“Chime, the largest of a new breed of branchless U.S. banks, raised $500 million in a series E round it closed recently valuing the company at $5.8 billion, according to people with knowledge of the situation. That is a remarkable increase from its last round nine months ago, when it raised $200 million at a $1.5 billion valuation.
But Chime appears to have struck on a winning formula: It targets the disaffected customers of traditional banks with no-fee accounts, free overdrafts and early direct deposits on paychecks. That’s led to torrid growth, going from 1 million accounts last year to about 6.5 million this month.”
“A survey of 405 global bank executives conducted by the Economist Intelligence Unit on behalf of Temenos, highlights how new technologies such as AI, open APIs and cloud are compelling banks to rethink their business strategies in preparation for a new age of digital banking.
Late last month, a report from Citi warned of a 30% revenue hit for incumbents as new digital first challengers enter the market. To avert an impending extinction-level event, Citi urged bank to “re-invent themselves and re-imagine banking” by building their own digital offshoots. ”