Making banking more accessible | Business Casual
I know someone who might have 50 K in their house. They don't have a bank account just because I'm unbanked or underbanked does not always equate to me being poor. It might just be the fact I don't trust banks Sheena Allen is the founder and CEO of FinTech Company and Neobank Kapp Way, which provides bank services and financial education and she joins us to talk about growing up in Mississippi, her journey in tech, and tells us why she created a company focused on serving unbanked and underbanked individuals Tell us what your exposure was to banking systems, financial services. I understand there weren't lots of Bank of America's in Wells Fargo, so it was a pretty limited experience, right? Yeah. We mainly have for the banks that we do have, there are mainly like credit unions, community banks, or like your local banks. We didn't have we mean to this day, there's no way I take that back.
I think in the last year we had our first Chase Bank in Mississippi Um, like the last year, I think there's like 18 team for like Bank of America, like Tupelo. And the only reason we have Wells Fargo is because we used to have Wachovia's and they took over Wachovia. But yeah, most of the banks in Mississippi are like local banks. Let's get some more insight into your own story. You went to the University of Southern Mississippi.
You were interested in building apps and you've noodled on lots of different apps. You've sketched on pieces of paper and worked with developers. So what were your plans in college and how did that lead you to developing apps in the first place? It was actually my senior year going into my senior year actually of college, and I had subleased my apartment out over the summer. And so when I went back, you know, right before school started, I mean, my roommate actually went to Walmart just to buy stuff because, you know, I needed stuff to kind of get settled back into my apartment that I sold, leased out and just had this long received from Walmart and told my roommate like, gosh, now if there is an app, I can keep all my money in my receipts because I was very independent. Like, I had to ask my parents for money. So like my I had a dollar.
Like, I wouldn't tell them I only had a dollar. I was going to figure it out myself. So I had to figure out a way to like better keep up with my money, my receipts, and I looked in the app store and I couldn't find it. And I was like, cool. I'm like, create this app because I can't find it and I want it to exist. And you were not a technical person by trade necessarily.
And you've talked a lot about working as an in tech, as a non-technical founder and finding people to help you. So what what does that exactly mean what was your approach to building the apps that you didn't have that you needed when you weren't the one who was coding it? I will admit I took a C++ class, Nick, my sophomore year and I hated it. I mean, absolutely hated it. I was like, This is not for me. And I only took I think it was like a dare to take their class or something, but so I couldn't find anybody on campus who could help me.
So I started asking, like just kind of asking the people that I knew. No one could, like, push me in the right direction. So I ended up, like, just Googling, like how to find a app developer. And of course, there's like bigger websites now. But this was 2000 liberty, like Guru dot com would really be back there like freelance with dot com and guru dot com was I did go to websites back then. Whereas like now like, like Upwork and a few others, it's much bigger.
But I did, I asked my dad for a loan. I'll take it, take my refund check by can give me a loan and I'll get this app built. My dad is very southern, very traditional. He's like, Why are you trying to get an app built? What is an app? And I was like, It's going to be on your phone. My dad still had like the old Nokia as you play Snake on.
So like he was like, what is an app? But he did. He gave it. He gave me that. He gave me the money, loaned it to me, and I paid him back and got my refund check. And I did all the designing myself though everything I did myself except the backend coding.
And that was my my first jump into into tech. It sounds like you wanted to launch a app empire with Sina Alan Apps. Right. And it wasn't just one app. It was a suite of apps. What was your goal with Sina Alan Apps when you first launched it? Being 100 and on its I Won't Be Rich like the next week, I was like, I'm on like this app now. Be like so rich like by the time like the end this year comes, which did not happen but I will say now people always say when you, when you find what you love, you know it and like taking the time to like sketch out those screens do like my spec she's my flowchart doing test me Q&A like I knew like this was what I was meant to do.
Like this is what I love because I still it kind of allowed me to also be creative in the artist, the artistic side of me. So even though the first one didn't do well, I said before I graduate I'm going to try one more time. And so I try a second app the way that I did the first app. So what time I graduate, I was like, This is what I want to do. And ultimately with Chanel apps, you know, the three biggest things from me that I always take away from it what one is what got me to Silicon Valley. You know, I left Mississippi and went to San Jose because Google being my friend, I Google, where do you go to build Tech Empire and the Silicon Valley? So I was like, let me get to Silicon Valley.
