Innovation from the Most Pedestrian Corner of Life
By Tony Morosini, VP of Banking
There’s no question deposit accounts are having a moment. In a rising rate environment, banks earn an increasing yield on the deposits they hold, and these additional proceeds can often go directly to earnings. To gather more deposits, banks fight to get consumers to switch banks, but it’s a tough sell because changing banks is painful.
While lots of institutions are offering deals to entice people to move their accounts, they haven’t invested in making the consumer experience as good as it should be. People have been using and managing money online at scale for 20 years, and we’ve now gotten to a place where people are not just comfortable with handling money online, but they expect it. The traditional financial institutions have improved on some marks, like improving their mobile experiences (or at least creating one at all), but there’s still a lot of space to tackle.
At SoFi, we’ve done our research and we’ve found people are frustrated with three central parts of their banking experience:
1. They hate fees. Who wants to pay $12 to maintain a checking account?
2. The technology is lame. It certainly doesn’t live up to other online experiences, like Amazon or Instagram. Why should you have a separate log-in at the same bank to manage your checking account and your mortgage?
3. Banks make (way) more off people’s money than they do.
And that’s why today, we are introducing SoFi Money: a simple, seamless and integrated new way to bank. At SoFi, we think we’re creating something that isn’t just different, it’s better. The mobile-first user experience offers a blended checking and savings account with better integrated technology for all of your banking needs, plus SoFi membership benefits, including complimentary access to career counselors, certified financial planners3, and exclusive events.
And research shows people-yes, of every generation-want to bank digitally, but some matters require that human touch. A
Looking to the future, we can expect this space to continue to get more crowded and the non-traditional provider’s market share to grow. The internet helps consumers better understand their choices and hear about new, better offerings, which we think will drive growth in these new offerings that have better value propositions.
Traditional banks will still command the dominant position–no one’s under any illusion that we’re going to see the majority of deposits shift away from them in the next few years. But, there will be increased pressure for traditional financial institutions to try and adapt to what we and others are doing. The speed and effectiveness of this adaptation is an open question over the long term, but companies like SoFi will work hard to never stop innovating.
It’s not about forcing the consumer to do what we want them to do-it’s about designing a product that allows them the flexibility to use the product as they choose. And we’ll be here iterating on an integrated product that continues to serve those needs and making sure that we’re fulfilling our mission of helping our members achieve financial independence by realizing their ambitions.
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC . Neither SoFi nor its affiliates are a bank.
The SoFi Money® Annual Percentage Yield as of 3/30/2020 is 0.20% APY (0.20% interest rate). Interest rates are variable subject to change at our discretion, at any time. No minimum balance required. SoFi doesn’t charge any ATM fees and will reimburse ATM fees charged by other institutions when a SoFi Money™ Mastercard® Debit Card is used at any ATM displaying the Mastercard®, Plus®, or NYCE® logo. SoFi reserves the right to limit or revoke ATM reimbursements at any time without notice.