'Fintech' Startup Sofi Moving Into Traditional Banking

Online lender and financial startup SoFi has taken the first step toward competing with the nation’s biggest banks on their home turf: the checking account.

Last week, the San Francisco provider of student and personal loans submitted an application for federal deposit insurance, a protection normally only available to conventional banks. In its application, the company said its SoFi Bank subsidiary will offer bread-and-butter banking products, including checking accounts, debit cards and eventually credit cards.

SoFi is one of a wave of new financial technology, or “fintech,” startups that aim to reengineer the way Americans manage their savings, take out loans and pay for things.

The company, whose name comes from the moniker Social Finance, was founded in 2011 with a focus on refinancing student loans. The company quickly branched into other products aimed primarily at millennials, including personal loans, mortgages, wealth management and, recently, insurance.