SoFi could provide banking as a service to diversify revenues, CEO says

SoFi Technologies Inc., which secured regulatory approvals in January to form SoFi Bank NA, could use its charter to provide banking as a service to commercial and enterprise businesses, CEO Anthony Noto said during the fourth-quarter earnings call March 1.

Although SoFi is built on the back of consumer-facing services and is known as a neobank, Noto said it will continue to diversify its revenue streams by serving enterprise businesses.

"SoFi Bank could be the sponsor bank to commercial partners, enterprise partners and have a 10-to-12-basis-points advantage, because we are the sponsor bank on top of the fact that we're also a payment processor," Noto said.

The company is already in the business of lending-as-a-service through a partnership with lending technology company Pagaya Technologies Ltd., in which loans are underwritten by Pagaya and a partner while SoFi provides services and referrals. This structure allows SoFi to avoid taking credit risks, Noto said.

SoFi posted $1.01 billion in adjusted net revenue for 2021, up 62.6% year over year, according to a Form 10-K filing. Roughly three-quarters of total net revenue was generated by the company's lending business, while nearly 20% came from its technology platform which features payments subsidiary Galileo Financial Technologies.

The company generated $30.2 million in adjusted EBITDA in 2021, and is targeting a roughly sixfold increase in 2022 to deliver $180 million in adjusted EBITDA, driven by implementation of several strategic initiatives and continued growth in existing business lines, CFO Christopher Lapointe said.

SoFi Bank, which opened in February, was capitalized at that time with cash, not loans, and expects to fully originate loans as a bank by the end of May, Lapointe said.