The CEO of SoFi, the digital personal finance company based in San Francisco, said its investor accounts have doubled this year, mostly due to fractional shares.
CEO Anthony Noto told CNBC’s “Squawk on the Street” that the FinTech company’s investing platform has seen a significant uptick in user numbers since January. The increase during what has been a volatile time for financial markets tells a “tale of two cities,” he told the network on Wednesday (May 27), as COVID-19 has wreaked economic havoc in addition to its health toll.
“There are some people that absolutely need to repair their financial lives, and they need to borrow to do so,” Noto said. “There are some people that need to build for the future, and they’re choosing to invest during these trying times now that they have more time to be home and be more thoughtful about investing.”
The coronavirus-driven market downturn has prompted investing by younger people who see it as an opportunity, the report said, noting a number of other online brokers have also seen an increase in new investor accounts this year.
Noto’s remarks came on the same day as the announcement of “Samsung Money by SoFi,” the new mobile-focused money management product SoFi is offering in partnership with Samsung Electronics America Inc. The company said the account is secure and offers rewards for savers with higher interest relative to the national average of transactional accounts. It will be available to U.S. consumers this summer.
“Our partnership with Samsung is really an extension of our ability to reach people to help them achieve financial independence and get their money right,” Noto told the network.
The former Twitter and National Football League executive said 40 percent of trades on SoFi Invest are through fractional shares. He said such purchases are seen as a way to make investing more accessible, especially among younger people.
Founded in 2011, SoFi made its reputation by refinancing student loans for millennials. Since then, it has expanded its financial products to offer personal and mortgage loans. In 2019, it launched SoFi Invest and SoFi Money, a cash management account.
Last month, SoFi inked a deal to buy Galileo Financial Technologies, a digital payments platform for $1.2 billion composed of shares and cash.