Just Economy Conference – May 13, 2021
Technology continues to transform our financial lives, at times perpetuating and deepening systemic inequities; at others, democratizing financial security in new and exciting ways. Change Machine continues to grapple with the opportunities and challenges that fintech holds for us as an organization and for the people we serve. As a result, we have learned many lessons and uncovered areas of further exploration.
One area of exploration is fintech accountability. As practitioners, how can we hold fintech accountable to not only protect, but promote the financial security of those who have been historically pushed to the margins of economic systems? Simultaneously, what assets do nonprofits bring to the table and what resources do we need in order to remove barriers to financial security, and shrink the gender and racial wealth gap?
In this session, we’ll apply a strong equity lens to the growing role of fintech in anti-poverty work. We will present Change Machine’s Data Equity Principles, covering themes of virtual service delivery, data ownership, advancing racial and gender equity in fintech and narrative change. Together, we’ll plot a future in which nonprofits play a leading role in tying the success of fintech to the success of the communities that we serve.
Speakers:
- Kate Reeves, Change Machine
- Jordan Sanchez, Senior Partnership Leader, IDEO.org
- Josh Sledge, Senior Director of Incubation, Filene Research Institute
- Briane Cornish, President, finEQUITY
- Megan Bolado, Senior Director of Fintech Partnerships, Change Machine
Transcript
NCRC video transcripts are produced by a third-party transcription service and may contain errors. They are lightly edited for style and clarity.
Reeves, 00:03
Well welcome, everyone. Thank you for joining us. My name is Kate Reeves and I’m with a nonprofit called Change Machine that builds financial security for low-income communities through tech and forms solutions. I’ll be moderating this panel on the future of financial security as it relates to technology equity and the role of mission-driven organizations. We want to send a big thank you to NCRC for hosting this amazing conference and for the opportunity to present on this really important topic. I’m honored to introduce some of my amazing colleagues on this panel, who are going to shed some light on some of the current issues and challenges faced facing mission-driven tech organizations. And specifically looking at the financial technology or the FinTech fields. So before we jump into what I’m hoping is a really robust discussion, I wanted to give my colleagues a chance to introduce themselves and describe some of the work that they’re doing. So first, I’m really excited to introduce Jordan Sanchez, who’s the senior partnership lead at ideo.org. So Jordan, I’ll hand it to you.
Sanchez, 01:12
Thanks, Kate. Everyone, as Kate mentioned, I’m Jordan Sanchez, senior partnerships leader @ideo.org. I look after our partnerships and projects focused on economic justice, and whole family approaches and Health and Human Services here in the States. And so in my role, I work with philanthropy, nonprofit partners, communities in the ground, and government agencies to build better products, services and programs through human-centered design. So I’ll talk a little bit about what I do.org is, who we are and what we do. So we’re a social impact Human-Centered Design Studio and organization. As such, we focus on building products, services and programs and services, social equity. So that’s the work that we do, we’ve been around for around 10 years now. So we’re not that new, but excited to be a part of this work. And I’ll give a little background on what human-centered design is. So, again, we so Human-Centered Design, is an approach to product and services and program design that focuses on desirability, or the preferences of the users first. So this sounds like it’s, um, people probably familiar with this, because it’s actually quite new, especially social impact space. And so we’re excited to be a part of this work. An important part for us is that we believe that no product, no service, no program, no system that can be designed without the input, and focus on the preferences of the people that will be using the services in the first place. So that’s our approach to our work. So as I mentioned, there, kind of three parts to product service and program design. Its first understanding desirability, what people want and the services that they interact with, what technology what things and infrastructure make it work, and what are the systems behind the those things better design. So the viability element, the values and the resources and the business elements of making those things work, we always start with the desirability what people want, before we move forward to any other parts of the product design process. At the heart of our work is community co-design and co-creation. So we believe that we can’t get to any meaningful solution without working with the people that are supposed to be using the service or the product in the first place. And that’s how we start every project, every program. Anytime that we build a partnership has to be centered on the desires, the preferences, the hopes and dreams of the people that we’re working with. So it’s a critical part for us. And it’s a really important thing for us because it allows us to interrogate some of the parts behind the design. So lets us interrogate the real preferences, the value systems, the things that are really driving the way people might use the services, the way that the systems that have to build these structures have to design. And so when we start with CO creation and co-design, we know that we can get to a meaningful solution, figure that way. And so this is just further saying, We started off thinking about desirability, feasibility and viability. But we know that in service of social equity, we can think about equity, justice, systemic change, dismantling systems of oppression through this work, if we always start with community co-creation and co-design. So that’s our work.
Reeves, 04:33
Awesome, thank you so much, Jordan, I’m really excited to jump further into it. Um, so Next, I want to introduce Josh Sledge, who’s the Senior Director of incubation at Filene Research Institute. So Josh, I will hand it to you.
Sledge, 04:49
Yeah, thanks, Kate, really appreciate the opportunity to be joining you today as well as to be a part of the the NCRC conference. As you mentioned, I’m the Senior Director of incubation at the filing Research Institute. For those who aren’t familiar with us, we are a 30-year-old plus thinking do tank we call ourselves with the mission of strengthening credit unions and their communities. So we have a membership of over 600 credit unions that we work with, and try to provide them with the support and resources they need to think forward and change lives. So this includes connecting them with events and communities to share what they’re learning what their key challenges are. We really our bread and butter has been our research function where we have six centers of excellence, we partner with academic fellows to dig deep into some of those challenges in the areas of interest for credit unions in their communities, things like looking into emerging technology, understanding community social impact, promoting Dei, within the credit union industry, things like that, we have our advisory services function where we get to roll up our sleeves and really do some custom research with our partners as well as do some capacity building around their innovation and ability to build new solutions. And last, but certainly not least, are incubators where we are able to test new solutions to some of these challenges we’re talking about and share those with the field. If you go to the next slide, I can share a little bit more about that piece of the puzzle. It’s where I’m really focused. The incubator is where phi lean is able to again, seek go through this process of seeking testing and scaling, we talk to our members try to understand what their challenges are what is really addressing their communities in terms of the way that they are working and living in what’s impacted their overall financial well being. Look for some solutions that might be ways to address that. And then we’re able to run live tests with our credit union members and bring them in and put some of these solutions into the real world and get some feedback around what’s working what’s not, and then look to scale those solutions that are really showing promise. And so previously, we’ve done this, in a couple of examples. One was reaching minority households incubator, which we did in partnership with visa, or we worked with credit unions who were developing strategies to try to reach black and brown communities develop new products that were really meeting some of their needs, such as a lending product that was based on an item for new immigrants as opposed to social security numbers. And we were able to again, test those out and see what worked, what didn’t that item lending product in particular had some real traction. And we’ve been working since with a few partners to try to help scale that we also had a prop incubator around FinTech and really looking at which of the new FinTech products and solutions could be a good fit for credit union members and really support a holistic set of products and solutions that were that a credit union could offer. And so you know, Filene has really been looking at that intersection between how we serve communities and at the same time use that as the basis of strategies for credit unions really putting financial health of communities and members at the core of what they do. before my time at filing was at the financial health network where I did a lot of similar work looking at potential partnerships between nonprofits and fintechs. Seeing where they were opportunities, challenges, barriers to working together. And in that vein, got a chance to work with change machine and a few of the other real standouts when it comes to intersections. Writing at the intersection of tech and equity, and I’m just really excited to be here and a part of the conversation today.
Reeves, 08:14
Awesome, Josh, thanks. We’re excited to have you on the panel. Cool. Um, so the next panelist is Briane Cornish, who’s the president of finEQUITY. So I’ll turn it over to you and let me get your slides here.
Cornish, 08:30
Great. Yes, I’m here from finEQUITY. We actually launched in early 2020, with a focus on building financial power by building bridges to financial power. And we do that specifically for community members who have been impacted by mass incarceration or directly experienced incarceration. And what that looks like tends to focus on this idea of, we want to create products that propel people along this pathway that they’re already taking, which is the prisoner prosperity journey. And in more detail that can look like things such as removing barriers to services that should or are harder to navigate, especially given if they’ve come home recently, and what that looks like, by giving access to capital when doors are closed. Specifically, again, because this person has been gone from the community for a really long time, and making processes that are arduous, more simple and easy to deal with. And so by, by the way, we do that as to make sure that at the end of the day, we want to remix and restructure traditional financial services because we don’t think it adequately meets their needs. And the ways we know that are because we really centered lived experience and this idea of understanding what are the barriers people are experiencing? Even though the launch in 2020, most of our first year was kind of community research, we started off with conversations about what are people actually experiencing, and what every time we solution eyes, it’s focused, again, by one of the expertise that we heavily lean on is this idea of lived experience. That’s the central expertise. And we then combine that with the financial expertise, we have access to the software development expertise we have access to, to then launch products. So I’ll give an example of the product that we were able, well, I’ll start with this, which is this idea of thinking, which is this idea of we were really committed to one using the code kind of design sessions that we had to think about what product do we want to launch first. And our conversations early in 2020 had been with people who were stuck in the in housing and security. So either they are in a shelter, or they were living with family members. And the question was, well, what was the barrier for them from getting to their next level where they wanted to be, and of course access to capital came up, but credit came up as a barrier to that extended their stay in an unstable housing situation. And so we created a product specifically to say this is this is a tool that one united caught in a catch 22 where people tell you that they won’t lend to you because you’ve never been lent to, or you haven’t recently been lent to. And so our product kind of makes sure that that credit is available. So anyone who wants to establish credit or build credit can build credit through us at no cost. And at no interest, again, to meet this specific need of we don’t want people staying in a shelter longer than the two if the barriers credit our capital. And we hope to continue this work to kind of build tools that address specific needs that are surfaced through these community conversations. And I’m excited to kind of participate in this conversation. So thank you.
Reeves, 11:32
Thanks, we’re excited to have you and to talk more about fund equity and the work you’re doing. So last but not least, is my colleague, Megan Bolado, who’s the assistant director of FinTech partnerships at Change Machine. So thanks, Megan, I’ll turn to you.
