RADNOR — Financial Technology firm BM Technologies Inc. (BMTX) has announced a series of actions it will take in an effort to streamline operations, strengthen its management team, position the company for future growth, and drive long-term shareholder value.
Among the actions the company plans to take is an estimated 25% reduction in the number of employees, along with other spending reductions, according to a press release. The company said it expects the cost reduction steps to be substantially completed by June 30.
The Radnor-based digital banking platform and Banking-as-a-Service provider — which is a spin-off of West Reading-based Customers Bank — this week outlined a targeted plan that is expected to result in an estimated $15 million in savings for 2023. It includes a profit enhancement plan, senior management changes and a new board member.
“The Fintech Industry is still in its early stages and continues to grow, but market dynamics are substantially different than they were a year ago,” Luvleen Sidhu, chairwoman, CEO and founder of BM Technologies, said in a statement. “Companies across the spectrum must adjust to new market realities including the current high interest rate and inflationary environment. BMTX’s imperative is to remain an agile company that can continue to innovate, serve its customers better than its competitors, and produce new products and services while facing uncertain headwinds.”
She added that the company’s objective is to position BM Technologies “for the next level of growth for our customers and shareholders as we accelerate expansion opportunities while strengthening our financial position.”
The company estimates it will incur $1.5 million to $3 million in charges in connection with the plan, most of which are expected to be incurred in the first quarter of this year.
In December, BM Technologies announced it would not be moving forward with a previously announced merger with First Sound Bank, a Seattle-based community business bank.
Senior Management Changes/Board Addition
On Jan. 26, Jamie Donahue was elected president of BM Technologies. He had been executive vice president and chief technology officer since 2020. Donahue will be responsible for leading the information technology, operations, product and program management, and sales teams as the company pivots its strategy to ensure sustainable growth and profitability, according to the company.
Effective Jan. 26, Robert Ramsey, the company’s chief financial officer, has been transitioned to a new corporate development role.
James Dullinger, the company’s chief accounting officer, will take on the additional position of chief financial officer. Dullinger has been in his current position with the company since March 2022. Prior to joining the company, he served for more than two years as chief financial officer at a publicly traded provider of Internet of Things services and technologies.
“These leadership changes will allow BMTX to continue driving long-term growth while maintaining continuity as it transitions its strategy from becoming a bank to refocusing on being a lean, efficient, innovative Fintech with a strong focus on risk management,” Sidhu said in a statement. “In our new model, we will partner with banks while we focus on building and delivering superior technology, market leading products, and memorable customer experiences.”
In addition, the company announced the appointment of investment banking veteran Raj Singh to its board of directors, effective Jan. 27.
Launched in 2015, BM Technologies, formerly known as BankMobile, provides a digital-first banking experience. On Jan. 4, 2021, West Reading-based Customers Bancorp completed the sale of BankMobile Technologies Inc. Under Sidhu’s leadership, BM Technologies went public in January 2021 through a merger with Megalith Financial Acquisition Corp.
The company is among the largest digital banking platforms in the U.S. and is geared toward students and young adults, providing access to checking and savings accounts, personal loans, and financial wellness. For more information visit www.bmtx.com.