BankMobile Morphing From Bank To Tech Company

Allows For Pursuit Of More Banking Partnerships

Keith Griffin

August 13, 2020

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BankMobile, which recently announced its banking partnershipwith Google, is transitioning to a tech company. The intent is to form more bank partnerships.

BankMobile CEO Luvleen Sidhu told BankingDive, "We can really operate as an independent entity with our own management,our own board, and really as a full service technology company with variousdifferent bank partners," Sidhu said on the spinoff of BankMobile fromCustomers Bancorp. "It really sets us up to be a technology company first, rather than a bank."

Investment firm Megalith Financial Acquisition Corp. previously announced plans to acquire BankMobile for $140 million. Merger talks with Megalith, which will become BM Technologies upon completion of the deal, began at the end of last year, its CEO A.J. Dunklau said, according to BankingDive.

The plan to divest from Customers Bancorp, which has incubated the fintech since 2015, has been a shared goal between the two entities for some time.

Wyomissing, Pennsylvania-based Customers tried to spin off BankMobile in 2018, but that planned transaction with Flagship Community Bankin Clearwater, Florida, fell through because of regulatory complications, S&P Global reported.

With the MFAC deal, the two entities won't entirely part ways. Customers Bank will become BM Technologies' largest investor with a 46.7% stake, according to American Banker. Customers Bank will also continue to hold BM Technologies' customer deposits going forward, the companies said.

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