SoFi (NASDAQ:SOFI) received regulators’ approval to become a bank holding company — sending its stock up 14%.

What’s the big deal? Financial super app, SoFi, has been chasing a bank charter for over three years — in order to reduce costs and improve its product offering in investing, banking products and loans .

As a bank, SoFi will be “subject to comprehensive supervision and the full panoply of bank regulations” — meaning it can’t touch any crypto asset activities or services.

Sounds terrifying. So why would anyone want to own a bank charter?

Here’s why: Before, SoFi acted as the bridge between customers and banks — relying on its partners to hold deposits and issue loans.

• Now, SoFi can lend out its members’ deposits as loans — as a bank (via The Operator).
• As per Mizuho analysts, this means an extra $200-300M in savings from lower funding costs (via Barrons).

SoFi could direct these savings back into growth, or offer its members higher savings rates — thereby incentivizing growth.

Varo, a competitor to SoFi, doubled customers and tripled revenue in the 13 months after getting its charter — its CEO having seen the benefits of saved costs.

Fintech bear market: The Global X FinTech ETF (NASDAQ:FINX) — is down 33% since November — underperforming the broader tech market (NASDAQ), which is down 10% in comparison.

• After the news, several research firms raised SoFi’s price targets — with Rosenblatt increasing its price target to $30 (117% upside).

With interest rate increases around the corner, the current market favors value stocks — but that doesn’t mean bargains can’t be found in bear markets.