SoFi Applies for a US National Banking Charter
- The fintech withdrew its application for the same in 2017.
SoFi, an online student lender, has filed for a national bank charter with the Office of the Comptroller of the Currency, taking a step towards becoming a bank, Business Insider reported on Thursday.
“We firmly believe that by pursuing a national bank charter, we will be able to help even more people get their money right with enhanced value and more products and services,” Anthony Noto, chief executive at SoFi, said.
This the second attempt of the fintech to gain a banking license as it also applied for the same in 2017, but later withdrew following the departure of its senior executives including its former CEO Mike Cagney for allegations of sexual harassment.
The recent application to form “SoFi Bank, National Association” is being reviewed by the OCC, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC).
Fintechs are taking a direct shot at banking
SoFi is one of the most well-funded Silicon Valley fintech to date, raising $2.3 billion since its inception. The company made its name by offering cheap refinancing options to college students during the Great Recession of 2008 and 2009 when the big banks were cautious in any risky financial step.
Apart from its core offerings, SoFi was also jumped into other areas of business including crypto trading. The company also bought Galileo, a digital Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. Read this Term company, earlier this year, for a $1.2 billion cash-and-stock deal.
The startup also expanded into Asia after the acquisition of the parent firm of Hong Kong-based online brokerage 8 Securities.
Meanwhile, SoFi is not the only US fintech to attempt for a banking license. LendingClub, anther online lending platform, gained the same license with a $185 million acquisition deal of Radius Bancorp. Twitter CEO’s fintech startup Square also received approval from FDIC for launching a bank charter.
SoFi, an online student lender, has filed for a national bank charter with the Office of the Comptroller of the Currency, taking a step towards becoming a bank, Business Insider reported on Thursday.
“We firmly believe that by pursuing a national bank charter, we will be able to help even more people get their money right with enhanced value and more products and services,” Anthony Noto, chief executive at SoFi, said.
This the second attempt of the fintech to gain a banking license as it also applied for the same in 2017, but later withdrew following the departure of its senior executives including its former CEO Mike Cagney for allegations of sexual harassment.
The recent application to form “SoFi Bank, National Association” is being reviewed by the OCC, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC).
Fintechs are taking a direct shot at banking
SoFi is one of the most well-funded Silicon Valley fintech to date, raising $2.3 billion since its inception. The company made its name by offering cheap refinancing options to college students during the Great Recession of 2008 and 2009 when the big banks were cautious in any risky financial step.
Apart from its core offerings, SoFi was also jumped into other areas of business including crypto trading. The company also bought Galileo, a digital Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. Read this Term company, earlier this year, for a $1.2 billion cash-and-stock deal.
The startup also expanded into Asia after the acquisition of the parent firm of Hong Kong-based online brokerage 8 Securities.
Meanwhile, SoFi is not the only US fintech to attempt for a banking license. LendingClub, anther online lending platform, gained the same license with a $185 million acquisition deal of Radius Bancorp. Twitter CEO’s fintech startup Square also received approval from FDIC for launching a bank charter.