LAS VEGAS — Majority CEO Magnus Larsson wants to serve a specific category of the U.S.'s unbanked demographic: migrant workers.
The digital bank, which has been servicing immigrants in Houston since April as part of an invite-only beta program, is scheduled to roll out its targeted services nationwide by the end of the year.
Majority's model is subscription based. For $5 a month, users can take advantage of three core services: mobile banking, remittances and an international calling functionality. Larsson said the bank's target demographic is already spending more than $30 a month on these three services.
Larsson said Majority's targeted approach to a specific need in the market is where the banking industry is headed.
"I think it's going to be verticals instead of the big general population kind of banks," Larsson told Banking Dive at the Money20/20 conference Tuesday. "I don't think the world needs another global Bank of America. I think we need banks that actually solve real problems for real people."
In the way that neobanks are emerging to meet the needs of millennials and Gen Z, Larsson said he expects to see more digital banks springing up to solve for specific segments of the population.
"Banks need to figure out their place in the value chain," Larsson said. "And I think that's where you're gonna see winners emerging."
Majority is based in Houston, but it plans to build brick-and-mortar centers in New York, Chicago, Los Angeles, Washington and Miami to help promote its services to the areas' immigrant communities.
The digital bank provides a Federal Deposit Insurance Corp.-insured bank account and a Visa prepaid card through a partnership with Ohio-based Sutton Bank. Customers can also access 55,000 in-network ATMs across the U.S.
BlueVine is also taking a targeted approach to banking services.
The Redwood City, California-based fintech announced Monday that it was adding a checking account to its suite of products, targeting small businesses with its 1% yield on balances over $1,000.
Like Majority, BlueVine says it's meeting a need that has been neglected by legacy banks.
"[Banks] don't lend to small businesses nearly as much as there is demand," BlueVine CEO Eyal Lifshitz told Banking Dive on Monday. "They're not able to assess that risk in a standardized, scalable way. And it's expensive for them."
Challenger banks say they can keep overhead costs low due to their digital models. And that translates into lower fees for customers.
"In the fintech space, tech companies are building new railways," Larsson said. "We're solving for a lot of the costs that come with infrastructure."
