Beyond the Status Quo: A Winning Expansion Strategy for Mid-Market Banks

We’ve all heard the old rule of thumb: acquiring a new customer is 5x more expensive than retaining an existing one. Retention is undoubtedly critical, but it’s not the only reason mid-market banks must expand their offerings. In a world where the giants have more name recognition, the digital banks have shinier gadgets, and the credit unions can offer more competitive rates, the same ol’, same ol’ isn’t enough for mid-market banks to stay relevant and sustain a healthy bottom line.

Research conducted in late 2024 uncovered a significant boost in customers’ confidence in large national banks’ ability to meet their needs, giving mid-market banks clear marching orders: use new offerings to prove they can meet evolving customer demands.

The Best Strategy to Expand Your Offerings

Adding new products and services isn’t easy, especially in an industry where “this is the way we’ve always done it” can be the prevailing attitude. The good news? The right approach makes success more likely, with a path to it that’s less bumpy. Read on for a proven step-by-step strategy designed to minimize roadblocks and maximize success.

1. Determine which gap to fill

This initial step isn’t about trying to match the big banks’ breadth of offerings — that’s too tall of a mountain to climb at once. Instead, pick a single winner to focus on. What offering has the potential for the biggest return on investment? That’s the gap you need to fill. 

Look no further than Liberty Bank’s expansion into personal loans. Established in 1825, Liberty Bank is the oldest and largest independent mutual bank in the country, yet personal loans were not part of their offerings until 2024. Why add them after nearly 200 years of success without them? Three key reasons:

• Customer demand: People had been visiting branches to ask about personal loans, but had to be turned away. 
• Market opportunity: The demand for personal loans has skyrocketed in the past five years, creating a multi-billion dollar market. Even a small fraction of market share would create transformative growth. 
• Dwindling share: Community banks have been losing share to fintechs for more than a decade, with companies like SoFi, Lending Club, and Best Egg emerging as faster, sleeker options. Implementing similar technology would level the playing field and give customers what they need, when they need it.

2. Embrace technology to optimize resources

No matter the new offering, there is one non-negotiable rule: it must have a seamless, end-to-end digital experience. Today’s customers value digital banking capabilities as highly as security, fraud protection, and customer service. They will go where the experience is best and their needs are met the fastest, pulling you out of the mid-market-only lane and putting you in direct competition with the giant and digital banks.

Technology doesn’t just fuel these all-important experiences — it also provides several opportunities to optimize:

• It optimizes your upfront investment: Buying a platform to power your new offering is cheaper and faster than building one in-house. 
• It optimizes your ongoing investment: A pre-built platform comes with ongoing feature updates, maintenance, and support, which saves significant money and time in the long run.  
• It optimizes a wide array of resources: Today’s technology has automation, fraud detection, and risk mitigation capabilities that make your operations as lean as possible. For example, Amount’s platform has equipped Liberty Bank to originate $20 million per year in personal loans with just a couple of employees. This isn’t just benefitting the origination side — it’s also scaling marketing’s efforts. A single email to existing customers led to 300 applications in one day. From there, a single origination FTE can support this application influx. Even better, Liberty Bank can fulfill the typical loan in just a few days, while some go from application to funding on the same day.

3. Open the lines of communication on day one

Every new offering requires input and approval from a variety of teams — risk management, fraud, compliance, vendor management, and more. Bringing everyone together on day one ensures smoother implementation and eliminates costly delays.

The communication doesn’t end there, though. Your in-branch teams play a vital role in recommending the offering and answering questions about it. Liberty Bank conducted detailed training but also kept things simple with QR code cards that link directly to the personal loan application on their website. All the in-branch employee has to do is hand over a card and the code takes care of the rest.

4. Measure success from every angle

Customer acquisition is, of course, a crucial metric to determine the success of your new offering, but it shouldn’t be your only measuring stick. Nine months after launching its personal loan offering, 75% of Liberty Bank’s personal loans were written to existing customers, confirming they were addressing a clear need within their customer base.

The demographics associated with your new offering will tell you if you’re reaching a new audience. For example, more than 40% of Liberty Bank’s personal loan customers are under 40 years old, which is lower than the median age of all customers.

The caliber of your customers is also important. Liberty Bank’s average applicant has a credit score of over 740. In the first nine months, they suffered less than 1% of losses, with zero first payment defaults in most of those months. While those numbers will likely increase slightly over time, Liberty Bank can grow without compromising on creditworthiness.

It's Your Time to Shine

Liberty Bank’s journey into the personal loan world is a shining example of how thoughtful expansion can move mid-market banks beyond the status quo to create significant growth and stronger customer relationships. Follow their lead by filling your own gaps — Amount’s team is here to help you do it.