Virtual financial institutions have transformed the way consumers and businesses manage their money. But launching or backing a digital-only bank requires more than sleek tech and mobile-first design. The banks that last are the ones that focus on factors like trust, compliance, mission clarity and sustainable growth strategies.
Below, Forbes Finance Council members share 20 key considerations they believe every leader and investor should weigh when building or supporting a digital-only bank. Follow their recommendations to set your venture up for long-term success.
1. Solve Real Operational Pain Points Beyond Banking
To set the business up for long-term success, focus on solving real operational pain points beyond banking—cash flow gaps, payments or vendor management—and layer financial services into that context. Build trust by offering transparency, flexibility and speed, then scale through strategic partnerships and platforms your customers already use. – Mrutyunjay Hiremath, LogiPe
2. Validate The Potential Of Your Target Market
When launching or investing in a digital-only bank, it’s essential to validate whether a target client segment is big enough to support profitability and scale. This is true for virtual banks that launch with bold visions to serve niche groups. While that focus has advantages, it may become a liability if the market size, client behavior or revenue potential hasn’t been thoroughly stress-tested. – Paul Davis, Bank Slate
3. Prioritize Cloud-Native Infrastructure
Digital-only banks should prioritize a scalable, cloud-native lending and onboarding infrastructure that integrates advanced risk analytics and automated compliance. This enables rapid customer acquisition, efficient operations and agility in adapting to new markets and regulations, and sets the foundation for sustainable growth and competitive differentiation. – Tomer Guriel, ezbob Ltd.
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4. Build In Security And Transparency
A critical factor is trust infrastructure—ensuring robust cybersecurity, compliance and customer transparency. Long-term success depends on blending tech innovation with human-centric design, building credibility through seamless UX, responsive support and regulatory rigor. This earns loyalty in a landscape where trust, not just tech, drives retention and growth. – Meelan Gupta, GeBBS Healthcare Solutions Inc.
5. Deliver A Rock-Solid User Experience
One key factor to consider is trust, and that starts with a rock-solid user experience. A digital-only bank must be fast, intuitive and secure from day one. But long-term success comes from building real relationships by offering responsive support, transparent policies and tools that actually solve customer pain points. – Nick Chandi, Forwardly
6. Guide Users To Better Financial Decisions
Success goes beyond providing traditional banking digitally. It’s about guiding users to better decisions through built-in budgeting, savings automation and personalized financial education. This creates sticky relationships, drives engagement and positions the institution as an indispensable partner in customers’ long-term financial journeys. – Michael Foguth, Foguth Financial Group
7. Ensure Accessibility And Ease Of Use
Accessibility is what matters most. How complex is it to set up customized access for different roles within an organization? Is the online interface easy to navigate, with accessible search features, downloadable statements and detailed transaction information? Also consider whether the bank offers add-on services that could be useful to organizations, such as bill pay, budgeting and more. – Julie DeLong, Backyard Bookkeeper
8. Prioritize Regulatory Readiness
One critical factor is regulatory readiness, as evolving state-by-state disclosure laws and compliance requirements can directly impact viability. Standardized disclosures and automated compliance tracking from the start ensure transparency, mitigate regulatory risk and build the trust essential for long-term, scalable growth. – Lawrence Pross, Nexi
9. Invest In A Future-Proof, Scalable Tech Stack
When launching or backing a digital bank, invest early in a secure, cloud-native tech stack that supports agile growth, regulatory shifts and evolving customer behavior. Future-proofing starts on day one. Scalability isn’t optional; it’s mission-critical. – Sumeet Grover, UFCU
10. Start With Credentialing And Compliance Culture
Start with credentialing. Verify the institution’s status via the Office of the Comptroller of the Currency. Ensure systems are in place for regulatory compliance. Compliance starts with culture. A strong tech stack, anchor investor and differentiated offerings are key. Targeting underserved segments such as solopreneurs, healthcare workers and founders, can drive traction and long-term success. – Zach Brody, Lumiere Financial
11. Define And Stay True To The Bank’s Mission
As with all business ventures, the key to success is to identify an unmet need. Building a digital-only bank that provides the same services as national, brick-and-mortar banks is unlikely to succeed. However, there are riches in niches with unmet needs. In addition, having a great user experience, while ensuring privacy and security, can be a major factor for success. – Kevin Cohee, OneUnited Bank
12. Build Diverse And Low-Cost Funding Streams
When launching or investing in a digital-only bank, prioritize building diverse, low-cost funding streams beyond retail deposits, such as strategic partnerships, embedded finance and B2B cash management services. This reduces reliance on rate-sensitive customers, stabilizes liquidity and creates a resilient revenue base that can weather market cycles for long-term growth. – Achal Singi, WestBridge Capital
13. Be Prepared To Adapt Based On Client Feedback
In digital banking, trust is currency. Strong security, compliance and an intuitive experience keep customers loyal. Pair innovation with discipline and adapt based on feedback. Without trust, tech alone won’t keep clients. Earn it daily to build a bank that’s safe, smart and built for long-term success. – Karla Dennis, KDA Inc.
14. Choose The Right Partners
The one thing that really matters is choosing the right partners. The collapse of Synapse showed how vulnerable it is to rely on others for ledgers and reconciliations. If your tech and banking partners aren’t best-in-class, your business is exposed. Neobanks must learn from Synapse, factor in long-tail risks and mitigate partner failures from day one. – Christian Jessen, Startup CFO Services
15. Focus On Sustainable Unit Economics
Focus on sustainable unit economics by keeping customer acquisition costs well below lifetime value. Use data-driven onboarding, cross-sell sticky products (payments → lending → wealth) and bake in scalable compliance so margins expand with growth. This is crucial for long-term digital bank viability. – Anatoly Iofe, IceBridge Financial Group, LLC
16. Create A Human-Centered Digital Experience
The key to virtual banks’ long-term success is delivering a truly personalized, human-centered digital experience. It’s not enough to be functional—customers demand empathy, customization and trust. Embracing AI-driven personalization and flexible tech isn’t optional; it’s essential. Banks that ignore this will fall behind in the fiercely competitive digital market. – Tomas Milar, Eqvista Inc.
17. Build Rigorous Digital KYC And Compliance
Trust isn’t optional; it’s foundational. Build rigorous digital KYC and compliance from day one to earn credibility from clients and avoid deadly regulatory missteps. – Tiz Gambacorta, Eunice.io
18. Embed Frequent Micro-Savings Into Partner Ecosystems
Prioritize deposit stickiness by embedding high-frequency micro-savings into partner ecosystems (ride-hail payouts, gaming wallets, creator royalties). This lattice of small, recurring inflows feeds an AI liquidity model that predicts stress withdrawals hours ahead, letting treasury hedge in the interbank market before the morning headlines. – Terry Chen, Modulate
19. Provider Personalized, Event-Based Financial Guidance
A digital-only bank should prioritize the provision of personalized, event-based tools and guidance to support significant financial milestones, such as homeownership, to guarantee long-term success. This results in a more profound level of user engagement and loyalty, as the bank transitions from a transactional platform to a trusted life partner. – Neil Anders, Trusted Rate, Inc.
20. Ensure An Accurate, Always-On Customer Interface
The biggest factor to consider is customer service. Virtual financial institutions rely on bots and email. Making sure that the customer interface is accurate is essential. Customers are looking for 24/7 availability, lower fees, higher interest rates and fast service. AI will continue to play a large role in making sure the customer experience is as perfect as possible. – Aviva Pinto, Wealthspire Advisors
The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation.