Upgrade launched its first mobile banking platform recently according to a report on Banking Dive. The fee-free checking account comes with a debit card that allows customers to earn 2% cash back on common expenses such as gas, groceries and recurring payments, and 1% cash back on all other debit charges.

Qualifying customers that open bank accounts with Upgrade can also get up to 20% lower rates on the company's loans. Cross River Bank is providing the banking services for Upgrade's digital checking account.

CEO Renaud Laplanche launched Upgrade in 2017, stating he knew the digital banking platform wouldn't be a revenue driver, but rather an offering that will bring new customers to Upgrade's personal loan and credit products.

Through direct deposit, Upgrade has better visibility into a customer's expense patterns, which translates into lower rates on personal loans and credit cards for mobile banking customers.

"We can more easily calculate free cash flow and their ability to repay the loan," Laplanche said. "Mobile banking for us is both a way to deliver more value to existing customers, and also to acquire new customers."

One million customers apply for Upgrade loans each month Laplanche said, and customers that don't qualify will now be encouraged to open accounts.

"Those who we decline, we tell them, 'Maybe we can't give you a loan or credit card right now, but you should open an account with us for direct deposit so we can get to know you better,'" he said.