Fintech Phenomenon Luvleen Sidhu on Mobile Banking, Leadership and Buddhism

Luvleen Sidhu was only 28 when she co-founded BankMobile, a digital banking platform and mobile app, in the US. In six years, the New York-based entrepreneur has expanded the company to serve 2 million customers, and partnered with telecom major T-Mobile and Google.

Her business model was considered disruptive at the time, but for Luvleen, it was a natural progression from the enterprise her father Jay Sidhu had already built. The executive chairman of Customers Bank, which with $12 billion in assets is among the top 3 percent of American banks, he was her biggest role model in launching a mobile-only banking app.

“Receiving the support and encouragement I did from an early age definitely helped instill confidence,” says Luvleen, who has earned various accolades including being selected as one of Crain’s New York Business 40 Under 40 Class of 2020 and as the Fintech Woman of the Year by LendIt Fintech in 2019.

We spoke to her about her personal and professional journey.

Till a few years ago, customers were hesitant to try app-only banking, preferring the security of brick-and-mortar institutions. Have things changed now?

Many people do not realise that digital banking is just as safe, if not safer, than using a bank branch. BankMobile is FDIC-insured and as a digitally savvy corporation, we are consistently focused on not only maintaining safety and security, but finding new ways to protect customers, while giving them flexibility and convenience.

I do feel that consumers are very open to digital banking models and are beginning to understand that their money is equally protected. I believe the pandemic is accelerating this point of view as digital-only banks have seen a significant growth in their customer and deposit bases.

BankMobile is targeted at low-income Americans, especially students. How are you able to maintain competitive pricing and low costs?

We employ a model called Banking-as-a-Service (BaaS) that allows high-volume customer acquisition at a low cost. By partnering directly with colleges, universities and other distribution partners, we can access millions of customers who can potentially open accounts.

This business-to-business-to-consumer (B2B2C) model’s cost is lower than traditional acquisition, which allows us more competitive pricing in markets. We have already established relationships with nearly 750 campuses across the country to specifically target students.

How has your business fared during the 2020 pandemic?

Despite some challenges, our business has remained strong. Because we are inherently a branchless bank, our digital model was more equipped to transition to a fully remote working environment when the pandemic began.

Additionally, since banking is an essential service, we needed to find ways to continue operations and support our customers throughout the pandemic. We are significantly growing our customer base and deposit base as people are focused on saving and also receiving stimulus payments, care-related grants from colleges and other benefits.

Recently, we’ve seen a greater increase in withdrawals and more interest in spending, which are good signs that the economy is bouncing back.

Where does BankMobile stand among other similar digital-only banks such as N26 in Germany or Tangerine in Canada?

BankMobile provides all the same features and functionalities from a consumer standpoint. What is different is the acquisition model – we employ a B2B2C model, while they pursue a direct to consumer model. Many of these digital-only banks are venture capital-backed and have the ability to spend large amounts of money on marketing, which helps them build a vast customer base.

Due to our BaaS model, we focus on helping nonbanks offer banking services in their own brand to their customer base. Examples of this model are our collaborations with T-Mobile and Google.

In countries like India – where people are often ignorant of basic security technicalities and phishing and financial fraud are quite common – is there scope for this kind of digital-only banking?

Absolutely. The unbanked population is very large in India, yet mobile phone penetration is high. This provides a huge opportunity for tech-savvy companies to offer Indians digital financial services. Paytm and Google Pay have had great success in India because their digital tools allow them to access the large unbanked ecosystem, while providing value-additive services.

What do you think is the future of banking worldwide? How is BankMobile preparing for it?

I think there is a movement towards a “super app” concept where individuals can use one app to manage their finances, book travel, order food, make payments, et cetera. Technology players will grow their presence in the banking ecosystem, as we’ve seen with Alipay and WeChat in China, Paytm in India, and Google in the US, as companies roll out digital bank account options to their customers.

There will be an increasingly large focus on money movement capabilities with faster and cheaper payment options, more savings options, unique rewards and investing capabilities. Artificial Intelligence (AI) and technology will begin to play an even larger role to optimise the customer experience and to fight fraud.

We are preparing for this future by investing in our own technology, AI innovations and partnering with technology companies like Google.

What steps have you taken so far in your workplace to ensure gender and racial equality?

Female empowerment is something that is very important to me and I have taken several steps to ensure all our employees are treated with respect and given the opportunities they deserve. About 48 percent of our 264 full-time employees are female.

Actively focusing on promoting women in leadership roles, creating mentorship opportunities, providing equal pay and ensuring female voices are represented on our board and senior leadership team are a few ways that I am focusing on bringing equality in the workplace. Our recruiting process focuses on attracting talent that is diverse in gender, age, race and professional experiences.

In response to the recent social justice issues, we expanded our Diversity and Inclusion Council, hosted an all team member family meeting to discuss the Black Lives Matter movement and issued a public statement rejecting all forms of hatred and prejudice.

What were the key influences from your childhood that set you on a path to leadership in later years?

I am the byproduct of having two parents who invested heavily in my personal and academic development from an early age and am very lucky. Growing up in a Sikh family in Pennsylvania, I studied a lot, played piano and have always loved traveling. In my spare time, I enjoyed horseback riding, track and basketball.

My father was my role model. He had studied at Harvard Business School and Wilkes University, where he helped establish the Jay S Sidhu School of Business and Leadership. My mom was born in Punjab, India, and came to the US after she married my father at the age of 20. She earned a Master’s in health and business administration and worked in that field until my brother and I were born.

Although I was inherently motivated and ambitious, my dad constantly pushed me to be the best version of myself, while my mother has taught me compassion, sincerity, spirituality and love for family.

Do you have any spiritual calling or practice?

Both Sikhism and Buddhism have played very strong roles in my spiritual development. I find inspiration from teachings in the scriptures from both practices on how to live my life in the most value-creative way. I begin each morning with Buddhist chanting and also recite Sikh prayers to elevate my vibrational frequency and focus my mind and heart on gratitude and introspection.

What are your favorite books and movies? How do you spend time outside of work?

I have been much more interested in podcasts than books or movies lately. Some of my favourites include Planet Money, How I Built This, The Daily, Joe Rogan and the Tim Ferriss podcasts. Since the start of the pandemic, I’ve been more focused on connecting to nature and have incorporated daily walks into my routine.

What have you learnt about success and happiness?

Success can be a part of the happiness equation, but happiness is driven by attitude and how you perceive the world around you. I believe that 90 percent of happiness is based on outlook and only 10 percent is based on actual circumstances. The older I get, the more convinced I become that happiness stems from attitude and gratitude.

I’ve also found that what brings you joy evolves over time. At one point, it may be family, work, friends or nature. It can be all of these things at once or can change from time to time.

First published in eShe’s November 2020 issue

Syndicated to Money Control