The New York Times reports that “neo-banks,” AKA mobile, fee-free banking services, are “finally having their moment.”
As VCs continue to pour money into fintech, new neo-bank on the block, Chime, has raised over $100m since launching in 2014, at a $500m valuation. It’s also adding more customers each month than Wells Fargo or Citibank, as it captures the hearts of young professionals everywhere.
Live fee-free or die tryin’
Chime is one of many alt-banks gaining popularity (along with others like Aspiration, Empower, and Varo) with a younger crowd, who — let’s be honest — would rather chew off their own feet than walk into a physical banking branch.
But, the fee-free mentality is its biggest selling point. According to Chime, traditional banks charged consumers over $34B in fees in 2017.
What’s a megabank to do?
Eh, does anyone care?
Traditional banks are outdated, inconvenient, and often unapologetically shady. Getting rid of predatory fees would be a good start, but at this rate, it’s looking more and more like the 2008 financial crash will indeed be the meteor credited with slowly killing the megabank-osaur.