Bolado, 11:48
Thank you. Hello. as Kate said, my name is Megan Bolado. I’m the assistant director of FinTech partnerships here at Change Machine. I have been with Change Machine since December of 2019, which feels like 100 years ago. So but I’m really excited to be a part of this panel of fantastic colleagues and experts. as Kate alluded to earlier, our mission here at change machine. We build financial security for low-income communities through people, people-powered technology. Our products and partnerships amplify the impact of social service organizations and public agencies and generate insights to help shape lasting change. And so our ultimate vision is to build an equitable economy in which we all thrive. So we can go to the next slide. Yeah, there we go. So recently, as part of my work when I came on board to the team is to really center on FinTech inclusive FinTech safe a FinTech to be able to connect practitioners, nonprofits, community-based organizations with FinTech products and services that really help folks to achieve their financial goals and to build financial security over time. We call this the recommendation engine. We’ve built it into our existing tech platform and it really is a tool to empower nonprofit practitioners directly to connect to their car. customers with these tools and services that might, you know, help them to achieve goals to build their financial security, be that credit via saving for school, be it, you know, trying to budget monthly for groceries. So it’s been really exciting, we’ve been partnering with mission-driven and like-minded fintechs around the country pretty aggressively including a brand within equity, we’re really excited to have them come on board as a partner, and continue to build this and learn about what types of products and services are going to be most useful for folks and where the gaps are, so that we can start to build more of a movement to, to, to support fintechs, creating and designing products that really meet the needs of low income, and especially black and brown individuals around the country. So the way that we evaluate our fintechs that we partner with, is through what we’re calling our seal of inclusivity. And so there’s four major pillars that we’re looking for when we look for a partner in a FinTech. The first is that it has that product, custom build financial security, and it has to be able to prove that somehow, and it also has to be fairly priced. So we’ve very much firmly believe that because the customer is at the center, and that that that desire, that person is the person who makes the choice. There’s no real sort of threshold of what is too expensive or not, or to free. It’s really about the value that the customer receives from engaging with a particular FinTech products that we’re calling it fairly priced, inclusive and accessible, we’re really looking for fintechs, that, again, are designed with the needs of the communities that you’re trying to serve. So that differences and, you know, apps or products that are in different languages, or that allow for it. And so we’re looking for all of those types of features. And then finally safe and transparent and want to make sure all of these FinTech products and services are really clear about their about their goals, and that they’re able to safely protect the goals and integrity and data and financial security of their customers. Finally, after we have one more back, I’m just going to talk real quick about the sale of equity things. So once a product is in the platform, based on all of the research that we’ve done on our side, then we have a second piece, which is the sale of equity. So we really again, want to make sure that the products that we have that we’re sharing, meet the needs of the folks that we’re trying to get them into the hands of and so we have opportunities for practitioners and customers alike, to, to share back what they think about products, this might be a great product, but I wish it was in Spanish or this is a great product, but you’re not available in Florida. And I really want you to come here. So these types of things really helped to build our knowledge and the knowledge of Intex about what is going to be most useful for for folks around the country. And so part of our work is that we want to make sure that we are highlighting FinTech founders that are black and brown, or women as well. And so we’re committed to at least 40%. Right now, we’re actually around 60%. But at least 40% of the products featured in the recommendation engine are founded by bipac. Leaders or women and sometimes both. So we all know that the fintechs that are developed by these folks by Black and Brown, individuals and women are going to be more effective in design and reach and building the financial security of communities of color and women and marginalized folks. So that is absolutely one of the more exciting features of the recommendation engine work.
Reeves, 16:52
Awesome, great. I’m super grateful to all the panelists again, and excited to kind of like jump into the conversation. So I’m actually going to stop sharing my screen so that I can see everybody in a bigger, bigger fashion. So, um, and really just like jump right into the discussion. And then maybe the last, like, sort of 20 minutes of this really talking about all the ways in which What does this future look like with FinTech? So, I want to kind of start the discussion with all of you by kind of talking about where we’re at in the FinTech industry, so So last year, and, and in 2019. Also, it was there was a huge amount of money that went into the FinTech industry, an unprecedented amount of money. And the industry still is struggling to meet some of the needs of you know, about a third of Americans low-income individuals who are really struggling to get access to financial services, and that low-income people adopt FinTech at a much lower rate than their wealthier counterparts. And so my first question really, for the panelists, panelists, and this is really for all of you are, what are some of the factors that you see in your work that really create barriers for FinTech adoption, specifically as it relates to low-income communities? And what are some, what are some of the impacts of that? That lack of adoption? Who wants to jump in first?
Cornish, 18:27
I’ll jump in.
Reeves, 18:29
Okay, awesome. Thanks, Briane.
Cornish, 18:31
Um, so one, one barrier, I think we’re starting to see a lot of movement on this, especially because of COVID. But I think for FinTech organizations, if they’re connected to traditional banking systems, then it’s contingent on the user also, usually mostly also having to have some traditional banking system. And I think, I hope we’re seeing this with the FinTech. But I hope it attaches to the entire financial industry, that we start to see people designing systems that incorporate people who are not using traditional banking systems, I would say this significant number of clients that we have that use chime is is is high, especially, it probably increased significantly, but it’s very high. And so if we have FinTech providers, or partners who cannot operate with a chime bank account, it does decrease what other financial services that they’d be willing to adopt, given that they’re trusting us to say, hey, this might be a good partner, so they’re open to it. But if it can’t work with their system, and how they come to this space, then it’s not going to go anywhere further. So that’s one of the kinds of biggest factors that I can see is that we need to really start to think more about the breadth of banking, and even start to get more aggressive as we start to think about what unbanked means. And I’ll just make one last point on this, which is that sometimes people I don’t even think that unbanked exist, I think that people who are on the bank, from our experience have been people who bank through their family members, right. So they don’t have access to traditional systems, but they pay bills, they do things, they figure it out using different payment systems. And so this idea, this kind of thinking through that as well, we’re, we have to kind of understand that people are on a spectrum, and how do we create for that entire spectrum?
Sanchez, 20:23
I’ll jump in with just the bill there beyond I think, yeah, in our work, I think we’re encountering similar kind of ideas that as people engage with some of these products, there isn’t a full end to end flow, it doesn’t connect to the way that they enter in using the service. And so oftentimes, it becomes a challenge to even complete simple tasks. And I think to your point, it’s because of the basis that it might be connected to. And so that’s the first thing we’ve learned that on a few a few of our projects, and the work that we do, I think on the piece around adoption or just usage, specificity, specificity of context isn’t taken into account, oftentimes with the design of product. So if it doesn’t align with kind of the process or the value systems with the individual user, it just won’t be something that’s attractive to us. So I think beyond your, your, your design choices around working with justice involved people and the process and the timeframe that they have needs a very specific nuance in the way that the product and the service is a design doesn’t come across often in the field. I think that’s one thing that we’re encountering quite a bit. And then behind it for us, we found that oftentimes, financial services are very individually focused. And what we’re coming to find is that oftentimes, people are looking for products that our whole family intergenerational focus, how does this get from one step to another? And oftentimes, products aren’t designed that way? So from an adoption perspective, designing for those things would be really important.
