Japanese bank SMBC to launch US digital bank Jenius

Diving Brief:

  • Sumitomo Mitsui Banking Corp. (SMBC) is launching a consumer digital bank in the United States, as the Japanese banking giant seeks to tap into the North American retail market.
  • The digital platform, called Jenius Bank, will launch and operate as a new division of Manufacturers Bank, a California state-chartered bank and subsidiary of SMBC, the company announced Wednesday.
  • SMBC tapped John Rosenfeld, Founder and former President of Digital Banking at Citizens Bank, to lead Jenius.

Overview of the dive:

“With the launch of Jenius Bank, we have the rare opportunity to create exceptional products from scratch that uniquely meet the needs of today’s digital native consumers who need and expect more,” said Kazuhisa. Miyagawa, chairman and CEO of Manufacturers Bank. statement.

Manufacturers Bank is a Los Angeles-based commercial bank that was acquired by Tokyo-based Mitsui Bank in 1981.

The bank, which serves middle market businesses, came under the SMBC umbrella after signing in 2001 merger of Sumitomo Bank and Sakura Banka descendant of Mitsui.

Jenius will launch personal loans in the coming months and expand into savings and checking products in its first year, SMBC said.

“Jenius Bank has implemented an extensive and ongoing consumer research program that will lead to product design with direct customer input,” SMBC said in a statement.

The Japanese banking giant has invested $150 million in the venture and Manufacturers Bank has hired 170 employees for the operation, according to Nikkei Asia.

The digital-only bank plans to leverage the “competitive differentiation” of a predominantly remote workforce and aims to operate without “punitive fees”, SMBC said.

“Our target customers don’t want these things, and the resulting efficiencies will allow us to bring more value to them,” Rosenfeld said in a statement. “We are also committed to being a fully digital bank and to providing exceptional customer service through a US-based support team.”

SMBC’s attempt to grow its international consumer banking footprint through a digital platform follows similar steps that other major companies have taken in recent years.

JPMorgan Chase launched a digital retail banking in the UK, a market where Goldman Sachs launched its Marcus platform in 2018.