SoFi

The deal marks a milestone in SoFi’s evolution into a private bank for millennials, but it won’t solve the challenges of the alternative lender’s funding model.

Arkadi Kuhlmann, the founder and CEO of the neobank Zenbanx who pioneered branchless banking at ING Direct, explains why he stopped pursuing a bank charter and made a deal with Social Finance.

The acquisition should allow the San Francisco-based online lender SoFi to fulfill a long-standing goal: offering a deposit account to its young, upwardly mobile customers.