The challenges for a new ‘bank’ with a famous parent

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When JPMorgan Chase set out to make its digital-only brand Finn, it quickly rejected the idea of using it to lure millennial customers over to the institutional side of the bank.

In market surveys where participants didn't know they were talking to the bank, respondents expressed reservations about banks, according to Matt Gromada, Chase's managing director of digital product strategy.

“It was like, ‘You know, big banks, there’s so much fine print and nickel-and-diming,' " Gromada said. "What we decided to do was build a fully standalone bank. So Finn is a fully standalone experience; it’s not an app that goes with another one of Chase’s products.”

Gromada shared insights into the development of the app during a session at a fintech conference in New York this week.

The banking industry at large is grappling with how to rejigger traditional banking services for a digital era, and the effort is already leading to changes in the consumer deposit business.

Finn is part of an attempt by large banks to create apps that are popular with digitally native millennials. With challenger banks like Moven, Simple and Chime delivering services outside the traditional banking system, incumbents deem standalone mobile apps as a way to present a traditional bank in a digital-only experience, under a different brand and with unique ways for millennial customers to save. Wells Fargo's Greenhouse mobile-only banking app is another example.

Finn by Chase includes what is now table stakes in the banking industry: remote check deposit, peer-to-peer payments, money transfer and bill pay. But the intent of Finn is to have it not feel like a traditional bank. Customers can still access their account in a branch or through — especially if they lose their mobile phone — but Chase is piloting the application in St. Louis because the city has no branches.

Testing with customers has been mostly one-on-one with a few group idea sessions. During the initial 15 months of testing that led to the creation of Finn, the team spent two days out of every three weeks of testing with customers. Now that Finn is developed and has beta users, the bank can experiment and spend more time with those users.

“Talk about low-fidelity prototypes,” Gromada said. “We had sketches we would bring to customers and eventually we went to screens and then full experiences.”

But the trial is in its early stages. “We are barely beyond a minimal viable product,” Gromada said. “It’s still in pilot and we’re learning from customers every day.”

Gromada’s team found that even digitally native customers want something physical. When exploring options, “Can I get checks?” was a question that mattered to digital-only users before deciding where to do their banking. As a result, an option to order checks through the Finn app will go live soon.

Finn has also found that for the 27 states where JPMorgan Chase is part of a shared ATM network but has no ATMs or branches of its own, customers have difficulty depositing cash. While those same customers can still withdraw cash and often don’t carry money with them, customers that work for tips have a hard time keeping Finn as their main banking account.

Another new function of the app is automatically saving by category. A customer can make it so that Finn puts away money every time they frequent a fast-food restaurant or a coffee shop.

The key savings feature of Finn is the option for customers to label their different spends as something they wanted or needed and whether or not they felt happy or sad about the transaction. If a user splurges on something but feels good about that purchase, then that transaction may not be as harmful as large spending in other areas.

“We want to help them make decisions to lead their best life,” Gromada said.

Part of the Finn team’s “secret sauce” is that it works separately from the main bank, he added. Its offices are in Hudson Yards, about a 20-minute drive from the Manhattan headquarters in Midtown. Many of the team members, he noted, are from outside of financial services.

“They don’t all look like bankers,” Gromada said. “That difference is important to customers.”

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Digital banking Mobile banking Client retention Fintech Apps JPMorgan Chase