Better software can only get you so far in banking. At the end of the day, they need to borrow and loan profitability and provide services at a low cost. In addition, they need customers, which are not easy to acquire for a new bank. Not having physical branches is definitely a cost saver; however, I’ve seen some surveys that indicate people still want access to some sort of physical branch.
According to their previous Techcrunch article [0], they are writing their own full-stack banking software. Writing your own banking core, external facing software, and internal process software is a massive undertaking, especially dealing with all the regulation and certification processes with third parties. You then become not only a bank but a specialized software development shop as well. Something traditionally only the big banks can afford. I’m not sure, given they are a bank and software business, that their cost base is 1% or 2% of a traditional bank, as stated in their article [0].
I hope they build something awesome but I think to do something of this size will take more than a few million.
Disclaimer: I write banking software.