Santander brings international experience to U.S.
Santander Universities U.S. is the latest player to enter the U.S. campus card banking market, and the bank intends to lay down roots in its new home. The Spain-based institution is among the world’s 20 largest financial institutions with strong presence in Europe, Latin America, Asia and now North America.
Santander bought Boston-based Sovereign Bank in 2009 marking the Spanish bank’s first retail presence in North America. “We had to upgrade the existing systems (at Sovereign) and that’s why we are later entering the campus market than we’d originally planned,” says Samuelson Drummond, vice president of smart cards at Santander Universities U.S.
Santander is no stranger on campus. Already 264 universities use Santander Universities card systems throughout the world, dating back to its first contracts with Spanish universities in 1995. The presence in Europe translates into experience with EMV and with contactless card technology–features it hopes to bring to campuses in the U.S. when the time is right.
“In most of our other countries, the cards we issue are dual-interface contact and contactless smart cards,” says Drummond. “The cards in the U.S. aren’t the final product that we plan to offer to U.S. institutions, but because the market here hasn’t migrated from mag stripe to EMV, we haven’t made that available yet. But we will be ready when the time comes.”
The company is a believer in smart card technology and wants to bring that to campuses in the U.S. “We see smart cards as an opportunity to increase value to universities and colleges that we serve,” Drummond says. “For example, we always offer a card with both mag stripe and contactless technology. We see it as an opportunity to transfer technology to the university.”
Santander Universities is a global division that maintains offices in each of the countries it operates including Portugal, Brazil, Spain, the UK and the U.S. This global presence has enabled Santander Universities to establish a wide perspective on the campus banking formula, explains Drummond.
“Across our branches we discovered that financial literacy was something that added value to universities,” says Drummond. “In the U.S. we created a manual called the Student Money Management Guide and we train managers to provide financial literacy lectures and classes to increase knowledge of money management.”
The extra attention to student financial literacy has been a valuable asset to Santander’s partnering institutions and their students.
“Institutions have requested that we take part in the student orientation, providing information to students when they arrive, and in some cases we conduct lectures and seminars for parents as well,” says Drummond. “It’s amazing, but usually the reason kids don’t know how to manage money is that their parents don’t know how to manage money. For many of us, this is information that we think is basic, but it is really good for anyone maintaining a bank account.”
For one of Santander Universities’ partnering institutions, Boston’s Mount Ida College, this level of service offers both value and a personal touch to the banking process.
“Santander’s commitment to offering financial literacy seminars and other educational efforts is of great value, particularly for our first generation college student population and their families,” says Laura De Veau, vice president of Student Affairs at Mount Ida College. “While Santander is an international bank, the local connection has made the relationship very positive and quite genuine.”
Mount Ida students, at their sole discretion, can choose to activate the Santander bank account and debit card feature on their student ID card, explains De Veau. “Our next phase is to make use of the card’s contactless MiFare technology by upgrading our residential access control and using the cards to track student engagement and participation in campus programs.”
Santander’s presence in the Boston area has been bolstered in part by its former namesake, Sovereign Bank, as it offered an opportunity to continue pre-existing relationships like that of Boston’s Wheelock College.
“Based upon the strong relationship Wheelock had with Sovereign Bank, we opted to move forward and continue the relationship through the transition with Santander,” says Beth Kaplan, Communications Manager, Wheelock College.
“We wanted a bank that provided the accounts and services necessary for us to manage college business and serve our students and employees with service fees that are reasonable and competitive,” says Kaplan.
In addition to their optional debit card functionality, Wheelock College is using its Santander-issued cards for entry to campus buildings and residence halls as well as access to campus services like dining, vending and laundry.
One service that Santander Universities will not be offering, however, is the disbursement of financial aid. “We are not specialists in disbursement and opted not to enter this market,” explains Samuelson.
At this point the Santander Universities team has no plans to issue prepaid cards. “Our clients have not expressed interest in the solution,” he says.
“We thought about issuing a prepaid card in the past, but as the economy was improving, we didn’t see a lot of demand for a prepaid card from the universities,” he adds.
Rather than offering a prepaid solution, Samuelson maintains that a solid financial education can provide far more value to a student over the long term. “We really believe in teaching students to handle a real checking account,” he explains.
The key for Samuelson and Santander Universities U.S. is to establish a long-standing relationship with its partnering institutions as well as with the students they serve.
“We don’t have a short term vision about our student relationship,” says Samuelson. “We don’t want them to overdraft their account and end their relationship in the beginning, we want them to bank with us as students, at the beginning of their career, for their first car loan, their mortgage and so on.”