MoneyLion is an American neobank headquartered in New York City and founded in 2013 by Chee Mun Foong, Dee Choubey, and Pratyush Tiwari.
The mobile and web-only platform offers credit building loans, investing, cash advances, and banking services.
Foong was inspired to create MoneyLion while performing research at an artificial intelligence (AI) lab at Purdue University in West Lafayette, Indiana, USA.
Prior to this, Foong had started another company called Simulex which had a core focus on the commercialization of human behavioral models.
Simulex was ultimately sold to a defense contractor in the United States.
Foong then co-founded MoneyLion with Choubey and Tiwari to use similar AI models in the consumer finance industry.
At a time when the market was starting to emerge from the GFC, the co-founders observed that the big banks were abandoning millions of middle-class Americans.
Moving forward, MoneyLion would provide access to private banking functionality to this underserved group.
Today, MoneyLion has around 2.7 million customers with the company going public via a SPAC merger in September 2021.
Around the same time, MoneyLion introduced a new cryptocurrency trading feature with a $1 million prize on offer for those who registered for a new account.
Business Model Element
Analysis
Implications
Examples
Value Proposition
MoneyLion’s value proposition includes: – Financial Wellness: Offering tools and resources to help users achieve financial wellness. – All-in-One Platform: Providing a comprehensive platform with banking, investing, and lending services. – Accessibility: Making financial services accessible to a wide range of users. – Personalized Recommendations: Offering tailored financial recommendations based on user data. – Rewards Program: Providing rewards for financial behaviors and activities. – No Hidden Fees: Transparent fee structure with no hidden charges.
Attracts users seeking to improve their financial well-being and manage money effectively. Offers convenience by consolidating multiple financial services in one platform. Expands its user base by catering to diverse financial needs and backgrounds. Enhances user engagement by offering personalized financial guidance and rewards. Increases user loyalty through transparent and fair fee practices. Promotes financial responsibility and incentivizes positive financial behaviors.
– Users looking to improve their financial health through MoneyLion’s tools and resources. – Accessing a comprehensive platform for banking, investing, and lending services. – A diverse user base with various financial needs and backgrounds. – Receiving personalized financial recommendations based on user data. – Earning rewards for engaging in financial activities on the platform. – Benefiting from a transparent fee structure with no hidden charges.
Customer Segments
MoneyLion serves various customer segments, including: 1. Everyday Consumers: Individuals seeking tools to manage their personal finances. 2. Emerging Investors: Novice investors looking for easy access to investment opportunities. 3. Credit Builders: Users aiming to build or improve their credit scores. 4. Underbanked and Underserved: Individuals with limited access to traditional banking services. MoneyLion caters to a broad range of users, from those seeking basic financial management to those looking to invest and build credit.
Attracts everyday consumers by providing tools for managing personal finances. Offers novice investors an accessible way to enter the investment market. Supports credit builders in their efforts to establish or enhance their credit scores. Addresses the needs of underbanked and underserved individuals by offering accessible financial services. Targets diverse user segments with distinct financial goals and backgrounds.
– Individuals using MoneyLion for basic personal financial management. – Novice investors looking for easy access to investment opportunities. – Users aiming to build or improve their credit scores through MoneyLion’s services. – Underbanked or underserved individuals seeking accessible financial solutions. – A diverse user base encompassing various financial goals and backgrounds.
Distribution Strategy
MoneyLion’s distribution strategy includes: – Mobile App: Offering a mobile app for users to access financial services conveniently. – Partnerships: Collaborating with various partners to expand its product offerings. – Online Access: Providing online access to its platform through web browsers. – Marketing and Advertising: Utilizing marketing campaigns and advertising to acquire users. – Financial Literacy Resources: Offering educational resources to empower users with financial knowledge. MoneyLion leverages mobile accessibility, partnerships, online access, marketing efforts, and financial literacy resources to reach and engage users effectively.
Enhances user experience by providing access through a mobile app. Expands product offerings and reach through strategic partnerships. Offers accessibility through both mobile and web-based platforms. Attracts users through marketing and advertising campaigns. Empowers users with financial knowledge through educational resources. Implements a multi-pronged distribution strategy for user acquisition and engagement.
– Users accessing MoneyLion’s financial services through the mobile app. – Experiencing expanded product offerings and features through partnerships. – Utilizing MoneyLion’s platform through web browsers for online access. – Encountering marketing campaigns and advertisements promoting MoneyLion’s services. – Accessing educational resources to improve financial literacy and knowledge.
Revenue Streams
MoneyLion generates revenue through the following channels: 1. Subscription Fees: Charging monthly fees for access to premium services like MoneyLion Plus. 2. Interest and Loan Fees: Earning interest and fees on loans and credit services. 3. Investment Management Fees: Charging fees for managed investment portfolios. 4. Affiliate Commissions: Earning commissions by promoting financial products and services from partners. 5. Advertising Revenue: Generating income from advertising partnerships. MoneyLion diversifies its revenue streams through various financial services and partnerships.
Increases revenue through subscription fees for premium services. Earns income from interest and fees on loans and credit services. Expands income sources by charging fees for investment management. Generates commissions by promoting financial products from partners. Attracts advertising revenue through partnerships with advertisers. Diversifies revenue streams within the financial technology industry.
