecticut-headquartered bank by deposits in recent years — mainly through a series of acquisitions — is well aware of threats posed by digital banks. However, at least for now, it has no plans to launch its own.
That’s according to Ravi Vakacherla, who was recently named chief transformation officer at People’s United.
“Never say ‘never,’ but currently we are focused on digitizing the bank and not going toward an internet-only bank,” Vakacherla said in a recent interview. “We continue to look at the market and evaluate our priorities, and while we may take a different path in the future, currently we don’t have any imminent plans to launch a standalone digital brand.”
It’s not that People’s United isn’t focused on improving its customer-facing and back-end technology systems. It’s investing heavily in those areas, and the bank’s recent creation of Vakacherla’s new role and the “business transformation office” he oversees is geared toward making customers’ digital experiences more seamless and secure.
It will also help inform the bank’s product strategy and fintech partnerships.
“It’s not so much a big change, but doing things in a more focused way,” said Vakacherla, who has been at People’s United for 15 years and was previously head of digital, product management and banking operations.
The formation of the new office within the bank had long been in the works, but the COVID-19 pandemic, which has led to reduced branch traffic for many lenders since it struck Connecticut in March, helped accelerate it.
“COVID-19 wasn’t the cause of the BTO as much as a catalyst for it,” said Vakacherla.
People’s United, which has north of $60 billion in total assets has partnered with a variety of fintech companies, including Blend, which has helped improve its online mortgage application collections; Numerated, which has boosted the bank’s small business digital lending platform; and Zenmonics, which has allowed more customers to open accounts and deposit digitally.
Part of the decision to not launch an online-only bank with a standalone brand comes down to trust and relationships, Vakacherla said.
People’s United, he said, is focused on “delivering tremendous value, in-depth support and expertise, unique solutions, and developing meaningful relationships with our customers, something the challenger banks aren’t really known for.”
“We are known for our ‘know how,’ and are working on some really interesting ways we can translate that into expertise into the digital space,” he said.