So it was my experience, it turned out was why my first experience of Silicon Valley. The second thing I appreciate which an Apple apps was, I bootstrapped it, whereas CAP was a VC backed company. So I love the fact that I was able to kind of literally like bootstrap work hard figuring things out the hard way. Because when you are a big, bad company, I mean, raising money is hard, but like having that money to scale and do those things is much easier than like literally like counting every penny.
So Sina Alex was great in that way. And lastly, for me, I I realized pretty soon that Chanel was not meant to be like my unicorn, but I know it's going to be like a heck of a lesson for me in taking it in to my next startup. So, yeah, I mean, I wanted to build a tech empire.
I want to learn more than anything, though, and that was wish an ally out there for me. Sina Before we get into more of the details of Cap Way, let's talk about just the system overall. You've tried to bring humanity back to finance and you're trying to prevent people from relying on these predatory financial services for those who are underbanked and those who are unbanked.
What is the difference, first, between those are underbanked and those who are unbanked? So if you are unbanked, it means that you do not have any bank account, any form of a bank account at all. If you are underbanked, that means you more than likely have some form of a bank account, probably with like a credit union. And or even if it's with a bigger bank, you have an account but you're not actually utilizing that account to the fullest. If anything, you're still relying on alternative financial services. So you might bank with Bank X, but you're still going to the check cashing place.
You're not going to lot from your bank. You're going to get a predatory loan. So you're still having to use outside resources and usually predatory resources, even if you have an account. So that's a difference in unbanked and underbanked. Can you describe for those who don't have experience with it, this whole ecosystem of predatory banking? You mentioned payday lenders, CHECK-CASHING shops, pawnshops, title loan shops. What are these? How do they operate and what's that? What's that life like? Living and relying on this predatory economy? Yeah, you know, it's interesting because for people who have never experienced it or they they think about it, they just researched this market.
I I've seen some very interesting opinions about it. And I always tell people no one is out here getting a like a loan with a 400% interest upon it because they want to like some of these people is literally the difference, like being their kids at night or keeping the lights on. But predatory lending is pretty much you. You go to a payday lender, you know, they'll look at how much you make.
They'll give you a loan. But the interest rate is just should be legal. I know people who have maybe get a loan for like $400 and by the time they pay it out, they probably pay 20 $500 if not more. Wow.
So you're paying is ridiculous and multiple get a payday loan unfortunately end up asking for an extension which actually makes the interest rate even worse. So they are honest. I don't want to even even misquote this to start out the last that out rate, but it was like if you I mean the average person, if you borrow like $400, you end up paying may I close like five grand. Oh, my gosh. So is this going to be a legal issue lately? It is. And it's a long period.
Once again, multiple a once in a, an extension on it, which is why you would like this three, four or five grand title loans. It's when you literally take the title of your car into this service and they look at your title like what kind of car it is, what year it is, and how many mouths are on and say, hey, we'll give you $3,000 for your 20, 15 Honda. Take the example if you do not pay the loan back, they have a title to your car and they will come and repo your car. They now own your car because you did not pay back a loan they might be a small is 2500 bucks.
So that's what a title loan is. You know, I've seen a documentary about people taking like their prized possessions or like so that their grandparents have left them just to go upon it to get money in, hoping to go back and get it. And they can't afford to go back and get it.
They're losing stuff. This like that means so much to them, but they're trying to survive. And so I always tell people there's a, there's a difference of here that I think people don't give credit to or maybe not understand. There are some people who are just irresponsible with money. I mean, I even as someone who's from those community, the type of community I know, there are some people who are just flat out irresponsible with money.
They don't want to do better. They're fine with their their condition at their end. I'm just going to make it and I'm good with that.
I wake up every day and watch two cars go by and call. But there are some people who are working two and three jobs and they are truly struggling. And it's not that they want this life This is the life that they live in.
If they could find a better way, if they had the resources, they had the education, they will take advantage of it. And that's an interesting distinction. And more people are impacted by these predatory banking practices than we might even expect. And you you highlighted this in your TEDx talk, where you pointed out that being financially underserved doesn't necessarily equal being poor. What did you mean by this and why was this an important thing to mention? I know people who have $17,000 in in their house, but they don't have a bank account. I know someone who might have 50 K in their house, but they don't have a bank account just because I'm unbanked or underbanked does not always equate to me being poor.
