With the rise of neobanks — mobile-centric digital banking platforms known for low costs and easy user experiences — the tendency has been to rely on third-party core providers such as Temenos, Q2, Mambu, FIS and others. 

Current, a six-year-old New York-based neobank that counts 3 million users, went the less popular route of building its own core banking infrastructure. It’s an approach that may seem costly and labor-intensive, but the company’s chief technology officer, Trevor Marshall, said an in-house core lets it have more control over the user experience and offer unique products.

"Unfortunately, when I think of a checking account, I think of a parking lot — something I really don’t engage with much," he said. "Current is about movement. It's about being a big part of the way that you're interacting with your money, so you’re this hub of being able to get money in, being able to spend money out, and then being able to take your excess money and earn on top of it."

Current, whose average customer is 27 years old, has raised more than $402 million and is reportedly valued at $2.2 billion. Its goals align with many other neobanks that are seeking to become a "hub" for customers’ financial lives: N26, for example, once described itself as a "central cockpit" for customers’ finances. But Marshall said a smooth user experience, and access to leading-edge products, depend on a core that can support those outcomes. 

Current’s path to a self-built core began early in the company’s lifecycle, when it was experimenting with building pathways to money movement that didn’t depend on legacy rails. As an experiment, Current built a proof-of-concept on top of Ripple in 2015 that allowed users to send money to one another. (The company's ledger as it stands now is not built on Ripple.)

Current launched custodial banking products in 2017, and checking accounts for all customers two years later — both built atop a ledger it crafted in-house that allows for quick money movement and cost savings it says are passed onto consumers. 

'No one else in the middle'

Current Core lets the company tailor its offerings to customers' needs, such as the need for instant availability of funds, Marshall said. A customer who deposits funds into their account at a retail pharmacy can get instant access to the money without having to wait because Current doesn’t have to go through a third-party processor.

"We've built this integration with InComm where they talk directly to our core, so as soon as they're making these sort of requests to us, we can run all of the validation around whether or not this user can accept the load, and we can immediately make those funds available to the customer," Marshall said. "There is no one else in the middle."

Beyond debit, Automated Clearing House, direct deposit and peer-to-peer payments, Current has no-fee overdrafts through its core, along with gas hold removals at the pump, the ability to earn points while transacting at partner retailers, merchant blocking and dynamic spending limits.

Building a core platform in-house was a significant investment, the company said, but it argues that the gains outweigh the costs. Sapphire Ventures, an investor, wrote last year that Current has achieved impressive unit economics "by building a cloud-native and horizontally scalable technology stack that brings core pieces of banking infrastructure in-house, resulting in meaningful cost savings that can be passed onto its users." 

The reach of Current’s custom-built core could ultimately extend beyond its customer base, an analyst argued.

"If I were the team at Current, and had spent the resources and, more importantly, the time to build that banking stack internally, I would want it to go beyond powering relatively insignificant features for my own customer base, " said Jason Mikula, a fintech consultant at 312 Global Strategies BV. "I'd be looking to monetize it as an 'infrastructure' play to other financial services providers — diversifying its revenue streams and building a narrative around a theme that is attracting increasing attention and funding from [venture capital firms] right now: 'fintech infrastructure.'"

Current’s focus is on delivering value for its customer base and the investment in a self-built core supports that effort, the company said.

"Part of the return comes from product flexibility. ... You can build products that others can't, and that's something that we're beginning to get the benefit of and that took a very long time to start paying out," Marshall said. "We’re able to take out very expensive per-transaction fees other partners would charge."

And while Current is committed to growing its product suite beyond banking and payments, the company has said it had no plans to become a bank. Instead, the company said it’s "focused on building the best, most innovative technology that can solve real problems for our members and enable them to change their lives through working with our partner banks to provide banking services."

Marshall said the company is exploring how the integration of decentralized finance (DeFi) offerings would work, in partnership with Compound, a DeFi protocol that allows users to lend and borrow crypto. Compound Treasury, an offering for non-crypto-native businesses and financial institutions, allows these businesses to access products including high-yield interest accounts powered by USD Coin.

Integrating Compound offerings within the Current platform will help take the friction out of onboarding, especially given that high-yield interest products are among the top requested features from customers, Marshall said.

"We’re constantly looking for more ways to deliver even more value back to our members," Marshall said. "Working with Compound Treasury, we’ll be able to give our members access to the protocol’s interest rates through a simple and unified experience that can enable even more people to improve their financial outcomes."