New Banks Target Underserved Communities
Over 1.7 billion adults worldwide remain unbanked – but identifying and providing for these consumers has the potential to add up to $250bn to global GDP. Financial brands have the opportunity to reach underserved consumers by removing barriers of access and tailoring services to their unique needs.
- Recirculating Wealth: In October, American rapper Michael Render, aka Killer Mike, announced a new neobank for Black and Latinx consumers, Greenwood. The bank’s name refers to Tulsa’s early-1900s neighbourhood known as Black Wall Street; it aims to provide equitable banking services for the Black and Latinx communities.
- Non-white people often face barriers to growing and retaining wealth owing to bias in the banking industry; a New America report found that banking charges for Black and Latinx consumers far surpass that of their white counterparts.
- Greenwood offers debit, spending and saving accounts, in-app money transfer, free ATM withdrawals and plans to add loans in the future. The bank’s pay-it-forward initiative builds altruism into its service; creating an account helps to feed a family, while spare change round-ups can be donated to UNCF and NAACP in-app. The bank leads by example, donating $10,000 every month to Black or Latinx businesses.
- Banking on Inclusivity: Announced in November, US-based Daylight is the first disruptor bank which caters specifically to LGBTQ+ consumers. Many traditional banks allow chosen names on bank cards to accommodate transitioning consumers, but the process can be taxing. Typical AI banking algorithms can also flag multiple names or genders in one profile as fraud. Daylight’s app algorithm is flexible, allowing users to adjust details with no ramifications.
- While offering typical features such as in-app spending limits and savings options, Daylight also hosts financial advisers in-app. These qualified professionals focus on LGBTQ+-specific money concerns such as planning for a family via IVF and surrogacy or applying for a mortgage in a same-sex couple (as they’re more likely to be denied or face higher interest).
- The start-up is part of Visa’s Fintech Fast Track programme – demonstrating how exiting financial brands can show solidarity through sponsorship and collaboration.
Check out our Financial Services topic for the latest banking initiatives.