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How Digital Banking Is Driving Social Change

by Dahna Chandler and E. Napoletano

Forbes Advisor

Saturday July 24, 2021

Stock image
Stock image  (Source:Getty Images)

Editor's Note: In this story, Dahna Chandler profiles OneUnited Bank and E. Napoletano profiles the Daylight financial platform; Mitch Strohm wrote the introduction and conclusion.

Someday soon, if not today, you may be able to find a banking platform that's designed specifically for you and those like you. A growing number of banks and fintechs are using digital banking platforms to meet the unique challenges and needs of individual communities.

Unconstrained by geography, these financial institutions can extend their reach and solve previously unsolved problems for particular consumer groups.

There are banks and fintechs that offer banking platforms for Black Americans, the LGBTQ+ community, disabled Americans, doctors, freelancers—the list goes on. Some of these institutions are newcomers on the scene. Others have been around for decades but are now able to leverage digital technology to help their communities and drive real financial change.

"That's what's important about digital banking," says Kevin Cohee, chairman and chief executive officer of OneUnited Bank. "Yes, it offers all of these very important benefits to consumers to make their lives easier and to make them better stewards of their money—it certainly does that—but the big deal is this changing our overall society," he says.

Below, we showcase OneUnited Bank and Daylight, both of which are helping to drive change both within their communities and in society as a whole.
OneUnited Bank


Black America Is Different Financially

Given their history with the financial services industry, wealth generation and money management in America, Black Americans have different needs in these areas than their white counterparts. Digital banking offers solutions for them not found in traditional banking, particularly if the banking platform caters specifically to Black people.

Enter unapologetically Black, OneUnited Bank, and its Black community-focused offerings, including the upcoming OneTransaction Free Virtual Conference on Juneteenth (June 19), 2021. The conference is founded on the concept that Black Americans can start with one transaction to begin their journey to creating generational wealth.

These critical financial transactions include savings and investments, homeownership, improving credit, getting life insurance, building a profitable business and drafting a will. Largely because of lack of financial wherewithal and limited financial literacy, many African Americans haven't leveraged these foundations of American wealth successfully. But OneUnited's owners, husband and wife team Kevin Cohee and Teri Williams, have ambitious plans to change this reality.

The institution started in Boston as Unity Bank in 1968, in response to Martin Luther King's assassination, and got purchased by Cohee and Williams when it was Boston Bank of Commerce in 1995. The bank achieved national scale by purchasing other Black banks in Miami and Los Angeles and became OneUnited. It is now the largest Black-owned bank in the U.S. and has been serving as its only Black-owned digital bank since 2004.

After decades of serving the Black community, "We understand what Black people know, and what they don't know," says Cohee.

OneUnited shows its dedication to serving the Black community in its offerings. As a Community Development Financial Institution (CDFI)—a private financial institution that's 100% dedicated to helping low-wealth, disadvantaged communities take part in the economic mainstream—OneUnited has won the highest Bank Enterprise Award by the U.S. Department of Treasury 10 times. In only the last two years, the bank has loaned $100 million largely to low- and moderate-income communities.

OneUnited started initiatives to grow financial literacy and access in the Black community, while the bank had only its brick-and-mortar presence. The bank works to make its website a go-to place for Black financial literacy that focuses on what people must learn to manage their finances successfully, gain access to credit and other resources and build wealth.

"We want the entire family involved in this process, including children," says Williams, president and chief operating officer of OneUnited Bank. So, OneUnited partners with nonprofits to provide financial literacy workshops and holds an annual "I Got Bank!" Essay Contest for youth. Held during National Financial Literacy Month, the contest, in its 11th year, rewards the 10 winning children with a $1,000 savings account.

Kevin Cohee, chairman and CEO, and Teri Williams, president and COO, OneUnited Bank (images courtesy of OneUnited Bank; Williams photo by Jeffery Salter)

Kevin Cohee, chairman and CEO, and Teri Williams, president and COO, OneUnited Bank  (Source: Images courtesy of OneUnited Bank; Williams photo by Jeffery Salter)

Driving Change With the OneTransaction Conference

OneTransaction is a financial literacy conference that specifically addresses issues Black Americans face in closing the racial wealth gap and building intergenerational wealth for their families.

"Our goal with this conference is to give our community specific tools and inspire them to take action that helps them on their journey to wealth for their families," explains Williams. "We call this event 'OneTransaction' for the one strategic transaction that can help a family close its wealth gap," she continues.

"That strategic transaction could be having life insurance, buying a home, owning a profitable business, having a savings and investment portfolio, improving your credit score so you can buy a home or having a will," explains Williams. The message of OneTransaction, which will provide education in all those areas, is to pick one transaction for 2021 and focus on it for wealth building.

