Arkadi Kuhlmann — once referred to as rebel with a bank when he led ING Direct — is turning heads again thanks to the Zenbanx-Social Finance deal.

Kuhlmann, the founder and chief executive of Zenbanx and a pioneer of direct banking, will spearhead SoFi’s banking products, including continuing to build out the innovative mobile banking account offered by Zenbanx.

As Kuhlmann sees it, there is a big need for the banking industry to better serve young professionals who are tech savvy and speak multiple languages. So what is his ultimate goal from SoFi’s agreement to buy Zenbanx, which is scheduled to be finalized in a couple of weeks? Work on eliminating banking hassles for that up-and-coming, cosmopolitan audience.

Sure, the fintech companies’ customer-acquisition strategies were on the opposite sides of the balance sheet. However, they have been gunning for similar customers. Zenbanx targets digital nomads who speak multiple languages and travel abroad, while SoFi got its start in refinancing student loans.

“It’s clear SoFi and Zenbanx were on parallel paths,” Kuhlmann told American Banker.

Furthermore, Zenbanx also already operates in Canada — widening the door for cross-border growth.

Arkadi Kuhlmann, CEO at Zenbanx
Barrier to entry: Compliance with U.S. bank regulations costs too much for a small startup, says Arkadi Kuhlmann. “To make it work, [we] need to get to a certain scale.”

“International expansion is a natural gateway for mobile users these days,” Kuhlmann said.

The Zenbanx-SoFi deal marks a change in strategy for the neobank that several times had considered seeking a bank charter.

“In the last four years, we have tried a number of ways to obtain a bank charter,” Kuhlmann said.

But with a multicurrency bank account that includes social components, the startup ran into regulatory challenges. “It just took forever,” Kuhlmann said.

Sure, the process may get easier with the Office of the Comptroller of the Currency’s limited-purpose fintech charter on the table. But other countries like the U.K. or India are much more amendable to startups, and compliance with U.S. regulatory guidelines (think anti-money-laundering and Bank Secrecy Act) is extremely hard for a startup to afford, Kuhlmann said.

“To make it work, [we] need to get to a certain scale,” he said.

To that end, the SoFi-Zenbanx marriage will, in time, also include bringing their separate apps under one brand and one sign-on — a direction the marketplace lending market has been moving in recent months.

“The way to stay close and connected with customers is through a mobile interface that is easy for them to navigate and access info,” Kuhlmann said. “It’s all about speed and removing any friction.”

As Kuhlmann sees it, millennials want banking to be just as easy as making a restaurant reservation or booking an airline ticket online. For now, however, he says there is no equivalent of Apple in the banking industry.

“I’d love nothing better than one financial brand to be really loved by the marketplace,” Kuhlmann said.

“I think somebody can,” he said. “I hope we do.”

Mary Wisniewski

Mary Wisniewski

Mary Wisniewski is deputy editor of BankThink. She also writes on a variety of subjects as part of American Banker's bank tech team.