Member Exclusive, New banks, Podcasts

Current’s Stuart Sopp on building a bank with customers’ best interests in mind

  • As a trader, Stuart Sopp thought he could do more to help the people not being served by the banking system.
  • His challenger bank Current targets people living paycheck to paycheck and teens.

Email a Friend

Current’s Stuart Sopp on building a bank with customers’ best interests in mind

When you talk to the founders of many of the leading challenger banks, you sense that they each have a touch of revolutionary in them. They see the present financial services system as broken — some more, some less — and their firms are out to provide better options for the bulk of people out there.

Stuart Sopp’s the CEO of Current. Growing up through the industry as a trader, Sopp made a decision midway through his career to leave his job as a trader and build a challenger bank that’s targeting Millennials and Gen Z with lower — or no — fees and early direct deposit. Current saw 200,000 new users in April and May during the height of the Corona crisis. The company has more than 1 million active accounts.

Sopp joins us to talk about the genesis of Current and how it’s helping its target customers. In a crowded field, he describes how Current differentiates itself from the other offerings out there. Sopp tells us how he thinks he can double his userbase in 2020.

SubscribeApple Podcasts I SoundCloud I Spotify I Google Podcasts
The following excerpts were edited for clarity.

Current's positioning

Distribution is changing. We have gone from branch network to the Internet. When we founded Current, few had gone fully mobile. In the 2010s, we experienced peek iPhone. On top of that, there are thousands of banks and credit unions. It's a heavily populated banking fraternity and much of it has this legacy infrastructure. Unless you're a top 10 bank, you can't afford to build your own technology -- you're with FIS or Jack Henry. And since the 90s, you've gotten card processing outsourced.

This massive banking fraternity also monetizes with fees -- late fees, overdraft, and other stuff. We're seeing a structural disfunction of how banks are set up. We don't have the demographic or interest rate for a lot incumbent banks to survive. Wealth inequality is real and debt cycles are keeping people from accruing assets. It's a technology, demographic, and a distribution problem.

We built Current's own banking core, called Current Core. If you think of a regional or community bank, they spend something like $10 - $12 per month on an open account on technology costs alone. We spend something like $0.10 - $0.15. We're able to profitably open and maintain bank accounts for gig workers, essential workers and teenagers.

Growing up in the financial services industry

I moved to New York from Hong Kong, where I worked for Morgan Stanley, Citi, and Deutsche Bank. I was a trader for many years -- foreign exchange and short term interest rates. I moved to the U.S. in 2011, just after the previous crisis.

My story is a non-standard way of founding a fintech. I get this question about my career trajectory a lot from West Coast venture capitalists because pattern matching is very important. In trading, I was responsible for a large part of Morgan Stanley's foreign exchange trading business.

I saw the advent of Bitcoin in New York in 2010. Being a transplant, it was that introduction to that anarchistic, anti-bank, anti-government group around Bitcoin that I learned that America has an interesting problem: access to banking isn't easy and people live paycheck to paycheck. Banks are focused on deposits -- that's their KPI, but people's money whistles out of their accounts right after they get paid.


What customers are looking for from Current

If you're living paycheck to paycheck, you don't really save, so APRs don't really mean anything anymore. If we can get their paychecks into their account two to three days early -- if you're working for Amazon during the crisis and you're working overtime and get paid more -- it means that we can deposit their paychecks on a Wednesday when they get paid on Friday.

Now, these workers got their money sooner and can pay off late fees for cellphones, utilities and car payments. Just getting money into their accounts early means these people can avoid the snowball of these fees and penalties.

Differentiating a challenger bank

When I was a trader, I wasn't really helping anyone other than the banks I was working for. Midway through life, I realized that, instead of improving the outcomes for myself and my employers, how great it would be to build a financial services company with technology that could align with our members and improve their financial outcomes. That's our mission.

Current's business model

We're an interchange model, as well, like many of our competitors. We have issuing banks we work with and partner with. We do use some parts of card processing -- card processing was the fintech of the nineties. We also have a subscription fee, which is a little unusual. That's mainly because of our roots in teen banking. Building your own core is extremely hard. We started with a demographic -- teens -- that doesn't need much. It's hard to make money serving this group and you don't want to encourage consumerism. It's been a focus of our product teams to provide enough value so that our upfront fee dovetails with consumer expectations.

We charge $4.99 for our premium account. We also have a totally free account which is our basic offering.

Product ideas for the future

We're in credit a little, but it's kind of collateralized with payroll and other things we do. Our DNA is in banking and payments. Drawing straight lines from liquidity management, you can see us getting into lending and credit. It's a cyclical, capital-intensive business. I think you'll see us dip our toes into that.

We'll look more like a traditional bank but without the breadth. We're focusing on the demographic with a banking problem and we'll service them with products only they need. We'll focus on little things like wire transfers that get us closer to features parity with a traditional bank.

We want to give as much value back to users as possible. Our clients that are living paycheck to paycheck won't ever have enough to save. The closest they get to savings is discounts -- 10 percent or 20 percent off when they're shopping. A large part of our future will focus on this vector.

0 comments on “Current’s Stuart Sopp on building a bank with customers’ best interests in mind”

Outlier OpinionsMakers


‘The Chief Data and Analytics Office is a team sport’: Vanguard’s Ryan Swann

  • Ryan Swann, Vanguard's Chief Data and Analytics Officer, champions the centralization of data analytics for business efficiency while highlighting the importance of diverse talent in innovation.
  • He envisions a convergence of offensive and defensive data strategies to enhance capabilities and reduce costs at Vanguard.
Zachary Miller | December 01, 2023

The state of bill pay with Solutions by Text’s Nick Babinsky

  • Consumers struggle with one-time payments, frequently forgetting to pay their bills on time.
  • Banks, billers, and payers can find success when simple texts are used as reminders and onboarding to payment flows.
Zachary Miller | November 29, 2023

‘If you can get Gen Z right, it’s going to build your bank for the future’: Citizens Bank’s Vice Chair, Brendan Coughlin

  • Regional banks like Citizens face a variety of challenges, from high interest rates to rising consumer expectations.
  • Brendan Coughlin, the bank's Vice Chair and head of consumer banking, joins us on the podcast to discuss how his firm is navigating the challenges and opportunities in this market.
Zachary Miller | November 21, 2023

Revisioning banking and BaaS last mile to safely deliver financial products

  • The BaaS ecosystem has been evolving and that means different things for the banks, fintechs, non-banks, and middleware companies participating.
  • On the Tearsheet Podcast, editor Zack Miller is joined by executives from Thread Bank, CCG Catalyst Consulting Group, and Infinant to discuss the last mile and where business models are headed.
Zachary Miller | November 17, 2023

The Gen Z Effect: Sustainability, technology, and the future of finance

  • Gen Z has demonstrated an interest in shopping for sustainable fashion, in goods and companies whose values align with their own.
  • In this special episode of the Tearsheet Podcast, executives from Klarna, Publicis Sapient, and Good on You join us to talk about the intersection between sustainability, technology, and finance.
Zachary Miller | November 13, 2023
More Articles