Fintech CEO Chris Britt of Chime on reasons Americans don’t trust banks
The disruption of traditional bricks-and-mortar banks by fintech companies was already occurring when the pandemic sent startups offering banking services faster, cheaper, and more digitally accessible into overdrive.
A rush of venture capital followed, with fintech companies raising more than $130 billion in 2021 alone, creating more than 100 new unicorns, or companies with at least $1 billion in valuation.
However, as the field of fintechs got more crowded and the economy has entered a more recessionary environment, funding has dried up and several fintechs have taken valuation cuts. The fintech reckoning is going well beyond private companies, as public markets have not been kind to former Disrupters Dave and SoFi, both trading well off their IPO prices. Legacy banks have seen their efforts to disruptor these disruptors fall short of expectations – for example, Goldman Sachs recently pulled back on its fintech ambitions.
Making that banking picture even fuzzier is the recent collapse of Silicon Valley Bank and the wave of concerns that followed.
But Chris Britt, CEO of Chime, which ranked No. 15 on the 2023 CNBC Disruptor 50 list, says even with much of the banking system on edge, he still sees a strong market need for fintechs.
“It’s very difficult for [the big banks] structurally to compete for the segment that we aim to serve, which is sort of mainstream middle and more lower income consumers,” Britt said on CNBC’s “Squawk on the Street” on Tuesday. “Big banks do a pretty good job with high income, high FICO score folks who have big deposits and are credit worthy, but for most Americans, the 65% that live paycheck to paycheck, the only way that big banks can make the math work on serving them is by being very punitive on fees.”
Addressing the part of the population that has been disillusioned by traditional banking was part of the impetus for Britt and Ryan King to found Chime in 2010. This year marks the fourth time Chime has been featured on the CNBC Disruptor 50 list.
“The trust levels that mainstream Americans have in banks is extremely low, and that was part of the opportunity that we pursued,” Britt said.
Those trust levels waned in recent weeks with the collapse of Signature Bank and Silicon Valley Bank, followed by the eventual government seizure and sale of First Republic Bank. Nearly half of the adults polled in a recent Gallup survey said they were “very worried” (19%) or “moderately worried” (29%) about the safety of the money they had in a bank or other financial institution.
Britt said that although Chime has a relationship with SVB, it “hasn’t seen much of a change as a result of the SVB situation” from members, as “99.9% of our consumer deposits are FDIC insured because they’re well below the $250,000 threshold.”
Chime’s focus on having a primary account relationship with members as opposed to other fintechs that may focus on one-off or peer-to-peer transactions has helped the company’s business be “very resilient.”
“Most of our members use Chime for non-discretionary spend; they’re going out and shopping at Target or Amazon or Subway, and they’re using it for their everyday purchases,” Britt said. The majority of Chime’s revenue comes from network partners like Visa when members use their cards at the point of sale.
Chime, which was valued at $1.5 billion in 2019, reached a valuation of $25 billion in 2021. The company became profitable on an EBITDA basis during the pandemic, Britt told CNBC in September 2020.
However, the company has not been immune from the current challenges. In November, Chime laid off 12% of its workforce, or about 160 people, in a move that Britt said would help the company thrive “regardless of market conditions.”
Still, Chime is still open to a future IPO, Britt told CNBC’s Julia Boorstin, something that the company has long been rumored for well ahead of the current frozen IPO market for new offerings from venture-backed startups.
A Waymo autonomous self-driving Jaguar electric vehicle sits parked at an EVgo charging station in Los Angeles, California, on May 15, 2024.
Patrick T. Fallon | AFP | Getty Images
Waymo said it will begin testing in Philadelphia, with a limited fleet of vehicles and human safety drivers behind the wheel.
“This city is a National Treasure,” Waymo wrote in a post on X on Monday. “It’s a city of love, where eagles fly with a gritty spirit and cheese that spreads and cheese that steaks. Our road trip continues to Philly next.”
The Alphabet-owned company confirmed to CNBC that it will be testing in Pennsylvania’s largest city through the fall, adding that the initial fleet of cars will be manually driven through the more complex parts of Philadelphia, including downtown and on freeways.
“Folks will see our vehicles driving at all hours throughout various neighborhoods, from North Central to Eastwick, and from University City to as far east as the Delaware River,” a Waymo spokesperson said.
With its so-called road trips, Waymo seeks to collect mapping data and evaluate how its autonomous technology, Waymo Driver, performs in new environments, handling traffic patterns and local infrastructure. Road trips are often used a way for the company to gauge whether it can potentially offer a paid ride share service in a particular location.
The expanded testing, which will go through the fall, comes as Waymo aims for a broader rollout. Last month, the company announced plans to drive vehicles manually in New York for testing, marking the first step toward potentially cracking the largest U.S. city. Waymo applied for a permit with the New York City Department of Transportation to operate autonomously with a trained specialist behind the wheel in Manhattan. State law currently doesn’t allow for such driverless operations.
Waymo One provides more than 250,000 paid trips each week across Phoenix, San Francisco, Los Angeles, and Austin, Texas, and is preparing to bring fully autonomous rides to Atlanta, Miami, and Washington, D.C., in 2026.
Alphabet has been under pressure to monetize artificial intelligence products as it bolsters spending on infrastructure. Alphabet’s “Other Bets” segment, which includes Waymo, brought in revenue of $1.65 billion in 2024, up from $1.53 billion in 2023. However, the segment lost $4.44 billion last year, compared to a loss of $4.09 billion the previous year.
Technology
Trump advisor Navarro rips Apple’s Tim Cook for not moving production out of China fast enough
White House trade advisor Peter Navarro chastised Apple CEO Tim Cook on Monday over the company’s response to pressure from the Trump administration to make more of its products outside of China.
“Going back to the first Trump term, Tim Cook has continually asked for more time in order to move his factories out of China,” Navarro said in an interview on CNBC’s “Squawk on the Street.” “I mean it’s the longest-running soap opera in Silicon Valley.”
CNBC has reached out to Apple for comment on Navarro’s criticism.
President Donald Trump has in recent months ramped up demands for Apple to move production of its iconic iPhone to the U.S. from overseas. Apple’s flagship phone is produced primarily in China, but the company has increasingly boosted production in India, partly to avoid the higher cost of Trump’s tariffs.
Trump in May warned Apple would have to pay a tariff of 25% or more for iPhones made outside the U.S. In separate remarks, Trump said he told Cook, “I don’t want you building in India.”
Analysts and supply chain experts have argued it would be impossible for Apple to completely move iPhone production to the U.S. By some estimates, a U.S.-made iPhone could cost as much as $3,500.
Navarro said Cook isn’t shifting production out of China quickly enough.
“With all these new advanced manufacturing techniques and the way things are moving with AI and things like that, it’s inconceivable to me that Tim Cook could not produce his iPhones elsewhere around the world and in this country,” Navarro said.
Apple currently makes very few products in the U.S. During Trump’s first term, Apple extended its commitment to assemble the $3,000 Mac Pro in Texas.
In February, Apple said it would spend $500 billion within the U.S., including on assembling some AI servers.
WATCH: Apple’s $500 billion investment: For AI servers not manufacturing iPhones
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