US Fintech/Digital Challenger Banks: Disruptors
Ally Bank, Chime, and Zero are three challenger banks that are disrupting the US market. Even though many European challenger banks are entering the US market, all three banks presented here are based in the US. Ally Bank offers the highest interest on its savings accounts, Chime provides its customers with a zero-fee banking experience, while Zero combines a mobile banking app, a rewards credit card, and a checking account into one seamless experience.
- Ally Bank is a digital-only bank that employs more than 8,200 people. It won the title of "Best online bank" in 2018, which is awarded annually by the Money Magazine. It claims it has the highest interest on its savings accounts out of all US banks.
- Number of customers: Ally Bank reported having 1.65 million customers in its 2018 financial report.
- Valuation: Ally Bank is a subsidiary of Ally Financial Inc, a publicly traded company. Ally Financial currently has a market capitalization of $12.7 billion.
- Chime is a challenger bank that helps its customers avoid bank fees. It offers a fee-free checking account. Chime's unique feature is that it doesn't profit from its customers directly. Rather, Chime earns profit from Visa whenever one of its customers uses his Visa card to make a purchase.
- Number of customers: In March 2019, Chime announced it tripled its number of customers from last year, reaching 3 million users.
- Total funding received: Chime secured a total of $308.8 million in funding.
- Valuation: After its last funding round, Chime was valued at $1.5 billion.
- Zero is a product created by the Zero Financial company. Zero consists of the Zero mobile app, the Zerocard — a rewards credit card, and their checking account called Zero Checking. It uniquely blends the credit card and checking accounts, and pays out annual interest on the remaining balance.
- Number of customers: Zero launched in 2018 to only a very small number of customers who tested out all features of the platform. In July, it launched its product to a waiting list of over 200,000 people.
- Total funding received: Zero raised $47 million in total. Its last funding round was a Series A funding round, led by New Enterprise Associates.