Sledge, 21:56
Yeah, well, I mean, I think, you know, Briane and Jordan hit on some really key points, you know, in previous initiatives, or pilots and things around just basic ID requirements that, you know, sometimes can be a hiccup as well, as I think Megan mentioned, language oftentimes can be a huge one, just, you know, even Spanish, there’s a huge percentage of FinTech products just aren’t translated are really designed to operate in Spanish. And so, you know, kind of represents some of those barriers. And I think there’s just something around basic marketing, right, who are the products being developed and designed for to Jordan’s point, I mean, I think in some ways, it echoes what you see in the broader financial services industry, you know, a lot of the development is in places around lending, or it’s in investment management or wealth management, and those products are going to be built for and more accessible to people who have more money, or have a more established credit score. And unfortunately, we know that, you know, when you were looking at lmia, and communities of colors, or communities of color, that’s where you are going to see folks, you know, don’t have those assets or lack the access to capital and credit in those more traditional forms. So I think part of it is just you know, is there the focus on really designing for those specific needs, and really creating products that speak to them specifically, in some instances, yes. But when you look at the full scope of the FinTech landscape, it’s still a relatively small part of the puzzle.
Bolado, 23:20
One quick point, Kate. Yeah, I absolutely agree with what you’re saying, Josh, I think that’s and everybody, I agree with everyone, as everyone said. But to build on that a little bit, I think that what we’re seeing as in the research that we’re doing is that there’s a lack of sort of onboarding type products and a lack of products that sort of meet somebody where they are in a specific place for a specific need, but then help them to transition to the next stage and the next step. And what that might look like. A lot of the fintechs that we come across are sort of like my colleagues like to call it like the Cadillacs of fintechs, where there’s all of these different like features, and they’re so cool. But maybe that person really just in that moment, needs a very specific thing. And all of these extra features, while they’re nice, can be really overwhelming. And also to your point about the language piece, which we’re running into a lot, and I’ve been doing some research on this, because there’s a lot of concern out there, that part of the lack of adoption is coming from mistrust. And there certainly is a whole elements of that, that goes long back into, like structural racism, and you know, everybody’s feelings about formal financial institutions, which is absolutely valid. But on another point of it, a lot of the even if FinTech is translated into a different language, a lot of times the actual sort of legal terms and conditions data privacy stuff is not translated. And so if you’re, if you have any questions or concerns about that, that’s immediately going to kind of bring about like, you know, like, I don’t know if I can trust them or not. So, yeah, there’s a lot in the design that in the marketing that I think could really lead to some good changes.
Reeves, 25:04
So yeah, I think they’re all great points. And, you know, have I have like maybe like a kind of a two-part question, like, what does this group sort of think the impacts are of some of those design challenges? Like what are sort of the ways in which that’s, you know, these sort of products that are not designed for low-income communities is really manifesting itself in, you know, real, real impact in low-income communities?
Cornish, 25:36
So, no, go ahead, Josh.
Sledge, 25:38
Sure, yeah. That’s because I, you know, whenever I think about that question around impact, I think about kind of the range of FinTech quality, right? There are good products that are really helping people to save money to build their credit to, you know, access new income opportunities. And, you know, I saw just on the list of companies on the change machine platform, you know, folks like fresh EBT and saverlife are designing specifically for lmia households, and are able to show that they’re making a meaningful improvement in their financial health. So I think in some ways, you know, it’s similar products aren’t being designed so people can access them, right, then there’s a problem because people aren’t getting the upside of FinTech. And on the other side of the spectrum, when you look at some of the products that may be harmful, too often, they’re either being targeted towards communities of color, and lmia populations or impacting them in a disparate fashion. So know, for instance, we’ve seen reports and analysis showing that some of the alternative underwriting and AI platforms tools that are used to underwrite loans, they’re exciting about credit access, but we’ve seen that some of them may be charging people of color higher interest rates than others or giving adverse lending decisions in ways that weren’t intended. But as the algorithm started to run, they kind of come, you know, you hear this term virtual redlining and kind of put together these systems of biases. So in those instances, you’ll be having access to those types of products or going to them can be actually harmful. So I think this is really where the challenge is, particularly for a lot of folks who are working to support communities is how do you parse it out, right, so that you’re, you’re able to get the benefits and direct people towards that and get the positive impact. But but really be able to influence the industry in a way that and protect consumers in ways that, you know, kind of keep them away from the bad. Briane, did you want to add?
Cornish, 27:25
I just want to jump in really quick about a marketing point. I think it’s kind of related to Josh’s point, but this idea of, we don’t have a really good vehicle for marketing. And I think that what happens is that the what most well-resourced organizations, let’s say the venture-backed organizations that might be FinTech are able to then get on TV. And that will be the choice that people will see sometimes that’s what I that’s what I hear. And that impacts in a negative way, because then that’s not a lot of options, right? It’s just the one that was able to get on TV. So I’ll say I’ll go with that one. Not necessarily because it offers the best benefit to me, or is even the cheapest, there’s actually maybe a free resource that I didn’t even know about, but this one is the one that I saw on TV. I think that that that’s the way can impact people by giving them less options and not the full spectrum of things that they can decide from and kind of pick the one that’s actually better for them.
Sanchez, 28:19
Yeah, I’ll build on that. I think it’s the impact is that lack of choice often and to Megan, to your point about being able to make decisions around what, what products are equitable, which one speak to my values, which, which ones will help me reach the outcome that I expect to reach often aren’t provided for the same roof or the same structural reasons not having visibility and not being marketed around. And then just to your point about that spectrum, people are always having to stay in that space, but then choosing extractive products instead of ones that would be perpetuating kind of the compound interest, if you will, making the right interest and making the choices that are specific to their, to their, to their context. So that’s we’re seeing the same thing.
