6 neobanks that are finding their niche

January 4, 2023 1:13 PM

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Everyone wants to receive personalized, individual treatment that meets their specific needs, but in the banking world it can sometimes feel very impersonal to say the least.

From a banking app for the "justice-impacted" to a digital banking company "of immigrants for immigrants," here are six neobanks that are adding unique value and serving their target audience in a way that more established financial institutions may not be able to and carving out their own space.

People with criminal past get fresh banking start with new app

Reestablishing a banking relationship after a felony conviction is a major challenge for people with a criminal past, but a new banking app launched by Frsh aims to give them just that, a fresh start.

"I am justice-impacted myself," said Danny Feldman, CEO and founder of Frsh. "The most difficult part of my journey has always been establishing meaningful banking relationships. Banks are hesitant to do business with those with checkered pasts."

Featuring a no-fee spending account and debit card, the app is designed to help people get the most out of their earnings by receiving them as direct deposits instead of having to use check-cashing facilities, money-transfer companies or payday loans, which typically charge a fee.

Read more:

Challenger bank serves people reentering society after incarceration

Banking app for kids and teens offers safety features for their parents

A new banking app for children and teenagers will offer them, and their parents, more than the typical suite of banking services by also including features such as crash detection, emergency alerts and location sharing.

"Learning how to manage money is a big part of growing up, but we also heard from parents that the physical safety of their children was a top concern," said Chris Halaschek, chief product officer at Greenlight Financial Technology.

Subscribers to the new Greenlight Infinity product will not only be able to take advantage of the security features, but will also receive a 5% return on savings up to $5,000 per family.

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Neobank for families now warns parents when their kids are in a car crash

Walden Mutual moves forward as depositor-owned bank after FDIC approval

Depositor-owned banks have been in decline for decades, but New Hampshire-based Walden Mutual is turning back the clock after receiving FDIC approval.

"We've had a couple of supportive notes from mutual banks that were excited to see us get over the finish line, but I think the people who are most excited are our borrowers," said CEO Charley Cummings. "We're eager to get those loans out the door."

With a background in the meat industry, Cummings plans to focus the mutual bank's lending on sustainable food companies in New England and New York.

Read more:

First new mutual bank in 50 years clears final regulatory hurdle

New proprietary core gives Stash control of its payment operations

Stash co-founders Brandon Kreig (right) and Ed Robinson (left) had a vision for their banking and investment app when they decided to build their own proprietary core software: the ability to innovate quickly and introduce new products and services faster to customers.

In a rare move among neobanks, the fintech launched Stash Core in September 2022, which will help it control its own real-time money movement. The upgrade is already earning industry praise.

"The advantage in building your own core is that you have a lot more control, so you can more easily support the launch of new products or features that may fall outside of what a standard core system can support," said Alex Johnson, author of the Fintech Takes newsletter.

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Stash debuts its own core system

Totem seeks to go beyond just finance for Native Americans

Understanding what it is to be Native American is one of the founding principles behind Totem, a new challenger bank for indigenous people.

The mobile banking app aims to "to change the status quo and create a new tradition of Native wealth-building," said Amber Buker, founder and CEO of Totem. "We're doing it in a way that honors and uplifts our people."

The neobank kicks off early in 2023 with a spending account, debit card and information on tribal benefits among other features, with plans to add credit-building, Native-specific mortgages and more in the works.

Read more:

Neobank for Native Americans raises pre-seed funding

New funding helps challenger bank for immigrants enhance services

Underserved immigrant communities in the U.S. can now take advantage of a new subscription-based digital banking app offered by Majority, which recently secured more funding for its fledgling services.

"Our mission, as a company of immigrants for immigrants, has always been to provide migrant communities with the resources they need," said Magnus Larsson, founder and CEO of Majority.

For $5.99 per month, the service comes with a debit card and offers international money transfer, discounts on international calling and access to in-person assistance in their own language via community meetup spaces.

Read more:

Majority, challenger bank for immigrants, raises an additional $37.5 million