New player Chime Bank is billing itself as the “bank account that has your back”. Chime, which partners with The Bancorp Bank, a FDIC member, is positioning itself to capitalize on consumers’ frustration with the industry. Shane Steele, vice president of marketing for Chime sheds light this new kid on the block.
What was the inspiration for creating Chime Bank?
Managing money is hard, and too often banks aren't making it easier. At Chime, we're dedicated to building a new kind of bank account that makes it easy to achieve financial wellness. We do this by eliminating unnecessary fees, creating a service that puts members in control, and helps them form healthy financial habits through features such as our automatic savings program.
Why was a bank like Chime needed?
Consumers are fed up with big banks because of fees, poor service, and outdated technology. Millennials are particularly dissatisfied, and most would not recommend their bank to a friend. That’s according to findings from the Banking Barometer report which also indicated that the mobile-first Millennial generation prefers using a smartphone to manage their banking needs over walking into a bank branch. They want more mobile-friendly features that aren’t offered at their current bank, and they want to get rewarded for their business.
It’s no secret that America’s big banks are raking in huge profits from fees. Last year they pocketed $33 billion in overdraft fees alone. Big banks are fattening their pockets through sneaky fees that chip away at their own customers’ savings, in many cases without them even knowing about it, and it’s contributing to a massive redistribution of wealth in this country. Our April 2017 Bank Fee Finder report shows that on average Americans are now paying about $330 in bank fees annually. That’s more than a subscription to Netflix, Spotify, and Amazon Prime, combined!
Chime is redefining what a bank account is, and what it should do by empowering people to achieve financial wellness rather than preying on customers through fees or financial products that take advantage of customers’ short term misfortunes.
What are you trying to do different and why?
First and foremost, we believe that a bank account shouldn’t cost you money. With Chime, there are no monthly minimums or fees, no overdraft, no transfer fees, no international fees, and we offer 24,000+ fee-free ATMs.
Our product is designed to put our members in control and to make managing money easier through automation. For years, personal finance experts have recommended automation as one of the best ways to achieve financial wellness. Chime makes it incredibly easy to sign up and get started with a healthy savings habit through our automated savings programs. And our app keeps members in control with real-time transaction alerts and daily balance notifications.
Finally, Chime makes it easy to manage your finances all in one place. You can set up direct deposit to the account as well as connect other accounts to view your other account balances on the Chime home screen and transfer money in and out between accounts.
How do you compare to Simple, for example?
Chime offers a number of unique features that help our members achieve financial wellness. Members who fund their account through payroll direct deposit can get paid up to two days early compared to other financial institutions.
Chime also offers a savings account and an automatic savings program that make saving effortless. Our “Save When I Spend” program lets you save spare change every time you use your Chime card. When you enroll, we round up each transaction to the nearest dollar and transfer the Round Up to savings. In addition, our “Save When I Get Paid” feature lets members automatically transfer 10% of every paycheck to savings. It’s a great way to “pay yourself first’ in order to boost your savings account without thinking about.
What are the chief advantages of banking with Chime?
The features that our members love most - lack of fees, early direct deposit, automatic savings, and a great mobile app.
- Avoid Fees - Unlike other banks, Chime has no monthly minimums or fees, no overdraft, no transfer fees, no international fees, and 24,000+ fee-free ATM locations.
- Early Direct Deposit - Members who set up payroll direct deposit with their employer can get paid up to two days early.
- Automatic Savings - Chime offers two ways members can automate their savings. Members can save Round Ups every time they pay with their Chime card, and they can save 10% of every paycheck automatically.
- Mobile App - Chime’s award-winning mobile app has been featured by Apple as one of the top banking apps. Members get real-time transaction alerts, daily balance updates, and can manage all aspects of their account on the go including bill pay, instant transfers to other Chime members or sending paper checks.
What have been some of the early challenges for Chime?
In the early days, the main challenge was growing awareness for the brand so that more people know about our product.
How have you overcome them?
We’re fortunate that our members love Chime. Our average NPS (Net Promoter Score) is close to 70 so we benefit from strong word of mouth which has helped grow the business 10x in the past year.
What might Chime look like five years from now (in terms of offerings, services, etc.) and why?
If our goal is to help our members stay on top of their finances and get head, we need to give them control across their entire financial lives. That’s why we believe the bank of the future will be open, connected and API driven. Our vision is to be a connected hub that enables members to seamlessly manage every aspect of their financial lives across all of their financial accounts. That could include credit, loans and investing products and services. In addition, we’ll see exciting improvements in Artificial Intelligence (AI) that will help members manage cash-flow decisions across all of their financial accounts.
How are you measuring success?
We measure success in terms of member satisfaction and improving their financial health. We’re thrilled to see that our members love Chime based on the feedback we receive from members on a daily basis. In addition, our NPS tracking shows our members would recommend Chime to a friend which we see in our strong word of mouth and referrals. And of course, we measure success in terms of the explosive growth we’ve experienced in the last year.