Tomorrow is a social business FinTech company and a neobank, that was started in 2018 by founders Inas Nureldin, Jakob Berndt, and Michael Schweikart with a vision to use money as a lever for positive change. Since its launch in 2018, the company has 50+ employees and 55,000+ customers.
Tomorrow is also a certified B Corporation that aligns profits with sustainability.
We are bringing you an exclusive interview with Michael Schweikart in which he addresses the key values of the company and why he believes the product of Tomorrow is good enough to once become used worldwide.
What exactly are the projects that you are financing, how do you get the money to fund them and what are the results?
The positive impact is at the core of our mission. Banks use their customer money for financing for example oil or weapon industry. Our core value proposition is that we don’t do that. Every single Euro is first of all deposited with the German Bundesbank and then we look for projects and investment opportunities that create a positive impact and that offer a low-risk option.
That means the deposits go into green bonds, social bonds, and microcredits. Right now we have about 100m € of customer deposits and approximately 20m € goes to the three asset classes I mentioned. Thereby, Tomorrow customers finance sustainable change.
You also invest in projects in countries like Peru, Vietnam or Uganda, can you tell us more about these?
This is a separate aspect of using Tomorrow. We take the interchange fee and use it to finance climate protection projects. This is a second funnel that also puts money into projects that support sustainability. It comes with our premium product that is called Tomorrow Zero. It is the first carbon-neutral bank account.
We choose the projects based on their positive impact measurements and they have to meet certain standards. If you look at CO2 projects, there is a certification called the gold standard. This means the project meets quality standards in terms of reporting or transparency. We also look for projects that are in the global south, where the effect of climate change is likely going to be the worst.
What is the next step for you from here?
One of the things that we are about to launch is investment funds. One would be a standard stocks fund and the other a standard bond fund. The idea is that you would be able to invest directly into the fund via the app. That means the customer can invest in the funds easily with just several clicks.
However, when we first took a look at the portfolio of sustainable funds there were 300 of them but just two of them were actually sustainable. Now there are about 800 of them but there are still just two of them truly sustainable. So we want to become the third one.
A lot has happened and changed during the last year. What does that mean for you and how you adapted?
You have to be agile in terms of the business model and be able to meet the customer needs. We also gathered information from all around the industry and consulted everybody who was willing.
Does a Fintech company like yours need millions of customers to meet the goal of its model or does it work just as fine with smaller amounts of customer numbers?
I believe the model can also work with few hundreds of thousands of customers. There are going to be more players serving very specific groups of customers. And we want to serve the people who are interested in truly sustainable offerings. For example, Revolut and N26 also serve different target groups. Revolut focused on traveling and N26 on lifestyle.
And with regard to traditional banks, I believe they will have a lot of problems in the future to keep up with the challenger banks, especially in the B2C sector.
What are your customers able to influence in terms of strategy and product?
We think that transparency is queen (and king). For example, we have a Trello board where we show our product road map and where customers can give their feedback on what they would like to see. The customer may also influence which requests are going to be taken care of with a priority.
“If you want to save the world, you need to throw a better party than the ones destroying it.” is one of your beautiful quotes and slogans. How is Tomorrow going to throw a better party?
Sustainability is one thing but the product needs to be fun to use, so we focus on the quality of the product a lot. You cannot have a buggy app and expect that customers are going to stick with it just because you claim you are sustainable. So a great UX and sustainability are what „throwing a better party“ means for us.
Do you plan to become a worldwide bank? And are challenger banks going to eventually become the banks where people have their primary accounts?
Yes, we plan to go worldwide. But so far there are some regulatory issues so we have 5 countries that are on the top of our list France, Austria, Spain, and Italy (with Germany being the home country of Tomorrow).
And for us, it is easier to become a primary account as people really want to put their money to work for something useful. We are seeing our primary accounts skyrocketing. So we already have about 30% of our customers who used Tomorrow as their primary account. We have about 2000€/customer on average on every single account, so this is also a signal that our customers are willing to use us as their primary bank.
Could you also tell us about some failures that you experienced during your business career with Tomorrow or even before?
I would say that we are not the fastest moving company as a consequence of our model, that is what I would mention. And before Tomorrow I tried to set up a company which produced ice cream with nitrogen. But it failed even before it began because we made every mistake a beginner entrepreneur is capable of.
Do you plan to get your own banking license?
I believe banking as a service (BaaS) providers like Solaris has evolved in the last three years. So we are considering it but it is also possible that we are just going to continue to use the service of Solaris or another BaaS company.