Would you say that you are happy with your bank?
It turns out that only 23% of customers are, according to a 2015 study by FIS. If you’re like most people who say their banks aren’t meeting their expectations, these statements may sound familiar:
“I don’t think my bank cares much about me.”
“When I walk into my bank, I just feel like I am the next number in line.”
“Accessing my bank is brutal. It is set up for the banks, not the customer.”
“They act like it is their money as soon as you put it in there.”
“I don’t really trust banking institutions in general.”
The issues with banks run deep into the realms of trust and respect, leaving people wondering if there could ever be an alternative. We don’t know a world without banks, but maybe it’s time to start exploring what that would look like.
Fueling the shift to a bankless world is modern finance company SoFi (as in social finance). They’re aiming to replace the impersonal, transactional bank experience with long-term partnerships, enabling members to realize the full potential of their money, careers, and relationships. Sounds nice, right?
SoFi offers student loan refinancing, mortgages, mortgage refinancing, personal loans, parent loans, parent PLUS refinancing, MBA loans, investment management, and….wait. How exactly are they different from a bank?
For starters, SoFi wants their members to feel like they belong to a community, not like they’re just another number in line. Also, in contrast to cookie cutter banks, SoFi functions more like a tailor, making sure their solutions fit each customer uniquely. They also declare themselves the “FICO-Free Zone”. They’ve banished the three digit scores from their application process and instead evaluate applicants based on a holistic view of their financial well-being, including their job, ability to save, and income to expense ratio. They also offer personalized career planning and job search assistance.
“We’re not trying to create a better bank,” SoFi CEO Mike Cagney said in an interview for San Francisco Business Times. Instead, “I want people to rethink how banking should work,” Cagney said. “And I want people to rethink the relationship they should have with their financial services partner. I want it to be completely different, not a small derivative off of banking but a completely different perspective on how that relationship should function.”
The message is resonating with customers. In January 2016, SoFi surpassed $7 billion in funded loans and is approaching 110,000 borrowers.
Their success is partially due to the fact that not everyone can be a SoFi member. “We can’t accept everybody and we make no apology for that because we want to work with people who can pay us back” says Dan Macklin, Co-founder and VP of Community. He notes that “not everybody gets approved, but we try to give them pointers as to how they can approve their finances.”
So what would a world without banks look like?
The SF Business Times gives us a glimpse, saying that “Cagney envisions SoFi becoming a verb for managing one’s financial affairs: ‘In 10 years instead of asking someone who they bank with, I want people to ask who do you SoFi with?’”
Could you see SoFi as your small business’s financial partner?
