On October 17, 2013, Sovereign Bank, the U.S. unit of Spain’sSantander Group, officially rebranded itself with the name of its parent company, becoming Santander Bank. Having fully acquired Sovereign Bank in 2009 following the financial crisis, Santander Group delayed the rebranding until it could shore up the battered U.S. bank by boosting capital and asset quality within Sovereign and synchronizing multiple legacy systems to a single platform. Four years after its buyout, Santander Group felt the time was finally right to launch Santander Bank.
Breaking into the U.S. Market
At the moment, Santander Bank has its work cut out for it. The acquisition of Sovereign’s existing clients and physical infrastructure has given the bank a modest foothold in the Northeast and Mid-Atlantic, with the bulk of its retail presence located in Massachusetts, followed by Pennsylvania and New Jersey (nine states in total). Unfortunately for Santander Bank, this means competing against the largest American banks in one of the most saturated markets in the United States – not an easy task even for a global banking giant.
Santander Branch and ATM Location Search
How the firm manages this rebranding will be key; as former Sovereign clients accustomed to the reputation of a local American bank suddenly find themselves confronted with a foreign-sounding name (San-tan-dair), and the constant reminder that their bank is no longer U.S. owned. That said, Santander Group has conducted similar campaigns in other countries, notably rebranding 1,300 U.K. bank branches in 2010. While Sovereign positioned itself as your neighborhood bank, it remains to be seen whether the new international feel will resonate with its existing American customers.
Embracing Cash Rewards Gives Santander an Advantage
Despite the aforementioned challenges, one area that may resonate with American consumers is Santander Bank’s generous product offerings. At a time when many U.S. banks have scaled back, Santander Bank has fully embraced the idea of cashback rewards tied to everyday banking activity and specific checking and savings accounts. For example, the recently launched Extra20 Checking package (which Robert De Niro is currently promoting) gives clients $10 a month if they maintain $1,500 in direct deposits and another $10 monthly if they pay two bills through online bill pay.
Additionally, the Santander Goal Savings Account rewards clients with an annual cash bonus dependent upon how much the client saved during the year: $2,500 to $4,999.99 in savings earns a $12.50 bonus, $5,000 to $7,499.99 in savings earns a $25.00 bonus, and so on. Finally, all checking accounts come standard with the Santander Debit MasterCard which earns cashback bonuses for purchases made through the Santander Cash Rewards website or at participating store locations. Clearly, Santander Bank hopes these generous rewards will be enough to carve out a greater market share.
Santander Cash Rewards Promotion on Client Homepage
In the end, Santander Bank’s innovative and generous personal banking products may hold the key to its future growth in the U.S. market. It will be interesting to see if the firm’s current modernization and brand recognition campaign is enough to propel it beyond the regional status it inherited from Sovereign Bank. What is certain, is that Santander Bank clearly sees itself as a new major U.S. player. With the backing of its giant global parent company, Santander Bank has the resources to push forward and succeed in the U.S. market.
Bank Monitor Subscribers:You can read a full review of Santander’s website and product offerings in theBank Monitor Update report released on 11-4-2013. CI Client username and password are required to view the report, click here to register.