Rising interest rates and market volatility, while feared on the Street, create an opportunity for online lending platform SoFi to gain new customers, according to CEO Anthony Noto.
“When the markets pull back, people evaluate: ‘Where am I putting my money from an investment standpoint?'” Noto said on CNBC’s “Closing Bell” on Tuesday.
SoFi, short for “Social Finance,” targets millennials with an array of banking products, including loans, refinancing and wealth management. The company launched in 2011 and has a $4.4 billion valuation.
Formerly the chief operating officer of Twitter, Noto stepped in to his role at SoFi after co-founder and CEO Mike Cagney was forced out last year amid sexual harassment allegations.
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“Financial independence” is the goal for SoFi’s customers, Noto said. “We don’t want any of that experience to be disrupted because of volatility in the marketplace.”
While rising rates have slowed down SoFi’s mortgage refinancing business, there is still “heavy demand” for student loan refinancing, said Noto. The company is also noticing a trend of customers consolidating their debts into personal loans.
As of Tuesday’s close, the major stock indexes are all down at least 4.8 percent for October amid fears of rising rates and global economic conditions.
During a market downturn, investors “recognize the fact that they need to diversify more,” said Noto. SoFi aims to integrate cryptocurrency investing into its platform by next year as interest in the asset grows among millennials.
