In a C-suite shake-up, banking-as-a-service provider BM Technologies, appointed Raj Singh as its co-CEO alongside CEO and founder Luvleen Sidhu, the company announced Monday.
Singh advised the fintech for nearly three years before joining the board of directors recently, Sidhu noted in the press release.
"His experience with corporate strategy, complex negotiations, mergers and acquisitions, finance and accounting, and capital markets brings both breadth and complementary skillsets to the senior leadership team," Sidhu said in a statement. "In his new role, Raj's principal responsibilities will be to assist in driving revenue growth and implementing operating efficiencies resulting in improved [earnings before interest, taxes, depreciation and amortization] over the next 3-5 years.”
Singh spent 20 years at Raymond James, most recently as vice chairman of investment banking.
He will receive 500,000 restricted stock units, half of which vest over four years. The rest are performance-based, BM Technologies said.
"I'm excited to partner with Luvleen and the rest of BMTX's skilled and accomplished executives, as well as its many talented team members," Singh said in a statement.
The company made two other changes in the top ranks in recent months. In January, the Pennsylvania-based fintech named former Chief Technology Officer Jamie Donahue as company president. James Dullinger, the chief accounting officer, took up the additional role of CFO.
"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 re-focusing on being a lean, efficient, innovative Fintech with a strong focus on risk management," Sidhu said in January.
"The co-CEO and CFO change marks that the board is getting a lot more aggressive and willing to take decisive actions to improve results," Brian Dobson, a senior research analyst at Chardan Capital Markets, told American Banker.
He said he expects the co-CEO appointment to be a short-term move before the fintech returns to its single-CEO model.
The new appointments follow a rough year at BM Technologies, which spun out of Customers Bank in 2021 and is best known for managing disbursements at universities and colleges and handling T-Mobile’s bank account.
The fintech in December called off its $23 million deal to acquire Seattle-based First Sound Bank following regulatory hurdles that first emerged a month earlier.
Through the tie-up, BM Technologies aimed to combine its technology and BaaS expertise with a bank charter.
The company announced a plan in January to cut 25% of its workforce to lower expenses by $15 million in 2023. The move also included reducing third-party service provider expenditures, the firm noted.
"BMTX's profit enhancement plan aligns with our focus on profitability from day one, which contrasts with many other FinTech companies just focused on growth," Sidhu told Banking Dive. "The $15 million of cost savings is from several strategies, including the reduction in force in January, which is only one aspect of this cost reduction plan."
During BM Technologies fourth-quarter earnings call, the company announced it entered into a new deposit processing service agreement with First Carolina Bank for its higher education business, as well as an agreement with Customers Bank for its existing partnership with T-Mobile.
The variable rate fee structure is crucial for the growth and profitability of BM Technologies, Sidhu said on the call, according to American Banker. The servicing fee agreements will give "a margin increase of more than 100 basis points on our average service deposits from the prior fixed rate servicing fee structure," she added.
"We are enthusiastic about our future as one of the largest and most established FinTech companies in scale, customers, and deposits. Our business is more comprehensive than a simple mobile app or web interface," Sidhu told Banking Dive. "We have significant and well-established partnerships in place and differentiate ourselves from our competitors with our in-house back-office support that enables us to provide the banking services, customer support and ease of use that today’s customers want.”