– Users paying monthly subscription fees for access to premium services like MoneyLion Plus. – Incurring interest and fees when utilizing loans and credit services through MoneyLion. – Paying fees for the management of investment portfolios on the platform. – Encountering financial product promotions and potentially using them through affiliate commissions. – Engaging with advertising content and partnerships on the MoneyLion platform.
Marketing Strategy
MoneyLion’s marketing strategy involves: – Targeted Advertising: Using data-driven insights to target relevant audiences with ads. – Financial Literacy Campaigns: Running educational campaigns to empower users with financial knowledge. – Incentive Programs: Offering incentives and rewards to encourage desired financial behaviors. – User Engagement: Fostering user engagement through personalized recommendations and notifications. – Partnerships: Collaborating with partners for cross-promotion and extended reach. MoneyLion combines targeted advertising, financial literacy campaigns, incentive programs, user engagement tactics, and partnerships to attract and retain users effectively.
Attracts relevant audiences through data-driven targeted advertising. Empowers users with financial knowledge through educational campaigns. Encourages positive financial behaviors by offering incentives and rewards. Enhances user engagement through personalized recommendations and notifications. Expands reach and offerings through partnerships with other companies. Implements a comprehensive marketing strategy for user acquisition and retention.
– Receiving targeted advertisements tailored to their financial needs and interests. – Participating in financial literacy campaigns to improve their financial knowledge. – Earning incentives and rewards for engaging in desired financial behaviors. – Receiving personalized recommendations and notifications for financial decisions. – Exploring additional offerings and promotions through MoneyLion’s partnerships with other companies.
Competitive Advantage
MoneyLion’s competitive advantage stems from: – Comprehensive Platform: Offering a one-stop solution for banking, investing, and lending needs. – Personalization: Providing tailored financial recommendations and incentives. – Accessibility: Catering to underbanked and underserved populations. – Financial Education: Empowering users with financial literacy resources. – Strategic Partnerships: Expanding product offerings and reach through collaborations. MoneyLion combines convenience, personalization, accessibility, education, and strategic partnerships for a competitive edge in the fintech industry.
Appeals to users seeking a comprehensive financial platform for all their needs. Enhances user engagement with personalized recommendations and incentives. Addresses the needs of underbanked and underserved populations by offering accessible financial services. Empowers users with financial knowledge through educational resources. Expands product offerings and reach through strategic partnerships and collaborations. Maintains a competitive position in the fintech sector through a multifaceted advantage.
– Users looking for an all-in-one platform for their banking, investing, and lending needs. – Receiving tailored financial recommendations and incentives for better financial decisions. – Underbanked or underserved individuals seeking accessible financial services. – Accessing financial literacy resources to improve their knowledge and skills. – Benefiting from expanded product offerings and collaborations through MoneyLion’s partnerships. – Choosing MoneyLion over competitors for its comprehensive and user-focused approach to fintech.
MoneyLion’s core product is a low or no-fee account that allows customers to save, invest, bank, or borrow.
The company also makes money from its premium mobile banking solution, investment platform, cash advance facility, and credit builder.
Let’s look at these in more detail below.
Premium mobile banking
The MoneyLion premium mobile banking option is called RoarMoney and comes with many perks.
These include fee-free withdrawals at over 55,000 in-network ATMs and early access to direct deposit paychecks.
MoneyLion charges $1 per month for this service as an administration fee, with out-of-network ATM withdrawals attracting a fee of $2.50.
Cash advances
MoneyLion also offers a cash advance facility called Instacash with zero fees for standard delivery within 24-48 hours.
For those who want their money in a matter of minutes, fees are charged based on the amount of money requested.
A cash advance of $20 attracts a fee of $1.99 for RoarMoney account holders and $2.99 for those with an external debit card.
For a cash advance of $100, on the other hand, there is a $5.99 fee for RoarMoney account holders and a $7.99 fee for external debit cardholders.
Managed investment account
MoneyLion also offers a selection of automated ETF investment portfolios based on a consumer’s risk appetite.
Portfolios can also take on a tech, innovation, or corporate social responsibility theme if desired.
A monthly account fee for this service is collected based on the total funds under management:
For accounts up to a value of $5,000, the fee is $1 per month.
For accounts up to a value of $25,000, the fee is $3 per month.
For accounts over $25,000, the fee is $5 per month.
Credit building loans
Credit building loans help a consumer boost their credit score with small principle amounts that are paid off over 12 monthly installments.
Note that the funds a consumer pays towards the loan will be available to them as savings once the loan term ends.
MoneyLion’s Credit Builder Plus Membership is charged at $19.99 per month, with the loan APR varying from 5.99% to 29.99%. Loans are available for amounts between $500 and $1,000.
Customers can also have their RoarMoney and investment account administrative fees refunded if they take out a loan.
Cryptocurrency
MoneyLion Crypto gives customers access to Ethereum and Bitcoin trading, with additional currencies expected to be added in the future.
The company makes money on the spread when cryptocurrency is converted to dollars.
Key takeaways:
MoneyLion is an American neobank headquartered in New York City and was founded in 2013 by Chee Mun Foong, Dee Choubey, and Pratyush Tiwari.
MoneyLion’s core product is a low or no-fee account that allows customers to save, invest, bank, or borrow. Revenue is bolstered with a premium mobile banking product and cash advance fees for customers who want their funds delivered in minutes.
MoneyLion also makes money from investment account management fees. Furthermore, the company collects a monthly fee and loan interest on its credit builder loans.
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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
