NEW YORK (Reuters) - Azlo, a U.S. digital banking startup that is majority-owned by Banco Bilbao Vizcaya Argentaria S.A. (BBVA.MC), will open for business this week, marking the latest effort by the Spanish lender to attract a new generation of digital-savvy customers.
The startup, which will offer online banking services to small businesses and freelancers, was built within a BBVA division that funds stand-alone fintech startups, the companies said on Tuesday.
Azlo will rely on BBVA’s banking license and payment infrastructure to operate across the United States, but will be run as an independent company, its founder and CEO Brian Hamilton said in an interview.
Founded in early 2017, Azlo has been in testing mode with a small group of clients over the past few months, Hamilton said.
Big banks across the world are seeking to court millennials as their next generation of customers, with products such as app-based accounts.
BBVA has already acquired or invested in several young online-only banks.
In 2014, it bought U.S-based digital bank Simple for $117 million, and the following year it acquired a majority stake in British mobile-only bank Atom Bank. Months later, it acquired Scandinavian digital bank Holvi.
The move could help BBVA expand its retail presence in the United States, where it operates through its subsidiary BBVA Compass.
Azlo will target “gig-economy” freelancers and self-employed workers, a segment which has been overlooked by traditional banks but is expected to grow, Hamilton said.
“We are targeting an underserved segment,” Hamilton said. “If you walk into a bank and try to open a business account it is still pretty wonky and not easy.”
Customers will be able to open the account online and will have access to digital tools for businesses, such as a service to send invoices to clients and request payments, he said.
The financial terms of BBVA’s investment in Azlo were not disclosed.
Reporting by Anna Irrera, Editing by Rosalba O'Brien