Santander to compete in the US with two digital banks
The group inherits BrioDirect, Webster's online subsidiary, which is offering a 3.75% rate for savings, in line with the 3.8% paid by Openbank in the US.
Santander will compete in the US with two digital banks following its acquisition of Webster, which closed on August 20. The group has inherited BrioDirect, an online subsidiary of Webster, which currently competes with Openbank, Santander's digital bank that launched in the US in 2024. There are no planned changes to the operations of the two neobanks at the moment.
Santander's focus is on ensuring a smooth integration of Santander and Webster, and no decision has been made on a long-term brand strategy, including the continuation of BrioDirect. In addition to Santander, Webster, Openbank, and BrioDirect, the group now also has HSA Bank, an online subsidiary of Webster that specializes in the healthcare sector.
Openbank and BrioDirect operate as two divisions within Santander Bank, the former Sovereign, where Santander and Webster's assets have been consolidated. The catalog of products offered by the two online banks revolves around a single high-yield savings account, for which they are offering virtually the same interest rate. The Openbank account, which can be opened with a minimum deposit of $500, offers an annual yield of 3.8%.
In contrast, BrioDirect, which requires a minimum balance of $5,000, earns a yield of 3.75%. The official exchange rate in the US ranges between 3.5% and 3.75%, and the average interest rate paid by US banking on its liabilities is currently 0.38%. Santander USA ended the first half of the year with $80 billion in deposit balances, with an average cost of 2.1%.
Of the total, nearly $27 billion (34%) are uninsured deposits by the FDIC, which covers up to $250,000 per client. The majority of deposits are linked to the consumer branch ($58 billion), followed by business ($13 billion) and private banking (over $5.3 billion). After the acquisition of Webster, Santander USA added $70 billion in liabilities, raising its deposit base to $150 billion.
This represents 1% of the total US banking volume. In four states (Connecticut, Massachusetts, New York, and Rhode Island), the combined Santander and Webster group has the greatest concentration of deposits, although none reaches the 30% threshold at which some jurisdictions impose limits. In Connecticut, where the merged bank has the largest deposit weight, the percentage stands at 23.8%.
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