Banking New leader, new mission for SoFi's banking-as-a-service arm

New leader, new mission for SoFi’s banking-as-a-service arm

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When the online lender SoFi announced its acquisition of Galileo Financial Technologies, a banking-as-a-service provider, for $1.2 billion a little over a year ago, it seemed an unusual match.

Galileo provides bank technology to a who’s who of challenger banks — and SoFi’s rivals — including Chime, Varo, Dave, MoneyLion, Current, Revolut, Aspiration and TomoCredit. All have stayed on as Galileo customers.

Last week, SoFi hired former banker and Google executive Derek White to be CEO of Galileo and plot its future. Galileo’s founder and former CEO, Clay Wilkes, will become vice chair of the unit and join SoFi’s board.

In an interview, White shared some of his and SoFi’s plans for Galileo, including an international expansion and offering embedded banking to companies outside the financial services industry.

White has been in digital banking since 1996. He was most recently vice president of global financial services at Google Cloud. Before that he was chief digital officer of U.S. Bancorp in Minneapolis. He was global head of client solutions of Madrid-based BBVA, and groupwide chief digital and design officer at Barclays in London. He also had a hand in the 1996 launch of Wingspan, one of the first internet banks, while he was at First USA.

Derek White, CEO, Galileo

“Open banking isn’t just about banks,” says Derek White, CEO of Galileo Financial Technologies, who plans to offer embedded banking to companies outside the financial industry.

We first met when you were running the Barclays Rise-Techstars fintech accelerator in New York City. You’ve changed jobs a few times since then.

DEREK WHITE: After Barclays, I went to BBVA for three years and ran a $25 billion revenue line. Then life called and we moved home to the States after 20 years away from my home state of Utah. Then I helped Andy Cecere at U.S. Bank. Then I went to Google and now the job of a lifetime has come up in my home state of Utah.

As I look at it now, I was very, very fortunate to be in the early days of the internet and financial services. We built one of the first internet banks. Then I was very active in the creation of one of the first mobile money services in the United Kingdom and a leading mobile banking application. The next wave is open banking, hence the move to Galileo and the opportunity to leverage a 20-year history of innovation at Galileo that Clay Wilkes created. Anthony Noto at SoFi acquired Galileo as an opportunity to continue to serve and to help scale emerging fintechs, and it’s all about open banking, banking-as-a-service, embedded finance, invisible payments — however you want to refer to it.

What does open banking mean to you? I’ve heard people say recently they think of open banking as simply the ability to siphon information from bank accounts into fintech apps. To me, open banking means much more than that.

Open banking is about recognizing how people interact with technology and money. At the very foundation of it, it’s recognizing that human behavior has changed and humans’ interactions with money and technology have changed. The top 50 reasons why a human would walk into a branch have changed. All of that is now available on a mobile device. So the customer expectation is that you can do all of that on a device, and at Galileo, and through open banking, we enable people to get the information they want when they want it, where they want it, in their mobile device or wherever that might be, whether it’s on a screen or increasingly voice-enabled.

Open banking isn’t just about banks. if you look how cloud and [application programming interface] technologies are changing the below-the-glass experience of what the customer doesn’t see, it enables the exchange of information in real-time formats, across not just banking, but also into other industries. And every industry now, especially in the digital world, is looking at the movement of money. And that’s where industry intersects with banking through movement of money, whether it’s buying online, shopping online, whether it’s through entertainment and the payment of subscription services. And that’s what we do. We enable the movement of money through APIs and the associated data.

Some of Galileo’s fintech customers are competitors to SoFi. How do you keep them comfortable with SoFi’s ownership?

Clay Wilkes, the founder and CEO of Galileo, and Anthony Noto, the CEO of SoFi, were very active in discussions with all the key customers, and the one thing that you see with neobanks and fintechs is it’s all about the best technology. Galileo is the technology market leader. It’s about ensuring that they have the technologies that enable the business model that they want to deliver and the end-user experience. Our job is to ensure that they continue to have what they need in order to scale their businesses.

Galileo suffered an outage in 2019 that caused disruption for some of those fintechs, including Chime and Varo. Can you comment on that and on anything Galileo has done to make sure that doesn’t happen again?

Galileo is very actively moving to the cloud and scaling our technology capabilities to ensure that we have the robust infrastructure and capabilities to deliver to customers real time.

When you combine SoFi, an online lender and digital bank, with Galileo, a banking-as-a-service and payment provider to fintechs, what do you get?

First off, I would suggest that SoFi is much more than a lender. It has the most robust product offering of any digital bank. I was involved in fintech before fintech was fintech. We built the first internet bank in the world, Wingspan. With any new business, you start with a very narrow product offering. SoFi found a great niche with loans, and then they have expanded that product offering robustly.

As SoFi builds out new products and services, it can offer the underpinning technology to others in the ecosystem, whether they be financial institutions or not financial institutions, because banking-as-a-service and open banking extend well beyond just financial services. And I would suggest the coupling of that technology as a service platform that is open and designed to be open to the ecosystem with the front-end user experience in the financial products offered through SoFi creates an incredible ecosystem and platform, not just products, but an ecosystem that is the future of financial services. And that’s why I joined.

Do you see SoFi becoming more of a technology company and less of a financial services provider to consumers?

They’re one and the same to me. It’s how you deliver financial services in the way people want financial services. I’ve been looking at how humans interact with technology and money for such a long period of time. At first, when the internet application came out, people were like, no one will ever apply over the internet. And then you moved to mobile banking and you simply look at how behavior changed during COVID, and it’s all about how technology enables better end-user experiences.

Is there anything you bring from your experience at Google, BBVA or U.S. Bank that you think you’ll be able to implement here?

When I was at the other organizations, including a large cloud provider, I talked with CEOs and boards at banks all over the world. Everybody’s looking to reinvent themselves, rebuild themselves, including their core-banking systems to create APIs to enable their businesses. And so one of the things that I bring to a brilliant technology business at Galileo is an understanding of the financial services landscape, the ability to scale product and extend the product offering, as well as the scale into geographies. I’ve had the privilege of working in all of the major geographies around the world.

There’s a massive opportunity that is open banking. Globally the trends and shifts to open banking are similar to the impact that the internet and mobile banking had. Open banking is going to drive that, and Galileo has been the market leader in this space for 20 years and is still the best-kept secret. We now have the opportunity to scale that not just within the United States and not with just the neobanks, but to extend it into additional verticals, products and geographies.

Can you say where you’re expanding to first?

I can say that we already have a presence in Mexico and in Latin America.

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