Colin Walsh, who founded neobank Varo Money in 2015,
Prior to his stint at Bakkt, Michael was head of technology for the global consumer bank at Citi and head of digital for JPMorgan Chase, chief innovation officer at Accenture, chief information officer at Lloyd’s Banking Group and general manager at National Australia Bank.
The two executives’ paths crossed when they both worked at Lloyd’s. (Walsh also worked at Wells Fargo, American Express and Visa.) They stayed in touch and remained friends.
“He was the perfect person to take this forward with his deep technology background, but also banking background and ability to take technology and turn it into commercial results,” Walsh told American Banker. Michael took an operating role at San Francisco-based Varo about five months ago and helped create its roadmap for 2025.
Walsh will stay on Varo’s board. “Gavin can expect my credible challenge as a board member and as one of the top shareholders in the company, and I’ll still be very active in terms of being a spokesperson for the company,” Walsh said. “But I’m also kind of excited to do some of my other board and advisory work.”
Varo maintains it had a good 2024, based on statistics provided by the company: it had a 38% improvement in net income, a 22% increase in revenue and a 31% reduction in customer acquisition costs. The company did not share the underlying numbers. Customer acquisition costs were cut by efforts on the part of Hussein Kalaoui, who joined as chief marketing officer in the second quarter, to stop using inefficient marketing channels, Michael said.
The company’s focus now is on growing. “Gavin, with his expertise, will be able to continue to drive tech transformation, continue to round out the product set and really focus on execution, and I’m excited to be able to support him in that,” Walsh said.
Michael said he was drawn to the opportunity to work with Walsh and to pursue Varo’s mission, which he describes as “helping people have been overlooked by traditional banks, and building stronger financial futures with them,” he said. “Digital banking is in my blood, so I couldn’t be more excited to be part of it again.”
Varo aims to serve consumers living paycheck to paycheck, “which, very sadly, there are more of now than ever before,” said Walsh, who has long been a critic of traditional banks.
In December, Varo announced a relationship with CVS and Green Dot through which bank customers can deposit cash for free at more than 7,500 participating CVS drugstores. Varo recently launched a line of credit and expanded its cash-back offerings. Michael said the company plans to expand its lending capabilities.
“Everything we do ties back to that mission of helping customers find that financial resilience,” Michael said.
Huspeth Savings Bank released a study this week that found that 60% of millennials and Gen Z have less than $5,000 worth of savings.
Varo’s cash advance product “is a critical lifeline for many consumers just getting to the next paycheck,” Walsh said. The line of credit helps people cover unexpected emergency expenses such as medical bills or car repair. Varo’s automated savings help people put money aside.
“All of these things, while they may seem small in isolation, together, they really are giving customers a greater sense of control in their lives,” Walsh said.