Innovative Lender Fidor Bank Gives U.S. an Upvote

Loans, Personal Loans
Fidor Bank to Expand to U.S.

Fidor Bank, a branchless, bitcoin-friendly German lender that adjusts some of its interest rates based on the number of Facebook “likes” it receives, plans to enter the U.S. with the help of an as-yet-unnamed American partner.

The online bank lists over 250,000 users and says total assets increased by 33% in 2014, reaching 305 million euros. Based in Munich, Fidor is a regulated bank, meaning it can operate in all 28 European Union nations. Yet America may offer the most promise, according to the bank.

“Even though the U.S. is the motherland of all innovative digital developments, we see some striking market opportunities for a consumer-centric banking philosophy and product,” Matthias Kroener, Fidor’s chief executive, said in a January statement about the bank’s plans for the American market.

Consumer-centric practices

As well as offering traditional services like checking and savings, Fidor also serves as a peer-to-peer lending platform. Customers can use the bank to make loans among themselves, including interest-free options.

The bank’s Smart Girokonto, or Smart Current Account, lets users buy foreign currencies, precious metals and swap cash for digital money like bitcoin.

Fidor prides itself on fostering communities, encouraging users to interact with one another in online forums and chat rooms and through social media. The bank offers cash incentives to those who respond to finance-related questions posed by others, share general personal-finance tips and rate financial advisors.

Account holders can also earn cash for creating videos in which they explain how Fidor’s services work. The bank pays up to 100 euros for every clip that it uploads to its YouTube account. Fidor limits customers to one video per month.

“We integrate the user and customer into the development of our service,” Kroener says by email in response to questions about how Fidor operates. “Together with our users and customers, we want to develop a financial service that they really need and want.”

In perhaps the most innovative of its practices, Fidor sets its overdraft interest rates for Smart Current Account users based partly on the number of Facebook likes the bank receives.

Fidor’s expansion

Although Fidor hasn’t revealed which services it plans to offer in the U.S., some reports suggest that facilitating bitcoin transactions may be a feature. The bank’s partnership with a German cryptocurrency marketplace called Bitcoin.de lets customers send and receive payments using the virtual money directly to and from their Fidor accounts.

A sometimes-volatile currency that has been targeted by hackers and scammers, bitcoin continues to be a subject of much debate. In August 2014, the U.S. Consumer Financial Protection Bureau warned that bitcoin and other forms of digital money pose risks of “unclear costs, volatile exchange rates, the threat of hacking and scams” and total loss in the event of theft.

Although certain states like New York and California are working to develop rules dealing with bitcoin, the virtual currency remains unregulated in most of the country, at least for now. Kroener, however, doesn’t necessarily view increased regulation as a bad thing.

“I do not think that regulation all in all is a burden,” he says. “We think that the bitcoin environment needs professional, and in particular, regulated support.”

The takeaway

As Fidor plots its U.S. expansion, Americans may look forward to having access to many of the same innovative, community-style services that the online bank provides in Germany and other parts of Europe. And who wouldn’t “like” a lower overdraft charge?

Tony Armstrong is a staff writer covering personal finance for NerdWallet. Follow him on Twitter @tonystrongarm and on Google+.


Image via iStock.