Competition in consumer banking is suddenly heating up as midyear approaches.
Already, the nation’s largest bank, JPMorgan Chase, has rolled out a digital-only bank — dubbed Finn — that primarily targets consumers in markets where it lacks branches. Several of its rivals, including Citigroup, Citizens Financial Group and PNC Financial Services Group, are following suit.
These banks detailed their plans for their new digital offerings at an investor conference in New York this week hosted by Morgan Stanley. Their strategies differ somewhat — Citizens is targeting consumers nationwide, said Brad Conner, its head of consumer banking (above, center), while PNC is focused on attracting clients in markets where it does commercial lending. But banks developing these new digital platforms all share the same goal: to gain a competitive edge in the never-ending quest for low-cost deposits.
Deposit-gathering was perhaps the biggest topic of discussion at the two-day conference.
It has been well documented that the largest banks hold the upper hand
in attracting deposits these days because they are perceived as having the best technology, and investors and analysts were eager to hear what smaller rivals are doing to help narrow the gap. Those that aren’t building their own digital banks say they are fighting back in more old-fashioned ways. KeyCorp's Don Kimble, right, said he expects more banks to begin raising CD rates. Others are hiring teams of bankers in new markets or, in the case of one bank, rolling out a new rewards checking account.
The conference also featured plenty of discussion about mergers and acquisitions, the state of mortgage lending in a rising-interest-rate environment — Wells Fargo's John Shrewsberry, left, is a bit bearish — and the evolving role of the bank branch. What follows are some of the highlights from the conference.