BANKING
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all through partnerships making it a tried and tested model that works , depending on your strategy . If , for example , your intention is to heavily lean into lending and you want to lower your cost of capital , then pursuing a bank charter makes sense . We ’ re more like a consumer app or a transaction-based business model , which is certainly not the traditional banking approach .”
Countering this perspective , Walsh confirmed that Varo ’ s ambition has always been to be a bank . He explained that — considering the companies typical customers (‘ the makers , creators and doers ’) — receiving a banking charter will enable the company to offer a broader suite of products beyond savings and lending . “ These are people that have complex financial lives ,” he said , “ and by being a full , national bank , we not only have the ability to innovate across that broader range of products and services but also to fund off our balance sheet from a lending perspective , or use the data we hold in a better way . The advantages are quite meaningful .”
Grasshopper has a banking charter , received in May 2019 . It is one of few commercial banks focused on the innovation economy as its primary market , delivering customdesigned services for entrepreneurial companies and their venture capital backers . This is an area that Erwin feels Grasshopper , with its digitally focused strategy and streamlined service models excels when compared to traditional banks . “ We decided to start banking from scratch , building Grasshopper from
JANUARY 2020