The traditional banking system leaves many US citizens underserved, with some minority groups struggling to access accounts. Varo Bank is one of many companies offering no-fee, high-interest accounts, as it takes on the traditional banks - with additional features such as a rewards program and access to early paychecks.
With many young customers distrustful of traditional banks, Varo has capitalized on this sentiment and grown to serve more than 7M customers. It does have a number of competitors, including Chime and Step, and it's also in competition with established traditional brick-and-mortar banks. However, as the first consumer fintech to be granted a national bank charter in the US, the company is at the front of the fintech revolution with a path to future success.
In response to ongoing economic uncertainty, the bank implemented cost-reduction measures throughout 2022, delivering a meaningful turnaround. These actions significantly reduced its burn rate, addressing a key area of concern. Notably, a refined marketing strategy has also emerged, with Varo prioritizing customers who use the platform as their primary bank rather than simply expanding overall user numbers, putting the company in a position for more sustainable, long-term growth.
Kirsty
Company Specialist at Welcome to the Jungle
