Coming Soon : How the First Artist Bank Is Catering to Creatives
“Most artists can concentrate for about three minutes in a business meeting before they’re doodling or writing song lyrics in the corner of the paper,” says Dave Stewart. Best known as one-half of ’80s pop duo Eurythmics (with singer Annie Lennox), Stewart, now an entrepreneur and acclaimed music producer, has spent more than his fair share of time discussing business when he’d rather be creating.
With the formation of First Artist Bank (FAB), Stewart and his partners aim to provide artists from all disciplines with a one-stop shop for money management, as well as aid in monetization and product marketing. “This is like a money manager in your pocket,” Stewart says of the free FAB Money iOS app, introduced in March at South by Southwest. (An Android app will go live later this year.) It’s the culmination of a 15-year dream for the musician, who was waiting for technology to catch up to his vision.
“I thought, How about if there was a bank that catered to creatives, and there was a way in which they could see in real time what’s going out and what’s coming in?” he explains.
While Stewart focuses on the customer interface, his partner and co-chairman, Michael Philipp, the former CEO of Credit Suisse Europe, Middle East and Africa, lends his expertise on the banking side. The app allows users to sync their banking, investment and credit card accounts, royalty statements and more to give a snapshot of their full financial picture, even down to suggesting a realistic per diem when they’re traveling.
Right now, users can transfer money between accounts and make payments. By September, FAB will start to act like a traditional bank, allowing customers to make deposits and payments directly from their accounts. Brick-and-mortar branches will be set up in London’s The Hospital social club, which Stewart co-founded; in a future Hospital location in Los Angeles; and in other clubs in New York and Nashville, Tenn. The app will also enable users to build websites through which they can provide updates on their activities, fundraise and sell merchandise or services.
“Our ideal client is an emerging artist who is out on his own, trying to figure out what’s next,” says FAB CEO Kyle Philipp (Michael’s son), who brings his background in investment banking to the team. “We boil it down to a very simple path for them to follow.”
FAB’s business model doesn’t follow that of a traditional bank, though, as it takes a small percentage of each micro-transaction its clients make. For example, if an artist sells music or sets up a crowdfunding initiative through the FAB app, the company will take a portion of the money generated.
“The basic revenue will come from these transactions,” says Kyle Philipp, who predicts the bank could have up to 5 million customers in five years. “It’s a volume game.” He notes that FAB will look to provide wealth management services as its clients achieve their goals: “We want to be with them through their whole journey.”
Stewart initially invested $1 million in FAB, as did the Philipps through their company, Ambata Capital. This past spring FAB set out to raise another $3 million through Crowdfunder.
Developing artist Marty Longstaff, aka the Lake Poets, says FAB’s Money app allows him to focus more on his music. “Everything is so disparate. I have various websites, different revenue streams from iTunes and live shows, and it’s quite hard to keep on top of it. This app puts it all in one easily managed place.”
However, there is one thing FAB can’t do, Stewart says. “It won’t help you write songs.”