Member Exclusive, New banks, Online Lenders

Digital lender LendUp launches a challenger bank

  • LendUp has introduced its own challenger bank, Ahead Financials.
  • Ahead will provide digital banking and financial education to emerging middle class consumers.
close

Email a Friend

Digital lender LendUp launches a challenger bank

LendUp has unveiled its digital bank, Ahead Financials. 

Ahead provides emerging middle class consumers in the U.S and worldwide with banking and financial health services. The LendUp subsidiary will offer a checking account and debit card with no monthly fees along with financial literacy tools to educate consumers on their budgeting habits. 

“Borrowing, saving, planning, budgeting and financial education each play an important role in financial health no matter where you fall on the income spectrum,” said LendUp CEO, Anu Shultes. “However there are tens of millions of Americans who have been shut out of the mainstream banking system and therefore do not have a financial partner to help them with these items. And these are not just students, new workers or immigrants, they are hard working individuals with good jobs.”

As of August 2020, around 167 million Americans identified themselves as ‘financially coping’ or ‘financially vulnerable’ in a Financial Health Network report. In the past year, financial health disparities have widened across income and race and have persisted across gender. 

SPONSORED

“LendUp and now Ahead were founded to break the cycle of hard-working Americans who are denied access to the system because they have poor credit or no credit,” said Shultes. “Improving financial education, improving credit scores, and improving the financial health of millions of Americans is one part of breaking this cycle. Because our customers have been shut out of the mainstream banking systems, we are creating a banking ecosystem specifically designed for our customers to be set up for success and that can grow with them.” 

Economically vulnerable consumers who live paycheck to paycheck struggle with poor credit histories, minimal savings opportunities and low financial literacy. “Our customer typically makes $35k-$45k, has a family, has probably made some mistakes at some point in their financial life and now are underbanked,” she said. 

Traditional banking services have largely neglected the lower middle class by targeting high income groups. “Most traditional banks are focused on the solidly middle class or wealthier consumers. Digital banking services are making headway to attracting younger consumers yet they are still focused on the upwardly mobile consumers who can grow with them. Ahead Financials has been created to focus on the emerging middle class -- customers who continue to be marginalized by mainstream and digital banking companies,” said Shultes.

Ahead will introduce its digital banking app to customers who will have early access to their paycheck, no cost overdraft protection for up to $100 and surcharge-free and in-network ATM access at over 55,000 ATMs. The app will assist consumers with their financial planning through a financial personal trainer tool and credit-building offers to strengthen credit scores. The company has partnered with Financial Health Network, SpringFour and the Balance Partnership to strengthen its financial wellness capabilities. 

Since its inception in 2012, LendUp provides financial solutions for the economically disadvantaged. The company has adopted alternative credit scoring, loan financing and cost-savings solutions as part of its financial service offerings. The company has originated over $2 billion in loans and served more than 1 million customers. 

0 comments on “Digital lender LendUp launches a challenger bank”

Outlier OpinionsMakers

BNPL, Online Lenders

PayPal’s evolving strategy in a crowded BNPL market 

  • We take a look at how PayPal entered the BNPL sector by launching its first BNPL offering – ‘Pay in 4’, and expanded its suite of products by rolling out another BNPL product, ‘Pay Monthly’, in 2022.
  • Steve Mikulcik, VP of Global BNPL at PayPal, talks about the ramifications of such a rapidly-growing industry, and whether it is still serving the purpose of facilitating consumers.
Sara Khairi | January 17, 2023
Online Lenders

5 questions about managing everyday Americans’ finances with Achieve’s Andrew Housser

  • Achieve, formerly known as Freedom Financial Network, offers digital finance solutions like consolidation programs to underserved credit groups.
  • Tearsheet sat down with the co-founder and co-CEO of Achieve, Andrew Housser, to learn about his plans for the company and how it caters to the needs of everyday Americans.
Rabab Ahsan | December 28, 2022
Online Lenders

Does B2B BNPL have the potential to emerge as the next top fintech trend?

  • Is B2B BNPL keeping up to speed with the B2C model?
  • Contrary to B2C, B2B BNPL is viewed more as the automation of existing credit processes with slight innovation. However, the model brings its own set of challenges.
Sara Khairi | October 31, 2022
Member Exclusive, Online Lenders

Lending Briefing: Upgrade CEO Renaud Laplanche on fintech lending in a tight market

  • Today, there's less demand for consumer loans, and lenders are tightening their credit books. The 'cautious approach' narrative prevails in many interviews and conference calls.
  • I sat down with Renaud Laplanche, CEO at Upgrade, one of the main direct-to-consumer fintech lenders in the US. We discussed the macro environment, and how he designed Upgrade's business model in a way that is proving resilient during these turbulent times.
Iulia Ciutina | October 12, 2022
Member Exclusive, Online Lenders

Lending Briefing: Debit cards are taking over

  • This year, debit cards have emerged as the preferred payment method for the majority of US consumers, dethroning credit cards.
  • Younger generations are behind this switch – even though they're also getting credit cards, Millennials and Gen Zers prefer to pay with debit.
Iulia Ciutina | September 28, 2022
More Articles