To say that there's a lot to like about SoFi (SOFI 2.46%) would be a massive understatement. Just to name a few things, member growth is accelerating and the addition of 800,000 new members to the ecosystem in the first quarter is a single-quarter record for SoFi.
In addition, SoFi reported its first full profitable year in 2024, and earnings are expected to grow rapidly. SoFi also has massive potential in areas such as home loans and third-party loan origination, both of which are gaining serious traction.
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However, as a SoFi stock investor myself, I think there's one area that holds tremendous room for improvement, and if the bank gets it right, it could be a major tailwind for the stock.
SoFi's cross-selling potential
One area in which SoFi could improve is cross-selling products to its large membership base. At the end of the first quarter, SoFi had a total of 10.92 million members with a total of 15.92 million products, or 1.46 per customer. A "product" refers to one bank account, brokerage account, loan account, and so on.
Mathematically, that means the most common number of banking products a SoFi customer has with the bank is one.
Part of the explanation here is that SoFi is still building out its ecosystem. SoFi continues to add products, and there are some relatively standard banking products, such as CDs and auto loans, that SoFi doesn't offer -- at least not yet.
However, the point is that it's important to focus not just on member growth. The key factor will be to encourage more members to make SoFi their primary bank. According to a study from Accenture, the average consumer has more than three financial products with his or her primary bank, and if SoFi could get to this level, it would be a big win for investors.
