SoFi Technologies, Inc. develops a suite of financial products that offers the speed, selection, content and convenience that only an integrated digital platform can provide.
The company offers personal loans, student loans, home loans and related servicing and offer a variety of financial services products, such as SoFi Money, SoFi Credit Card, SoFi Invest and SoFi Relay, that provide more daily interactions with its members, as well as products and capabilities, such as SoFi at Work, that are...
SoFi Technologies, Inc. develops a suite of financial products that offers the speed, selection, content and convenience that only an integrated digital platform can provide.
The company offers personal loans, student loans, home loans and related servicing and offer a variety of financial services products, such as SoFi Money, SoFi Credit Card, SoFi Invest and SoFi Relay, that provide more daily interactions with its members, as well as products and capabilities, such as SoFi at Work, that are designed to appeal to enterprises. Lending related services that the company offers through its Loan Platform Business help a broader range of borrowers to find lending solutions, through the company’s relationships with members as well as third-party enterprise partners. The company has also made strategic acquisitions to further expand its technology platform capabilities for enterprises, which deepen the company’s participation in the entire technology ecosystem powering digital financial services.
The company has built a personalized area within its digital native application, which it refers to as the member home experience. The member home experience is an important part of the company’s strategy and its ability to use data as a competitive advantage.
Segments
The company operates through three segments: Lending, Technology Platform and Financial Services.
Lending segment
This segment offers personal loans, student loans, home loans and related servicing to help its members with a variety of financial needs. The company’s market opportunity within each of these lending channels is significant. The company’s lending process primarily leverages an in-application, digital borrowing experience, which it serves as a competitive advantage as digital lending becomes increasingly ubiquitous. Furthermore, the company’s platform supports the full transaction lifecycle, including credit application, underwriting, approval, funding and servicing. Through data derived at loan origination and throughout the servicing process, SoFi has life-of-loan performance data on each loan in the company’s ecosystem that it originates and on which it retains servicing, which provides a meaningful data asset.
Personal Loans
The company originates personal loans to help its members with a variety of financial needs, such as debt consolidation, home improvement projects, family planning, travel and weddings, to name a few. The company offers fixed rate loans with flexible repayment terms. The company generally offers loan sizes of $5,000 to $100,000, subject to legal and/or licensing requirements, with terms generally ranging from 2 to 7 years. The company regularly updates the annual percentage rates offered on its personal loans.
Student Loans
The company operates in the student loan refinance space, with a focus on prime and super-prime school loans, as well as the in-school lending space, which allows members to borrow funds while they attend school. The company offers flexible loan sizes, repayment options and competitive rates. Within student loan refinancing, the company generally offer loan sizes of $5,000 or higher, subject to legal and/or licensing requirements, with terms generally ranging from 5 to 20 years. Within in-school loans, the company generally offers loan sizes of $1,000 or higher, subject to legal and/or licensing requirements, with terms generally ranging from 5 to 15 years. The company regularly updates the annual percentage rates offered on its fixed and variable-rate student loans.
Home Loans
The company offers agency, non-agency and certain government loans (e.g., VA and FHA loans) for members purchasing a home or refinancing an existing mortgage. For the company’s home loan products, it offers competitive rates, flexible down payment options for as little as 3% (or 0% for VA loans), a close on time guarantee, and educational tools and calculators. For one-unit properties, the company generally offer loan sizes of $75,000 to $806,500 in conforming normal cost areas (with exceptions for smaller loan sizes considered on a case-by-case basis), up to $1,209,750 in conforming high-cost areas (GSE-eligible loans above the normal conforming limit, which is determined by county). For multi-unit properties, the company offers loan sizes up to $2,326,875. In addition, the company offers loan sizes up to $3,000,000 for jumbo loans (loans in the jumbo loan program), up to $1,500,000 for VA loans, and up to $524,225 for Federal Housing Administration loans in most areas. The company’s fixed rate home loans generally have terms of 10, 15, 20, 25 or 30 years. The company offers adjustable-rate mortgage products for conforming and jumbo loans, with a fixed rate for 5, 7 or 10 years followed by rate adjustments every six months for the remainder of the 30-year term, and for VA and FHA loans, with a fixed rate for 5 years followed by rate adjustments every year for the remainder of the 30-year term. The company regularly updates the annual percentage rates offered on its home loans. During 2024, the company began offering fixed rate home equity loans and variable rate HELOCs.