Reeves, 29:04
I feel like it’s a really good lead into sort of like what the future could look like, like what is our what is the role of a practitioner? What are the role of fintechs in the future? I mean, Josh had started talking about this, but there are so many upsides to FinTech, especially for low-income communities, it provides an opportunity for cheaper prices, more options, especially in the context of COVID-19. And the pandemic, it’s becoming more accessible and more important to have sort of these virtual, like virtual services, online services. And so I think because we are at a conference about an inclusive economy, I am really curious. And maybe this is really a sort of a question for Megan and Jordan around what the role, what role can nonprofit practitioners play and holding FinTech accountable to promote the financial security of low-income Americans and those who’ve been historically pushed to the margins of our economic system.
Sanchez, 30:10
I can jump in, I think, again, just leaning more kind of into the value discussion, we talked about this a lot. And back to the issue of choices, is that oftentimes a financial services is either or choice, there’s this, you can do this or you can’t, or you can reach your goal you won’t, in the constraints of the system that we have now. And I think the role that nonprofits can play is bringing, like, what if what is that third option is that new way of interacting with the systems to help us reach our goals, the way that we expect for ourselves and for our community and for our next generation? And I think, interestingly, but we get to be imaginative in this space, to think about what is the new version of the thing that we hope to exist in the future, that oftentimes the kind of the formal system or the private sector system might be, are constrained by policy regulation and some of the forces around marketing and accessibility. And so I think we actually have a really interesting place to play and just like, what could a new thing look like, that doesn’t exist before as a as a field. And so bringing that kind of thought to, to this work is a mandate that we, you know, we hold and we carry? So that’s more value. Not very specific, but I think we have that option, that option.
Bolado, 31:21
No, I like it. I that was inspiring. Thank you. I feel I feel like mandated and inspired. And I also think that that nonprofits and and the practitioners that make them up, sort of, I mean, we’re all in a place where, like the cats out of the bag, like it’s happening, FinTech is happening. And it’s going very fast. And what we do know, particularly for communities that have been historically pushed to the margins, treated poorly by all of the institutions in this country, is that for them, a trusted resources, a really important thing. And so nonprofits, and many and community-based organizations, in many ways are kind of that trusted resource, that place where a person can go, and really feel confident that the person that they’re asking advice from or, you know, learning from is giving them, you know, appropriate information, safe information. And so practice, nonprofits and practitioners and nonprofits actually have a really unique space to sort of support the communities in which they work by saying, Okay, this is happening, here’s some tools that you can use to identify whether a product is going to be the right fit for you Here is a list of products that we’ve already researched, that we think are going to be great that we’ve partnered with, we’ve talked to them, we know that we know other people who have used them who have had positive financial security outcomes or have reached whatever their goals might be. And kind of like it’s so there’s a little bit going back to the mandate thing, a little bit of a mandate for nonprofits to sort of like take a deep breath and recognize that it’s always going to be a lot of work. But as much as our the communities that we serve, have to build their capacity to sort of like think about FinTech differently and think about what the opportunities, as well as the risks are the nonprofit’s also have that mandate to sort of sit with themselves and say, Okay, what are some of the learnings that we can do and what are the ways that we can And support delivery of some of these fantastic fintechs that do exist that are out there that can actually really help.
Reeves, 33:17
Yeah, I think that’s that that’s great. I mean, I think there’s also just a role of, you know, nonprofits and the customers that they’re working with are they have a huge voice in this, that’s a huge sort of, like, for lack of a better word voting bloc within the FinTech industry, and using an amplifying those, those voices, I think, is really important in the context of that. So definitely, definitely important. And there’s a role for nonprofits to play in this. Um, maybe kind of looking at the other side for Josh Umbreon. What, how can financial institutions and fintechs also play a role in holding the new FinTech industry sort of accountable for, for making sure that we have safe and inclusive products?
Sledge, 34:11
Briane, you go first.
Cornish, 34:13
Okay. Thank you. Okay, so I think it’s related to kind of one thing I’ll say about, you know, what, what I really like about change machine is this idea of being very clear about what products can add value to, you know, what are the restraints, because I think every product does have constraints. And I like to, I thought, I would say, was transparency, but it’s way more than transparency, because transparency is this idea of telling people what the APR rate is. That’s not like, it’s a level of transparency. But it’s not deep enough, it’s not engaging, it kind of ends the conversation that doesn’t invite and say, well, let’s actually get to know what this means for you on an individual basis based on what you know, what you’re planning to do. And just like the idea of language being very transparent, so I think the role of fintechs fintechs, and financial institutions can plays, one living those values, which is going way past transparency, what does that mean about your own services about the restraints that you do have not withholding that information, being very transparent about that information. And this idea of letting people know that there are up options. So this idea of just putting down on the table as well, which is, you know, we may charge this other people may charge this, it’s not to say that this is the only place you can get this resource, because I think that does create this negative environment where people feel like, Okay, I gotta go for this, because this is the only option on the table. It’s not. And I think we can live through those values. By talking about them, I want to say thought leadership, which is a term that I came across in the past decade, this idea of talking about those values, and getting people to kind of, you know, buy into them, but also operating under them.
