Varo Joins BlackRock’s Savings Program to Build Out Financial Wellness

  • Varo is committed to helping people increase their savings by joining BlackRock’s savings program.
  • This could help raise the profile of customers as a trustworthy financial institution.

Varo is one of several companies that have joined wealth management giant BlackRock’s philanthropic initiative to help people increase their emergency savings.

How much trust and how little trust we users of digital banking perceive and interact with their bank

Varo builds on financial wellness offers.

Inside information

The USA

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will partner with BlackRock on a program to help workers automatically set aside portions of their salaries to build funds for rainy days. The challenger bank is supported by the established counterpart Truist, which wants to bring new products to the market in the future to support people’s efforts to save.

This is not the first step Varo has taken to offer financial support and improve its image:

  • Credit building. In February, Varo launched a credit-building product called Varo Believe. The offer, which includes a Visa-issued card and credit monitor, is interest-free, fee-free and does not require prepayment. When a customer makes purchases using the credit card, funds from their linked Varo bank account are reserved in secure accounts. These funds are then used to pay off their expenses in full each month.
  • Small loans. Last October, Neobank introduced a small dollar loan program that allows customers to receive cash advances of up to $ 100 with a 30-day repayment period. The advances, which are made with no instant access fees, include Varo providing up to $ 20 free to borrowers and charging a maximum fee of $ 5 on borrowed amounts of $ 100. Varo promoted the program as a way for customers to avoid overdrafts. The program acts as an affordable alternative to payday loans – which can carry sky-high, triple-digit interest rates – and in response to a March 2020 call by U.S. regulators urging financial institutions to offer small dollar loans amid the coronavirus pandemic.
  • National Banking Charter. Varo made history last July by becoming the first US neo bank to receive a national banking charter from the Office of the Comptroller of the Currency. A charter helps Varo build consumer confidence by telegraphing that it is just as regulated as incumbent operators and freeing it from potentially negative publicity about its self-marketing. In contrast, Fellow Neobank Chime is unlicensed and recently agreed to stop calling itself a bank after a California regulator took action against it.

Varo’s partnership with BlackRock underscores how the company intends to achieve primary bank status for its customers. Neobank uses philanthropic cooperation and other financial wellness products to raise its profile and position itself as a trustworthy financial institution.

And building his reputation could have tangible benefits to his business – USA

digital banking
According to Insider Intelligence, users with above-average trust in their banks are more committed and more satisfied with them than colleagues with below-average trust. And customers with greater confidence are also more likely to open additional accounts with their previous bank.

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