LendingClub Says Cash-Back Offers Boost Account Openings and Customer Engagement

LendingClub said Tuesday (July 29) that two recent additions to its mobile-first platform are driving more account openings and more visits to the company’s app.

“I want to spend some time talking about our innovation efforts built on our mobile-first platform, each designed to more regularly engage our members and build multiproduct relationships,” LendingClub CEO Scott Sanborn said Tuesday (July 29) during the company’s quarterly earnings call.

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 this checking account and 1% cash back when using the associated debit card for qualifying purchases, according to a presentation released Tuesday.

“We’re rewarding borrowers for their financial discipline while allowing us to benefit from a stickier relationship,” Sanborn said during the call. “While it’s still early, the initial results are encouraging.”

During a June interview with PYMNTS CEO Karen Webster, Sanborn said the target customer for LevelUp Checking and its rewards program has a high FICO score and a high individual income.

This new offering built on the success of LendingClub’s LevelUp Savings, Sanborn said during Tuesday’s earnings call.

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.

Since the launch of this offering in August, the company 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 a Tuesday earnings release.

The company also said in the presentation that it expects that positive momentum to continue in the third quarter, as it forecasts year-over-year growth in total originations to be between 31% and 36%.

“We said we were going to drive growth through marketing and product innovation, and we did just that, generating meaningful originations growth both sequentially and year on year while realizing better-than-expected marketing efficiency as we return to channels, including direct mail and online advertising,” Sanborn said during the call.