In 2017, SoFi spent $170 million on marketing and paid $756 to acquire each customer; in 2018 the company plans to spend $200 million; in comparison LendingClub and Prosper spent between $350-$450 to acquire a customer; back in 2015, SoFi spent $30 million on marketing and $375 to acquire a customer; at the time marketing spend as a percentage of originations was 0.6%; SoFi’s marketing strategy is different than other fintech firms who often show up on rate comparison sites. Source
Formed in 2016, the Golden Contract Coalition was designed to help small banks negotiate better with core banking providers; the mission has now expanded to include a FinTech Advantage unit dedicated to helping the banks by financial technology; the member banks of the coalition pay a fee for the group to provide more negotiating muscle; Fiserv, FIS and Jack Henry are the major core providers for banks and the group is there to help smaller banks even the playing field. Source.
The head of the UN economic agency says that central banks in Africa are failing to understand the power of banking innovation; less than a third of people in sub-Saharan Africa have access to the financial system; certain countries like Kenya have seen wide adoption of services like mobile money, but then crossing into Nigeria the same service can be used by 1 percent of people; Telcos have really taken the lead on the continent to help bring access, but central banks are still regulating banks through the lens of traditional banks; regulators are starting to learn and enthusiasm for new ideas is increasing. Source.
According to researchers from the Federal Reserve and University of California, non-bank mortgage lenders are not prepared to weather a financial downturn and are a risk to taxpayers; According to the paper, “Non-bank failures could be quite costly to the government, but this issue has received very little attention in the housing-reform debate. The funding and operational structure of the non-bank mortgage sector remains a significant channel for systemic liquidity risk.”; non-bank lenders originated half of home loans in 2016. Source
Tim Draper was an early investor in the internet and is also a big believer in blockchain technology; in an interview on Fast Money he shares that he believes that crypto will be a main payment method in just five years and that none of us will be using fiat currency; Draper is known for purchasing 30,000 bitcoins in a 2014 US Marshals Service Auction and has said he still holds all of those coins. Source
Circle is planning to offer a similar product to Coinbase called Circle Invest; the platform has now launched in beta as users reported they were receiving invites; the app will support Bitcoin, Bitcoin Cash, Ethereum, Litecoin and Ethereum Classic; the app currently does not support cryptocurrency deposits. Source
The continued push by Amazon into financial services could have a bigger effect on startups over banks; Nicolas Parmaksizian, global head of Capco digital, tells TearSheet, “If you combine an Amazon with a Capital One, you’re combining the amazing power of Amazon and Capital One’s data analytics, and that’s a challenging thing to compete with as a startup banking brand.”; digital only banks look to offer a better experience at a lower cost than the traditional banks, adding Amazon into the mix could drown out those startups before they ever get going. Source.
The bank is currently recruiting engineers to help launch the online lending platform Marcus in the UK according to Business Insider who found the job listings; last September Goldman Sachs said the Marcus brand would launch in mid 2018; Goldman Sachs’ Marcus has taken off in the US and have been aggressive in expanding their consumer finance offerings. Source
SoFi has already done two Super Bowl commercials but has also become a sponsor of numerous sporting events; The company most recently sponsored the Big Ten men’s college basketball championship final last week; SoFi finds that sporting events are a great way to reach their target audience and build the SoFi brand. Source