How Barclays plans to grow its U.S.-based digital bank

• Key insight: Following the acquisition of personal loan originator Best Egg, Barclays is looking to grow its U.S.-based digital bank by cross-selling its other banking products to its 25 million customers. 
• Expert quote: "We see some really unique opportunities to offer those products to all of our 25 million consumers." — Doug Villone, head of U.S. cards and partnerships, Barclays.  

LAS VEGAS — Barclays is practicing the art of the cross sell. 
Specifically, the U.K.-based bank is looking to grow its U.S. digital bank by offering its other banking products, such as high-yield savings accounts, certificate of deposit accounts, and personal loans to its broad list of co-branded credit card customers. 

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And while cross-selling banking products is in no way novel, Barclays is betting that its long-term relationships with the brands it provides co-branded credit cards to will differentiate the bank. 

"We see some really unique opportunities to offer those products to all of our 25 million consumers," Doug Villone, head of U.S. cards and partnerships at Barclays, told American Banker at Money20/20 in Las Vegas. Barclays is the co-branded credit card provider to companies such as General Motors, Samsung, AARP, Jet Blue, Carnival and Frontier Airlines, among others. 

"If I think about the partners we have and the lists that they have — think about frequent flyer lists and how big they are," Villone said, noting that with Frontier, Barclays can cross-sell loans and deposits not just to their credit card customers, but to their loyalty customer base, as well.  

Barclays has also been cross selling its savings and checking products to AARP's more than 38 million members, which Villone said has been "phenomenally" successful. 

"If you think about a world in which you know there's a certain penetration level you might hit in credit cards within a customer's file or partner's file, these are new avenues for us to deepen relationships with consumers," Villone said. "[Our partners] would not endorse something that wasn't credible, so there's a trust. If AARP has endorsed a savings product, then the consumer is going to be like, 'I know that's a good product.'" 

Barclays will also incentivize its other banking products with the same rewards currency that is offered by the credit card. For example, a personal loan offer to a Frontier Airlines co-brand customer may be incentivized with additional airline miles. 

"Generally, a customer who likes earning frequent flyer miles with their credit card spend would be really interested in taking a personal loan that would give them maybe a bonus of more frequent flyer miles," Villone said.  

Barclays is also looking to increase penetration of its personal loan product following the acquisition of Best Egg. But that growth comes at a time when consumers are starting to get worn down by rising prices. 

Still, consumers continue to remain resilient, according to Citizens analyst David Scharff, who analyzed collateral performance of personal loan asset-backed securities. 

"Personal loan credit performance continues to show signs of stability, despite the cautious market sentiment, and initial 3Q earnings results from large banks once again indicate a resilient consumer," Scharff said. 

"Despite recent headlines, particularly the hotter-than-expected September inflation data, performance on surveyed lenders' personal loan [asset-back securities] remains stable. This is partially fueled by a strong labor market, with unemployment still near record lows," Scharff said.