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banks on digital transformation. In 2015, Fifth Third lured
him to Ohio as its chief strategy officer and then expanded
his mandate. He now also oversees consumer banking and
payments, putting him in charge of $3 billion worth of Fifth
Third’s $7 billion in revenue. Last year, he brought home
$3 million in total compensation, making him the bank’s
fourth-highest-paid executive.
Fifth Third has 1,143 branches, but today Spence is fo-
cused on Dobot, a mobile app the bank acquired in 2018
and relaunched this year. Dobot helps users set personal-
ized savings goals and automatically shifts money from
checking to savings accounts. “We reached 80,000 down-
loads in a matter of six months, without having to spend
hardly anything on marketing,” he says.
Scooping up new products is one part of a three-pronged
“buy-partner-build” strategy that Spence has helped devise
to combat the neobank challenge. Partnering means both
investing in fintechs and funding loans generated by the
newcomers. Fifth Third has a broad deal with Morris’ QED,
which gives it a chance to invest in the startups the VC firm
backs. One of Fifth Third’s earliest QED investments was
in GreenSky, the Atlanta-based fintech that generates home
remodeling loans (some funded by Fifth Third) through a
network of general contractors.
The best of these partnerships provide Fifth Third ac-
cess to younger borrowers, particularly those with high
incomes. In 2018, it led a $50 million investment in New
York-based CommonBond, which offers student-loan refi-
nancing to graduates at competitive interest rates. Similarly,
Fifth Third has invested in two San Francisco-based start-
ups: Lendeavor, an online platform that makes big loans to
young dentists opening new private practices, and ApplePie
Capital, which lends money to fast-food franchisees.
“The thing I’m most envious of, when it comes to the
venture-backed startups that we compete with, is the qual-
ity of talent they’re able to bring in. It’s really remarkable,”
Spence says. But while Spence envies them sometimes and
partners where he can, he isn’t convinced the neobanks
will make big inroads into traditional banks’ turf. “None of
them have shown that they can take over primary banking,”
he says. He also argues that having physical retail branches
is still important for building long-term relationships with
customers. In a recent Javelin survey of 11,500 consum-
ers, an equal number rated online capabilities and branch
convenience as the most important factors when deciding
whether to stick with a bank.
Fifth Third has been reducing its overall number of
branches an average of 3% a year, but it’s opening new ones
designed to be Millennial-friendly. These outlets are just
two thirds the size of traditional branches. Instead of snak-
ing teller lines, there are service bars and meeting areas
with couches. Bankers armed with tablets greet customers
at the door—Apple Store-style.
That raises the question of whether any neobanks will be
so successful that they’ll eventually open physical outposts,
the way internet retailers Warby Parker, Casper and Ama-
zon have done. After all, it’s happened before. Capital One
pioneered the use of big data to sell credit cards in the early
1990s, making it one of the first successful fintechs. But in
2005 it started acquiring traditional banks, and today it’s
the nation’s tenth-largest bank, with $379 billion in assets
and 480 branches.LEADING THE NEOBANK PACK
IN 20 YEARS, THESE NINE VC-BACKED STARTUPS COULD DOMINATE CONSUMER BANKING, BUT THEY’LL
FACE PLENTY OF COMPETITION ALONG THE WAY. FINTECH COMPANIES THAT ORIGINALLY OFFERED
INVESTING ARE RUSHING TO ADD BANK SERVICES, WHILE THE FALLING COST OF LAUNCHING A
NEOBANK IS ATTRACTING AN ARMY OF NEW ENTRANTS. (COMPANIES RANKED BY VALUATION)VALUATION FUNDING USERS YEAR BANKING FEATURES
COMPANY (BIL) RAISED (MIL) (MIL) LOCATION FOUNDED (IN ADDITION TO CHECKING ACCOUNTS)
Nubank $10.4 $818 15.0 São Paulo 2013 Savings accounts, personal loans, credit cards
SoFi $4.3 $2,300 8.5 San Francisco 2011 Student loans, personal loans, mortgages,
savings accounts, investing, insurance
N26 $3.5 $670 3.5 Berlin 2013 Personal loans, money transfers, insurance,
overdraft protection
Monzo $2.6 $400 3.3 London 2015 Savings accounts, personal loans, overdraft
protection
Revolut $1.7 $345 8.0 London 2015 Money transfers, investing, insurance
Chime $1.5 $307 3.3^1 San Francisco 2012 Savings accounts, money transfers,
overdraft protection
Atom Bank $1.3 $372 0.1 Durham, U.K. 2014 Savings accounts, mortgages
Dave $1.0 $186 4.5 Los Angeles 2016 Overdraft protection
MoneyLion $0.7 $200 5.7 New York 2013 Personal loans, investing, credit monitoring
(^1) FORBES ESTIMATE BASED ON 5 MILLION TOTAL ACCOUNTS AND AN AVERAGE OF 1.5 ACCOUNTS PER USER. SOURCES: THE COMPANIES; PITCHBOOK; CB INSIGHTS.