Discover Financial Services’ ads primarily focus on its credit card brand, but the company now plans to spotlight its less visible online banking.
For the past two years, the Riverwoods, Ill.-based company has considered when to start advertising its deposit products, CEO Roger Hochschild said this week.
“I guess that’s something you can expect to see in the future,” Hochschild told analysts Tuesday during a presentation at the Goldman Sachs 2021 US Financial Services Conference. “This is a significant area of opportunity for us.”
Discover operates a full-service online bank that offers checking accounts with cash back, savings accounts, money market accounts and certificates of deposit, as well as personal loans and home equity loans. The $109 billion asset-based company also markets student loans to consumers through educational channels.
Credit card receivables at the end of the third quarter accounted for about 78% of Discover’s $90 billion in loan balances, while the company had $10 billion in private student loans and $7 billion in loans. personal.
Meanwhile, direct consumer deposits accounted for 65% of the company’s total liabilities at the end of September.
Discover sees opportunities to improve its cross-marketing by raising its online banking profile, Hochschild said.
In recent Facebook ads, Discover cites online banking as the first of its three core services, along with credit cards and loans.
“We have a leadership position in multi-loan products and actually a great model where we have strong relationships with consumers on both the asset and liability side, and so increasingly we want also showcase our deposit products,” Hochschild said.
Putting more advertising weight behind its online banking could help Discover sell banking services to its student borrowers, Hochschild suggested.
Student loans “are a great way to get our brand across to students and their parents when they’re making a very important financial decision and sometimes the first of many decisions,” he said.
Discover had considered launching an advertising campaign for its online banking services before the pandemic hit, Hochschild said.
“We decided against it because, like most banks, we saw a huge run on liquidity. And we were in an overfunded situation, so it really didn’t make sense to spend money advertising deposit products,” Hochschild said.
Discover, founded in 1985, operates a strong credit and debit card network as well as a global card network that includes the Diners Club brand. The company wants to ensure that it capitalizes on all of its advertising and marketing opportunities.
“We continue to grow the Discover brand and broaden the consideration [for it]as well as making people realize that we are not just a credit card issuer,” Hochschild said.