Green Dot aims to create a mobile bank

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In a previous era, industry executives debated the merits of a purely online bank and the extent to which such a bank could compete with traditional banks.

The idea held appeal years ago, and people assumed that an online bank could operate with drastically reduced expenses and strong appeal to younger, internet-savvy consumers. It's fair to say that the concept never really emerged as viable.

The issue is relevant again as mobile banking starts to gain traction. Can a purely mobile bank succeed?

Green Dot, which recently purchased Bonneville Bancorp of Utah, has announced its intention to operate a mobile-based bank. As noted by Bank Systems & Technology, the bank has launched GoBank, which offers no overdraft or penalty fees, no minimum balance requirements, and a large network of no-fee ATMs.

"Each account includes a checking account with a linked Visa debit card and a second integrated bank account, which the company calls a 'Money Vault,' that's designed for account holders as a way to put money away for savings. Accounts are demand deposit accounts (DDA) with full 'Regulation E' consumer protections."

The obvious target will be younger, mobile-savvy consumers. But in the end, can it thrive in an era where much larger banks are investing heavily in consumer platforms that encompass physical branches, online offerings and mobile offerings?

Perhaps it is destined to be a niche bank, but it would be terrific to find a massive audience.

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