Future Fintech: The Fight for the Digital Banking Crown

As 2019 moves into its third quarter, the once burgeoning industry of digital banking is starting to make serious waves in the financial world – and investors are taking notice. Big players like Monzo, Starling, N26, Revolut, and EQIBank have recently completed massive funding rounds supported by a range of VC’s and angel investors from around the world.

UK-based Monzo has been making headlines lately with a £2 billion valuation following a £113 million funding round led by startup accelerators Y Combinator and Latitude. Despite lacking some of the advanced features and alternative asset investment options, it now presents serious competition to its closest rival, Revolut.

Monzo announced in June that it plans to roll out its services into the USA, where it faces stiff competition from tech startups like Wirex, Varo Money, Chime, EQIBank, N26, Aspiration and more. P2P lender Zopa has long messaged its intent to transition into a digital bank. US-based marketplace lender LendingClub revealed earlier this month its intent to pursue a banking charter thus throwing its hat into the ring of digital-only banking operations.

Since its launch in 2015, Monzo has already amassed over 2 million users and has drawn the attention of Instagram founder Kevin Systrom and musician Tom Odell.

Fellow UK-based digital banking startup Starling Bank has flexed its muscle in the sector, having secured £75 million in a funding round earlier this year led by Merian Global Investors. The move brought its total valuation to over £120 million and solidified the bank’s plans to expand into Europe later this year.

European newcomer N26 dominated the global digital banking scene in 2018, being named the number one tech startup in Germany by Linkedin. It powered its way into 2019 by raising a whopping $300 million in its Series D funding round, bringing its total valuation to $3.5 billion. New investors to the N26 table include the New York firm Insight Venture Partners and Singapore-based GIC.

Bringing Custody Solutions to the Table

Since its inception in 2016, fresh tech startup EQIBank has forged ahead with a wealth of new features, including multi-layer custody storage for alternative assets. The strategic relationship, formed with trusted South Dakota-based custody solutions provider Kingdom Trust, makes the firm a leader in digital asset insurance. As of this month, EQIBank customers can now enjoy up to $50 million in digital asset insurance.

“We’re proud of our growing operational and technology relationships, of which Kingdom Trust is a welcomed addition. Our job is to give EQIBank’s clients the ability to protect their future,” said EQIBank CEO Jason Blick. “We think about the things they need before they know they need them. Strong, insured custody is one of those things.”

California-based Aspiration has been around since 2013. Following a $47 million investment round in 2017, the firm launched a new $200 million fundraising round in April this year in hopes of pushing its valuation past $1 billion.

With over 1 million investors, the firm benefits from backing from famous Hollywood actors Leonardo DiCaprio and Orlando Bloom and focuses on providing more ethical and social banking services to those in need.

Far from the struggling tech startups of the early 2010s, online digital banks now represent serious competition to the traditional banking sector. With lower fees, faster transactions, digital asset support, and increasingly comprehensive custody solutions, the big banks have no choice but to sit up and take notice.


Aubrey Hansen is a freelance writer, a graduate of Aarhus University and crypto enthusiast. She writes about blockchain technology, Fintech, and cryptocurrencies.  She’s been researching major developments in the crypto world in the past couple of years.

Unicorn Challenger Bank Chime CEO Chris Britt Chats Up Speedy Deposits

Digital challenger bank Chime raised $200 million in funding earlier this year vaunting the upstart bank into Unicorn status. Chime is one of a growing number of digital banks that seek to challenge the hegemony of traditional banks and their brick and mortar legacies.

Yesterday, Chime CEO Chriss Britt visited with CNBC to discuss its services with one specifically in mind. The fact that Chime deposits salaries immediately into consumer accounts once it receives notification of the pending deposit. This can mean that their customers receive their money 2 days or more in advance of traditional banks.

Britt said that Chime is the “largest and fastest growing company in the [US] challenger banking space.”

Britt notes that in the US most payrolls process on Tuesday night. Chimes customers can be notified on Wednesday that they have been paid.

So could other banks provide this type of “advance.” Of course, they could but they do not. Britt says the “advance” is really at a minimal risk because once payroll has been processed the chance of it not showing up is pretty low.

Chime reports that, to date, they have advanced over $4 billion in paychecks. Not once has the money not shown up.

Britt says they are planning to add new products and services in the credit and lending space over the next few months. Currently, Chime offers no-fee savings and checking accounts plus credit/debit cards.

Say Goodbye to Ridiculous bank fees.

