September 25, 2023

SoFi CEO Anthony Noto on student loans, AI and the future of banking

SoFi technologies

Chief Executive Officer Anthony Noto told from Baron that it is only a matter of time before his company becomes one of the top 10 financial companies in the country, but the question is how much time.

Student loan shares have almost doubled this year, but they still trade at less than half the price of their public debut in 2021. Financial institutions can be ranked by market capitalization and SoFi currently clocks in at $8.2 billion. For comparison, the three largest financial institutions in the country by market capitalization

JPMorgan Chase


bank of America

(BAC), and

Wells Fargo

(WFC) at approximately $424 billion, $228 billion, and $159 billion, respectively.

None of this has deterred Noto, who sees strong growth for his company by focusing on his target audience of high-earning professionals and ultimately meeting all of their financial needs.

SoFi (ticker: SOFI) was founded in 2011 and floated on June 1, 2021 by special acquisition company Social Capital. Shares opened at $21.97 and closed at $22.65 that day, according to Dow Jones Market Data. Since then, the share price has fallen sharply and is now trading around $9.

It started as a lender focused on refinancing student debt, and last year’s acquisition of Technisys SA helped transform it into a full-service bank. Last quarter, it posted a smaller-than-expected net loss and delivered excellent personal lending numbers, but saw student loan numbers fall year-on-year. SoFi is expected to report second-quarter results on July 31, before the market opens.

Noto assumed the role of CEO at SoFi in February 2018. Prior to that, he served as chief operations officer and chief financial officer at Twitter, having held senior positions at

Goldman Sachs

and the National Football League.

Last week, from Baron spoke to Noto about a slew of topics ranging from student loans to artificial intelligence to future plans for the company. An edited version of the conversation follows.

Barrons: The Supreme Court blocked President Biden’s student loan forgiveness plan. Analysts tell us the decision didn’t do much for SoFi stock, as many of its borrowers wouldn’t have qualified for that forgiveness in the first place. What do you think?

Anthony Note: We supported his utility. I agree that it probably won’t have a major impact on our members or potential members as their income would be higher in many cases [than the forgiveness plan allowed]and the amount of debt they refinance would be significantly greater than the $10,000 that was offered.

There is debate about what the student loan refinancing opportunity looks like. What’s your opinion?

We think there will be enough demand for people in this environment trying to lower their costs on a monthly basis and then, more broadly, some of the people who are able to actually lower their overall cost of their loans.

What Would a Recession Mean for SoFi Stocks?

Our outlook for 2023, which we formulated at the end of the first quarter, does take into account a mild recession. We think we have a diversified business that will allow us to deliver really outsized growth compared to others.

SoFi is suitable for individuals with high credit scores and high incomes. What do you see as the way forward in the long term? Refine the experience for that select group, expand to a broader customer base, or something completely different?

Our core goal is what we call ‘high earners not well served’. People who have done very well professionally, their average income is $100,000 or higher. Our products will appeal beyond our core purpose; they already have. But like most major brands crossing over, if we build a great product for one core group, it will increasingly meet the needs of other core groups.

But we stick to our core purpose, just like other successful brands. And we will see groups of people around that mass center continue to use our products. But they are designed for that specific audience and purpose.

At the Morgan Stanley conference last month, your CFO said that all the building blocks are in place to start scaling. What does a scaled SoFi look like?

We’ve been on a journey over the past five years to be a one-stop shop for all of our members’ financial needs. It’s really hard to help people get their money’s worth when you’re only in one product. When we talk about everything being in place and we’re ready to scale, it’s that we have that complete product offering. It’s mobile, it’s largely based on our technology.

In my mind, it’s a matter of when, not if we become a top 10 financial institution in the country. “When” will be determined by us continuing to perform as a well-known brand name, as a trusted partner to our members.

To tie into that in technology, AI is obviously huge right now. Anything planned for SoFi in that space?

It is our duty to use the technologies available to us to ensure that we build competitive advantage, that we meet the needs of our members. And today we use artificial intelligence in a product called Konecta, a natural language bot that helps us reduce the number of contacts per customer.

Fraud safety is of paramount importance to the business in which we operate. People have to trust us when they give us their money. [Artificial intelligence] also allows us to better personalize products and services for our members and our partners. So it will be a new wave of technological innovation that improves business, drives efficiency. It helps us innovate faster and more comprehensively, so I’m excited about it, but it’s early.

And things tend to get hyped when they’re this early. So we’re cautiously optimistic about the impact it could have, but we’re already using it in products that generate revenue for us and help our partners and us better meet the needs of our members and our customers.

Write to Emily Dattilo at

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