Cohee agrees, adding, "We recognize lack of information and understanding about financial transactions is a primary factor stopping most Black Americans from building net worth." OneTransaction seeks to change that by using state-of-the-art digital technology to bring people nationwide together on a single platform for a day of financial education workshops provided by an unparalleled group of experts in Black finance. More than 25,000 people have already registered, and OneUnited's goal is 50,000.

"We designed this event to provide financial information on building net worth in plain language, so it's easily understood by everyone in attendance," Cohee says. "We then use digital banking technology to motivate participants to continue the process until they complete their one transaction," he continues.

The conference is cosponsored by Visa and Fidelity, and held on Juneteenth, the African American holiday that celebrates the end of Black enslavement throughout the U.S. Featured presenters are some of the who's who in Black finance, business, activism, scholarship and entertainment. This includes award-winning actress and author Tiffany Haddish, whom Williams invited because she's candid about her money journey, which includes struggles that many Black Americans recognize.

Pulitzer Prize-winning journalist and Sirius XM radio host Karen Hunter will interview Professor Mehrsa Baradaran, a law professor at the University of California, Irvine School of Law. Baradaran is author of The Color of Money: Black Banks and the Racial Wealth Gap.

Other Black financial luminaries featured at OneTransaction include Shark Tank's Daymond John, Tiffany Aliche (The Budgetnista), Michelle Singletary of the Washington Post, CNBC Personal Finance Correspondent Sharon Epperson, Popcorn Finance's Chris Browning, Forbes Advisor Tax Analyst and CPA Kemberley Washington and The Clever Girl's Bola Sokunbi.

This conference also reflects OneUnited Bank's activist role in pursuing racial and economic justice for Black Americans, using technology as a tool. "Black Americans always have understood the importance of being organized to create change in American society, but it was too difficult physically," says Cohee. "The internet allows Black Americans and their allies to organize to teach Black Americans the critical transactions necessary to build net worth with conferences like OneTransaction."

Targeting the Racial Wealth Gap

"There are two principal problems that Black Americans face," says Cohee. "One is access to financial resources, which is measured by the racial wealth gap, which attempts to quantify the difference between the net worth of the average white family and the average Black family." According to a 2019 American Progress study, Black Americans have 12.7% of the net worth of white Americans, or $24,100 to their $189,000.

But it can be a far wider gap depending on where Black Americans live. In Boston, a Federal Reserve study published as part of a 2017 Boston Globe investigative series found that, while whites in the city have $171,000 in average net worth, Black Bostonians had a paltry $8. (No zeros missing after that single digit.)

This points to the second problem Cohee says is causing the wealth gap to persist intergenerationally among Black Americans, which is "racism and its impact on black Americans." Williams agrees, adding, "The truth is this wealth gap is systemic racism."

"It started with slavery, and continued with Jim Crow," she explains. "As I say to people, we've only been legally 'free' for 50 years." She references the Civil Rights Act of 1964 and the Voting Rights Act of 1965, which many African Americans assert didn't take full effect in much of the U.S. until the early 1970s. "Today, systemic racism in the financial services sector, as well as the criminal justice system, persists, and they have impeded us from building wealth," she asserts.

Cohee adds, "It's also not that white Americans are smarter, more clever or work harder than Black people. It's that they were provided with opportunities, money and the ability to live in communities that increased in value."


The Daylight Banking Platform

As the first and only digital banking platform built by the queer community, for the queer community, Daylight's goal is to bring LGBTQ+ money matters into the light. It's an even more substantial undertaking when you consider that Millennials and Gen Z are the first members with the societal backings and legal protections to live openly. Yet despite increasing acceptance and protections, the savings habits of LGBTQ+ Americans lag behind.

"There are more than 30 million LGBTQ+ folks in the U.S.," says Rob Curtis, Daylight's cofounder and CEO. Of those 30 million, 44% struggle to maintain adequate savings, according to Experian.

"Our goal is to help [LGBTQ+] folks create smarter money habits, starting with savings," Curtis says.

Bit by bit, Daylight is hacking away at that goal like no other company in the banking world: with an unapologetic focus on building a community inside of a demographic that's always turned to their own when they need help.

Daylight cofounders Billie Simmons and Rob Curtis  (Source: Images courtesy of Daylight; Simmons photo by Eli Schmidt)

How Daylight Invests in the Queer Community

"Gen Z was born into a world that personalizes everything," Curtis says. That's why he asserts that there's a whole generation walking into a banking paradigm that looks foreign, especially for LGBTQ+ Gen Z. With their history of clunky online interfaces, bland mobile experiences and stringent identification protocols, traditional banking experiences don't offer the functionality, fluidity or identity validation that the queer community demands.

"We've always been a community," says Curtis, who identifies as gay, of those who identify as LGBTQ+. "And, given that we've always been a community, we had to ask: Why are we trying to figure out money on our own?"

