GE Capital Wades Into Online Banking

Online banking is getting to be big business -- big enough to become attractive to GE Capital, which has announced it's buying MetLife's online banking platform and will get into the retail online banking business.

“This acquisition fits with our plans to launch a U.S. deposit platform,” Dan Henson, president and CEO of GE Capital - Americas, said. “It accelerates our timing, helps us build a stronger and more cost efficient funding base, and allows us to better serve our middle market commercial customers.

Major banks already offer online banking to their depositors and there are any number of standalone "virtual" banks that operate only online, including

Ally (former GMAC) and Ing Direct. Niche players like PerkStreet, which offers only personal checking accounts, have also been growing steadily.

GE is already a big player in the lending business, with a lending business that's bigger than all but seven U.S. banks, according to the Wall Street Journal.  Through GE Money and numerous private labels, it finances consumers purchases.  Its comercial lend money to big and mid-sized businesses.

No branches

But what GE has lacked is a network of branches and an online banking presence. What these provide is a way for banks to collect money from individual consumers and small businesses, in the form of checking account deposits, savings accounts and other services.  

GE hopes the MetLife platform will help fill that need, boosting its existing U.S. deposit base, estimated at $23 billion, by $7.5 billion.

“These new capabilities combined with the GE Capital brand and our financial services marketing expertise provide an excellent engine for future growth,” Henson said. “And since we will be using the same service and support platforms, the customer transition will be seamless and the quality experience consistent.”

The deal is expected to close in mid-2012, assuming it wins regulatory approval.