How Zolve is helping US immigrants land on their feet

Founded by serial entrepreneur Raghunandan G (Raghu), the idea behind Zolve was formed over a dinner with friends in New York City in 2020.

When the cheque came, Raghu realised that none of his fellow diners, all Indian citizens, had a US credit card and had no choice but to pay in cash or with a debit card.

In India, these individuals were considered creditworthy, and yet, in a new country, they were a credit risk. The US financial system is not set up to monitor financial data spanning borders.

This experience inspired Raghu to found Zolve, a cross-border neobank “for the global citizen”. Zolve enables fair access to financial products and understands that individuals with financial lives in more than one country need access to financial products worldwide.

Immigrants moving to the US cannot obtain a bank account or a reasonably high-limit credit card without waiting months, sometimes years, to establish credit. This means they are often unable to set up a bank account or access lines of credit, or must accept higher fees when borrowing money and pay more for essential services like insurance, utilities and car loans.

Zolve provides immigrants in the US with access to FDIC-insured bank accounts, high-limit credit cards and debit cards without the need for a social security number or US credit score.

Culture shock

“When immigrants move to America, they might get hit by the reality of how expensive the States is compared to their home countries,” Raghu tells FinTech Futures.

Rather than waiting months or years to build a credit score, new immigrants can use Zolve to access US banking services from day one, allowing them to begin building credit immediately “and achieve their long-term financial goals”.

The lack of access to financial services can cause difficulty when it comes to saving money and securing housing. Many new immigrants cannot secure affordable housing because they do not have a credit history, or they may be unaware of how to apply for a mortgage. Immigrants who do not have a credit history sometimes do not get loans at all or must pay a higher interest rate on existing loans.

“Education around investments and asset building, budgeting tools, credit score tracking and the ability to manage personal finances, especially in a new country, is the way to go,” Raghu says.

Customer onboarding

Zolve acquires customers within India and retains them in the US, the two nations in which the company currently operates. “This way, current acquisitions happen through multiple marketing channels including affiliates, offline and online channels, digital media and content marketing,” Raghu says.

Zolve has partnered with affiliates in India who are education loan providers, overseas education counsellors, visa consultants and accommodation providers, among others. Another big pull for the Zolve product has been the power of referrals and word of mouth among the student community.

“We have a strong presence across more than 380 US universities, and we have a long-term student ambassador programme to help with growth in the US.”

For working professionals, the approach is slightly different. Zolve has focused on corporate tie-ups where the partnership is mutually beneficial for both the employees and the corporates. “As professionals experience the product, they eagerly refer their colleagues as they experience the gap in the existing system,” Raghu says.

Zolve has also teamed up with partners such as Mastercard, Wise, Trulioo, ZeroHash and CFSB. “These partnerships have been essential in allowing Zolve to make our product user-friendly and convenient across geographies,” Raghu explains. Additionally, forging partnerships with household names in the US has given the company an “elevated sense of credibility” in the marketplace.

So, why haven’t legacy financial institutions done more to support this cause?

“There could be multiple reasons why legacy financial institutions might not have stepped up to this cause,” Raghu says. First, most of them may not have been exposed to the plethora of issues immigrants face moving into the country, especially regarding financial literacy in a new geography.

Second, even if legacy FIs are aware and strive to serve this population segment, they may only be able to do so effectively once the immigrant has arrived in the country.

“But, in reality, an immigrant thinks of managing finances way before they move,” Raghu explains.

Neo problems, neo solutions

Certainly, neobanks such as Zolve are particularly well placed to tackle this issue.

Firstly, neobanks are built on technology platforms that allow them to offer services at a fraction of the cost of traditional banks.

This means they can pass those savings onto customers in the form of lower fees and better rates.

Since they don’t have physical branches, most neobanks only offer their services online or through mobile apps — so they can focus on providing good customer service through those channels rather than having to worry about building a brick-and-mortar network first.

Neobanks are also agile by nature. They don’t have the same legacy systems and processes as traditional banks, so they can more easily adapt their offerings to accommodate changing customer needs and segments.

They also offer on par fraud protection since they use biometrics and artificial intelligence (AI) to identify potential fraudsters before any money is lost — “An advantage that can save consumers a lot of time and trouble dealing with claims,” Raghu says.

Problem Zolver

The benefits to society being driven by solutions such as Zolve are numerous. Zolve helps immigrants accelerate their financial health through products that build wealth in the long run, which leads to higher income levels for immigrants, and the propensity to save is much higher.

“Another way Zolve helps the larger good is facilitating smooth money movement across the globe,” Raghu says. Raghu cites research that shows immigrants send around $600 billion every year to their families back home. With Zolve, remittances are competitively low cost and happen at lightning speed.

“So, imagine if they didn’t have to pay those high fees anymore? That money could be used for other things like higher education or health care or deposits or whatever else they want to invest in,” Raghu says.

The lack of access to credit products, meanwhile, isn’t just limited to immigrants. Those with weaker credit scores, certain professions or new students and young teenagers are also impacted. “These groups will benefit highly from what we are currently building in the coming quarters which will serve as a game changer when it comes to building credit seamlessly and risk-free,” Raghu says.

Global ambitions

“At Zolve, we’re building a global multi-suite product for the ambitionists,” Raghu says. Soon, Zolve will service multiple countries providing those thinking of emigrating with not just a functional bank account and a credit card from the home country, but a myriad of other products in the offering. These geographies include Australia, Canada, Germany, India and the UK.

“Currently, we are building multiple new-age product offerings that enable financial independence for every global citizen,” Raghu says.

“With this in mind, our greater goal over the coming quarters is not only to continue adding to Zolve’s current product suite across investments, credit building, savings and tracking tools, but also to expand the current geographies we serve.”