Banking

A neobank for healthcare professionals is on call

  • Panacea Financial is a financial services provider for health care professionals, and it recently upgraded its product offering.
  • The neobank claims it understands healthcare professionals a lot better than big brands and its product focus on this niche consumer group sets it apart.
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A neobank for healthcare professionals is on call

Financial services provider for healthcare professionals, Panacea Financial has upgraded its digital banking services.

Built by practicing physicians Michael Jerkins and Ned Palmer, Panacea Financial claims that traditional FIs do not understand the  medical profession and are, in turn, unable to adequately service this consumer segment. 

Doctor knows best

“Most medical, dental, and veterinary students take on six-figure student debt as they make their way through school, then earn very little while in training or residency. This period of no- or low-income can lead to financial stress and could cause these individuals to rack up toxic credit card debt to stay afloat,” said Ned Palmer, MD, MPH, Chief Operating Officer and Co-Founder of Panacea Financial.

Typically, a medical school graduate carries up to $200,000 in student debt. After training, most medical professionals are unable to access financial assistance from banks because high student debt is seen as a “red flag” on lending applications. “Doctors have limited time and atypical working hours, so traditional banking hours do not always work for their busy schedules,” he added. 

Panacea Financial caters to doctors, dentists, and veterinarians and the unconventional hours that medical professionals keep by offering a digital banking platform that runs around the clock. 

Panacea Financial’s chose Bankjoy as a digital banking technology provider, motivated in part by the user experience that Bankjoy offers. Palmer expects that Bankjoy’s UX will make it convenient for Panacea’s client base to access important features like account opening and personal and professional financial management. The digital banking provider is also expected to ease the process of adding third-party solutions to Panacea’s existing offering. “Because we are fully digital, our digital banking tools must be top-notch to provide the best banking experience for our clients. Bankjoy’s user-friendly platform helps us achieve our goal of making banking simpler and easier to access for the doctor community,” he said. 

Working with digital banking providers like Bankjoy allows neobanks to remain competitive in a market dominated by larger banks. And some neobanks have been able to prove their mettle and wrestle away customers from incumbents. Since customers are now likely to own multiple accounts across multiple institutions, more accounts are being opened than ever before. Neobanks and fintechs have been poised to take advantage of this change and have captured 47% of all new checking account openings in 2023. 

The ability to focus on niche consumer groups, like SMBs, Gen Z, families, or healthcare professionals, allows emerging neobanks to set themselves apart from the homogeneity of big brands. It’s a question of positioning, but will that be enough?

Will the neobank keep the big brand at bay?

The trouble for neobanks like Panacea Financial is that big banks aren’t ignorant of their positioning advantage. U.S. Bank recently announced a new initiative which will serve small-to-medium sized healthcare practices with more than $25 million in annual revenue. The bank is also throwing some of its weight behind the initiative by adding 50 new positions across the country to power its plans. In the face of incumbents ramping up their efforts, it's the little things that will make a difference for the little guy.

For example, Panacea Financial isn't putting up a revenue filter for its services, which makes its offering more widely applicable. Similarly, the company offers loans for those who are thinking of starting their own practice, with the possibility of same-day approvals of up to $400,000. For healthcare professionals who just want an easy way to bank or are thinking of striking out on their own, Panacea Financial could be a better fit. 

But as some of these practices grow, incumbents like U.S. Bank will be poised to take advantage of the most profitable members of this consumer group. At that point Panacea Financial may be fighting a battle on two fronts. Its product offering will have to remain practical for those just starting out in the healthcare industry. At the same time, it’ll need banking products that can retain customers and make sense at scale, which big banks are already adept at doing. 

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