Lending Model
The company originates loans through its lending business and have the option of pursuing a gain-on-sale origination model, whereby it seeks to recognize a gain from these loans and sell them into either the company’s whole loan or securitization channels or holding loans on its balance sheet when advantageous.
The company sells its whole loans primarily to large financial institutions. In securitization transactions that do not qualify for sale accounting, the related assets remain on its balance sheet and cash proceeds received are reported as liabilities, with related interest expense recognized over the life of the related borrowing. In securitization transactions that qualify for sale accounting, the company typically has insignificant continuing involvement as an investor. In the case of both whole loan sales and securitizations, and with the exception of certain of the company’s home loans, it also continues to retain servicing rights to its originated loans following transfer.
The company also originates and sells loans in support of its Loan Platform Business, through which it provides lending related services to third-party partners. The company maintains the same lending relationship with borrowers across all loans that it originate, inclusive of those originated on behalf of a third-party partner and as such, reflect these products within its Lending segment total products. This enables borrowers to gain access to all the benefits of becoming a SoFi member and enhances the company’s opportunities to sell additional products from across its platform to these members.
The company directly services all the personal loans that it originates through its lending business, as well as provide servicing in support of its Loan Platform Business on loans originated on behalf of third-party partners and servicing rights assumed from third parties. The company acts as master servicer for, and rely on sub-servicers to directly service, all its student loans and GSE conforming home loans. The company’s view servicing as an integral component of the Lending segment, as the company’s servicing function is an important asset because of the connection to the member it affords it throughout the life of the loan thereby enhancing the effectiveness of the company’s Financial Services Productivity Loop by increasing member touchpoints and driving new product adoption by existing members.
The company relies upon deposits, warehouse financing and its own capital to enable it to continue to expand its origination capabilities. The company’s ability to utilize deposits held at SoFi Bank to fund its loans has lowered its overall cost of asset-backed financing relative to alternative sources of funding. The company expects to benefit from the continued mix towards deposit funding through operating SoFi Bank.
Underwriting Process
The company has developed an extensive underwriting process across each lending product that is focused on willingness to pay (measured by credit attributes and risk scores), ability to pay (measured through free cash flow), and stability (measured by credit experience). A key element of the company’s underwriting process is the ability to facilitate risk-based interest rates that are appropriate for each loan using proprietary risk models. Further, the company’s data and monitoring tools enable it to implement risk mitigation strategies quickly and efficiently, including underwriting standard adjustments to adapt the company’s operations to changing environments and expectations.
The company’s personal loan and student loan underwriting models are typically based on credit reports, standard industry credit scores, custom credit assessment models, and debt capacity analysis, as indicated by borrower free cash flow. The company’s underwriting strategy utilizes an advanced risk model that provides refined risk separation. Home loans originated by SoFi that are agency-conforming loans are subject to credit, debt-to-income, and collateral eligibility established by the GSEs. Government loans, such as VA and Federal Housing Administration loans, are subject to the underwriting requirements established by the appropriate government agency. In addition to these requirements, agency-conforming and government loans are subject to credit eligibility overlays imposed by SoFi as well as individual investor requirements. Other non-agency loans originated by the company, such as jumbo loans, are subject to investor credit criteria, which typically includes a minimum tri-bureau credit score, established credit history requirements, income verification, as well as maximum limits on debt-to-income and caps on loan-to-value.
The company also leverages its data to provide existing members a streamlined application process through automation. Across the company’s loan products, existing members generally experience a higher approval rate than new members, subject to the existing member being in good standing on their existing products.
