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Deep Dive: Current

  • Current is a challenger bank with a focus on improving consumers’ access to banking services and financial literacy through technology.
  • Starting out as a teen banking product, building its own core technology, and now diving into DeFi, the company has taken an interesting route compared to competitors.
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Deep Dive: Current

Profile 

Current is a six-year-old challenger bank based in New York. The company was founded by Stuart Sopp, a veteran in the financial industry who served as head of trading both at Morgan Stanley from 2009 to 2014, as well as Citi, between 2008 and 2009. Sopp started the challenger bank as a way to address financial inequality through technology.

As a challenger bank, Current’s features are pretty standard. But what differentiates it is that it has its own core banking infrastructure. That’s given it more flexibility to develop its own features and products without going through a third party provider.

Today the company, which is currently private, has around 200 employees, a $2.2 billion valuation, and has raised just over $400 million in funding.  As of April 2021, the company reported reaching 3 million users. In 2020, it hit the 1 million mark. 

The challenger bank’s average user is 27 years old, earns $45,000 a year, and lives in cities like NY’s Brooklyn Borough, Chicago, Las Vegas, and Atlanta, according to an article by CNBC.

Banking products overview 

Current’s bank accounts include integration with Apple Pay and Google Pay, P2P, spend tracking, mobile check deposits, and privacy controls. 

It also offers a hybrid account with checking and savings components, which it first launched back in 2017. Current’s banking services are provided through partnerships with Metropolitan Commercial Bank and Choice Financial Group.

Users can choose between either a free or paid account.

Basic account (free)

The basic account includes the basic things like no monthly fees, a Visa debit card, and access to 40,000 fee-free ATMs through the allpoint ATM network. The company charges $2.50 per ATM transaction outside the ATM network in addition to fees charged by that ATM operator.

Features

  • Savings pods: An sub-account within the Current account that allows users to define and set money aside for specific goals. There's only one savings pod in the basic account.
  • Budgets: Users can set budgets to track spending throughout the month. In the basic account, you’re allowed one budget per savings category.
  • Round-ups: As consumers use their Current debit card, charges are rounded up to the nearest dollar and then that change is added to a savings pod.
  • Current points: When users use their Current debit cards at select merchants, they can earn Current points, which they can then trade in to get cashback and other rewards.

Premier account ($4.99 a month)

Current’s premier account contains the same features as the basic account but with greater access and less limits:

  • Budgets for every spending category instead of only one
  • Three saving pods instead of one

There are also other features exclusive to the premier account.

  • Direct deposit up to two days early: Early wage access depends on available funds from employer/payroll provider
  • A premium debit card that has tap to pay capability
  • Overdrive: Current’s overdraft protection program allows qualified members to overdraft up to $100 on card purchases without overdraft fees. To enroll in the program, a user has to be at least 18 and have $500 or more in qualifying deposits within a 30-day period

Current doesn’t offer checks or check-writing services, but users can still use vendor bill payment services through plugging in their Current account and routing numbers.

Account for teens

Current also has an option that lets parents open an account for their teens. 

The account gives teens autonomy surrounding financial decisions, while still giving parents control over lots of features. For example, parents can transfer money to teens, create automated allowance payments, set up chores for teens to complete, set spending limits, block certain purchases, and receive notifications for all purchases.

The account comes with a debit card and other similar features to the other accounts like round-ups, budgets, one savings pod, and one giving pod.

Zeroing in on financial needs specific to teens has helped Current gain popularity within a user segment that’s on its way into adulthood and financial autonomy. 

“We really designed the experience around serving the teenager more than we did around serving the parent. And the reason why is that we see a really high conversion rate when our teenagers turn 18, which is when you can open a full individual account,” said CTO Trevor Marshall. “So we look at the teen product as utility now and opportunity in the future. It’s a big part of our business today.”

Today, Current  has a rating of 4.7 on the App Store, and 4.6 on Google Play.

Core banking infrastructure

One major way Current differs from other challenger banks is through its core infrastructure. The company built its own core without using any third-party core providers like FIS, Q2, Temenos, and Mambu.

Current was experimenting with a self-built core when it was starting out. It wanted to build pathways for money movement that didn’t rely on legacy rails.

The company built a proof of concept on Ripple in 2015 that allowed users to send money to each other. Later, the company built its own ledger.

Having an in-house core lets Current have more control when it comes to building new unique products and controlling user experience. According to Marshall, it gives the company more freedom to integrate and create new features and branch out within its own roadmap. 

