Barclays got out of the branch-banking business in the United States in the early 1990s, but now the British bank is making a digital run at the U.S. by wooing Americans to its new online banking service.
The Wall Street Journal reports that Barclays, which will have its name on the side of the new Brooklyn Nets arena when it opens later this year to basketball (and Barbra Streisand) fans, is looking to “diversify funding for its growing credit-card operations” in the U.S. The British bank, as Marketwatch notes, today went live in the U.S. with a high-yield savings account and certificates of deposit through its Barclays Bank Delaware subsidiary.
"If you look at the liability side, this is going to play an important role in that growth," said Steve Carp, managing director of deposits for Barclays US, to the Journal. "Retail deposits are certainly one that has a lot of supply and is one we felt like it made sense to tap into."
In addition to making deposits, individuals will be able to link existing checking accounts at other banks directly to Barclays online savings accounts.
The online move extends its U.S. credit card arm, which issues co-branded credit cards with companies including retailer LL Bean and US Airways. It also comes as Discover, American Express, and Capital One are all growing the online-banking parts of their business.
Carp acknowledged in an interview with Reuters that online competition for deposits has increased recently with bidding for funds by Ally Financial Inc, CIT Group and ING Direct, a unit of Capital One Financial Corp.
Barclays' new U.S. banking portal reassures customers of the brand's "long, reliable global history" in a section of the new website that notes:
Barclays roots can be traced more than 300 years to our original bank's 1690 founding in the City of London. Today, Barclays operates in more than 50 countries. A commitment to our U.S. customers: Our North American bank serves over 7 million U.S. customers through Barclaycard which is headquartered in Wilmington, Delaware. Additionally, our Barclays Wealth unit is based in New York City, and our Barclays Capital corporate finance business operates in more than a dozen U.S. cities.
Carp said U.S. consumer interest in online savings has increased, citing its research that found that 58 percent of Americans adults with savings accounts would switch to an online-only account if it consistently offered higher rates — as Barclays US is now setting out to do.