Santander Launches Digital Bank in the U.S.

Santander launches Openbank in the U.S. to enhance growth, focusing on deposit generation to support its auto lending strategy. Explore the details.

In a strategic maneuver to bolster its presence in the U.S. market, Openbank, the digital banking arm of Santander, is poised to enhance its growth trajectory by amplifying deposit generation to support its auto lending initiatives. Announced on Monday, the launch of Openbank signifies a pivotal step for Santander, as it seeks to leverage this digital platform to not only accelerate its U.S. expansion but also to establish a robust funding mechanism for its automotive financing operations.

The platform is set to offer an enticing high-yield savings account, currently boasting an impressive 5.25% annual percentage yield—an attractive proposition that eclipses competitors such as Goldman Sachs’ Marcus at 4.1% and CIT Bank’s platinum savings account at 4.7%. This strategic offering is expected to facilitate the funding of approximately $30 billion in loans dedicated to vehicle purchases, thereby enhancing the lender's retail footprint across the United States.

Openbank's entry into the U.S. market marks the arrival of Europe’s largest digital bank, which currently manages a staggering €18.5 billion in deposits and operates across four European nations: Spain, Germany, Portugal, and the Netherlands. However, prospective applicants for the Openbank high-yield savings account must navigate certain stipulations; specifically, they must not possess existing deposit accounts with Santander nor be current lending customers of the institution.

In a noteworthy declaration, Santander's management has assured that the introduction of Openbank will not precipitate the closure of any existing U.S. branches, a sentiment articulated by Wennes in a conversation with American Banker. This assurance is particularly significant in light of the broader trend among international banks—such as BBVA, HSBC, Mitsubishi UFJ, and BNP Paribas—that have divested their U.S. retail operations in pursuit of more lucrative markets.

The genesis of Openbank is not merely a spontaneous venture; rather, it is the culmination of Santander's long-held aspirations to establish a digital banking presence. The bank's structural overhaul in September 2023, which consolidated its retail and commercial operations into a cohesive global unit, further underscores its commitment to creating a global digital consumer banking division. As Santander embarks on this ambitious journey, it stands in stark contrast to its international counterparts, positioning itself as a formidable player in the evolving landscape of U.S. banking.