Sledge, 35:58
Yeah, and I say from the financial institution perspective, I think there’s a couple of different ways to think about it. I mean, the first is, oftentimes, financial institutions are partnering with fintechs, right, they’re either providing the backend, um, you know, China is probably sitting on top of another bank, that’s, you know, providing the backend plumbing and compliance work, or they’re, you know, referring a product to their, their members or their customers. I think in those instances, there’s a big opportunity as a customer partner, to make sure that the fintechs you’re partnering with are providing safe products that are ultimately special for getting in the hands of your customer are going to be safe and making sure you’re looking out for their best interests above and beyond what’s required from a compliance standpoint, right. I mean, that’s, that’s table stakes. What else can you really do when you’re vetting new partners to say, Are you really going to be good for the members or customers we’re serving. And the second thing I say is compete, right compete for lmia communities business, on the basis of improving their financial well, being in the financial health, I think if you are a bank or credit union, and you’re reaching into communities, trying to understand their needs, building good products at good prices, and providing value and thinking about how you can support the community that’s going to hold fintechs accountable, because then they have to compete with you as well. So I think the more good products you have, the more it puts pressure on other good products to come about. So I think that’s another way for financial institutions to really lean on that industry to step up.
Bolado, 37:23
Can I just add one more thing? Awesome. Thank you. I think that in addition to, to what you just shared, what you just shared, I also think that, you know, in my conversations with many financial institutions and fintechs, over the past year and a half or so, there’s often sort of maybe a hesitancy to actually go into the communities that they’re trying to serve and really do some hard like focus group work, you know, and product testing from the, you know, from the perspective of the FinTech or the financial institution. And so not just sort of making assumptions based on like, large data swaths about what is going to be useful and what’s going to be helpful for folks. But actually spending time in the communities and saying, like, what, how can we make this better? How can we make this But work better for you and normalizing that a little bit. And taking that feedback and actually incorporating it as opposed to saying, Well, you know, no, your customer role says it’s too hard. So that’s just how it’s going to be. But really like starting to spend some time like thinking more explicitly and bringing the community into that, as opposed to we hear that, you know, this is your problem. So we’ve created this for you, you’re welcome kind of a mentality.
Sanchez, 38:33
I also had one build. This is harkening back to my days in financial institutions working in banking. But this idea of like, What does what is really our fiduciary responsibility? So the idea of, there’s compliance, there’s rules in place compliance, regular compliance and transparency are table stakes, but like, what are the downstream things that institutions services products can look forward for clients and bring that back to them in the service and product design really resonated with what you all have been sharing. So just a personal reflection, that was really important to me.
Reeves, 39:09
I feel like this is a really inspiring place to sort of like leave the panel and transition to the question and answer section. So I really want to thank all our panelists, and NCRC, for hosting and for being part of this conversation. And I really encourage you to learn more about all of our panelists work either by visiting their websites, or really participating in the conference a little bit more. So thank you for discussing this with us for the last 45 minutes or so.
Reeves, 39:57
Hi, everyone. Thanks for joining us, we’re really excited to continue the conversation. So please feel free to drop questions as they come up in the chat. I’m trying to see if there’s any yet. I think maybe just start us out. Because I don’t see any unless I’m missing it. But inlet questions from the audience yet. But there is a question that I had that we didn’t quite get to in the panel, um, that I would love to do sort of just a quick warm-up round robin with our with the panelists. And so one of the things that we had talked a lot about our is sort of the role of FinTech and nonprofits in the context of changing the landscape, but wanting to kind of hear from all of you What, what resources and the environment, but it could be the environment or other resources, do nonprofits and fintechs need to really make this change happen. So we can start, start there. It doesn’t have to be around anyone who wants to jump in.
Bolado, 41:13
So can I could just ask you to maybe rephrase the question. Sorry, Jordan, I didn’t mean to jump in front of you. If you were gonna say anything. Can I just ask you maybe clarify the question you’re asking? So like, Where are the resources for fintechs to for nonprofits to learn more about the contemporary.
Reeves, 41:30
To to make a new future of FinTech that we sort of laid out? What resources do we need? Interesting. Okay. Jordan, did you have a thought?
Sanchez, 41:42
Well, I actually just based on a lot of the work that we’ve done with you, change machine, keep thinking about, I mean, really thinking about kind of the back end technological infrastructure, and oftentimes for nonprofit, or social impact organization, oftentimes are working on the front end, without deep immersion in the back end of what some of the fintechs so integration, integrated systems, data systems, like some of these things that are kind of might have might already be established that would help superpower some of the changes that are happening in the social impact space. So I think that’s one like area. That’s right for partnership. And I know you all are doing a lot of this already. But think that continued kind of immersion in the technical technological infrastructure that would be required in the back in the back for this work is something that I think nonprofits can really dig into to make impact.
Sledge, 42:39
Yeah, I think a bigger picture on that infrastructure point. I think there’s just something around you know, making sure everyone has access to affordable high-quality Wi-Fi Right. I mean, just, you know, a lot of people we’re seeing some of the access to Wi-Fi especially for people that are able to use smartphones, it’s increasing, but the digital divide is still there, it still exists. And even if you have access one day is that reliable access. You know, if you’re using a product to save over a year, you need to have that same phone and that same phone number for a year. So, you know, what are just the broader infrastructure resources just enable that people have access to the kinds of devices and internet access, they need to really take full, full advantage of some of these new tools.
Cornish, 43:22
I would just add to one would be this idea of one is like resources for community engagement, because I think that’s such an important part of the products by developing products. When I think about the idea that there are people who are accessing the internet via their mobile phone, or that there are still many people who have phones that do not have access to cannot go to the Internet, and the full spectrum of like, there’s so many products that if we actually were into this idea that people want to keep that phone, there’s no value that they want to have that phone or there’s a you know, there’s a lot of people who are still in that situation, what does it look like to create products for them in that situation, we know that maybe it’ll change soon, because maybe they’ll, you know, through a family, they’ll find out that this is a better phone, or they’ll see the value of the smartphone and not be intimidated by it, because it can be really intimidating, then they’ll get access to new products. But we’re where they are right now. I think a lot of organizations do need resources to invest in this idea of community engagement as part of their product development process. And on the flip side of that, I’d say, in addition to data back end, trying to the regulatory part of it as well, just because there are a lot of ways to create financial solutions. And I think if you’ve been in the financial industry for a long time you have, you’re privy to all that you’re privy to how to set up a credit line, you’re privy to just particular things that a lot of fintechs will have to figure their way out to through, even though it’s been figured out before. So I think that sharing of that knowledge can help us, you know, he wrecked solutions faster, that that are based on this idea that maybe we’ve heard from community, this is something that should exist now we have to figure out and get quickly be able to implement it.
