SAN FRANCISCO–In what may offer a potential lesson for credit unions, LendingClub is reporting the two pricing changes it has made to its mobile-first platform have resulted in soaring account openings and visits to its app.
During an earnings call, CEO Scott Sanborn said the company’s latest innovation, LevelUp Checking, has increased the number of checking accounts opened each day by six times since its launch in June.
LevelUp Checking offers customers 2% cash back for on-time loan payments made from the checking account and 1% cash back when using the associated debit card for qualifying purchases, according to a presentation it released.
‘Stickier Relationship’
“We’re rewarding borrowers for their financial discipline while allowing us to benefit from a stickier relationship,” Sanborn said during the call, according to PYMNTS. “While it’s still early, the initial results are encouraging.”
PYMNTS added that during a June interview, Sanborn said the target customer for LevelUp Checking and its rewards program has a high FICO score and a high individual income.
According to Sanborn, the new offering built on the success of LendingClub’s LevelUp Savings, PYMNTS reported.
LevelUp Savings offers a competitive base APY as well as a higher rate for customers who add at least $250 a month to this savings account, according to the presentation shared during the call.
80% Meet Thresholds
Since the launch of its offering in August, the company is reporting it has seen that 80% of account holders meet that monthly threshold and that they visit the app 30% more often than the customers of LendingClub’s previous savings product, per the presentation.
“Now, LevelUp Savings was designed specifically for savers who have cash to put to work,” Sanborn said. “Even so, we’re finding that over 10% of new accounts are being opened by our borrowers who are coming to us for loans, which is indicative of their desire to engage more deeply with us.”
During the second quarter, LendingClub saw year-over-year growth of 32% in originations, according to an earnings release. It is forecasting year-over-year growth in total originations to be between 31% and 36%.
