Can U.S. Bancorp find an edge in crowded field of digital-only banks?

Everyone wants wants to launch a digital bank these days, it seems.

Over the past year, U.S. Bancorp has talked up its plans to expand its retail division on a national scale, offering digital accounts to customers outside its brick-and-mortar branch network. But as other big banks — including JPMorgan Chase, Citigroup and PNC Financial Services Group — make similar moves, the Minneapolis company faces the challenge of distinguishing itself in an increasingly crowded field.

During a conference call Wednesday, analysts pressed U.S. Bancorp executives for information on their national ambitions. Rather than compete on price, or target a particular customer segment, the company plans to market its digital banking services to people who already have an account through one of its national lending businesses, such as a credit card or mortgage.

“I think if you go into a market without a customer base, and you either compete on price or product, you could get a negative selection,” Andy Cecere, the chairman and CEO, said during the call.

Cecere added that the $462 billion-asset company has not lost customers to its competitors that have expanded into its key regional markets.

“In Minneapolis, in our core markets, we have not seen movement or lost customer base either on the wholesale or on the consumer side of these new entrants,” Cecere said.

Bank of America has expanded into the Twin Cities, opening just a handful of branches and emphasizing its digital capability. Additionally, JPMorgan piloted a mobile app for millennials in St. Louis — a key retail market for U.S. Bancorp — and last month expanded it on a national scale.

The focus on expanding digitally into new retail markets comes as the competition for consumer deposits intensifies.

PNC said during its earnings call last week that it has begun marketing its digital bank, which will roll out in multiple markets later in the year. Citizens Financial also launched a digital platform, known as Citizens Access, aimed at attracting deposits by offering higher rates.

U.S. Bancorp, meanwhile, plans to play up its strong reputation in its pitch to prospective depositors.

“When we do customer focus groups and surveys, we know that they like us,” Chief Financial Officer Terry Dolan said during an interview following the quarterly call. “The goal is to be able to expand our relationship with them and become more central to their lives.”

U.S. Bancorp also expects its mobile technology to set it apart. Dolan pointed to the company’s use of geolocation to protect customers from fraudulent charges. Additionally, it plans to incorporate what Dolan described as “clairvoyant” alerts, to help customers avoid overdraft fees and other service charges.

“Those are things that customers find invaluable,” Dolan said.

Whether it is enough to give U.S. Bancorp a competitive edge remains to be seen.

The company has begun testing its digital-only banking product with its employees, and expects to begin marketing on a larger scale later this year, according to Dolan.

U.S. Bancorp currently has branches in 25 states, extending from the Midwest to the West Coast. Rather than entering the remaining 25 states all at once, the company will likely target a handful of new markets, with the goal of gaining a better understanding of what, exactly, customers want.

“While you can enter all the states, we’re going to focus on a few, and we’re going to continue to test and learn and try different things,” Cecere said during the call.