Technology Platform segment
This segment provides technology platform services through a diversified suite of offerings which include an event and authorization platform accessed via application programming interfaces, a cloud-native digital and core banking platform and services related to both platforms. The company’s customers include financial institutions, government entities and non-financial institutions in primarily North America and Latin America. The company earns technology product and solutions revenue through the use of the platforms, either as a stand ready obligation, or from overall license and maintenance fee service arrangements related to those respective platforms. The company also offers additional add-on technology solutions to support its clients and drive engagement, such as a conversational AI engine for customers of banks and financial institutions, and a real-time payment risk platform which employs AI and machine learning technology to enhance payment fraud mitigation strategies for financial customers. The company continues to leverage investments made to integrate Galileo and Technisys and position the Technology Platform segment for diversified durable growth.
Financial Services segment
This segment offers a suite of financial services solutions. The company’s financial services products by nature provide more daily interactions with its members and are differentiated from the company’s lending products, which inherently provide less consistent touchpoints with its members. The company also offers financial services solutions which are designed to appeal to enterprises, including its at Work product and lending related services offered through the company’s Loan Platform Business. Certain products, such as the company’s complementary SoFi Relay product, do not provide direct sources of revenue but foster additional touch points with its members. The company’s suite of financial services offerings provides many ways for its members to actively engage in getting their money right as well as attractive enterprise solutions. This enables the company to deliver positive experiences through various channels, building trust and durable relationships which can ultimately demonstrate the effectiveness of its Financial Services Productivity Loop virtuous cycle.
SoFi Money
Checking and savings accounts provide a digital banking experience which allows members to spend, save and earn interest and rewards in flexible ways. The company’s legacy cash management product utilizes a sweep administrator to sweep funds to and from program banks (inclusive of SoFi Bank), as necessary, under a program broker agreement between SoFi Securities and the sweep administrator, as well as program account and program bank agreements. Following the Bank Merger, the company began to allow members to convert their cash management accounts into checking and savings accounts held at SoFi Bank.
SoFi Invest
A mobile-first investment platform offering members access to trading and advisory solutions, such as active investing and robo-advisory. The company’s interactive investing experience fosters engagement by allowing members to view and monitor other investors’ activity on the platform. The company’s active investing service enables members to buy and sell stocks and ETFs, as well as alternative investment funds, mutual funds and money market funds beginning in January 2024, to engage in options trading, to participate in IPOs, to buy and sell fractional shares, to engage in margin investing and to access a retirement investment account.
The company’s robo-advisory service offers a variety of managed portfolios comprising ETFs and mutual funds that are built and managed by its investment committee with support from an asset management partner. Additionally, the company provides introductory brokerage services to its members and has invested heavily to create an appealing mobile investing experience.
In connection with the company’s approval as a bank holding company in February 2022, the Federal Reserve determined that the activities of SoFi Digital Assets, LLC in providing members with the ability to buy or sell various digital currencies through SoFi Digital Assets, LLC's omnibus account with a third-party custodian is not a permissible activity under the Bank Holding Company Act and Regulation Y.
Loan Platform Business
The company provides lending related services to a broader set of members through its platform of enterprise partners. Revenue from the Loan Platform Business is fee-based. This includes activity through which third-party partners leverage its end-to-end origination and servicing platform to acquire loans within their credit specifications on a fee per loan basis; referred loans originated by a third-party partner to which it provides pre-qualified borrower referrals, and activity related to certain loans associated with the company’s Lantern financial services marketplace platform.
Additional financial services solutions offered within the company’s platform include:
SoFi Credit Card: Designed to help eligible members spend better with cash back rewards on every purchase and without limits. The company offers three different credit card products, all of which feature no annual fee, no foreign transaction fees and cash back rewards on trips booked through SoFi Travel. The SoFi Essential credit card offers a reliable credit line for those focused on building or improving their credit scores. The company’s SoFi Unlimited and Everyday Cash Rewards cash back credit cards also feature flexible options to redeem cash back rewards through statement credit or other SoFi products, with a 10% boost on cash back rewards earned for credit card members with direct deposit through SoFi Checking and Savings.
