‘We’re shortening the distance between consumers and the products they want and need’: MoneyLion’s Dee Choubey comments on Q3’23 and more

MoneyLion delivered strong third-quarter earnings and revenue last week.

• Revenue came in at $110 million, up 24% YoY
• Net Income before other expenses and income taxes of $1 million compared to $24 million in Q3 2022
• Adj. EBITDA of $13 million compared to a loss of $14 million in the same period a year ago
• 2.2 million total customers added in Q3 2023

MoneyLion has shown strong revenue growth over the past quarters, but its profitability has been a cause of concern for analysts. 

Richard Correia, chief financial officer at MoneyLion, discussed the strategies including expanding into different verticals and new personal finance tools that worked in keeping the firm on course and where the company's headed from here.

“We’ve been able to extract our business away from the macro. And I’m acutely aware of what I’m saying that that is something unique, given that there are kind of headwinds happening within the space and the amount of uncertainty,” said Correia at the firm’s earnings conference.

“And as the headwinds that we’re seeing in the macro diminish, we expect that [cash flow and EBITDA] to actually be a multiple of where we sit today,” he added. 

I sat down with Dee Choubey, co-founder and CEO of MoneyLion, to learn more about where MoneyLion stands in today’s market and the trends propelling the digital banking industry heading into 2024.

What factors led to MoneyLion’s Q3 results?

Dee Choubey, ML: MoneyLion’s performance in the third quarter was driven by strong demand for our consumer products, product diversification, and expansion of the Enterprise business. We continue to innovate our technology by developing and releasing new product features that exist within our consumer-facing Personal Financial Management product set — such as savings and loan calculators that make it easy for users to find the products they need. We're shortening the distance between consumers and the products they want and need. 

We have a capital model where we don't rely on having a massive marketing spend and continue to see record customer adds due to our diversified business model. Moreover, we have a strong balance sheet going into Q4 and 2024 that gives us a lot of confidence to execute. 

It’s been a wild ride for financial markets over the past quarters – are better days in the offing?

Dee Choubey, ML: While 2023 has been a year of challenges and opportunities for fintech/financial services companies, recent developments suggest a turning point. For example, Plaid's highly anticipated plans to go public, and SoFi and MoneyLion's upbeat financial results for Q3. Both events reflect confidence from key players despite a dynamic market and are an encouraging sign for the broader industry. 

The deal value has also been on the rise, as PitchBook reported a 5.1% QoQ increase from Q2 to Q3. With three fintech companies (QI Tech, Tabby, and Next Insurance) raising $650 million alone during the last week of October and early November, Q4 is bound to keep the momentum going.  

Which trend according to you has made a major impact in the US digital banking space in 2023?

Dee Choubey, ML: Open banking. 

The proliferation of fintech platforms has prompted consumers to demand more from their banks. Over time, I’ve seen that banks have shifted their mindset to embrace open banking infrastructure as it benefits both banks and consumers through a larger marketplace of product options. Consumers use open banking by consenting to share their data with other providers securely and receive a more comprehensive range of product offerings and more personalized and efficient services — all in one place.

For example, SoFi used an API to power customer acquisition, prequalification, and preapproval for loans, credit cards, and life insurance customer acquisition via its Lantern by SoFi platform. A smooth user experience allowed for real-time, personalized offers that, according to the company, helped build a multi-vertical financial marketplace and more than double revenue and engagement.

To that end, open banking infrastructure can significantly enhance distribution channels for banks and fintechs, lowering the cost of customer acquisition while increasing trust and engagement. 

A trend you see gaining ground in the US digital banking sector in 2024?

Dee Choubey, ML: Consumers already see their financial management app as the go-to place for all things finances. As we head into 2024, these expectations will begin to involve apps in not just storing and aggregating data but also providing proactive, personalized advice, and real-time solutions to consumers’ financial challenges. The integration of AI will play a crucial role in enhancing these apps’ ability to understand, analyze, and address individual needs.