Discover Financial Services (DFS) is positioning itself to be the leading direct bank, said Mark Graf, the company’s Executive Vice President/Chief Financial Officer. He was speaking at the 33rd annual BancAnalysts Association of Boston Conference.
The target toward becoming the leading direct bank is to “create a strategic shift in consumer perception,” said Graf. “Today, we’re largely a credit card company in the mind of consumers.” By building upon its base of credit card users and adding in more financial services and bank deposits, the company feels it is well on track.
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Discover Financial Services has $54 billion in card receivables, $29 billion in direct-to-consumer deposits, $13 billion in personal and private student loans, and $2.5 billion in home loan originations and home equity loans. The deposit business is just over seven years old, and Graf noted, “When we think about deposits, ours is a long-term strategy. Doing it right takes time.”
The shift from branch to Web and mobile banking will aid Discover’s plans, Graf said, noting the company is going after first-time customers who are technologically savvy but without an established brand loyalty. The company hopes to attract them early and build a relationship going forward.
Among the new products being rolled out is a checking account program, which has been quietly introduced regionally and without a national rollout, Graf said. “We want to grow our checking product over time,” Graf said, again targeting first-time customers by offering non-fee, no minimum balance checking with a cash-back reward option, plus a no-fee ATM network.
“As a direct bank, we have to get the digital presence and customer service right,” Graf said.
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