SoFi Relay: A personal finance management product that allows members to track all of their financial accounts in one place and gain meaningful insights into their financial health and habits to help them improve their financial standing, such as credit score monitoring and spending behaviors. SoFi Relay also provides the company with unified intelligence about its members that offers information about what SoFi products and features help the company’s members best achieve their financial goals, allowing it to further personalize the SoFi experience for its members.
Lantern: A financial services marketplace platform developed to help small businesses and individuals who do not qualify for SoFi products, through a simplified search and application experience that connects these users to alternative financial solutions from a curated network of other providers.
SoFi Protect: A service through which the company’s partner with providers who offer insurance products to help its members protect their assets, including providers across auto, life, homeowners, renters, and cyber insurance products and estate planning.
SoFi Travel: A service through which the company’s partner with a provider to offer an easy travel search and booking experience that can be managed directly through the SoFi app or website, alongside expanded member benefits including member prices on certain bookings and additional cash back rewards on purchases made with SoFi Credit Card.
SoFi At Work: A service through which the company’s partner with other enterprises looking for a seamless way to provide financial benefits to their employees, such as student loan payments made on their employees’ behalf.
Members
The company’s platform offers its members a suite of financial products and services, enabling them to borrow, save, spend, invest and protect their finances across one integrated platform, as well as personal financial management tools and benefits to complement its products.
Enterprises
In addition to benefiting the company’s members, its products and capabilities are also designed to appeal to enterprises, such as financial services institutions that subscribe to the company’s enterprise services and third-party partners in its Loan Platform Business and have become interconnected with the SoFi platform. The company continues to expand its platform capabilities for enterprises through strategic acquisitions, including its acquisition of Galileo in 2020, which provides technology platform services to financial and non-financial institutions and which has allowed the company to vertically integrate across more of its financial services, and the Technisys Merger in the first quarter of 2022, through which it added a cloud-native digital and core banking platform into the company’s technology platform offerings and expanded its technology platform services to a broader international market.
SoFi Bank
As a bank holding company, the company offers checking and savings accounts and credit cards through SoFi Bank. The company is originating all new loans within SoFi Bank, and it intends to continue to explore other products for SoFi Bank over time.
International Operations
The company primarily operates in the United States, it also operates internationally in Latin America and Canada, largely through its Technology Platform segment, as well as in Hong Kong through SoFi Holdings (Hong Kong) Limited (an investment business).
To build best-in-class offerings, the company focuses on four differentiators: fast, selection, content and convenience.
Fast
The company aspires to be the fastest place for its members to responsibly do anything, whether it’s applying for a loan, getting a funded loan, opening an account, buying or selling a stock, uploading a mobile check, getting access to money, paying a friend, or accessing relevant financial content. Other than certain products acquired and offered through SoFi Bank, the company’s products are all digital and it has a culture of iteration to help drive faster and faster services.
Selection
Given the digital nature of the company’s products, the permutations of features and services that can be made available to its members across their needs to borrow, save, spend, invest and protect are significant.
Content
The company’s financial education, insights, research content, actionable tools and advice are designed to provide meaningful value for its members. The company carefully crafted and personalized content is offered through its member home experience and is designed to help its members get their money right. The company strives to provide digestible financial education, meaningful answers, salient information, advice, credit scores, financial calculators, investment research and financial news that enhance member loyalty and increase the likelihood that members use additional SoFi products.
Convenience
Each product the company offers is delivered in a member-centric way and is built and enhanced with these differentiators in mind. The company’s member-centric, one-stop shop for financial services serves as a competitive differentiator for its relative to other financial services providers.
The company offers its members a full suite of financial products and services all in one common mobile application. To complement these products and services, it believes in building vertically integrated technology platforms designed to manage and deliver the suite of solutions to the company’s members.
