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SimpleFi is working with a New Jersey bank to pitch its payday loan alternative and financial educational services to employers across the country come February 1. It represents part of the trend of disruptors rethinking payroll data.
January 28 -
Regions Financial is testing gamification as a way to teach financial literacy to young people with a mobile app that simulates a sport more commonly associated with older generations.
January 15 -
Lenda, a new mortgage company backed by Silicon Valley investors, wants to supplant the traditional loan officer with consumer self-service technology.
January 8 -
With the availability of artificial intelligence and sophisticated risk algorithms that can run on mobile devices, some say theres no longer a need for even stripped-down versions of the branch.
January 8 -
Moven has modified its personal financial management app to work on a smartwatch. Will millennials be more likely to heed spending advice delivered to their wrists rather than their phones?
January 5 -
Toronto-Dominion Bank's second video smash hit is the latest example of how marketing is evolving to suit digital audiences' tastes. The key to the video's success is an emphasis on customers and community, not the TD brand.
December 23
LONDON Fidor Bank, a branchless German institution known for experimenting with technologies most bankers won't touch, plans to enter the U.S. consumer banking market with a digital-only account aimed at millennials.
The bank recently announced an agreement with an undisclosed partner financial institution to offer a U.S. version of its Smart Cash Account.
"It's a bank with a proper bank license in Germany, but they launched with the idea of being for the post-Occupy generation that is disillusioned with the old system," said Chris Skinner, author of "Digital Bank" and chair of the Financial Services Club networking group in the U.K. "So they do lots of interesting weird and wacky things. They're very social media-oriented."
Like a number of startups and "neobanks" that have sprouted up to challenge incumbent retail banks, Fidor is positioning itself as a more consumer-friendly alternative.
"Banks are first of all solving their problems and [then] maybe the problems of their customers," said Matthias Kroener, CEO of Fidor Bank. "Just have a look at the products and their pricing."
Fidor, founded six years ago, clearly has its sights set on the generation born between 1981 and 2000. Kroener cited a research report that found 71% of millennials would rather visit the dentist than a bank.
While most U.S. millennials might not trade precious metals or foreign currency, a great many of them are digital natives who spend substantial time on social networking sites such as Facebook and YouTube. Fidor offers a savings account with an interest rate that increases over the course of the year depending on how many "likes" the bank's Facebook page gets. And customers can earn 50 euros (about $57) if they create a financial education video that Fidor posts to YouTube.
"The reason that a lot of very successful fintech startups are happening in the U.S. is not only because there are so many talented people setting up those businesses," Kroener said. "It is also because there is a huge gap and demand in innovative services."
One way Fidor has tried to fill that gap is by introducing a host of banking application programming interfaces for software developers to build on. A few U.S. banks,
And Fidor is one of the very few banks in the world to
Of course, the reputational and regulatory risks of these young technologies particularly Bitcoin, which criminals have used to buy drugs online and collect ransoms entail high compliance costs.
Fidor Bank has about 30 business clients that operate in digital currency, and "we have to overthink pricing for those accounts, simply because our supervisory and audit function is increasing driven by regulators," Kroener said.
But unlike some early adopters of cryptocurrency who seemed to live by the startup credo of "beg forgiveness rather than ask permission," Fidor prides itself on being compliant.
The bank is licensed to do business throughout the European Union, and said that when it expands into other regions it "relies on entrepreneurial and consumer-centric banking partners with stellar regulatory records to form fully compliant alliances"
Kroener said he is encouraged by what he sees in the U.S., where several states, including California, New Jersey and New York, are trying to regulate businesses operating in digital currency without stifling innovation.
"They all aim for proper regulation and not for a general ban. That is something we clearly appreciate," said Kroener. "As a fully regulated entity we are used to such environment and see lots of advantage in it."
Fidor eschews retail branches, for reasons that it frames in techie terms.
"Branches don't show me how qualified advisors are, whereas we show that in our chat rooms," Kroener told Skinner for the Financial Services Club
Fidor is also pursuing expansion in other countries as well. The bank is already lending in the U.K. and is working to make its services available throughout the Eurozone.
"There clearly is a need for 'better banking' not only in Germany but all over Europe," Kroener said. Fidor is also looking to expand into the BRIC nations (Brazil, Russia, India and China) in the next few years.
Fidor Bank has 277 million euros (about $310 million) in assets.
Marc Hochstein contributed to this report.
