On Episode 5, expert Luvleen Sidhu shares advice on how to choose the most effective program management approach for your business, untangling the complexity of launching and sustaining an embedded finance business that lives up to its potential—long term.
Listen here: Profitable Embedded Finance Step 5: Program Management
In this session, Luvleen shares:
• The genesis story and market dynamics she saw when she started implementing BMTX’s Banking-as-a-Service model
• How to leverage the complementary relationship between banks and fintechs
• BMTX’s mission to financially empower millions of Americans, including the unbanked and underbanked in the U.S.
Miguel Armaza heads to Fintech Nexus New York for a live conversation with Luvleen Sidhu, CEO & Founder of BM Technologies (NYSE American: BMTX) a US Banking-as-a-Service platform that provides access to multiple financial services. The company currently serves over two million account-holders and provides disbursement services at approximately 725 colleges and universities.
In this episode, they discuss:
Fintech Nexus hosted its seventh annual awards ceremony to honor the world’s leading fintech influencers and innovators in 10 unique categories. Luvleen was recognized as the Fintech Nexus 2023 “Executive of the Year.”
Luvleen was chosen as the winner of this prestigious award out of five esteemed finalists, including Zach Perret, CEO and Co-founder of Plaid, Chris Britt, Founder and CEO of Chime, Rania Succar, CEO of Intuit Mailchimp, and Jennifer Tescher, Founder and CEO of Financial Health Network. The panel of judges comprise a diverse group of leaders and experts in the banking and lending industry from companies such as Prosus Ventures, Team 8, Sutton Payments Division, and BankTech Ventures. This award is a testament to Luvleen’s leadership and the continued growth and innovation demonstrated by BMTX, one of the first publicly traded neo-banking fintechs in the country. As a woman in a male-dominated industry, Sidhu was the youngest female to take a company public at the time of its listing.
“I am truly grateful to be honored with the 2023 Fintech Nexus Executive of the Year award,” said Luvleen Sidhu, Chair, CEO, and Founder of BMTX. “The finalists in this category represent admired executive leadership from a group of inspiring companies, and it is a privilege to be among them. This year has been pivotal for the company. We began 2023 with a new bank partnership with First Carolina Bank (FCB) for our higher education business, a two-year renewal of our existing and largest BaaS partnership, and a new deposit servicing agreement with Customers Bank for our existing and largest BaaS partnership. In October 2022, we announced a partnership with Helix to provide comprehensive embedded banking solutions for consumer brands, combining Helix’s embedded finance platform and bank partnerships with BM Technologies’ award-winning app development services and program management.”
The Fintech Nexus Executive of the Year Award is given to a senior executive who has demonstrated outstanding leadership, integrity, performance, and team building within their company while at the same time contributing to the advancement of the industry. It is a celebration of the industry, for the industry, by the industry.
The Fintech Breakthrough Awards is a prestigious international awards program devoted to honoring excellence in financial technologies and services companies and products, with over four thousand nominations entered worldwide. Other winners in the Banking Infrastructure category include Savana, Yapily, and Railz.
“It is an honor to be named a winner in this category of innovative companies. BMTX is a leader in the banking-as-a-service space, and we are proud to partner with brands and FinTechs to deliver embedded banking experiences. Our business is more than a simple mobile app or web interface; we have significant and well-established partnerships in place and differentiate ourselves with our in-house, back-office support that enables us to provide the banking services, customer support, and ease of use that today’s customers want.” – Luvleen Sidhu (Chair, CEO, and Founder of BMTX)
Read the full release on the BMTX investor relations website!
Host Paddy Ramanathan sat down with Luvleen Sidhu (CEO at BMTX formerly BankMobile), Jamie Donahue (CTO of BMTX), and Ahon Sarkar (General Manager at Helix by Q2) to talk about all things BaaS, Embedded Finance and the recently announced partnership between BMTX and Helix.
