Businessmodel of SoFi

Customer Segments

SoFi targets students, former students, young professionals and general consumers. It is designed to help customers that are seeking an alternative to traditional lending providers, who want a more flexible, accessible and easy-to-manage service.

The Company also provides its services to businesses and trade organisations, providing services to their employees and members.

Value Propositions

SoFi’s ending products are attractive as the Company does not charge in relation to loan originations or for prepayment services. SoFi also provides discounted repayments and additional support and services not offered by traditional lending organisations. This includes industry events, career guidance counselling and 24-hour support services.

The Company claims that its customers save, on average, around $18,936 on student loan refinancing.

SoFi’s services are available online and can be accessed easily through the Company’s website. It also provides wealth management services at a discount for its lending customers.

Channels

SoFi’s services are accessible via its website at www.sofi.com. Applications for products and services can be completed online, with support from the Company’s sales and marketing team. The Company can also be contacted directly over the telephone.

Customer Relationships

SoFi works under a largely self-service model, with consumers able to apply for various products through a series of forms hosted on the Company’s website. The Company provides ongoing customer support to its clients through online chat and FAQs, as well as via access to its sales and marketing teams.

SoFi interacts with its customers directly, keeping them up to date with changes and developments via its social media accounts with Facebook, Twitter, Instagram, Pinterest, LinkedIn and Google+.

SoFi’s wealth management services are provided with a greater degree of personal care, with advisors discussing preferences and requirements directly with customers.

Key Activities

SoFi is a non-banking lender, that provides an alternative to traditional loan and refinancing service providers. The Company provides a number of products and services, including student loan and mortgage refinancing, parent loans, personal loans, MBA loans and mortgages.

SoFi also offers wealth management services, investing in a range of funds to suit individual customers. It also provides online and offline investment and trading advisory services.

Key Partners

SoFi partners with a number of organisations, including insurance providers, financial services companies, trade associations and professional organisations. SoFi offers two types of partnership: a standard partnerships and standard loan contributions. The first allows employees of members to access discounted rates on SoFi loans as well as to career services and networking events. SoFi also provides these partners with benefits not offered by traditional lenders, including unemployment protection and career support. The second enables partners to make regular contributions to the student loan repayments of employees or members, with SoFi offering reduced payments.

SoFi has partnered with numerous bodies, including insurance provider USI Affinity, the American Academy of Paediatric Dentistry, the Pennsylvania Bar Association, and venture capital firm Institutional Venture Partners. SoFi purports to have as many as 400 partners of this kind.

It is also a member of a number of national and regional professional organisations with which it collaborates, including the National Association of Student Financial Aid Administrators and the National Council of Higher Education Resources.

Key Resources

SoFi’s key resources are its personnel, its partners, its IT infrastructure and its associations with various trade organisations and groups.

The Company depends largely on the expertise of its employees and its network of contacts and partners in order to provide an efficient and cost-effective service to its customers. This is supported by SoFi’s online presence, with its services and support all available through its website.

While the Company is reported to be profitable, its financial backers also represent key resources.

Cost Structure

SoFi’s major costs come in the form of employee retention, the management of its partnerships and associations, maintenance of its IT infrastructure and costs associated with organising events.

SoFi must pay to retain its team of expert lending professional as well as a large teams devoted to customer support and advisory services.

The Company also accrues fixed costs in the form of rent and utilities through its network of seven offices across the US.

Revenue Streams

SoFi does not generate revenue through loan originations or prepayments. Instead, the entirety of the Company’s revenue is generated by the investor services and wealth management side of its business, in the form of management fees and service charges. According to its website, SoFi charges its wealth management clients $5 per month for every $100,000 invested.

The Company also charges a small service fee to its clients. SoFi claims to have been a revenue-generating Company since it was established. While it does not disclose details of its annual and monthly revenue, it purports to be a profitable entity.