General Electric to create UK online bank

Now an online UK bank

American power giant General Electric has announced it is to launch an online bank in the UK within the next 18 months.

The news, that was broken by the Sunday Times, will see the firm's GE Capital unit attempt to break into the ever-growing market of online UK banks that includes the recent additions such as Metro and Virgin Bank.

The GE online bank will hope to win customers from those banks that were hit hard during the global recession and have said they aim to launch their service within the next 18 months.

GE Capital, has already launched a similar bank in Germany, called GE Direkt, but its plans for the UK would make it the first online bank in the country launched since the end of the recession.

The German branch is already seeing strong popularity, with good reviews and good rates on offer. For example, investors can deposit their savings at a competitive rate of 2.25 percent with a full deposit guarantee and without any limitations to the amount of investment. GE Capital hope to replicate this level of success in the UK.

GE Direct

The new bank is rumoured to be called GE Direct, and will operate purely online. It will be the first Internet bank opened in Britain since the tightening of legal regulations for online banks made two years ago by the FSA, as a result of problems with Icelandic financial institutions.

As such, the creation of a new online bank may be a feat even for GE. However brand recognition may be in its favour, something that has taken the likes of Egg and Cahoot to build up over time.

Many online banks have also been scaled down in recent months, as many banks increase services through branch and telephone services. Egg was recently put up for sale by its US owner Citigroup and Cahoot has been scaled down by Abbey and Santander.

Whether GE Direct will be a success remains to be seen, but the company has a lot of resources behind it that should ensure a big impact in the market.

Relevant articles:

RBS to sell WorldPay stake | RBS fined for IT system failure | BBVA launches new ATMs

Like this article? Get the RSS feed: