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9 Dec

Inc. Magazine | Dec 2021

Luvleen Sidhu was just 28 when she founded BankMobile with a lofty mission: to reinvent banking for millions of Americans through the power of tech. The 2015 launch presciently anticipated the coming rise in mobile banking, and six years later the Radnor, Pennsylvania-based business merged with a special purpose acquisition company (SPAC) in a transaction worth $150 million. That made Sidhu the youngest female founder and CEO ever to take a company public at the time, and led her to even grander goals: Still at the helm of the company–now called BM Technologies–she says she wants to “create ripple effects and inspire other women.” Here’s why you should put your money on her to do just that.

Full article: Inc. Magazine Winter 2021/2022 Issue

23 Mar

Crains 40 Under 40

Luvleen Sidhu, 34

Co-founder and CEO, BankMobile

In the crowded field of financial startups, Luvleen Sidhu has stood out far from the pack since she launched BankMobile, a financial institution used by 1.1 million college students in the U.S.

Last year her five-year-old startup become the backbone for T-Mobile’s banking app. BankMobile generated $85 million in revenue in 2019 and became profitable in the second half of the year. It holds $540 million in deposits.

Few Silicon Valley–backed banking startups have broken through like this. 

Sidhu doesn’t come from Silicon Valley, but from Reading, Pa. That’s where her father ran the local bank and, eventually, many others. Her parents wanted her to become a doctor; they were disappointed when she chose finance. 

Lehman Brothers went bankrupt the first day she worked there, a sign mighty institutions perhaps weren’t as solid as they seemed. After cutting her teeth in investment management, she urged her father to back her idea to start a bank that wins over customers at a young age and grows up with them. 

BankMobile has succeeded in part because its fees are often much lower than those of most established banks. Sidhu promotes her brand on digital channels such as Instagram and at Ted-like talks, media approaches that tend to mystify the banking world. 

Maybe one day her digital-native bank will be bought by a larger financial institution, as is the customary order of things.

But it feels more likely that one day she’ll be the one buying out her rivals. — Aaron Elstein

See full article here

20 Mar

Crain’s Rising Stars in Banking & Finance

Luvleen Sidhu

Co-founder and chief executive officer, BankMobile

Luvleen Sidhu co-founded BankMobile with a fully digital customer experience and multiple-partner “bank-as-a-service” distribution model. It has since become one of America’s largest and fastest-growing mobile-first banks. BankMobile’s disruptive business model earned recognition from LendIt Fintech, which named BankMobile the Most Innovative Bank in 2019. Sidhu was named Fintech Woman of the Year in 2019. She made her case for changing the way banks do business in a book she co-authored, Why Can’t Banks Be as Easy as Uber? The book landed her among Amazon’s top 100 authors in business and money within 24 hours of its publication. Through the BankMobile Foundation, Sidhu funds budding entrepreneurs and organizations promoting financial literacy.

19 Mar

American Banker Feature

Where Luvleen Sidhu is taking BankMobile now that she’s in charge

Luvleen Sidhu, recently named CEO of BankMobile, one of the country’s first digital banks, says she is expanding it from a service for college students to a mobile bank that serves multiple segments.

Along the way, she plans to pursue more banking-as-a-service partnerships as part of a cost-conscious growth strategy.

BankMobile, the digital-only division of Customers Bank in Wyomissing, Pa., serves students at nearly 800 college campuses in the United States. It offers a digital checking account as a convenient place to store refunds of unused financial aid and other deposits.

But other consumers are using products created by the digital bank, founded in 2014, without even realizing it. BankMobile is the white-label partner behind T-Mobile’s checking account, T-Mobile Money, which made a splash in 2019 with its 4% interest rate on balances up to $3,000. According to the T-Mobile Money website, that 4% rate persists even as the Federal Reserve has slashed the federal funds rate to nearly zero.

“My goal is to have at least a million accounts opened every single year through our white-label strategy,” says Luvleen Sidhu, CEO of BankMobile.

The company is eyeing potential new partners and will soon round out its suite of services with a workplace banking program that features bank accounts, loans and financial wellness tools.

Seeking new partnerships is part of Sidhu’s strategy to secure a steady stream of loyal customers at lower cost. “There are a lot of companies that are constantly looking to attract, engage and retain customers, and we help them with financial services,” Sidhu said.

A former pre-med student, Sidhu got her first taste of financial services as a college intern of Lehman Brothers before its collapse. She became a full-time employee of Lehman Brothers the day of its bankruptcy, and ended up at Neuberger Berman side of the business as an investment analyst. She later headed up business development at the $11.5 billion-asset Customers — which her father, Jay Sidhu, has led since 2009 — before getting her MBA from the Wharton School. She and her father co-founded BankMobile in 2014, and in January she was promoted to its CEO from president and chief strategy officer.

BankMobile’s first foray into direct-to-consumer banking was disappointing, with small account balances and inactive users. In a bid to become more profitable, it shifted to a banking-as-a-service model and pinpointed colleges as its first partners, thanks to Customers’ relationship with the financial aid disbursement company Higher One.

“Instead of going on campus and paying millions of dollars to sponsor the football team and have a bank branch and ATM, we went in saying, hey, we recognize you have a pain point trying to send payments between yourself and your students in a compliant way, so we’ll take that over for you,” said Sidhu.

BankMobile Disbursements routes refunds from colleges to students, with a choice of how they receive their money: as a deposit to an existing account, to a BankMobile Vibe checking account or a paper check (this is an option at some schools).

With college campuses acting as their stand-in retail branches, schools do most of the marketing for them. This enables BankMobile to rake in approximately 5,000 new accounts each week at an average acquisition cost of $10 per customer. One third of their customers are single mothers, and two thirds are minorities, Sidhu said.

The bank’s all-digital service also means customers can interact with them as usual while more traditional businesses close due to coronavirus, and the company says it has noticed a slight uptick in activity among its Vibe customers in recent days.

Customers for life

BankMobile’s relationship with students should continue when they graduate, Sidhu said. “Instead of just becoming a payment company that disburses money between colleges and students, we thought this could be our customer acquisition strategy and create customers for life,” she said.

If students choose to deposit their financial aid credits into the Vibe checking account, they will earn a 3% yield on balances under $1,001 and avoid the $2.99 monthly fee as long as they receive qualifying deposits of $300 or more each month (excluding financial aid refunds). Savvy academic and financial practices can also get them awards. Signing up for mobile alerts, setting a budget, maintaining a high GPA or other steps earn the user “stamps” toward a quarterly $10,000 sweepstakes as well as deals with merchants such as Apple and Target. Customers can also open a savings account.

Recently, BankMobile sweetened the pot with exclusive discounts from two other partners, the bill-negotiation service Billshark and the student educational service Bartleby.

Beyond its bank accounts, BankMobile provides personal loans in partnership with Upstart and student loan refinancing with LendKey. Its two no-annual-fee credit cards are available to the public, while a secured credit card, intended for students struggling to build their credit, is in the works.

Stephen Greer, senior analyst at Celent, pointed out that many consumers tend to jump around among credit cards rather than relying on ones offered by their bank. Still, “bank relationships tend to be very sticky,” he said. “If the experience to refinance a loan is good, I think a customer is more likely to stay with their bank.”

Michael Perito, managing director at KBW, said that Department of Education regulations require financial providers to present students card and checking acccount options in a neutral manner. That means the retention rate after students leave school have likely fallen short of expectations, he said.

But “ultimately, they acquire these students at a low cost, so they don’t need the highest retention rate,” he said. “It’s a self-filling bucket. After the seniors graduate, freshmen come in and refill the bucket.”

Hitting its stride

BankMobile reported its first quarterly profit last year: $890,000 in the third quarter on revenue of $24 million, Customers said. Revenue was slightly lower the following quarter, but BankMobile stayed in the black, the company said.

Sidhu attributed the back-to-back profits to year-over-year increases in organic deposits (or funds the students deposited above and beyond their financial aid refunds), stronger fee revenue and cost cutting.

“My goal is to have at least a million accounts opened every single year through our white label strategy,” she said.

At the end of 2018, after deals to spin off BankMobile fell through, Customers Bank said that it expected to retain the digital division for up to two or three more years.

The uncertainty has weighed on Customers Bank’s overall valuation, said Perito. “It’s hard to know what the real outlook is at this point.”

Sidhu said the bank is continuing to look for new opportunities, whether that means spinning out as an independent company or merging with another firm.

“We want to continue to be an innovative, world-class digital bank that focuses on our mission — to be affordable and transparent, in a way where we are also high growth and profitable,” she said.

17 Dec

Banking Dive Feature

Luvleen Sidhu is co-founder, president and chief strategy officer for BankMobile.

Fintechs frequently join forces with financial institutions to strategically scale products and services. These partnerships can create innovation opportunities in traditional finance.

In a What’s Going on in Banking study, 53% of C-level executives at midsize banks and credit unions believed fintech partnerships would be important in 2019. Thanks to advances in machine learning, artificial intelligence and cloud computing, banks can get the help they need to improve their menu of products while creating a frictionless experience for customers. Although these partnerships often make sense, they’re not perfect. Problems may arise from failing to properly follow financial regulations. And rapid movements in tech have yet to be covered by certain regulations. 

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BankMobile, for example, has built a successful partnership with Upstart to offer personal loans. Upstart’s focus on using artificial intelligence and machine learning to predict a borrower’s creditworthiness has been a game-changer. BankMobile can provide its existing customers with a new offering to help them save money and get out of debt faster. And more than two-thirds of the loans originated through Upstart were entirely automated and approved in real time. Partnering with Upstart has generated positive customer feedback, and the Net Promoter Score (NPS) score thus far for this offering is 82.

To gauge whether a potential fintech is right for your company, start with the following questions:

Does the fintech partner have a positive relationship with the appropriate regulators? 

In the U.S., fintechs need to follow federal and state laws. Some regulators support the need for tech companies to have simpler laws so they may innovate quickly. But the fast rise of startups and fintechs means that regulators sometimes play catch-up to cover these innovations in detail. 

Partnering with a fintech means having a proper plan to address existing and potential regulatory obstacles. It’s important to find a partner that has a good standing relationship with appropriate regulators. 

Ask the partner what kind of infrastructure they have in place to follow these rules. The following questions should be on your radar when navigating through the regulatory space: 

  • Are there current regulations that apply to the fintech’s specific product or service?
  • Do they need to have certain licenses? If so, do they already have these in place?

Don’t leave it up to the partner to do all the heavy lifting, however. Banks have a regulatory obligation to have a vendor management program with oversight over fintech partners. Make sure you either hire someone who is knowledgeable of rules and best practices, or dedicate a team member who can interface with the appropriate regulatory contacts. It’s important that the fintech partner keeps up with the latest regulatory practices as the industry grows and evolves. 

Does the fintech partner have a proven approach to combat fraud, particularly for new online-only accounts and identity verification? 

According to a Global Identity and Fraud Report from the credit reporting agency Experian, 55% of businesses reported an increase in fraud-related losses over the past year. Specifically, these losses occurred from account opening and account takeover attacks. 

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It’s crucial to stay ahead of cyberattacks. Find out what measures the partner has in place to combat fraud and how they are keeping customers safe. Ask about the type of investments or infrastructure the partner is using to respond swiftly and effectively to fraud-related issues. Advances in artificial intelligence and machine learning have helped in determining who might be a fraud risk. By looking at multiple aspects of a single person, it’s easier to weed out bad actors. For example, one can look at a variety of factors including the longevity of an email address which, when combined with other data points, could help determine the fraud risk for a potential new customer. It’s much harder to outsmart a highly multidimensional model than a rule-based linear model. 

Modern security measures can better authenticate actual customers without slowing down the process. Customers today expect a seamless and fast digital experience when signing up for new financial products and services. 

What is the long-term sustainability of the fintech business? 

It’s important for a fintech company to have a strong vision for the problem it is trying to solve. But that vision needs to be sustainable with a clear-cut business plan for continued growth.  

Investigate the following details to determine long-term sustainability: 

  • A five-year road map for revenue and funding.
  • Demand for the product or service.
  • A strategy to scale and continue to test and reiterate.
  • A plan for dealing with regulatory hurdles.
  • How the company stacks up against the competition.
  • Market opportunity and how that may change in the future.

Final words

Partnering with a fintech can help you provide the best service to customers. Whether it’s through integrations, plug-and-play or other financial planning mechanisms, banks are able to bring a modern digital customer experience to the forefront. Asking these questions early in the vetting process can help ensure a successful partnership and long-term sustainability.

15 Aug

Authority Magazine Feature

Meet The Female Leaders Of Finance With Tyler Gallagher: “I believe that there are macro trends towards embracing diversity” with Luvleen Sidhu and Tyler Gallagher

Tyler GallagherAug 12 · 11 min read

I believe that there is a macro trend towards embracing diversity. I also think the #MeToo movement is bringing awareness to issues faced by women; however, much more attention needs to be brought to the topics of women’s equality and women’s rights. Overall, we are becoming more cognizant and sensitive. There has been progress, but it is far from a reasonable or fair outcome. A large gender income gap still exists. A lot of women are also missing on board seats.

I had the pleasure of interviewing Luvleen Sidhu, founder of BankMobile.

Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the Banking/Finance field?

How I came to found BankMobile is a unique story, where every major step I took during and after college led me to its launch.

I was actually a pre-med student at Harvard and on the path to become a doctor. However, I was always intrigued to explore finance, having grown up in a finance and banking family. During my sophomore year, I convinced my parents to let me try a finance internship. I joined the sophomore rotational program at Lehman Brothers and interned with the firm during my sophomore and junior years of college. After graduating, I joined Lehman fulltime. My first full day on the job was the day of the Lehman bankruptcy, which came after six weeks of training. This experience has significantly impacted my career trajectory because it made me more aware of the fragility in the financial system and the importance of helping Americans create a strong financial foundation in their lives.

After Lehman, I joined Customers Bank for a short period in a business development role where I was exploring digital banking models. It was at this time that I learned about Bank Simple, which was one of the first movers to explore the new digital model. I was intrigued by what they were doing and knew they were on to something. After my brief stint with Customers Bank, I enrolled at Wharton for business school and here is where I caught the entrepreneurial bug.

Along the way, my interest in banking continued. I remember opening my first bank account and having to wait 15–20 minutes in line and feeling that the whole experience was very uninspiring and long. I did not feel I had a trusted advisor or partner as I started my first financial relationship. With banking in my genes, I started to look for other pain points and ways to improve the experience. After Wharton, I worked at Booz and Company and helped a large financial institution launch a digital bank.

My experiences across all these organizations culminated in me pitching the idea to Customers Bank on how we can leverage technology to build a better bank. In 2015, we officially launched BankMobile.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far?

I think the most interesting story in my career is the above-mentioned Lehman Brothers narrative, my first day on the job, September 15, 2008. After the six-week training period, I was gearing up to start fulltime when the firm filed for bankruptcy. I called HR and asked if I should be going in and remember the words told to me, “Business as usual.” It sounded so ironic and it was definitely a unique way to start my career. I was walking in on my first day as, sadly, people were walking out with boxes. That moment in time helped me realize I wanted to help others, and also impacted me enough to create a more affordable banking solution with the launch of BankMobile.

Are you working on any exciting new projects now? How do you think that will help people?

We are very excited about the T-Mobile MONEY checking account. T-Mobile took the broken industry of telecom and helped to improve it dramatically. Similarly, we felt that banking was broken and wanted to improve the experience for consumers. We came together with T-Mobile to solve another consumer pain point and our collaboration is something that we are really thrilled about this year. T-Mobile MONEY is helping everyday Americans have a seamless user experience with a no-fee, interest-earning, mobile-first checking account.

What do you think makes your company stand out? Can you share a story?

I think one of the things that makes us stand out is our “customer-obsessed” approach to banking. We truly want to make a positive impact on our customers’ lives and are always on a mission to financially empower them. One of programs I am most proud of is the Passport Student Success Sweepstakes, which is the BankMobile Vibe Checking Account recognition program for smart money management, academic achievement and good financial behavior. In February 2019, we awarded $10,000 to a University of North Texas graduate to help pay off his student loans. We are making real changes in the lives of our customers.

Wall Street and Finance used to be an “all white boys club”. This has changed a lot recently. In your opinion, what caused this change?

I believe that there are macro trend towards embracing diversity.

I also think the #MeToo movement is bringing awareness to issues faced by women; however, much more attention needs to be brought to the topics of women’s equality and women’s rights. Overall, we are becoming more cognizant and sensitive. There has been progress, but it is far from a reasonable or fair outcome. A large gender income gap still exists. A lot of women are also missing on board seats. Only 24 of the Fortune 500 companies had female CEOs in 2018 and this number represents a decline of 25% from 2017 [Fortune]. Additionally, as of June 2019, a mere 5.2% of S&P 500 companies have female CEOs [Catalyst, Pyramid: Women in S&P 500 Companies (June 11, 2019)]. Female-led companies received only 2.2% of the venture capital money invested in firms in 2018 [Fortune].

We are becoming more sensitive and women have fought for their rights, but we still have a long way to go.

Of course, despite the progress, we still have a lot more work to do to achieve parity. According to this report in CNBC, less than 17 percent of senior positions in investment banks are held by women. In your opinion or experience, what 3 things can be done by a)individuals b)companies and /or c) society to support this movement going forward?

I think companies need to promote women and give them fair opportunities, in order for them to get the mentorship and career trajectory that they deserve. There needs to be pay parity, and leadership needs to make this one of their key areas of focus. Senior management across the board at corporations needs to give light to this. Also, I think the women that reach leadership positions can be a force for accelerating this movement, help others move up and be advocates for equal pay. Companies can also invest in creating programs to specifically help women, such as Goldman Sach’s Launch With GS, which is the firm’s “commitment to invest $500 million in women-led companies and investment managers.”

On an individual level, I want to make sure that there is a strong female representation on the BankMobile advisory board and that we are promoting women from within. For example, we recently promoted Regine Fiddler, who served as our Vice President, Marketing and Product Management, to our Chief Marketing Officer position. She has earned this role and now has a seat at the table and is helping others pave the path forward.

You are a “finance insider”. If you had to advise your adult child about 5 non intuitive things one should do to become more financially literate, what would you say? Can you please give a story or example for each.

1) Talk about money with your friends. While you do not need to get into specifics, tapping into your close network can be a beneficial way to learn what tips or tricks they may be using to manage their money. Oftentimes, even though your friend group might come from different socioeconomic backgrounds and have diversity in terms of jobs, etc., you can learn what does and what might not work for one another, and apply it to your own life. Maybe they are going through, or have gone through experiences that you are questioning when it comes to your own financial situation, and insights from someone you trust can provide the perspective you need. On the other hand, you can also learn from their situations if they have made some not-so-savvy decisions, and learn from their past mistakes.

2) Watch documentaries. If you browse through Netflix or Hulu, there are countless options available that show the life story of notable people who once struggled with money. While sometimes these films can be dramatized, the premise of seeing someone’s path and their financial journey can be inspiring. A great example of this is Magic Beyond Words: The JK Rowling Story. Knowing that the author of the Harry Potter franchise once struggled financially and had to live on welfare to survive and now has a net worth of over $1 billion is a testament of how believe in your dreams can help you overcome any financial hardship.