“The real output of owning your own core is being able to very seamlessly integrate additional features into your product. Because at the end of the day, really the product that we sell, in a sense, is a balance. And it's [about] what you can do with that balance,” said Marshall. “It's about the movement of the funds on the platform, and that balance is made up of debits and credits, and really getting down to Banking 101. And being able to control the way that those transactions relate to a user's experience means that we can own the full roadmap for integration.”

Marketing and outreach

Since Current entered the market with a focus on teens, Marshall says a lot of its outreach and brand evolution have involved influencers.

“They've really helped carry this narrative to today, where Current is really positioned more as an alternative to a traditional bank account,” he said.

Some of the influencers Current has worked with include MrBeast, Kyle and Jade, and Kelz Washington – all influencers with millions of followers.

All in all, the company works with over a thousand influencers. 

MrBeast, for example, has over 32 million followers on TikTok and over 88 million subscribers on YouTube. In Current’s latest collaboration with MrBeast, the influencer announced he was giving away $1 each to the 1,000 Current users who use the promo ‘BeastBank’. People who sent him CurrentPay requests could also win up to $20,000. 

https://www.youtube.com/watch?v=cExLQ1o2pDw

Sometimes the videos the influencers post don’t even involve them even mentioning the brand, says Erin Bruehl, senior director of communications at Current, but rather just using the card. She also mentions that a lot of the videos involve things that the TikTok algorithm tends to value, like treating someone else to something, or ‘TikTok made me buy it’ type content.

https://www.tiktok.com/@_angelicasong/video/6969338697233730822

Dive into DeFi

Current’s original plan was to improve consumer access to banking products through blockchain. But because the market wasn’t ready for blockchain when the company started out, it first stepped onto the stage as sort of a teen banking product.

This led to Current’s customer base being pretty young – a base that is just starting its financial journey and maybe more open for new trends – like DeFi.

Current is now putting more focus into introducing DeFi. The company tried this back in 2018 with a points platform built on blockchain – but put the idea on hold. In 2021, though, it started offering solutions built on blockchain again. The company defines its strategy around the idea of HyFi, which means bridging the gap between DeFi and traditional finance. It also means rather than building its own DeFi products, the company integrates other tech into its own core.

For instance, the company announced a partnership with Acala in May 2021. Acala is a decentralized financial platform built on the Polkadot blockchain network. The platform's integration into Current’s core banking platform would allow the challenger bank’s users to access a variety of the platform’s cross-chain financial applications.

In June, Current began collaborating with DeFi firm Compound Labs. The collaboration means Current can offer new services based on the firm’s Treasury product, which lets non-crypto native businesses and financial institutions access Compound Protocol, an autonomous interest rate protocol built for developers.

New high-yield savings product 

Current recently launched a high-yield savings product. The new product, called ‘Interest’, lets users earn 4.00% APY on up to $6,000.  The new offering is available to both basic and premium account holders. People who sign up for Current can start earning interest on a daily basis by putting money into their savings pods.

Since there aren’t any requirements in terms of spending, balance or direct deposits, Current’s new product could be more appealing compared to competitors’ similar products. Aspiration, Varo, and One Finance, for example, all have a bunch of requirements surrounding direct deposits and balances for users to benefit from higher yields.

New partnership with TurboTax

On January 18, Current announced it was partnering with TurboTax to allow users to get their tax refund up to five days faster. There is now a ‘Go to TurboTax’ button within the account, which users can click to set up their e-file account. 

Competitors 

Current’s competitors are largely other companies in the challengers game like

  • Chime
  • Square’s Cash App 
  • Aspiration 
  • Varo 
  • One Finance 

Current isn’t on the road to becoming a bank, says Marshall, but rather focuses on the technology enabling financial services. In this way, its roadmap tends to differ, even compared to more obvious competitors.

“If you look at the newer challenger banks, there's sort of a differentiation against pretty much all of them for different reasons. Compared to Chime [and Varo], we're more focused on our core technology, compared to Cash App we’re more focused on core financial services,” said Marshall. “Even compared to Coinbase, we're far more focused on being able to serve customers that don't already have this education around crypto and the future of money.”

Tearsheet Coverage  

  • Who led banking app downloads in 2021? 
  • Challengers 2021: The Guide to Challenger Banking
  • If hybrid is the future of finance, Current aspires to be the key that unlocks it
  • Announcing the winners of Tearsheet’s 2021 Challengers Awards (Current wins best banking app)
  • How Current is building a Gen Z brand through influencer marketing

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