Fintech startup Finch launches hybrid checking and investing app

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The fintech company Finch has gone live with an app that’s half digital checking, half digital investing.

Its goal is to lower the barriers to investing for consumers between the ages of 25 and 35.

Neel Ganu, founder and CEO, Finch
"We want our customers to know that they can reach out to someone who can answer their queries,” says Neel Ganu, founder and CEO of Finch, in explaining that he has prioritized customer service.

“Three out of five don't invest,” said Neel Ganu, founder and CEO of Finch. “A lot of them are particularly jaded from the financial crisis and not putting their money to work. The really good news is they are a long way out to retirement, and they have time to turn the ship around and start investing.”

Finch offers a checking account through a partner bank, Evolve Bank & Trust, that has Federal Deposit Insurance Corp. coverage. It provides a brokerage account through Apex Clearing Corp., which has Securities Investor Protection Corporation insurance.

“We are a software company, and we stitch these two accounts together in a super seamless way so that people can start investing and put their money to work,” said Ganu, who previously had been the first employee of the German challenger bank N26 and had worked at National Australia Bank and Fidelity Investments.

As a user deposits money into a Finch account, those funds are automatically invested in a portfolio of exchange traded funds. Finch has two portfolio options: Stable and Growth. Stable is free and consists of cash and a mix of ETFs that invest in short-term government and corporate bonds. It's meant to help users dip their toes into investing while preserving their capital. The Growth portfolio consists of cash and a mix of ETFs that invest in U.S. large stocks and bonds. Finch charges a monthly subscription fee for this option that varies by balance.

“That money is working for you from day one,” Ganu said.

The invested money can also be spent through a debit card.

“As you swipe your card at Starbucks, you pay for your coffee with a fractional portion of your portfolio,” Ganu said.

"The Finch team is not only disrupting the checking account to become truly customer-centric, they are transforming the fintech industry as the first player in the market that is enabling instant liquidity on investments," said Senofer Mendoza, general partner at Mendoza Ventures, a backer of Finch. "This is no doubt a game-changer."

Finch plans to make money from the interchange income as customers use their debit cards, and from subscription fees from the Growth portfolio.

There are 14 people on the Finch team: six in the U.S. and eight in Bangalore. In the U.S., two people are dedicated to customer service.

“One thing I learned from my experience at N26 is that customer service is incredibly important,” Ganu said. “The only time people really interact with us is through the app and if they ever were to speak to customer service. So we have prioritized that from day one. We want our customers to know that they can reach out to someone who can answer their queries.”

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