SoFi's newly launched SoFi Money checking account is an effort to maintain a daily relationship with customers and enable them to use a mobile device for all their banking needs, CEO Anthony Noto said this week.

"The reason we call it SoFi Money is it's different from a bank account or a checking, savings or investment account — we're allowing individuals to use their mobile phone to do everything they need to do," Noto said during CB Insights' Future of Fintech conference. "They can pay a friend, pay a bill, withdraw cash at an ATM, pay with a debit card, they can transfer money, they can wire money, they can set up instant bill pay, they can schedule bill pay, deposit a check from their phone. Ultimately we want to be a place that allows them to do all those different activities in a differentiated way."

The company is offering a 1% interest rate to customers who keep deposits with SoFi. It also intends to use customer data to help give them advice, he said.

Anthony Noto, CEO of Social Finance.
"We're going to be strategic and make sure we want to maximize simplicity, maximize our ability to operate at a low cost, but we don't necessarily want to burden the business in ways that are unnatural to what we're doing," said SoFi CEO Anthony Noto. Bloomberg News

The key differentiator SoFi Money will have from its many competitors, both incumbents and startups, is speed, Noto said.

"We think there's a lot of white space in making every transaction faster, every activity faster, using technology to do that," he said. "There's no reason it takes five or six days to approve a loan, it should take five or six seconds. There's no reason the funds aren't available for five or six days, it should take five seconds. There's no reason it takes us a month to do a securitization, it should take an instant. We'll continue to use technology to Iterate and innovate around fast, and fast implies literally to everything."

The original plan was to launch SoFi Money after the company acquired a federal banking charter. The charter application was withdrawn soon after former CEO and founder Mike Cagney left the company in a cloud of scandal.

The company has rethought this whole idea, Noto suggested. It already has acquired banking licenses in several states.

"It's not a strategic imperative that we need to have a [federal charter] in order to operate since we went down the path of getting state licenses," Noto said. "We don't have a license in every state, we have them in the states that are most critical to scale. We did $12.9 billion in loan volume in 2017, which sends a message that we've reached critical mass in state licenses."

And though an advantage of being a bank is the opportunity to gather low-cost funds in the form of deposits, Noto hinted that the company has other ideas.

"An ability to use deposits as a funding source is one way to have low cost of funds," he said. "But it's not the only way. We're going to be strategic and make sure we want to maximize simplicity, maximize our ability to operate at a low cost, but we don't necessarily want to burden the business in ways that are unnatural to what we're doing. We'll evaluate it but we haven't made any decisions yet."