Fintech for Good: Five Innovators Changing The Banking World

A bank CEO with heart looks at how fintech companies can tackle difficult consumer financial problems. In his new book, "Fintech For Good," Dave Reiling from Sunrise Banks looks at five innovative fintechs addressing everything from student loan debt to the need for emergency funds.

It’s unusual for a bank CEO to write and publish a book with a title like Fintech4GOOD. Then again, David Reiling, the author, is not your typical banker.

The CEO of Sunrise Banks, based in St. Paul, Minnesota, describes himself as a “social entrepreneur.” The bank, with $1.2 billion in assets, is one of roughly 100 Treasury-certified Community Development Financial Institutions, and is a certified B Corporation. That means it is a “business that meets the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose,” according to the Certified B Corporation website.

Reiling’s career has centered on using banking as a force for good — not unusual for community bankers, but what sets Reiling apart is that he is also an entrepreneur. When he sees consumer needs that traditional banking approaches don’t meet — as he found in working with the Hmong community — he seeks practical alternatives, often in partnership with other organizations or community groups.

“Traditional brick and mortar banks are not the preferred place for everyone, and cookie cutter banking products are not ideal,” Reiling insists. “Innovation is needed to make basic financial services more inclusive and accessible.”

Advances in digital technology and the rise of the fintech movement opened up huge possibilities to assist individuals and businesses in ways that truly meet their needs. Reiling and his team were early in seeing the potential of partnering with fintechs, including a $125 million investment in TrueConnect, a tech-powered alternative to payday lending.

Based on his experiences, Reiling wrote Fintech4GOOD, as he says, “to inspire others and showcase how financial technology companies are addressing the financial issues we face today.”

The 125-page book is a quick read. It focuses on five entrepreneurs and the companies they launched to help remedy issues of economic inequality and other difficult financial issues.

Read More: Why Would Innovators Want to Work With a Bank?

5 Fintechs Making a Difference

The five fintech companies profiled by Reiling in Fintech4GOOD include:

  • Peanut Butter — Assists employers to offer student loan repayment assistance and provides financial tools to the graduates
  • Nova — Provides a means for immigrants to use their home-country credit history in the U.S.
  • Self Lender — Addresses young consumers’ lack of credit history and lack of savings in one solution
  • Earnup — Helps people automate and manage credit card, student loan, and other debt payments using technology and psychology
  • TrueConnect — Works with employers to offer workers a cheaper alternative to destructive payday loans when a financial emergency arises

Besides its investment in TrueConnect, Sunrise Banks partners with that company and Self lender, providing both deposit and credit support as the “bank behind the fintech.”

Reiling says that he profiled these five companies because they’re using technology to improve the lives of other people, especially those overlooked in some way by the traditional financial system. “But I also chose to feature these companies because most of them created their products based on the personal experiences of the founder, which makes the stories more compelling,” says Reiling. He acknowledges there are many other new companies with the same mindset of using fintech for good.

The book frames the five companies and their solutions in the context of the problems they address. Highlighting these problems was in fact another primary reason for writing the book, Reiling says.:

“There are now more payday loan shops in the United States than there are McDonald’s.”
— David Reiling, Sunrise Banks

“One of the most important, albeit unfortunate, parts of the book is that it reveals how often ordinary people struggle to make ends meet. Student loan debt is now more than $1.5 trillion; 70% of Americans have less than $1,000 in their savings accounts; and there are now more payday loan shops in the United States than there are McDonald’s.”

The Financial Brand sat down with Reiling to discuss his book Fintech4GOOD, and his views on disruption, digital channels, and doing good in the banking sector.

TFB: Why focus solely on fintechs?

David Reiling, community bank CEO and “social entrepreneur.”

DAVE REILING: Sometimes, new technology — or terms like “disruption” — can have a bad connotation. In the last decade or so, some have seen Silicon Valley as the enemy, a place where the new kicks out the old, collateral damage be damned. I wanted to let readers know that these up-and-coming tech companies can, indeed, do good.

The five companies I chronicle in the book are not only ahead of the curve in terms of technology, but also mission-driven organizations that pride themselves on helping others. That’s something I wanted to share.

TFB: Shouldn’t banks be doing some of these things?

DAVE REILING: Too often, corporations and banks see mission as something that takes away from margin. Doing well and doing good are not mutually exclusive. At Sunrise we describe this as “mission times margin.”

That said, there are many financial institutions around the world that strive to effect positive change in the financial sector and beyond. The Global Alliance for Banking on Values, for instance, is an organization of more than 50 financial institutions, of which Sunrise Banks is one, that advocate for and practice environmental, social and economic responsibility.

Fintechs, however, have the technology that banks don’t, while banks possess the regulatory framework and institutional knowledge that fintechs lack. While banks can move and store money, fintechs focus on customer experience and the front end, providing applications for the end user.

TFB: What drives Millennials’ desire to do something meaningful?

DAVE REILING: There’s no easy answer. However, Millennials have grown up in a time of major economic uncertainty. When the 2008 financial crisis struck, most Millennials were just entering the workforce or still finding themselves as young professionals. That kind of downturn, happening during such a pivotal point in their lives, likely played a key role in how they think about money and financial stability.

Another factor is the exorbitant cost of a college education. Today’s students and recent grads are mired in debilitating student loan debt. This has created advocacy for lower tuition rates.

When it comes to social issues, this generation came up in an era where social justice has taken center stage, from the Anita Hill hearings of the 90s to the Black Lives Matter movement. I think that plays a big role in their desire to be advocates for marginalized groups.

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TFB: Has technology also increased the potential for wrongdoing?

DAVE REILING: There is the potential for misuse with any new product or technology. And there will always be corporate entities that only focus on profits and financial gain. But, this in no way supersedes the fact that when technology is used to help others, it can create amazing impact with the potential to affect people around the world.
I wanted to emphasize this potential in Fintech4Good.

TFB: Any closing thoughts for your fellow bank and credit union execs?

DAVE REILING: When we work together to effect positive change, the sky’s the limit. I would also emphasize the fact that it’s up to us, financial institutions and fintechs, to create as much positive impact as we can and do everything humanly possible to develop cutting-edge solutions that remedy issues of economic inequality and the accessibility of traditional banking products.

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