Fintech savings app Digit will launch a neobank product in early December, offering a full-fledged banking app and paid subscription service to access saving products.
The firm has helped members save upwards of $7 billion to date through retirement savings, investing, and rainy day fund planning.
Now, founder, CEO, and lifelong saving fanatic Ethan Bloch said the next step is to become a banking provider.
“For a long time, we’ve heard our customers ask us for Digit to do more for them. It’s like: ‘Hey Digit, You helped me save so much money, or you helped me save for this trip. He helped me save for this event in my life. I love for you to help me better manage my spending or control my spending or better manage my bills.” Bloch said.
“And so what we’ve been working on for the last year and a half is what we call Digit Direct, which now is sort of a fully functional bank account by Digit and our partner MetaBank.”
Digit already enabled customers to put money aside for a subscription fee of $5 a month toward projects or vacations in an incremental way. The company, founded in 2013, added retirement savings and index fund investing soon after its original products took off.
“So DriveWealth is the broker-dealer that provides us the services we provide our customers,” Bloch said. “We actually have a registered investment advisor called Digit Advisors that provides the recommendations to our customers.”
Bloch said that $7 billion is a gross savings number – customers take out their funds when they reach their goals; he said Digits customers had completed over 10 million goals.
With numbers like that, becoming a neobank seemed like the next logical step. Bloch is nearly a serial entrepreneur: his first startup was a digital marketing software company called FlowTown. After selling the company and exiting, he had time to plan out what he wanted to work on next.
“I really wanted to work on some of the problems plaguing our society when it comes to managing money,” Bloch said.
“It was within this sort of early exploration, almost nine years ago, that I started to believe: if you want to make managing money easier, or if you want everyone to have good financial health, that you need to build a product or service that helps do it for you.”
That vision evolved to today, where Digit helps customers pay off mountains of debt and save for weddings, Bloch said. Soon, they’ll be able to launch debit cards and build savings accounts. The new accounts will cost $9.99/month or $95 annually, and before the launch, customers can sign up on a waitlist.