Reeves, 45:19
Awesome, thank you. We have a few questions that are coming through in the chat. Um, one is around how do you identify your nonprofit partners? So I think that’s probably likely for maybe more like Jordan, and Megan.
Sanchez, 45:52
Alex, you go ahead, Megan, this time.
Bolado, 45:47
So, change machine, we’re always looking for nonprofit partners that are really trying to build financial security, obviously, through financial coaching programs, financial capability programs, but also any organization that is working to build sort of the agency and the ability, like break down barriers, so that folks can actually survive in the moment, but then also thrive and build all of that. So that could look like a workforce development organization, it could look like a domestic violence organization, it could look, you know, like a sort of a larger standard nonprofit, in service delivery. So we’re just looking really looking for folks that are trying to not just address symptoms, but really start to tackle problems at the root cause. And so we’re always open for new folks that are excited about that.
Sanchez, 46:41
Yeah, I think we actually take quite a similar approach, we recognize that most of the challenges that we try to design around are intersectional. So requires that you have to think kind of, like from an ecosystem lens for a family or person to change to talk to seek and so we look for partners that think that way, too. That also I think, are interested in Brianne your point about community engagement, user engagement, first as the impetus for any change, or any solution is supposed to happen. And so we spent a lot of time discussing those things with our partners, or whomever works with us on our projects to make sure that we’re aligned in those ways. And I think for that it helps us better get through the design process so we can actually get to a solution that’s meaningful. And then the other piece is just like staying committed to the entirety of the design process. It takes a while to get from understanding the user to designing a new version or new product or cutting away maybe some things that are barriers. And so we look for kind of those commitments to from our partners.
Reeves, 47:51
That’s great. There’s a few more that I think are both really great questions. So I’ll start with Patrick’s question here. How do you see lmia FinTech services, especially virtual banking products, subverting payday lenders, in cash, checking services in a way that many, maybe credit unions specifically for lni folks seek to do. So how is the FinTech industry really changed some of these more predatory products?
Sledge, 48:25
Yeah, I think in a couple of ways, there’s, you know, we’ve seen FinTech providers work with I think some of those same players that Patrick mentioned, credit unions and CDF eyes to provide them with platforms or tools that they can then offer their members and customers that I think have been successful. You know, as he mentions, payday lenders, I’m thinking about a company called q cash, it’s was formed out and out of a credit union in the state of Washington, that was basically developed for credit unions to be able to offer a payday lending product quickly, right, we all know that one of the main points of competition when it comes to why are people going to credit you are payday lenders is speed, right? I need the money. Now, I can’t wait three days or go through a financial education class or whatever, you know, this alternative may be able to have so the Q cash platform, I think, within the six or seven taps can get people approved through the process and money into their accounts. And so these are products that are being delivered by credit unions, meaning that they are a much lower interest rates by law. But oftentimes, those credit unions as well are offering other types of savings products, other types of supports. So in that instance, you’re seeing how that use of technology enables a credit union to be able who has a petty alternative product, to be able to compete with that payday lender on the basis of speed, right, and merely meeting that that consumers need. So I think there’s a lot of those types of partnerships, as well, as I point to the group in lift group, right in the know the change machines involved, a lot of nonprofits were developing their own financial technology, you know, saverlife just hit the, I think the 500,000 member, Mark 500,000, people have used that platform, it’s a savings platform designed specifically for low and moderate-income folks, and it has a real track record of helping them save money. And especially during the pandemic, they’ve been able to use the platform as ways to provide support for people that are going through emergencies and be able to crunch the data to really get insight on some of those needs of the communities at the time. So I think there’s ways that the technology itself can be applied to really be, you know, kind of attacking some of those harmful products and really trying to compete out of them. There’s another question around are the companies that sit behind them, right? It’s the companies that are behind them, you know, what are they? What’s their main motivation for coming to the marketplace? And really, how are they approaching the use of that technology.
Bolado, 50:38
So it’s a follow-up quickly on that. We’ve also partnered with another sort of their banking Credit Union as us Alliance, but Dora is a is an online-only bank that is super easy to enter for eligibility reasons. And like signup process is really easy to get into. And then once somebody has that checking account, which is completely free, it is available for itin holders and social security number holders, then as they’re using that product, which allows them to deposit checks remotely to like not spend money to cash and checks and things like that, then they have available to those folks, those customers, the other US Alliance products that they have, which is a wide range of products that maybe that person would not have been eligible for first. So what I’m seeing actually a lot of in terms of the from the banking perspective, a lot of fintechs thinking really can and credit unions and CDF eyes, thinking really carefully about, as I mentioned earlier, those onboarding products, so getting somebody kind of in the door with their basic needs, and then helping them like through the process. It’s not always, not always quick to your point, Josh, but helping them to the process to then graduate into, you know, different types of products that are then available to them.
Cornish, 51:54
I’ll just add a point there, which is that I kind of see a mix, because during the pandemic, in that my neighborhood, I still saw tons of people waiting outside of a cash checking place. And I still saw some many people also banking directly with the bank. So not using like a mobile tool, but long lines outside of the bank, down the street long lines outside of the cash checking place. And so I think it’s about, again, similar to what Megan said, this idea of giving people tool that they can use, but also making sure that they are on boarded properly, to be able to see the full utility that might then you know, mean that the next time they make a choice about going to their local cash checking place, which is right, you know, five blocks down. Maybe there’s a reason why they decide, well, that’s, you know, this actually is easier this choice to go with this lmia FinTech service is easier for me. And I think those kind of decisions are what we want to see more of, but I’m kind of still seeing like a mix. I feel like there are people who, nevertheless are using still a mixture of both until they get good reasons to start using these FinTech services more.