Click the link for episode details of the Podcast: Embedded Finance and Evolution of Core Banking
Luvleen Sidhu is the founder and CEO of BM Technologies – a leading digital banking platform in the US. She describes her journey into fintech and banking.
As one of the leading figures in the US banking space, Luvleen Sidhu is the Chair, CEO, and founder of BM Technologies, Inc. The company is one of the largest digital banking platforms in the US and provides access to checking and savings accounts, personal loans, and credit cards. As a member of the BM Technologies (BMTX) Board of Directors and Director and founder of the BankMobile Foundation, Sidhu identifies and funds budding entrepreneurs and organizations that promote financial literacy. We caught up with her to find out more.
Describe your role and your journey into fintech – is there a story there?
I began day one of my career in 2008 at Lehman Brothers. Witnessing firsthand the fragility of the traditional financial landscape instilled in me a passion for using digital means to create a strong financial foundation for millions of Americans. Prior to founding BM Technologies (BMTX), I was a management consultant at Booz & Co. in their financial services practice and also worked as the Director of Corporate Development at Customers Bank.
I founded BMTX in 2015 with a mission to financially empower millions of Americans by providing a more affordable, transparent, and consumer-friendly banking experience. Even more so, I aspire to help Americans achieve financial stability, engaging the millions of unbanked and underbanked individuals in the US Many of these people are locked out of the system by monthly fee requirements and have an inherent skepticism of traditional banks. By offering a low-to-no-fee digital banking platform focused on technology and financial empowerment, we aim to provide an alternative. I believe in breaking the traditional mold and partnering with global brands and universities to distribute financial products that foster inclusivity and build wealth that enables real people to live better lives.
What is it about your chosen sector that attracted you?
The inspiration for BMTX came when I walked into a bank branch for the first time to open a checking account. I was astounded to find that this process took me 25 minutes. I couldn’t understand why it was so difficult. Just the day before I had booked an online ticket to Australia, halfway across the world, and it had taken less than five minutes. I was shocked that this bank was so out of touch with the technology that I took for granted. In an age in which we can see almost any movie the moment we want to see it rather than trekking down to the video rental store, or book airline travel and hotel stays right from our phones, why should banking be as difficult and inconvenient as it is? I decided to do something about it.
In addition to making banking more accessible, it was the opportunity that I saw in 2016 when I shifted BMTX’s direction to a B2B2C approach, and started implementing BMTX’s award-winning Banking-as-a-Service (BaaS) model. BMTX was a first mover before BaaS became the industry buzzword it is today. BMTX’s BaaS model is a proprietary, API-driven platform and white label interface through which it powers brands and FinTechs to expand access to digital banking products and launch fully branded financial services products at a fraction of the cost. This leads to attracting new customers, adding new revenue streams, and providing a more personalized experience to their customers.
The full article can be found in FinTech Magazine.
What’s your business, and who are your customers?
BM Technologies, Inc. (NYSE American: BMTX), formerly known as BankMobile, is among the largest digital banking platforms and Banking-as-a-Service (BaaS) providers in the country, providing access to checking and savings accounts, personal loans, credit cards, and financial wellness. It is focused on technology, innovation, easy-to-use products, and education with the mission to financially empower millions of Americans by providing a more affordable, transparent, and consumer-friendly banking experience. BM Technologies (BMTX) currently has approximately two million accounts and provides disbursement services at approximately 750 college and university campuses (covering one out of every three college students in the U.S.).
Read the full interview at: https://gosolo.subkit.com/luvleen-sidhu/
BM Technologies’ Luvleen Sidhu bets on BaaS, bank charter
“For those that can combine the charter with the technology, that is the most competitive way to play in the banking-as-a-service space,” said Luvleen Sidhu, BM Technologies’ chair, CEO and founder.
This interview has been edited for clarity and brevity.
BANKING DIVE: You started BankMobile as a direct-to-consumer bank but eventually pivoted to BaaS. How has the BaaS space changed over the years?
