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GLOBAL 2016: Lack of services limits the growth of direct brands

Direct banks such as Ally, Capital One 360, USAA, and Discover, have done a good job of growing their businesses over the past few years. Without operating physical branches they’ve successfully taken customers away from traditional banks by offering relatively high interest rates on savings related products. The challenge that most direct banks face is that when customers have an emergency situation or a need to access to a physical office - they just don’t have the infrastructure in place to meet these demands. However, having appealed to consumers by offering high interest rates, they’ve retained them with strong and differentiated service levels compared to their brick-and-mortar peers. Ultimately, most direct banks face a ceiling on growth as a result of their limited set of products and services.
Charles Schembri
Vice President, Financial Services