Brick-and-mortar banks have been developing online-only counterparts since the 2000s. First National Bank of Omaha’s FNBO Direct and River Valley Bank’s IncredibleBank were among the first. Some, such as JPMorgan Chase’s Finn, made a splash before sputtering out. But in the last couple of years, traditional banks have launched a crop of digital-only brands to go after niche audiences, experiment with new technologies that could potentially feed back into the home bank, and acquire rising tech talent.
“A few years ago, a lot of banks were standing up a new digital brand to go after high-rate deposit offerings and grow funding,” said Matt Kelley, director at JAM Fintop, a joint venture that runs a venture capital fund with banks as limited partners. “When the pandemic hit, rates collapsed, liquidity flowed into the system like we’ve never seen before, and a lot of these strategies went dormant.” But more recently, banks have been resuscitating this idea, inspired in part by new technologies, he said.
Read Miriam Cross’ roundup of 5 banks that just launched digital-only brands, including MANTL customer Cambridge Savings Bank, in American Banker here.
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