LUVLEEN SIDHU: When we did T-Mobile and we were trying to pitch to other brands, everyone was kind of scratching their head, like, what is this? … Now all of a sudden, everyone has heard of embedded finance and banking-as-a-service.
A shift is taking place, and there is an awareness of how helpful this strategy is — both from the position of a digital banking platform, but also for enhancing loyalty and differentiation, and increasing [customer lifetime value] for brands. And with the acknowledgment that it’s happening, you’re seeing businesses emerge from everywhere trying to compete in this space.
For those that can combine the charter with the technology, that is the most competitive way to play in the banking-as-a-service space, where you can work with fintechs and nonbank brands that want to enter into this space and can come to them with a full package: one platform, one partner, one experience on the technology and the banking charter and banking program management all in one player.
Your planned deal with First Sound Bank is under regulatory review. What made you choose First Sound Bank as an acquisition target?
SIDHU: One of the reasons was Marty [Steele], the CEO. It was very important to find a partner that I could partner with that had a similar vision of what we’re trying to create here, the combination of a fintech with a charter, because you need that buy-in. You can’t have a traditional community bank CEO mindset.
We were also looking for a bank that was under $10 billion in assets. That was the sweet spot. It was big enough for us to have the infrastructure to have a well-functioning, profitable bank that has a strong asset generation strategy, that had strong regulatory standing, but not too big where it was too difficult for us to acquire. And lastly, it’s in the Seattle area, where our biggest customer [T-Mobile] currently is, and that is just icing on the cake.
We’ve seen other fintechs submit applications for a bank charter. Why didn’t BM Technologies go this route?
SIDHU: That didn’t make sense for us because we came from a bank and our whole team is a mix of banking and technology. Fifty percent of our company is bankers, from banking operations to [anti-money laundering], compliance, risk management, audit, fraud management, all the things you would require in a bank.
We weren’t trying to build this from the ground up. We have a team that’s functioned under a bank umbrella for seven years. … For us, it was just getting back to the charter model and continuing to run our current infrastructure.
Marty, on the asset generation side, already has a really strong asset strategy, and we have a really strong deposit acquisition strategy, and you meld those two together, and it’s definitely not a de novo bank but a well-running bank on day one.
Several other firms have purchased community banks in an effort to gain a charter. What does a community bank get out of these kinds of deals?
SIDHU: In general, banks that are in that sort of midsize space are being forced to innovate. There’s going to be a lot of consolidation and it’s difficult to rely on what they’ve relied on in the past to survive.
I think we’re gonna see a lot more of either banks dying or they’re going to innovate, one or the other. This was a way to accelerate innovation by combining the best of what [Marty] has today, which is an awesome community banking institution with a strong asset generation strategy and strong regulatory standing, with our technology and banking infrastructure.
You said you have a signed term-sheet to offer BaaS to another yet-to-be-announced corporate brand. How do you find corporations that are interested in embedded banking?
SIDHU: I think, in an ideal world, we would go about having a sales team really proactively go win these deals, and we’ve been so fortunate that I think our reputation has been strong enough where these deals come to us. People know that we’re in this space. Usually someone knocks on our door to let us know, or it’s the formal [request for proposal] process that’s conducted by an outside third party and they reach out to us. But we are really thinking about creating a more sustainable sales pipeline in the future, thinking about what is growing our sales strategy instead of relying on our reputation. But so far, that’s been helpful.
Do you think we’ll see bank regulators taking a closer look at the BaaS model?
SIDHU: Yeah, probably. But I think that the players that are going to survive and grow into banking-as-a-service leaders are ones that understand the regulatory environment, respect it and learn to innovate and work within it. My hope and goal is that it’s not just us. I hope that we can grow the banking-as-a-service industry in a healthy, consumer friendly and regulatory-friendly way.
The full article can be found at: https://www.bankingdive.com/news/fintech-bankmobile-bm-technologies-luvleen-sidhu-baas-bank/629324/