Chime undercuts traditional banks with their app-based platform by eliminating typical fees charges by their analog competitors. They make their money on taking a small cut of the transaction process. While not (yet) a chartered bank, Chime has partnered with the Bancorp Bank to provide these services.

Overdrafts? Chime is looking to eliminate that unnecessary $35 immediate fee charged by “pretty much every bank” in the US. Britt says that over $30 billion is paid in overdraft fees annually – thus this represents a significant opportunity for a challenger bank. He adds that all big banks generate a billion or more in overdraft fees and account fees each quarter.

“It’s hard for them to change that. Even Bank of America actually announced last quarter that they are going to reduce [their fees] …”

Britt says the result was the stock was down after the earnings were announced. Big banks are very reliant on these fees and shareholders may be upset if they diminish or go away.

Chime’s core consumer is an everyday user, that leans younger, who is fed up with these egregious fees.

So how can traditional banks compete? Good question.


U.S. Digital Bank Chime Secures $200 Million Through Latest Investment Round Led By DST Global

Chime, a U.S.-based app-only bank, has reportedly secured $200 million through its latest investment round, which was led by DST Global. This news comes just two months after the banking startup announced it is on track to open more than 100,000 bank accounts per month and expects to reach one million total.

As previously reported, Chime is on a mission to help its members lead healthier financial lives. The company’s service is described to help customers avoid feeds, save money automatically, and improve their finances.

We’ve created a new approach to banking that doesn’t rely on fees or profit from members’ misfortune or mistakes. Chime Members get a debit card, a Spending Account, a Savings Account, and a powerful app that makes financial automation simple and keeps members in control. The Chime app is available for iPhone and Android devices and has been featured as one of the best new Money Management apps on the App Store.”

According to Crunchbase, the funds from the investment round will be used to launch new products in both credit building and short-term lending, as well as smartphone capabilities. Chime CEO, Chris Britt, also stated that DST investment shows international investors are gaining interest in online banking. 

Chime Milestones: Surpasses 750,000 Bank Accounts, 2.5 Million Transaction Volume, & Saved Members $72 Million in 2017

Chime, a U.S.-based app-only bank, announced earlier this week it is on track to open more than 100,000 bank accounts per month and expects to reach one million total this quarter. The banking group claims that with more than 750,000 bank accounts opened to date and over $2.5 billion in total transaction volume, it has emerged as the clear leader in the challenger banking segment.

As previously reported, Chime is on a mission to help its members lead healthier financial lives. The company’s service is described to help customers avoid feeds, save money automatically, and improve their finances.

We’ve created a new approach to banking that doesn’t rely on fees or profit from members’ misfortune or mistakes. Chime Members get a debit card, a Spending Account, a Savings Account, and a powerful app that makes financial automation simple and keeps members in control. The Chime app is available for iPhone and Android devices and has been featured as one of the best new Money Management apps on the App Store.”

Chris Britt, CEO and Founder of Chime, stated:

“Traditional banks are failing to meet the changing needs and expectations of millions of Americans. There’s too much friction in consumer banking, and the days of big banks profiting from customer misfortune are ending. Your bank shouldn’t be your adversary. We make banking easier and help our members achieve long-term financial health.”

Chime went on to add that its members avoided more than $225 million in potential overdraft fees from traditional banks in 2017 alone while putting over $72 million into savings accounts with help from the bank’s automated savings tools.

App-Only Bank Chime Surpasses One Million Bank Accounts (Infographic)

Chime, a U.S.-based app-only bank, recently announced it has surpassed one million bank accounts. Founded in 2013, Chime is on a mission to help its members lead healthier financial lives. The company’s service is described to help customers avoid feeds, save money automatically, and improve their finances.

We’ve created a new approach to banking that doesn’t rely on fees or profit from members’ misfortune or mistakes. Chime Members get a debit card, a Spending Account, a Savings Account, and a powerful app that makes financial automation simple and keeps members in control. The Chime app is available for iPhone and Android devices and has been featured as one of the best new Money Management apps on the App Store.”

Speaking about the digital bank’s milestone, Chris Britt, Co-founder & CEO of Chime

“One million bank accounts to date is an exciting milestone for us and it’s just the beginning. We’re thrilled to usher in a new era in consumer banking and serve the many Americans who we believe are frustrated with traditional banks. This year we’ll launch new products with a continued focus on improving our members’ financial lives while refusing to profit from their mistakes or misfortune.”

Chime also shared an infographic on its progress, which is featured below.