Traditional banks don’t connect with most millennials. The millennials are tech savvy; growing up with computers and the Internet and quickly obtaining smartphones as soon as they came on the market.
Banks, on the other hand, tend to rely on older technology. Many are using mainframes that are decades old, and respond to customers’ desire for mobile access and capabilities far after similar companies in retail and other industries do.
That is the foundation behind BankMobile, Luvleen Sidhu, chief strategy officer, tells Mobile Marketing & Technology. “Millenials want a bank that is tech savvy, but they’re not getting what they want from traditional banks.”
“We want to create a bank for millennials, built by millennials. We will launch in our most basic form, and then use crowdsourcing to co-build a bank with millennials that they can finally feel they love,” she adds. So they are looking for mobile capabilities they can get through many retailers, but not through most financial institutions.
BankMobile will launch with 5,000 beta testers in December. A division of Customers Bank (NASDAQ: CUBI), will be offering customers the following perks:
- No fees, including no fees for overdrafts
- Higher rates on savings accounts, with at least 0.25% higher rates than the largest four banks in the United States;
- Access to 55,000 fee-free ATMs across the country – more than three times the amount of Bank of America ATMs;
- Access to a line of credit up to $5,000.
The bank’s full roll-out is expected to be in May.
Sidhu expects BankMobile to ramp up to 250,000 customers within the next two years. The immediate plan is to remain a division of Customer’s Bank, though if the parent, now at about $6 billion in assets starts approaching $10 billion in assets, BankMobile may be spun off to stay below the $10 billion plateau because exceeding it would result in reduced interchange as a result of the Durbin Amendment, according to Sidhu.