Legacy Banks and Digital Startups See a Big Opportunity to Move Beyond Simply Storing Money
Shaking up the finance industry, from AI to community building
Luvleen Sidhu, co-founder, president and chief strategy officer at BankMobile, said she started the mobile-only brand as a solution to the massive costs that physical banks devote to customer acquisition. The average bank branch opens one net new checking account per week, equivalent to 52 new accounts every year, said Sidhu.
“That’s a very costly customer-acquisition strategy and it’s subsidized by fees, especially overdraft fees,” she noted. “We’re going after working-class Americans [and] millennials—those living paycheck to paycheck—to give them very affordable banking that leverages technology to make the banking experience as seamless as possible.”
For example, artificial intelligence is built into the BankMobile app to speed up the sign-up process so that customers answer a handful of questions before they’re approved for an account within a few minutes. From there, they can use the app’s camera feature to snap a picture of a bill to pay or apply for a line of credit. The strategy appears to be working: In three years, BankMobile said it has amassed 1.8 million customers with an average age of 27.