Sumitomo Mitsui Financial Group (SMFG), one of Japan's largest banks by total assets, has announced a new digital bank offering–Jenius Bank for the US retail banking market– set to launch by 2023.

The strategic move comes as the SMFG attempts to diversify its revenue away from its domestic market, which is facing a decreasing population and a prolonged period of low-interest rates. SMFG also aims to improve profitability by targeting an expense ratio of ~50% by specializing in online banking which will help minimize costs. 

Jenius Bank will primarily target consumers between the ages of 20 and 40 who are more digitally savvy and have an annual income of more than USD 100,000. It will initially provide unsecured personal loans before expanding into savings accounts, mortgages, and credit cards. It also intends to gradually offer investment products such as investment trusts.

Jenius Bank is incorporated as a division of Manufacturers Bank, an indirect subsidiary of SMFG. Its digital banking capabilities are developed by fintech infrastructure provider, FIS, and the bank intends to hire 300 employees to manage its operations. Jenius Bank claims to be the only Japanese bank to engage in retail finance in the US.