It might just be the fact I don't trust banks. It might be the fact that I had to drive 30 minutes to a bank and I want to be out, touch my money quicker I want to see my money. Everyone who is unbanked underbanked is not poor, which is horrible for some reason. Distinction that people have not yet to make but some reason.
When you say underserved to integrate, people immediately equate that to white being poor. And that is actually not the case. You know, you mentioned your TED talk, the availability.
Banks today in certain communities can be traced back to redlining practices, other discriminatory practices. How are local communities and local economies still experiencing the effects of redlining and that discrimination? Yeah, I mean, redlining, of course, is outlawed in a quote unquote outlaw. But we still see it.
I mean, it was that a lot of things are technically outlawed that, you know, still is still happening today. If finance is it's one of those things that just hasn't changed. I mean, the American system, for one, our financial system is outdated. If you go to some of the countries, they are light years ahead of us. When it comes to how they handle finances.
There are some changes that we're going to have to make overall. But this is going to be that's really hard to do as a capitalistic country in a way that something has been done for so long, whether it's mortgages for redlining, where people get loans, where people stay. I mean, this has been this way for so long. And so it's an uphill battle. But yeah, this this is why can't we exist? Let's talk more about Cap. You're solving all the problem.
China, as you mentioned, it's a financial system. It's not just for the underserved and unbanked necessarily. And you started this in 2016 it launched in 2019 during which you became the youngest female in America to own and operate a digital bank which is an amazing thing to be able to say and walk us through exactly how Cap Way works and why it's different from your traditional banking institutions. Yeah. So I had the idea for as you mentioned in 2016. Um,
I did like two years of research and I didn't want to do research of Lemmy like go and like Google Things or Legg. Let me look at like stats from my Harvard Review or like Deloitte, like I want to like I already got in my car on planes. I want to hear people's stories and this goes into me saying how cowboys is different.
I want to hear people's stories of why they thought the way they felt about the financial system, what they was unbanked or not. I remember one story they stuck out to me is always is just like being embedded in my brain. I talked with the gentleman from the Bronx and he talked about going to cash check the check cashing place every Friday.
And he would say like, you know, I work a year, my check, I go home pass and I get a gun, and then I go to check cashing place and I say, well, why do you carry a gun to the check? Get in place? And he said, well, think about it. If I was walking the streets of New York, if somebody asked me for a dollar, I can easily be like, I don't have it. I don't have cash on me.
I'm good, he said. But if I'm going to walk into a Check-cashing place when I walk out, is somebody where their homes are now approaching that money, I can't really lie and say I don't have money because my to go to ten. I went in there to cash.
My check was now I have cash on me. It's almost like those type of stories, all those things I put together to really decide what direction I want to go in with cash away. And so the original idea of cash was I mentioned 20, 19, it was How do we build a digital bank for unbanked underbanked? And I want to couple financial education with it. I'm a true believer that one should not exist without the other. There's a lot of financial literacy tools out here but to me, if I give you information or education, but I don't give you resources to put the education to use, it's kind of like a lost cause.
If you say so and the same goes opposite if I give you a lot of money, but I don't give you any information and resources, you're probably going to blow through that money, which we see happen all the time. And so that was kind of what we the path we win in 2019. We actually stealth mode for about two years though, honestly. And then we kind of came back out or launched again, shall I say, in 20, 21. And that was it transition of saying we can bank people but that should be a a puzzle piece. The whole puzzle should be this actually inclusive financial system.
Whereas for us, you know, over the years we're looking at hardware, software payments, business account, personal accounts, not digital banking. How do we provide the resource to truly become financially healthy? And so that was kind of that transition we made between 20, 19 and 2021. What does that financial literacy look like on the Cap Boy app? Yeah, so we have a few different things we have like your general kind of like financial article Wells.
We do a lot of videos, we interview people, they're giving out information, we do like infographics, we have this thing called facts and hey, so very quick, like factual information but we also have a for financial education program called Funds PR. You endorse, it is completely not in-house. We have entire content team in-house and I want to make you aware was totally different from like your quote unquote like textbook type of financial literacy. And so we we've worked really hard and we're still improving it. But it was I wanted the entire financial education system within cap way and that's what funds is.
