Citizens Financial Group is the most recent traditional institution to launch a standalone digital bank. The space has seen a flurry of activity this year, with the country of Georgia’s largest bank, TBC, recently rolling out its own offering, Spaces.
Citizens Access, the new digital bank from the Citizens Financial Group, offers US customers online savings and certificate of deposit (CD) accounts. The bank made the move because it saw more and more customers switch from traditional to direct deposits in “innovative new ways to save money,” says John Rosenfeld, president of Citizens Access.
Citizens Financial Group’s offering comes on the heels of US-headquartered JPMorgan Chase launching Finn last month, a mobile-only bank targeting US Millennials.
On the other side of the ocean, Georgian bank TBC launched its own standalone offering, Space, which took them eight months’ time, at the end of June. Their endeavour offers customers comprehensive retail banking services, such as loans, payment cards, and savings products.
These efforts to add standalone digital offerings with their own DNA could be seen a couple of ways, depending in location. In the US, where challenger banks have failed to materialise like they have in Europe, banks diving into digital standalone spaces is a way of shoring up customer bases in an increasingly digital world. In Europe, challenger banks entering the space once solely occupied by traditional institutions, as well as the rise of regulation-drive open banking, may be pressuring the old guard to expand in attempts to keep pace with challenger banks which are, usually, significantly cheaper and more tech-savvy.