A recent report from Corporate Insight (CI) investigated the online and mobile experience from nine fintech banking platforms. CI analysts will discuss results from this report in an upcoming webinar, Fintech Banking: How Innovative Approaches to Banking Threaten to Shake Up the Industry, which will take place on Tuesday, October 27 at 2:00 p.m. EDT.
Our webinar will help you better understand the unique and innovative features that banking fintechs are spearheading to stand out in a crowded industry. Throughout the webinar, we will provide specific examples of the features that are most likely to change industry practices overall, from the following innovators:
- Acorns
- Betterment
- Chime
- Monzo
- N26
- Revolut
- Robinhood
- SoFi
- Varo
How are fintechs reimagining banking with innovative offerings?
Competitive pricing and fewer fees are a main selling point for most banking fintechs. Only one startup we tracked charges for banking services, and none require a minimum balance. In addition to eliminating fees that make it costly or inconvenient to maintain checking accounts, several fintechs enhance their offers with valuable features:
- Betterment and SoFi reimburse ATM operator fees worldwide; Betterment also reimburses Visa’s 1% foreign transaction fee on international purchases and withdrawals
- Revolut’s multicurrency account supports conversion at the interbank rate on up to $6,500 each month, so clients can send and spend money across borders with minimal additional cost
- Betterment and SoFi also employ deposit sweep programs with partner banks to increase FDIC coverage for clients
How does fintech banking provide clients flexibility and convenience?
Cash flow can be a significant issue for consumers, with paychecks coming in too late to cover bills on time, causing many to incur costly overdraft fees or resort to high-interest payday loans. To avoid practices that penalize clients on the brink, none of the promising banking fintechs we track charge overdraft fees, but most simply deny transactions that would overdraw an account.
However, three of these fintechs—Chime, N26 and Varo—provide greater flexibility through early availability of direct deposits, so clients can receive paychecks up to two days early. Chime and Varo go even further by offering no-fee overdraft coverage to eligible clients:
- Chime clients with at least $500 in monthly direct deposits can overdraw their accounts by $100
- Varo allows clients to overdraw by up to $50 if they receive $1,000 in direct deposits and use their debit card for at least five purchases every month
While fintechs may be at the forefront of reimagining value-added services and pricing structures, incumbents are also experimenting with new approaches. Bank of America recently introduced a way for clients to overdraw their accounts by up to $500 for a flat $5 fee rather than incurring a $35 overdraft fee. The feature will launch in select states early next year. This move from a longstanding incumbent demonstrates how innovative fintech banking practices have the potential to introduce dramatic shifts in the industry. And how important it is for banks to stay abreast of fintech offerings to stay competitive.
To learn more about innovations in this space, register today for the Fintech Banking: How Innovative Approaches to Banking Threaten to Shake Up the Industry webinar.
