Jenius Bank, a new digital-only division of Los Angeles-based Manufacturers Bank, announced the launch of its personal loan product last week, the first of several offerings the firm plans to debut this year.

The digital bank, which is backed by Japanese parent company Sumitomo Mitsui Banking Corp., plans to roll out a full-service suite of products that include savings and checking accounts in the next several months, Jenius Bank CEO John Rosenfeld said. 

Jenius Bank is launching its personal loan product in an environment plagued by high interest rates and inflation.

But despite the tough lending environment, Rosenfeld is optimistic. 

“[Other lenders] are starting to experience increased default rates on their loan book, and they will likely tighten their credit policies,” he said. “They may reduce their marketing spend. They may even lay off individuals.”

Rosenfeld said he sees an opportunity to hire newly available talent, and anticipates fewer competition in marketing channels as established lenders tighten their purse strings amid the tough environment.

“I don't have an existing loan book that I'm incurring losses on that is further impacting my overall business,” he said. “It's actually not a bad time to launch a new lending business when you're coming into a field that’s challenged.”

As a new player in the digital banking arena, Rosenfeld said the firm will lean heavily into customer service to help differentiate its products from others in the market.

“We understand that our brand is not widely known,” said Rosenfeld, who previously headed Citizens Bank’s digital bank, Citizens Access. “We understand that our experience is in its early stages of what we're trying to build long term. So we have to make sure that our products are easy to use and that we have really exceptional customer service.”

Jenius Bank will offer its customers 24/7 U.S.-based customer support online or by phone, he said.

As Jenius looks to fully launch with its savings and checking accounts this year, the firm has the support of a patient investor, Rosenfeld said. 

“[SMBC] has a very patient mindset to their investments,” Rosenfeld said.

Rosenfeld said he has conversations almost daily with executives at the Japanese banking giant, which, according to Nikkei Asia, has invested $150 million in the U.S. digital banking venture.

“They don't do short-term investments. They look at this as a long-term plan,” he said. “When we first laid out the plan to build this, they asked me for the 10-year business plan. Never in my life at any of the other banks I've worked at did anyone ever suggest they would be willing to even consider a 10-year business plan. They all want to see a three-year plan.”

SMBC’s conservative approach, and its financial support of the venture, means Jenius Bank can focus on its products, Rosenfeld said.

“Probably the biggest impact they have on us is making us think about how we approach this differently than we might have if we were a startup, having to generate investments in our business,” Rosenfeld said. “We can really focus on what we're creating for the customer.”

Phase 1

The launch of a consumer loan product is “phase 1” of Jenius’ strategy to grab a chunk of the U.S. digital banking market, Rosenfeld said.

“The way we looked at it, for us to be successful, we ultimately have to have a solid loan and deposit platform,” he said. “But the real power is when we build what we call ‘involved banking’ on top of that, which really allows a customer to glean better insights about how they save, spend and borrow their money and help them do it more efficiently.”

Jenius Bank will eventually offer consumers the ability to aggregate their money management through a single app, he said.

The company will allow users to track cash flow, as well as link data from credit cards, other banks, loans and potentially investment accounts.