‘General Electric to launch online bank’
September 10, 2010 at 3:47 pm
Online banks have not had a particularly great time of late. The credit crunch revealed weaknesses in many of them, and it is no surprise that not many new names have been entering the market in the last two years.
However, that could all be about to change as it is thought that General Electric is considering launching its own online bank in the UK. If it goes ahead it will become the first online bank to be launched here since the start of the credit crunch.
It will be launched by GE Capital, the financial arm of the company, and it is thought that it could arrive sometime within the next 18 months.
It would not be the first online bank that General Electric has set up. Back in July it launched GE Direkt in Germany, which is already receiving good reviews due to its favourable rates.
If it is a success it could help to improve trust in the sector which was badly hit by the credit crunch and has been facing difficulties ever since.
The online banking sector was launched a decade ago, with such well-known names as Egg and Cahoot. However, with the credit crunch came the collapse of Icesave, the Icelandic online bank, and the problems that ensued which led to new legal regulations being imposed on online banks by the FSA.
The new online bank from General Electric will probably be given the name GE Direct, and will have no limitations on the amount of investment, a 2.25% rate on savings and a full deposit guarantee.
