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FORBES.COM NOVEMBER 30, 20 19FRANCOVOGTFOR^ FORBESTHETRENDFINTECH50change,” the 1% to 2% fees that retailers get charged when-
ever a debit card gets swiped. These fees are split between
banks and debit-card issuers like Dave. Wilk optimistically
predicts Dave will bring in $100 million in revenue this year
from its 4.5 million users—up from $19 million in 2018, the
year before it transformed itself into a neobank. Dave was
recently valued at $1 billion.
Established fintech companies that didn’t start out in
banking are getting into the game too. New York-based Bet-
terment, which manages $18 billion in customers’ stock
and bond investments using computer algorithms, recently
rolled out a high-yield savings account. It pulled in $1 bil-
lion in deposits in two weeks. “The success has been unprec-
edented. In our history we’ve never grown this fast,” marvels
Betterment CEO and cofounder Jon Stein. Now he’s launch-
ing a no-fee checking account with a debit card, and credit
cards and mortgages might be next, he says.
Neobanks are swiftly emerging as a huge threat to tradi-
tional banks. McKinsey estimates that by 2025 up to 40% of
banks’ collective revenue could be at risk from new digital
competition. “I don’t believe there’s going to be a Netflix mo-
ment—where Netflix basically leapfrogs Blockbuster—where
fintechs basically put the banks out of business,” says NigelMorris, a managing partner at QED Investors, an Alexandria,
Virginia-based VC firm specializing in fintech. “[Traditional
banks] are really complicated businesses, with complex reg-
ulatory issues and consumers who are relatively inert.” But,
he adds, “If [neobanks] can get people to bundle, [they] can
get more of a share of a wallet of a consumer. [The] econom-
ics can move dramatically. It changes the game.”D
iwakar (Dee) Choubey was supposed to
be an engineer, not an investment banker.
Born in Ranchi, India, he came to the U.S.
at 4 when his father was finishing a gradu-
ate degree in engineering at Syracuse Uni-
versity. The family ended up in New Jersey. Choubey’s mom
taught autistic children, while his dad worked as an engineer
at Cisco—and plotted his son’s future.
When Choubey started at the University of Chicago in
1999, he signed up for a bunch of computer science classes
picked by his dad. But after earning a couple of B-minus-
es, “I cried uncle,” Choubey says. He became an economics
major, strengthening his grades and job prospects by taking
corporate finance and accounting courses at the business
school. After graduating with honors, he went into invest-Bandwagon
Betterment cofounder Jon Stein at his New York City startup. It took a decade to get 420,000 clients for its robo-advisor business managing stocks and
bonds; as a neobank newcomer, Betterment already has 120,000 on a waiting list for a checking account.