It’s something startups have been doing for years: partnering with financial institutions to offer you digital checking, or digital banking, accounts.
But for a number of direct banks, or online-only banks, checking accounts are not on their product menu. Instead, online banks like Marcus by Goldman Sachs, Citizens Financial Group’s Citizen Access, MUFG Union Bank’s PurePoint Financial and Emigrant Bank’s DollarSavingsDirect are vying for your deposits with savings, money market accounts and CDs.
It makes sense: Checking accounts are a tougher sell. Such accounts will not pay you much, if any, interest. And they require you to do work, like switching where your paycheck hits and updating your automatic bill payments, when you open them.
But this week, Barclays flipped the script when it told the Financial Times it will roll out an online-only checking account sometime in 2019 in the U.S. While details on the upcoming product are scarce, it could signal a trend of more direct banks breaking into the checking account business at a time when competition continues to intensify and interest rates are rising.
Your habits are driving a large part of this trend. Already, you do all sorts of tasks digitally, including shopping online and paying back friends, so why not only bank online, too?
“People are getting used to mobile first,” says Kevin Travis, executive vice president and co-head of the advisory group at Novantas.