SMBC Winds Down Digital U.S. Bank Jenius as Consumer Banking Strategy Shifts

Sumitomo Mitsui Banking Corporation (SMBC) has announced it is winding down and closing its U.S. digital-only banking unit, Jenius Bank, marking a retreat from its ambitions in the American consumer banking market less than three years after launch.

Jenius — launched in 2023 under SMBC MANUBANK, a California-chartered commercial bank and wholly owned SMBC Americas subsidiary — had aimed to establish a modern digital retail banking business in the United States by offering high-yield savings accounts and personal loans. However, the Japanese banking giant has now decided to discontinue new account openings and loan originations and proceed with a full shut-down, with existing accounts to be serviced only until the closing process is complete.

The decision comes amid broader strategic shifts in global banking and reflects the intense competitive pressure and structural challenges facing digital challenger banks operating in the U.S. market. Industry analysts say smaller digital banks often struggle to achieve profitability quickly enough, particularly under rising interest rate environments and against entrenched incumbents.

Why SMBC Is Closing Jenius Bank

The announcement from SMBC follows the filing of a WARN (Worker Adjustment and Retraining Notification) notice in South Dakota, which signals a permanent mass layoff connected to the closure of Jenius Bank.

According to the WARN notice, more than 160 employees will be impacted as the bank winds down operations, with layoffs set to take place after a typical 60-day notice period, meaning most roles will be eliminated by March 2026.

An SMBC spokesperson confirmed that the bank is suspending all new account openings and loan originations in the U.S. digital bank, and that the process of closing the business has begun. The financial institution has not yet announced a final date for the complete shutdown of Jenius.

Industry observers suggest that while Jenius achieved some early milestones — including surpassing $1 billion in deposits and expanding into savings products — the economics of operating a standalone digital retail bank in the U.S. may have fallen short of SMBC’s expectations, particularly as customer acquisition costs and competitive pressures have remained high.

Jenius Bank: Ambitious Launch, Rapid Wind-Down

Launch and Products

Jenius Bank debuted in mid-2023 under the leadership of veteran bank executives and offered a high-yield savings account along with personal loan products. Over time, it had hoped to expand its suite of consumer offerings.

By May 2024, Jenius had reported over $1 billion in deposits and about $700 million in loan originations, milestones that signalled initial traction in the U.S. digital banking segment.

Despite this early growth, the bank’s leadership had yet to fully roll out additional services such as checking accounts or a dedicated mobile app with broader functionality when the decision to wind down was taken.

Operational Challenges

Digital banking in the U.S. has become highly competitive, with established players such as JPMorgan Chase, Bank of America, and Citigroup entrenched alongside a growing number of fintech-related digital banks and neobanks. New entrants like Jenius must compete not just on rates, but on brand, service breadth, mobile experience, and scale — all while facing significant regulatory obligations and cost structures.

Several former Jenius employees have described the abrupt nature of the shut-down internally, noting that staff were informed about the closure in virtual meetings before access to internal systems was restricted shortly after, underscoring the pace of the wind-down process.

Impact on Employees and Customers

Workforce Impact

The planned layoff of more than 160 employees reflects the human cost of the closure. These positions — which included roles across product, engineering and operations — are being eliminated as part of the permanent winding down of Jenius Bank.

Industry filings and employee reports suggest that many workers were surprised by the announcement, with staff transitions taking place rapidly following internal notifications.

Customer Accounts and Deposits

SMBC has indicated that existing Jenius customer accounts will continue to be serviced while the bank undertakes the closure process, but it has suspended new account creation and new loan origination.

Given that Jenius Bank operated as part of a chartered U.S. bank — SMBC MANUBANK — customers’ deposits were FDIC insured up to applicable limits. Nonetheless, many customers have reportedly begun moving funds early due to uncertainty about the timeline and future support.

The exact process and timeline for account transition or closure has not been made fully public, leaving some customers seeking clarity on next steps.

Strategic Realignment at SMBC

The decision to wind down Jenius Bank reflects broader strategic recalibrations at major global banks facing mixed outcomes in digital-only retail banking ventures. While the digital bank achieved meaningful deposit and loan milestones, sustaining growth and profitability in the U.S. digital market remains complex — particularly when weighted against other business priorities within a global banking group.

SMBC Group has a diversified global business and continues to operate in corporate, commercial and investment banking segments worldwide. The wind-down of Jenius suggests a shift in focus away from digital consumer banking in the U.S. market toward other strategic priorities, possibly including deeper integration of commercial or wholesale banking services where SMBC has long-standing strengths.

Industry Context: Digital Bank Closures Are Not Unique

The closure of digital banking units launched by established banks is not unprecedented. Several fintech-style banks backed by larger financial institutions have found the economics of rapid growth challenging, especially in periods of tightening credit markets, high customer expectations for product breadth, and intense competition.

Many digital neo-banks that lack scale have also faced consolidation pressures, often either pivoting to niche services, partnering with larger banks, or being acquired. SMBC’s choice to shutter Jenius rather than continue investment highlights the fine balance between opportunity and cost in digital retail banking — particularly in the world’s largest banking market.

Looking Ahead

As Jenius exits the U.S. digital banking space, customers and industry watchers are paying close attention to how SMBC will address remaining obligations and the future direction of its American retail strategy. The closure of Jenius Bank may prompt other global banks to assess their digital retail operations more closely, weighing long-term customer acquisition potential against profitability timelines.

For consumers, the closure underscores the importance of understanding the backing and risk profile of digital banking services — even those backed by large global institutions.

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