REDWOOD CITY, Calif.–Several more fintechs are either entering the banking business or expanding the offerings they already have.
In addition to the well-known Social Finance (SoFi), which in January debuted SoFi Money (a hybrid between a checking and savings account), other new entries have been rolled out by micro-investing platform Stash, which announced a service that will allow users to open bank accounts with no overdraft fees, according to Bloomberg.
Up next might be Wealthfront Inc., which is doing research to see if it wants to get in offering banking services as well, Bloomberg added.
Redwood City, Calif.-based Wealthfront has sent a survey to customers gauging interest in a cash account with an interest rate similar to a savings account and features that would include direct deposit, a virtual card and the ability to instantly move cash between Wealthfront accounts, according to a report.
Part of the reason so many startups are moving toward bank accounts is that it can lock in a customer relationship, Matt Harris, managing director at Bain Capital Ventures, told Bloomberg. “Most of these companies started as single-product companies, and need a second act."
Noting banking licenses are difficult to obtain, Bloomberg reported Social Finance is working with WSFS Financial Corp. on its checking account offerings, and Stash has partnered with card provider Green Dot Corp. on its no-overdraft accounts.