Reeves, 53:12
Yeah, I think that’s a really it’s a really great point. And I think that is is definitely something that we were talking about it change machine is sort of that value exchange and kind of thinking about how fintechs can add value and what we have talked about for the panel, how do you really reach communities in a meaningful way too. So I really like that. I really kind of want to end with this question, because I think it’s a really good one. Um, and I’ll change it a little bit so that Briane, if you have any success stories also, but do you have any success stories about a particular product or service and how its poverty positively impact LMI communities, or those who are usually facing barriers to accessing financial services and so Briane, I want to also make sure that you get an opportunity to talk about any success stories to from your own, from Finn equities perspective, want to open that up to the panel.
Cornish, 54:17
So for us, we’re we do credit building. So credit building is one of those tools, that takes a little bit of more time. So credit building takes time. And, and so the media impacts aren’t necessarily saying, but just getting people their credit status, I think is really important. For us, we serve people who are coming home, when we talk to financial players, they talk about issues of credit and visibility. And there’s like a lot of research on it. But in real-time, there are people that we work with who can’t get access to their social security benefits, because they are credit invisible. And so that’s because, you know, the Social Security benefits are using identity like checks security questions from their credit report, but they don’t have one. And so in real-time, I think those success stories that people are actually on ended on for their individual scenarios being blocked by blocked to benefits such as like Social Security, even the Affordable Care Act actually is in the same boat. And so for us what it means when we when we say we’re building someone’s credit, or for any kind of credit builder loan that’s out there, so not just ours, but the other ones as well, by establishing some of these credit history, they are getting access to a number of services that were then either not available to them. And maybe they didn’t understand why. For the person that I mentioned, with the Social Security benefits, they didn’t understand that it was related to their credit at all. And so I think there are real tangible effects, especially around credit, because we overuse credit. And that’s really the problem. credit builder loans are only a value because we’ve had this overuse of the system. So I think there are many success stories, but it all stems around what theories have we already created as a financial system. And then these products are coming in to kind of deconstruct some of that.
Reeves, 56:10
That’s awesome. Thank you. Thank you, Briane. I don’t know if any of the other panelists have a success story or ways in which they’ve seen the positive impacts and LMI communities specifically for either specific products or through a specific design mechanism?
Sledge, 56:28
Yeah, I’ll jump in. I think, you know, one thing I’ve seen, you know, previously, was at the financial health network, and was working on a program called the nonprofit FinTech exchange, which was really looking at partnerships between community organizations and FinTech providers, where products were either developed in partnership or delivered to as a part of broader programs. And we saw a lot of success there. So the National Urban League was, you know, in a lot of the work that we’re doing directly with financial coaching and coaching some of their clients able to introduce products that met the particular needs, without having any kind of back end arrangement, just kind of saying here, this can work, this might work well for you and saw some good results there with people being able to select products that help them save or pay down their debt. We saw greenpath, which is one of the nation’s largest credit counselors and working with an organization called earn up to create a program so that when people who weren’t necessarily qualifying for a debt management repayment plan could still get a tool that helped them pay down their debt faster, up the management pay it down in a way that was optimal for them, and again, saw people saving a significant amount of money in terms of reducing their debt, reducing the amount of total interest they pay over time. And so I think there’s a lot of those kind of partnerships essentially, especially where the voice of the nonprofit community organization is influencing how the product is either developed and designed or how it’s delivered. And in terms of it’s really designed to meet the needs of the people they’re serving. I think that’s a good recipe for for for finding some success.
Sanchez, 57:59
Yeah, and I think for us, we often work through partnerships. So we’re not an implementer per se ourselves, but we work with implementers through our work. I think we see success kind of in two ways. The first is when you’re shifting the discussion around the conditions to make people successful is the first I think probably what we see the most, like most useful for success and impact. And so an example of that is we developed a toolkit. And so and also trying to make sure that we make our products are designed to be like simple, accessible and replicable for people. So developed a toolkit for Latino families in California around financial health and security, the purpose was twofold to to start engaging individuals to understanding financial health, health and wellness and financial security, but also to start engaging, like local leaders, some of the policymakers, some of the folks in the area to start thinking the same way around financial security for that community. And so we find that like, it was a really simple design, deeply steeped in community engagement. But it started fostering, like meaningful discussions around changes in policy regulation, and people’s kind of power when it comes to statutory change in their area. And that was really something that we lean on a lot in our work. And then from a technical perspective, this is more. This was in not in the States, but we developed a program called B cash, which was, first of its kind digital platform for small, small businesses, to connect to digital cash transfer from their client to themselves. So really focused on supporting women entrepreneurs, and we saw because of it’s kind of a simple application, Brianne, to your point about it being in a tool that everyone has access to, which is a smartphone. And we’re able to start facilitating, like rapid cash transfers from individuals, to these entrepreneurs. And so, for us, we find that really stressful because, again, it was simple design, leading folks where they are, and were able to capture a lot of usage, a lot of users found value in using that product. And so I’m happy to share more about the B cash program, but that’s one that we find to be really successful.
Reeves, 1:00:20
That’s great. Thank you so much. It’s a great way to end I know we’re a few minutes over. So thank you to everyone who is joining us today and the conversation really again, thank you to NCRC for hosting has been having us on the panel. We will be sending out all the contact information for folks here so please feel free to reach out and enjoy the rest of the conference. Thank you