3) Follow popular trends. Keep note of what is trending in the marketplace, and pay attention to the stock prices of the companies or entities involved with the trend. This can help you learn how different events influence stock prices, while familiarizing yourself with the process. An example of this is when Disney released Black Panther, which broke box office records by grossing over $1 billion, which caused Disney’s stock value to rise [MarketWatch].

4) Attend investment seminars. At these types of events, you are given the opportunity to network and connect with like-minded people who are interested in building their wealth. Investment seminars are filled with people who invested their money (and their time!) to attend, which indicates that they are serious about building their wealth, and looking towards those who can help them get there.

5) Find a mentor. Look for someone who can guide you on the ‘dos’ and ‘don’ts’ within your particular field or industry, but can also guide you financially. Finding a mentor does not necessarily mean someone who is much older or far more advanced in their career, it could be a colleague who is at a similar level with skills or accomplishments you admire. Tapping into someone that you can relate to on this level, who can provide you with insights outside of your normal realm of thinking, can add value to your career, but also save you both time and money in the long run.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

My father, Jay Sidhu, Chairman and CEO of Customers Bank and BankMobile, has been a great role model for me throughout my whole life and continues to be someone I look up to. He is a visionary and always thinks outside of the box, a quality that I have always admired and tried to follow. Jay focuses on how to deliver value and have a strong work ethic, and build a business that does well by doing ‘good.’

In 2014, we combined forces. He is a traditional leading banker and I am a millennial who loves innovative ideas. My insights around customer-centricity and technology coupled with his industry expertise, learnings and drive helped us launch BankMobile and create our Banking-as-a-Service (BaaS) platform.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Tough times don’t last but tough people do”

We founded BankMobile with a lot of skepticism in the industry and had to be extremely diligent throughout the launch process, making sure we were compliant and also resilient. Early on, our original B2C platform was not growing at the exponential rate that we needed to and we faced challenges. Instead of giving in, we re-strategized and were able to use that challenging time to pivot our strategy to a B2B2C platform, which we now call our Banking-as-a-Service (BaaS) platform. I always remind myself that when things are difficult, I have the opportunity to learn from them. I think this is important in life and also as an entrepreneur. It is not an easy road, but one that can be very rewarding if challenges are seen as opportunities to grow and if you remain passionate about your venture.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂

For the business that I am in, there are over 65 million unbanked and underbanked in the U.S. These individuals are not part of the traditional banking system. They do not trust banks and are skeptical and also, because of the monthly fee requirements, often locked out of the system. Due to these circumstances, they often opt to work with payday lenders and alternative banking solutions where 10% of their income goes towards the exorbitant fees of these providers.

I hope to inspire the movement of providing banking services that are affordable without outrageous fees, to have financial education, to not be in the business of making money by having our customers mismanage their money. I hope that a movement starts that will help people manage and grow their money, and achieve dreams that they can set for themselves, to be a banking partner that wants to help. That is the movement we are trying to create.

Thank you for all of these great insights!

About The Author:

Tyler Gallagher is the CEO and Founder of Regal Assets, a “Bitcoin IRA” company. Regal Assets is an international alternative assets firm with offices in the United States, Canada, London and Dubai focused on helping private and institutional wealth procure alternative assets for their investment portfolios. Regal Assets is an Inc. 500 company and has been featured in many publications such as Forbes, Bloomberg, Market Watch and Reuters. With offices in multiple countries, Regal Assets is uniquely positioned as an international leader in the alternative assets industry and was awarded the first ever crypto-commodities license by the DMCC in late 2017. Regal Assets is currently the only firm in the world that holds a license to legally buy and sell cryptos within the Middle East and works closely with the DMCC to help evolve and grow the understanding and application of blockchain technology. In addition to his role with Regal Assets, Tyler is a regular contributor to Forbes, Arianna Huffington’s Thrive Global and Authority Magazine. Tyler has also been featured in many news publications and has been a guest expert on “The News with Ed Shultz”. Tyler is a proud member of the Forbes Finance Council a private invite only-group of hand-selected industry leaders.