It has been a wild ride for many companies that come under the heading ‘“FinTech.” Case in point: MoneyLion. Just a year ago the company was a neobank struggling under a $9 million loss for Q1 2023. Fast forward a year and the data-driven financial product marketplace recently announced earnings up 29% from a year ago to $121 million, beating Wall Street estimates. Adjusted EBITDA, a rough measure of cash flow, surged by triple digits. Total customer counts nearly doubled to 15.5 million in Q1.
As CEO Dee Choubey told Karen Webster recently, the key difference has been a move from the “monoline” business model of banking to a more agile — and financially sound — business model.
“When we were a monoline company you had to have a bank account to be in that ecosystem,” Choubey said. “That’s the fundamental thing that we’ve changed over the last three years. Now you can be a MoneyLion customer and you don’t have to have a bank account with us to search for personal loans, credit cards, mortgages, earned wage access and other financial bundles.”
If that model sounds familiar, that’s because it is. Just as Expedia is in the decision layer of travel decisions, bookings and payments, Choubey wants MoneyLion to play a similar role for financial services.
And as he told Webster, it has been a long journey. The company he co-founded and has helmed ever since its inception 11 years ago has navigated through various macroeconomic cycles. The macro environment still is choppy, he said — with at least some headwinds in financial services as consumers are buffeted by high interest rates. But, said Choubey, MoneyLion has invested in a broad line of products and solutions that now include embedded finance. Traditional banking customers are looking outside of their banking networks and gravitating toward platforms to gain access to financial services.
MoneyLion’s evolution has come at a time when the neobank model itself has been forced to change to survive, and the marketplace concept has been validated by MoneyLion’s earnings, which show that 80 million customer inquiries had been made through the first three months of 2024 alone, surging 130% from a year ago.
He said the guiding vision has been, still is, and will be what Choubey termed the “rewiring of the American financial ecosystem with the mission of giving everyone the ability to make the best financial decisions.” As he noted, “over a trillion dollars of financial products are ‘turning around’ on an annual basis.”
And those trillions are up for grabs precisely because most consumers have relationships with as many as four or five providers, cobbling together the financial products they need and use — from debit and credit cards to HELOC loans. The number of financial decisions the average household makes on a yearly basis adds up, he said. The technology and the cross-selling opportunity, he said, enables MoneyLion’s marketplace model to capitalize on operating leverage as customers signed on for 1.6 products on average.
The opportunity for consumers: they can “bring their own bank” to the MoneyLion app.
As MoneyLion’s approach has broadened through the years, Choubey said, so has its customer demographics. Five years ago, the core customers were policemen, firemen, teachers and gig economy workers — at times, consumers who would have fallen outside the mainstream of traditional banking from an underwriting perspective. Now, the customer base is tracking the general population more closely. Choubey recounted that the average FICO score in the U.S. is about 710, while MoneyLion’s installed base tracks above that level. Fifty-five percent of MoneyLion’s enterprise business comes from personal loans, which can range from $10,000 to $50,000, and which indicates that borrowers are feeling sanguine about taking on home improvement or other products.
“This is a win-win for our enterprise partners because they are getting ‘vetted’ consumers who have shown they have the ability, willingness and ‘skill’ to pay” back those loans, he said. “We’re bringing that to a segment of the population that previously did not have access to it.”
The strategies in the months and years ahead, he said — and for 20% to 30% growth — include leveraging gen AI and other technologies to link accounts so that customers have a holistic view of their finances. And, he noted to Webster, there’s potential in helping banks themselves sidestep the hindrances of their own legacy infrastructure and push into embedded finance. MoneyLion and EY earlier this year said they would partner to help the latter’s smaller banking clients scale into digital innovations more efficiently.
For the small, regional and local banks, he said, the partnership “allows them to have ‘completion’ products — where someone you’re writing a business loan for may also need a credit card or personal loan.”
As he told Webster, as MoneyLion puts its neobank roots into their rear view mirror, the marketplace is using “bleeding-edge, cutting-edge technologies in ways that society needs.”
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