Varo Money Inc. is shooting to be the first national mobile bank. The mobile banking startup announced Tuesday that it has applied for a national bank charter from the Office the Comptroller of the Currency and for federal deposit insurance from the Federal Deposit Insurance Corp. to form Varo Bank N.A.
Varo is not applying for a special purpose charter because they are "generally used for a bigger company that is applying as a subsidiary where banking is actually not their core business," according to Emily Brauer Gill, director of brand and communications for Varo.
Brauer Gill noted that from its inception, Varo's founder, Colin Walsh, wanted to make the firm a national bank.
"Banking will be our core business, so we believe that the national bank charter is the right one for what we want to achieve," Brauer Gill said.
She said that Walsh left the financial services industry after holding positions at Wells Fargo, Lloyds and American Express "because he saw this widening gap between what banks were making and what they were offering from a product perspective, and what he thought the majority of people actually needed and wanted."
The rest of the founding team and several other members of the leadership team also has a financial services background, Brauer Gill said. "They know what is missing from a solution set perspective and what problems aren't being solved for customers."
Other members of the team come from the consumer technology space. Brauer Gill is from Apple, while the head of products, John Vars, was with TaskRabbit, and head of strategy Adam Nathan came from Lyft.
Brauer Gill said banking used to be about relationships, but most banks have gotten too big to help their customers solve "everyday problems and really get ahead." With higher operational costs, incumbent banks can only afford to offer higher-touch wealth management and financial planning services to a small segment of their customers, she explained.
Incumbent banks are only making incremental changes to their technology offerings, too, she said. "They're not looking to the future and making step changes to what banking really can be. That's what Varo is doing; the basic concept is we want to help customers solve everyday financial problems."
