Digitally native Genius Bank began offering its first product, personal loans, about a year ago. Its second product, a high-yield savings account with an annual interest rate of 5.25%, was launched in November.
But don’t call them beginners. Jenius is backed by a Japanese megabank. Sumitomo Mitsui Banking Corporation is a bank with hundreds of years of history.
Banking Dive caught up with Jenius Bank President John Rosenfeld to discuss what has driven the bank’s growth over the past year and what the bank is excited about going forward.
Editor’s note: This interview has been edited for clarity and brevity.
BANKING DIVE: Genius recently reached $1 billion in deposits in its high-yield savings accounts since launching the product in November. What’s the secret to that rapid growth?
John Rosenfeld: The parent company They were looking to start a digital consumer bank in the US, and they hired me because I had done that before, and gave me funding, autonomy, and the opportunity to start with a clean slate.
We didn’t have any existing customers, so we didn’t have to deal with legacy technology or migrate customers from one system to another. We were able to start with modern technology, so our entire bank was built on the cloud. We don’t have a single data server in our organization. Secondly, we’re 100% paperless, and we don’t even actually have an office. We were able to get talent that other banks wouldn’t be able to get because other banks would say, “You’ve got to just move to Topeka.”
When I was talking to people about what we were going to build, I asked them, “What is something that really pisses you off about your bank? What do you not like that banks do to their customers? We don’t have to do that.”
Therefore, there are no fees. To make it easier for customers to contact us, we have posted our phone number in the center of our website and our call center is available 24 hours a day.
We keep it simple and offer just two basic products: the simplest savings account on the planet and the simplest personal loan on the planet. And that’s by design. We’re not going to add any extra features, we’re just going to make it really easy to do business with us.
Is a check on the way?
Yes, absolutely. If you think about what you need for a checking account, you need a debit card, which requires a whole different level of monitoring for fraud. You need Zelle and the ability to withdraw money from ATMs. There’s a lot of complexity that you don’t really need for a savings account. It’s going to take us a little longer to deliver on this promise because we want to make sure that we’re doing it really well.
Last year you said Banking Dive Jenius would launch savings and current accounts later in the year, has the launch of the current account been delayed?
After diving deeper into the scope of work and fully understanding all the complex additional needs, the check timeline was extended to some extent. [to launch it]Soon after, they realized they had a savings account ready to open, so rather than wait to open a checking account and make their customers wait, they decided to open the savings account sooner.
Genius won’t disclose the number of customers it has, but within seven months it had $1 billion in deposits. How did the bank acquire these customers?
Our primary customer acquisition channels are digital aggregators like Bankrate, NerdWallet, and DepositAccounts.com. And for lending, we offer loans through Credit Karma and LendingTree. It’s like a food court for financial services, and people come in with a plan to eat. They come in with a plan to get a savings account or a loan. In a way, we’re competing with the other people in the room for their business.
What is the relationship between Jenius and its parent company?
They gave us autonomy to create and design the value proposition. I think they recognized that there was no retail expertise in the Americas. We’ve had all the support we wanted. That’s the easy side.
They also have very high standards when it comes to things like compliance, risk management, and cybersecurity. These things are sacred to their reputation. We have to meet these standards. It’s expensive to get in, but it’s great to get to the show, right? You can really enjoy a great show, but you have to earn the right to get in.
