SoFi Technologies (NASDAQ:SOFI) is a bank, but we might also think it of as a technology company. Even if you’re purposely avoiding financial sector stocks, SOFI stock could still deserve a place on your watch list.
That’s because SoFi Technologies can secure its place as a fintech standout by protecting its customers during these uncertain times.
Possibly, the most important lesson banking sector investors have learned in 2023 is this: Trust is everything. Without trust, banking and fintech firms won’t survive in the long run.
Hence, SoFi Technologies must continue to reassure its customers and shareholders that it can be trusted. SoFi Technologies is staying proactive and showing its reliability, which should reassure some nervous bankers and investors.
SoFi Technologies Diversifies Its Business Model
One way that SoFi Technologies can secure its place in the fintech world is by being and doing more than traditional banks. SoFi is already a digitized one-stop shop that offers saving and investing services along with financial planning, credit cards and loans.
Thus, it’s easy to see why young bankers would turn to SoFi Technologies for all of their personal finance needs. Still, SoFi is diversifying its business operations as the company is ambitiously moving into the mortgage lending market.
Specifically, SoFi Technologies recently acquired a mortgage lender called Wyndham Capital Mortgage. As you might expect, SoFi targeted a digital-first firm.
With this acquisition, SoFi Technologies’ customers can now have access to Wyndham’s “intelligent and scalable platform that has set the industry standard for a fully digital mortgage experience.”
The Banking Crisis and SOFI Stock
Again, it’s understandable if you don’t want to buy bank stocks right now. The implosion of SVB Financial Group (OTCMKTS:SIVBQ) subsidiary Silicon Valley Bank and Signature Bank (OTCMKTS:SBNY) left a foul taste in the mouths of financial sector investors.
SoFi Technologies doesn’t belong in the same category as Silicon Valley Bank and Signature Bank. SoFi is still standing and should be able to honor its customers’ deposit withdrawal requests.
If trust really matters, then SoFi Technologies is on the right track. The company is establishing itself as a reliable place to park one’s money, as SoFi offers to $2 million worth of Federal Deposit Insurance Corporation insurance per customer account. Remember, the industry standard for FDIC-covered deposit insurance is $250,000 per account.
SoFi Technologies is going far above and beyond the minimal requirements for customer account protection. So, there’s really no need to obsess over the banking crisis if you’re thinking about investing in SoFi Technologies.
This company isn’t the same as Silicon Valley Bank and Signature Bank, and can actually boost its reputation during times of crisis.
What You Can Do Now
SoFi Technologies is already taking action to secure its place in the fintech world. Hopefully, the company will continue to show its reliability and trustworthiness.
Sure, there’s risk involved if you’re invested in SoFi Technologies. The banking sector is shaky now, so don’t overload your account with SOFI stock. Still, if you’re willing to accept the risk, you might consider a very small share position in SoFi Technologies.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.