Long before their soft launch in December 2020 (with their official public launch coming in Q3 2021), Curtis and Daylight cofounder Billie Simmons, a trans woman, asked how they could build Daylight into a community-driven force that transformed the way queer people bank. The answer came through focusing on the unique needs of the queer community — identity and savings goals — that weren't being met by traditional banks and leveraging social sharing to turbocharge their members' financial goals.

Here are a few of the ways in which Daylight is personalizing banking for the LGTBQ+ community.

Identity

Transgender and nonbinary individuals are inarguably the most underserved in traditional banking, especially when it comes to names. Legacy banking systems aren't built to be nimble and adapt to someone's chosen or legally given name, forcing a disconnect with the name a trans or nonbinary person uses daily and the deadname (a name assigned at birth) they're forced to carry on a credit or debit card.

Through a partnership with Visa, Daylight offers all its members the ability to choose the name that appears on their debit card. Whether it's a "legal name" yet or not, Daylight respects each member's chosen name and has created a system to support its members every step of the way. The company maintains a 24-hour staffed customer service line to verify any member's identity should an issue arise when using their card.

Unique Savings Goals

Daylight saw a significant disconnect between the financial needs of their members and the savings goals typically marketed by traditional banks. Transition-related medical procedures top the list of unmet needs, so the Daylight team focuses on four primary savings goals for its members: transition, emergency savings, starting a family and buying a home.

Members get guidance and encouragement every step of the way when they create a savings goal, from regular encouragement from Daylight itself to valuable tips such as when their goal will be fully funded. Members have less of a "set it and forget it" experience commonly preached by the traditional banking world and more of a community that recognizes their goals and is ready to help each member take tiny steps that add up to significant savings.

Daylight even has its own interactive nonbinary assistant in the platform to help guide members through the goal-setting process for savings. For example, if members don't have a solid idea of what specific medical procedures might cost, the assistant can help them set a goal using average costs and get them on their way toward saving. Even inside the banking platform, no one has to go it alone, and even the "bots" are queer.

Social Sharing

When members start a savings goal, they have the option of sharing that goal with other members via Daylight's community timeline. Sharing is always voluntary and follows the two principles Daylight uses to guide all its brand and member interactions: Don't out or deadname anyone. But sharing also comes with another benefit for their LGBTQ+ membership:

"Sharing de-shames money in a community that already has a lot of shame," says Curtis.

And it's working. Curtis shares that when the timeline-sharing feature launched, one member shared their emergency fund savings goal to the feed. By the end of that week, 30% of savings goals were emergency funds.

How the Queer Community Invests in Daylight

As Daylight gears up for its 2021 public launch, they're up and running with 500 active alpha and beta testing members today, with another 4,000 people on the waitlist. Within that same group is another group helping shape the Daylight experience.

"We mean it when we say we're queer banking built by the queer community, for the queer community," says Simmons. She stays in direct touch and hosts regular meetings with what Daylight calls its Builders Community.

Simmons regularly meets with the 100 Builders, listening to feedback that helps Daylight dial in on what their members need most. From designing new features to fixing bugs as they surface, Simmons isn't shy about getting her hands dirty with authentic feedback from the community they're built to serve.

"We're building this community together," she says. "We have the accountability and the openness to get things wrong as well."

Beyond the Builders, Simmons hosts weekly interviews with actual customers to hear about their lives and experiences. This helps Simmons and the Daylight team stay in tune with how the world-at-large impacts what queer people need most from their money and the platform they're trusting to keep their savings safe.

After Simmons gathers her near-incessant flow of feedback, she takes that information back to the Daylight team, which is nearly 100% queer. From nonbinary and gender nonconforming to queer women and men, Daylight is powered by the community they seek to serve. The only team member who isn't queer is a cisgender man with a nonbinary child, a lived experience Team Daylight's delighted to have involved in shaping their community.

Yet Simmons is delighted with what's perhaps the most unexpected feature of the community their team and members are building: Daylight members are coming to work for Daylight. The company now posts available jobs directly to the community timeline, and the resumes roll in.

From members to the Daylight team itself, community is at its core. They're taking aim at traditional banking, which by its very "tradition" isn't built to serve the queer community, and building a place where LGBTQ+ persons can come as they are and get the support they need to learn, establish goals and accumulate wealth like never before.

They're not particularly concerned with what the legacy banking world thinks of what they're doing, either. Instead, they're much more focused on building a place where queer people see themselves, their lives and their needs reflected in every aspect of the banking experience.

"It's our house," says Simmons. "We can build it any way we want."

Moving Forward Together

Digital banking technology is giving banks and fintechs the opportunity to reach a geographically dispersed audience and put individual customers at the center of what they do. By offering personalized products and services tailored to specific consumer groups, financial institutions can serve communities that may otherwise have been underserved in the traditional banking industry.

The only limits are the imaginations of those who are creating these intentional communities. "These types of tools allow you to inspire change in groups," says Cohee. "That's the opportunity our society has that it's never had before. That's our hope. And you're seeing it happen."