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Mobile banking is growing in popularity in the fintech space, and a new startup is poised to worm its way onto consumers’ smartphones.
Varo Money, a San Francisco-based startup that focuses on mobile-only banking, has received $27 million in a funding round led by private equity firm Warburg Pincus.
Varo plans to offer customers a debit card and "deposit and lending products," but its true value will come from personal financial management. The company’s app will function as a "digital financial coach" that would provide the customer with real-time budgeting and insights on how to spend his or her money.
The company intends to get a banking charter, but it will look for a sponsor bank until that time.
Colin Walsh, the former CEO of the American Express in the U.K., will lead Varo, which he co-founded.
The rise of mobile-only banking, robo-advisors, and the like shows that we’ve entered the most profound era of change for financial services companies since the 1970s brought us index mutual funds, discount brokers and ATMs.
No firm is immune from the coming disruption and every company must have a strategy to harness the powerful advantages of the new fintech revolution.The battle already underway will create surprising winners and stunned losers among some of the most powerful names in the financial world: The most contentious conflicts (and partnerships) will be between startups that are completely reengineering decades-old practices, traditional power players who are furiously trying to adapt with their own innovations, and total disruption of established technology & processes: Traditional Retail Banks vs. Online-Only Banks: Traditional retail banks provide a valuable service, but online-only banks can offer many of the same services with higher rates and lower fees […]
