In an effort to make the banking experience more beneficial for everyone, especially millennials, an Indian American father-daughter team have created an app they hope will revolutionize the industry.
Jay Sidhu and his daughter Luvleen Sidhu set out to provide young and middle-class people with a banking experience similar to that of a VIP.
The elder Sidhu has spent his career in the banking industry. Currently the chairman and CEO of Customers Bancorp and Customers Bank, he was previously at Sovereign Bank in the same capacity where he built it into the 17th largest bank corporation in the nation by the time he left in 2006.
The Sidhus founded BankMobile, which is a division of Wyomissing, Penn.-based Customers Bank, a $6.5 billion asset bank, in January. The idea behind BankMobile was to provide education and easy access to its users.
“We wanted to revolutionize the bank experience and create a wow factor,” Luvleen Sidhu told India-West. “So we created BankMobile, which is a branchless bank with absolutely no fees.”
Anyone can create a BankMobile account through the company’s Web site, BankMobile.com, or its free downloadable app available on Android and Apple devices.
Jay Sidhu wants to assure any skeptics that, although it’s a new bank, it’s completely secure.
“This is more secure than bank branches,” the Indian American banker told India-West. “It’s more secure than traditional systems which have been hacked. BankMobile provides an ATM card that, if stolen, can be deactivated with the app.”
He added that the company is backed by a well-established bank on the New York Stock Exchange and it is FDIC insured.
Sidhu added that BankMobile will “guarantee, in accordance with the law, any losses with security issues (such as recent compromises at Target and The Home Depot) will be reimbursed” completely.
BankMobile accounts can be created at no cost. As an account holder, you essentially have a “personal banker for free,” Sidhu said, adding that someone will be able to advise you whether you should buy or rent a home, or buy or lease a car, depending on your funds and income.
There are no penalties for low balances in a checking, savings or joint account, and BankMobile reimburses all ATM withdrawal fees.
The company also offers loans.
Sidhu explained that where many traditional banks make their money off fees, BankMobile relies on the usage of the ATM card it provides to make money.
“When I was running banks, the idea was to let the fees pay all the salary of all the people working,” Sidhu, who came from India to the U.S. when he was 20, elaborated to India-West. “Someone who was working at one of the banks asked me, ‘You want 10 percent more people to mismanage money so we can charge them fees?’ That resonated with me.
“I want a bank of the future,” he added.
BankMobile, with its educational approach, providing hands-on advisers, support and financially-savvy individuals, hopes to be the bank of the future.
While technology is advancing and smartphones are in the hands of millions of people, the Sidhus want to take advantage of that.
“Times are changing,” Jay Sidhu said. “But banks remain the same, ripping the average consumer off.”
Sidhu said he hopes to have 500,000 Americans banking with BankMobile within five years, which would position it as a top-20 banking corporation.
With plans to fund the new banking option to the tune of $6 million each year, the Sidhus plan to have a multi-phase approach for expansion, such as creating an account in two or three minutes; a photo bill pay facility, allowing a customer to pay anyone with a name and email address; and utilizing technology to provide an effortless way of banking.
When Phase 1 is completed, Luvleen Sidhu, one of Bank Innovation’s 2015 Innovators to Watch, added that Phase 2 will incorporate creating the “wow, memorable experiences” and developing the app to new levels, including having a supplement that allows pre-approved auto financing.
“We are giving a private banking experience for people who are not served properly,” Sidhu stated.