Forget Foreclosure Fees: Introducing KOHO’s Consumer-Focused Digital Bank

Traditional banking strives to change its ways, but hundreds of years of history provide difficult ground on which to grow and diversify in new directions. Today’s banking customers are looking for the kind of convenience and speed that dozens of providers offer them through the smartphone in their pocket. Order a taxi, a take-out meal, change car insurance, or even buy an apartment? Everything is done from an application in 2022. Shouldn’t the bank be the same?

Daniel Eberhard founded a local Canadian offering, KOHO in Vancouver, and the bank is now headquartered in Toronto. It provides innovative banking services that could only be offered from a digital-first institution, all via a mobile app and/or a “traditional” Visa card. There is an element of a KOHO mission to democratize the nation’s financial sector for consumers, a goal it is working toward with appropriate use of digital technology. And it all starts with simplifying the banking experience.

The Prepaid Visa Card (available for Standard, Joint, and Premium Accounts) connects your income to your bank in new ways, even enabling advance government payments when you need them (link your CRA to KOHO to qualify). Add money to the card account by sending funds via wire transfer or ask your employers to directly deposit your paycheck. Employers can offer Instant payment also to their staff, so that employees can cash in up to half of their earned wages every day, every day.

The app offers consumer-focused features such as the ability to track your spending and savings, categorizing what you spend and where. Additionally, you can invoke a “round up” function that takes pocket (virtual) change from purchases and ranges it. Without thinking too much about it, KOHO customers find that they are saving, perhaps like never before.

There are little to no fees for most features, and the account offers interest on credit balances (at a higher rate in the Premium account), and you earn cashback on every purchase. Instead of quietly waiting until you’re overdrawn and landing the reckless spender with fees and interest, KOHO actively encourages you to stick to your budget and know where every penny goes. There’s even financial advice available if you’re struggling to make ends meet.

Users of challenger banks around the world tend to gradually switch their accounts to a digital provider, and KOHO is set up for this arrangement. The benefits of the new style of fintech (financial technology) banking stem from several causes. Institutions like KOHO do not have a merchant bank or investment arm and do not have a long history of debt with stock exchanges or existing bond arrangements with governments. The big benefit for consumers is that there are no land rents or brick-and-mortar costs that the bank has to pay, passing those costs on to the consumer.

Perceptions of traditional banking are rooted in trustworthiness, trustworthiness, and the fact that many have been around for decades, if not centuries. Yet the challenger banks, like their older competitors, must abide by exactly the same rules, regulations and financial safeguards as everyone else. Consumer protection, guaranteed funds and business continuity are all legally binding on all banks: the difference with KOHO is that its philosophy is focused on consumer value, not anonymous shareholder compensation. It offers the same level of security as traditional banks to protect your data and finances.

And at a time when the average Canadian has a debt of $1.73 for each dollar they earn, additional features like a credit building service are invaluable to many. And being a prepaid card, the KOHO Visa does not count as debt on users’ credit scores.

Create budgeting goals and access financial coaching, pay your bills online with just one click, and earn money (and interest) as you go. Open a KOHO account today, say goodbye to hidden fees and say hello to safe and reliable banking!

Sylvia B. Polson