The Customer Effect
SoFi rolls out mobile checking account aimed at millennials
- SoFi rolled out checking accounts this week, the foundation for a bigger financial health mission for its customers
- SoFi said it's differentiating with a tech-driven experience that prioritizes speed and efficiency of transactions
SoFi is trying to cater to millennials with a new checking account geared toward their needs as young spenders. "We have a huge opportunity to impact people's lives," CEO Anthony Noto told an audience at CB Insights Future of Fintech Conference in New York on June 20. "Financial independence redefines as having enough to do what you want. For some that's having children, for others it's buying a house, and for some it's retiring early. What we aspire to do is to help our members [customers] get there." The checking account, which is in beta, is called SoFi Money. It marks an important step for the company that started out as a digital lender seven years ago, then branched out to wealth management, personal loans and mortgages. SoFi is aiming at digitally native millennials; owning deposit relationships keeps customers within SoFi's ecosystem and lets it cross sell other products. "We think of it as a membership card and not a debit card," Noto said. "Ultimately, we want to be the place that allows them to do all those different activities to get their money right in a differentiated way ... we'll use the data to help give them advice on discretionary spending, saving, investing and also borrowing." SoFi Money will give users the ability to make peer-to-peer payments, bill payments, transfers and wires on mobile devices. Those who use it for direct deposit will get 1 percent interest along with opportunities to add more value with the debit card, he said, without specifying what those are. Transactions also will be faster than big banks typically are, he said. App users also will get personalized financial advice based on their spending patterns. "We think there's a lot of white space in making every transaction faster, and every activity faster by using technology to do that," Noto said. "There's no reason it should take 5 or 6 days to approve a mortgage, there's no reason funds aren't available for 5 or 6 days -- it should take 5 seconds." As for whether SoFi will apply for a banking license -- which it once pursued but later withdrew -- Noto said such a license would pre-empt the need for SoFi to get state-by-state regulatory cover for banking operations, and deposits also lower the cost of funds. But the company is no rush to become a bank. "We want to maximize simplicity, which is pre-emption, we want to maximize our ability to operate in other environments at a really low cost, but we don't want to burden the business in ways that are unnatural to what we're doing," Noto said.