Apple Bank Case Study

Fulfilling customers’ need for personal loans

For over 160 years, Apple Bank has served customers in New York and surrounding counties, competing with some of the largest banks.

Before partnering with Upstart, Apple Bank did not offer personal loans, a product that its customers were consistently inquiring about. Their board and executive management team turned to Upstart after evaluating several personal loan fintech partnership options.

“We found the people of Upstart to be more engaged than other fintechs. They were better able to explain their goals, their culture and how the program would fit nicely within Apple Bank’s strategy. That’s how I want to go to market, with a true partner, not just a vendor, and Upstart is all of that,” said Gordon Levy, Senior Vice President.

Apple Bank launched personal loans in February 2021 through both the lender-branded offering on its website and the Upstart Referral Network, which has since brought thousands of new customers to the bank.

Smooth implementation

Levy shared that executive and board buy-in came early in the process, thanks to clear communication about the market opportunity and how Upstart’s model could fill a major product gap. “Once we showed the leadership team the data, the potential returns and how it aligned with our customer-first approach, the feeling from just about everyone was, ‘We need to work with them,’” he explained. “Upstart brought professionals, knowledge and people who were willing to lean in for us in ways we didn’t often see from other partners, right in the middle of a pandemic.”

Training branch staff and communicating the benefits of the new loan product to customers were key to launching successfully, ensuring both existing and new customers were served.

Four years of performance and portfolio growth

Over the past four years, Apple Bank’s personal loan portfolio has met and, in some cases, exceeded expectations in terms of returns and performance.

“Over the last year, we’ve been very pleased with performance exceeding our expectations. We’ve made some adjustments to ROA and expected loss rate, and expanded into the T-Prime program to help manage losses without giving up too much return,” said Levy.

The addition of T-Prime has expanded Apple Bank’s reach to more super prime borrowers, a strategic move to grow deposit relationships. Levy explained that by acquiring higher FICO score customers, the Apple Bank team is hopeful these borrowers will be more likely to open a savings or a checking account with the bank.

Strong compliance and exam support

Levy also shared that Apple Bank’s compliance, AML and legal teams have partnered very closely with Upstart from the due diligence process through regulatory examinations.

“Upstart has always said, if you ever have an exam and need our help, we’re available. I have as good of a relationship with Upstart’s Chief Compliance Officer as with my daily Upstart Account Manager. Upstart has volunteered to help and demonstrated that help during actual exams,” Levy shared.

Expanding reach and deepening relationships

From day one, Apple Bank’s primary purpose was to retain customers by offering loans in-house rather than sending them to other providers, while acquiring new customers through the Upstart Referral Network. Since partnering with Upstart four years ago, Apple Bank has acquired over 14,000 new customers. These new relationships have also opened opportunities to grow deposit products.

“We’ve tried to build some form of loyalty so that our deposit products would appeal to them and they’d be willing to trust us on the deposit side, as they trust us today with our partnership with Upstart on the lending side,” Levy said.

As part of its growth, Apple Bank has also expanded personal lending into New Jersey, increasing its reach in the region.

Establishing long-term customer relationships

Looking ahead, Apple Bank will utilize Upstart’s Customer Cross-Sell program and targeted email campaigns to convert new loan customers into multi-product relationships, incentivizing checking and savings account openings. This next phase builds on Apple Bank’s commitment to long-term customer relationships and sustainable portfolio performance.

Ultimately, through the Upstart partnership, Apple Bank has successfully been able to compete with larger institutions in New York while expanding access to personal loans and maintaining high returns with strong performance.