A Canadian banking upstart called Koho is joining Simple, Moven and other neobanks trying to reinvent financial services in ways that make sense to Millennials, American Banker reported.
Among the key features aimed at 18- to 34-year-olds are a short-term cash-flow forecast to show customers an estimate of their available funds; automated deposits to help customers reach savings goals; and the ability for customers to set card restrictions to protect them from, say, buying a round of tequila shots at 2 a.m.
The neobank also is mobile focused, aims for low- or no-fee services, and has partnered with a credit union it has not publicly identified to process its transactions.
Koho is working to open its services to a national test group by the second quarter. Customers will sign up online for Koho accounts and will receive a Koho card -- essentially a prepaid card -- that the customer will have to load funds into before using. Payments will run on traditional card networks and Koho will make money from interchange. Koho plans to let users eventually access credit too.
But before that, Koho will have to successfully acquire customers -- and it will also have to work out how to make money beyond interchange fees, according to Ronald Mazursky, director of debit advisory services at Mercator Advisory Group. Simple and Moven both ran into that issue. Simple solved it by being acquired by BBVA, while New York City-based Moven licenses its tech to banks in other countries, including Toronto-Dominion Bank in Canada.