An upstart FinTech founded by a former Goldman Sachs trader has wrapped up a deal to acquire a brick-and-mortar bank in Minnesota.
Jiko, a digital bank, is taking a big step into the world of traditional banking, having just completed its acquisition of Mid-Central National Bank — formerly Mid-Central Federal Savings Bank — based in Wadena, Minn.
The represents the first time a FinTech has acquired a nationally chartered and regulated bank, according to CNBC.
The deal was consummated following final approval the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Bank of San Francisco.
“The past decade of fintech and online banking innovations has exposed new customers to our industry and demonstrated that innovation in the financial sector is needed,” Stephane Lintner, the former Goldman Sachs trader who co-founded Jiko three years ago and is the company’s CEO, said in a press release. “People’s relationship to money must be fundamentally improved for everyone. One of Jiko’s primary goals is to give people what they deserve: more organic and direct returns, without intermediaries and unnecessary friction.”
With the deal for Mid-Central National Bank signed, sealed and delivered, Jiko said it will soon roll out a new mobile banking app for consumers.
The green light by banking regulators for the deal is also unusual given Jiko’s business model, which is significantly different than that of traditional banks.
Instead of taking in deposits from customers, Jiko invests its customers’ cash in U.S. government Treasury Bills, which are then converted into cash when customers go to an ATM or use their debit cards.
For his part, Lintner is a 40-year-old math whiz with a PhD in computational mathematics who spent years working on the trading floor for Goldman Sachs, according to CNBC.
During his time with the investment banking and financial services giant, Lintner helped automate the sale and purchase of stocks and derivatives.