Government Regulation
As a bank holding company, the company is subject to regulation, supervision and examination by the Federal Reserve under the Bank Holding Company Act of 1956, (BHCA), and SoFi Bank is subject to regulation, supervision and examination by the OCC and secondary supervisory authority by the Federal Deposit Insurance Corporation (FDIC) as the insurer of SoFi Bank’s deposits, and beginning January 1, 2024, SoFi Bank and its affiliates became subject to supervision and examination by the Consumer Financial Protection Bureau (CFPB). SoFi Securities is subject to regulation by Financial Industry Regulatory Authority (FINRA) and the U.S. Securities and Exchange Commission (SEC) and the company and its affiliates are subject to supervision and examination by various state regulators.
Under the Dodd-Frank Act, the company is required to serve as a source of financial strength for SoFi Bank.
The company has elected to be treated as a financial holding company pursuant to Section 4(l) of the BHCA.
SoFi Bank is subject to regulation, supervision and examination by the Office of the Comptroller of the Currency (OCC).
Beginning January 1, 2024, SoFi Bank and its affiliates became subject to supervision and regulation by the CFPB as an insured depository institution.
The company applies the customer identification and verification program rules pursuant to the USA PATRIOT Act amendments to the Bank Secrecy Act (BSA) and its implementing regulations and screen certain customer information against the list of specially designated nationals and other lists of sanctioned countries, persons, and entities maintained by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).
The company is subject to CFPB supervision and regulation of its loan servicing activities conducted by SoFi Bank and SoFi Lending Corp.
The company is subject to the United States Bankruptcy Code, which limits the extent to which creditors seek to enforce debts against parties who has filed for bankruptcy protection.
The company offers the securities issued in its sponsored securitizations only to, or for the account or benefit of, 'qualified institutional buyers' (as defined in Rule 144A under the Securities Act) in compliance with Rule 144A and to 'non-U.S. persons' outside of the United States in reliance on Regulation S under the Securities Act.
SoFi Invest is the brand name for the following legal entities: SoFi Wealth LLC, SoFi Capital Advisors, LLC, SoFi Securities, and SoFi Digital Assets, LLC, each of which provides different products and services. The company offers investment management services through SoFi Wealth LLC, an internet-based investment adviser and SoFi Capital Advisors, LLC, which provides portfolio management services for pooled investment vehicles that invest in asset-backed securitizations. Both SoFi Wealth LLC and SoFi Capital Advisors, LLC are registered as investment advisers under the Investment Advisers Act of 1940, as amended (the Advisers Act), and are subject to regulation by the SEC. SoFi Securities is an affiliated registered broker-dealer and FINRA member.
SoFi Securities is subject to Rule 15c3-1 under the Exchange Act, the SEC Net Capital Rule, which requires the maintenance of minimum levels of net capital.
SoFi Securities is registered with the Municipal Securities Rulemaking Board (MSRB) and subject to the MSRB’s regulatory regime, including applicable MSRB rules.
SoFi Securities is a Participant of Depository Trust Company (DTC) and is, therefore, subject to DTC’s regulatory regime, including applicable DTC rules and bylaws.
Moreover, through SoFi Securities, the company is licensed to underwrite securities offerings and have served as a firm commitment underwriters of, or as selling agent on, registered equity securities offerings.
The Gramm-Leach-Bliley Act (GLBA) requires the company to disclose certain information sharing practices to consumers, and any subsequent changes to such practices, and provide an opportunity for consumers to opt out of certain sharing of their non-public personal information.
On January 1, 2020, the California Consumer Privacy Act (CCPA) took effect, directly impacting the company’s California business operations and indirectly impacting its operations nationwide.
The company’s broker-dealer and investment advisers are subject to SEC Regulation S-P, which requires that these businesses maintain policies and procedures addressing the protection of customer information and records.
Intellectual Property
The company has registered several trademarks, including but not limited to related to its name, 'SoFi', SoFi's logo, its company motto 'Get Your Money Right', and certain SoFi products, such as 'SoFi Money' and 'SoFi Invest'.
History
SoFi Technologies, Inc. was founded in 2011. The company was incorporated in 2020.
