Charter Savings Bank, a digital only lender has been givenregulatory permission to begin taking consumer deposits as it prepares for afull launch in March of this year. According to the new savings bank (whoseparent company is Charter Court Financial Services), consumers will haveinstant access to longer term savings accounts as well as bonds, but CharterSavings Bank will not offer checking accounts.
Commenting on the prospect of the bank, Ian Lonergan, CEO ofCCFS who will also run the savings bank said, “We see the development of aretail banking proposition as a logical extension for our business, enabling itto diversify into new markets and build a sustainable business model for thefuture.”
While employing the digital only model will ensure that CharterSavings Bank can offer superior rates on savings accounts, the decision to notoffer checking accounts, may hurt the bank’s prospects in the long run as itnot only faces a challenge from another digital bank in the form of Atom bankwhich will offer customers a full range of banking and payment products as wellas a growing number of other challenger banks.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments, Mercator Advisory Group
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