But then we also like have a little fun things or engaging things. Probably one of our most engaging pieces of content is we have a system called Money Talk where people can come in like votes on different topics that we put out. And you can either vote anonymously or you can comment if people have conversations in the comment section, because what we found through some a few different activities that we did was we will put people in this room like five people, ten people in a room, and we would talk about money and no one really say anything like they would answer a question maybe, but they won't really say anything, but they will always put like the one person in the room who will stand up and purposely say like, Hey, I've been broke or I've been to overdraft, or I noticed I can do X, Y, Z.
And whenever one person opened up to say, this is what it is, everybody in the room had a story to tell. And so Money Talk to us is more of a digital version of that to say you're not by yourself. I don't I don't know anything I said Southern, but the South, it was this thing of what happened in this house stays in this house. So no one knew anything. If your lights was off, nobody would have known your life was off except the people in your house. It was like an unwritten rule.
And money talk is a way that we want to kind of pull out because people can help you if they don't know you're hurting, you're offering education, you're offering a safe space. Clearly, you're offering banking services. You're trying to be the opposite of predatory you're still a business, though. You have to make money. So what is your revenue model that cap way? Well, we do like the general things for any form of a banking bank, which is we make interchange. So pretty much any time someone swipes their Camp David Cart, we make money at Camp Way.
We also make money from our content through different ways. Sponsor, post sponsored polls. We also do with funds. There is a paid version of funds that we have. So there's different tiers in the different ways we work with people, but then find and then there are some things that we have coming actually over the next few months and this year and down the road that will bring in other revenue streams. But we have a I always tell people we are here to help people but to your point, we are a for profit business and making money is part of how we stay alive.
And you are VC backed, so you have to make sure you're investors feel comfortable with their growth. Is that an extra layer of pressure where you feel like you have to be in hyper drive and grow, grow, grow? Yeah. I want to let you know, you have somebody else's money and you have to show how you're going to exit money and yet so how are you going to grow and how you're scaling in the month-to-month growth? And yes, it is pressure. And I always tell people that's the beauty that I'm happy I learned from Cap Way I mean from from Shane Allen apps that know the difference in being bootstrapped and I have to ask to anybody versus being VC backed and have to send out like those monthly, you know, investor updates and raise capital and make sure you're making money and you're scaling. So it's definitely pressure because to me I would say the CEO one side of me is I have well three yet the business that are trying to run and make sure that the people who are consuming get your customers anyone who is using looking at cap way is happy that you have your team.
That one wrong decision by you means that X amount of people might not be able to pay their mortgage next month. This pressure. And then you have your stakeholders, your investors who are looking to get their money back at times X times, ten times, 50 times a hundred. So yes, I would be glad to say that there was not pressure.
I want to talk now about the importance of building generational wealth. This is something I know you've you've I've seen t shirts you've worn. It's a generation and wealth generational. Well, how do you think about it? Is there are you earn it, right? Perfect. So how do you think about building generational wealth now? As a fintech entrepreneur, what do you think is essential for for your clients and customers to know? I think that most people think or thought of generational wealth, for one was out of their reach. I mean, we talk about even like as far as investing, most people that I know can't go to a family member to get like that first, like 5000, 10,000 to 20,000 to like even do a beta test or the MVP and that's what I want to change.
But there's resources and there's tools that have to be in place to make that change. And that's what I want cap wise to be able to offer. So whether that is how to invest in stock, you know, I tell the story now that when my friends have baby showers now, you know, if, if I had a friend of mine, the baby shower ten years ago, I probably bought Pampers and Booties and the usual baby shower stuff when my friends have baby showers. Now I buy their key stock. So in my my thing to my friends is always is I'm going to buy the stock now and I'm going to commit to buying at least one share depending on if what it is. Because once you it might be a lot depending on what it is.
I'm committed at least by one share every year for this child's birthday. But you have to match it, right? You you your you your who's your fan? Somebody has to match the share that I'm going to put in every year for their birthday. So it's things like that that I do personally I put on in cap way you know how to invest in stock. No. Now we're going to do social metaverse but hey, there's going to potentially be a way for you to build generational wealth. Let's talk about it.
Of course, the everyday person now can invest in startups. We know a lot of people build generational wealth, wealth, especially on the coastal areas in New York City and in San Francisco, California is from investing in startups. It used to be where you had to be an accredited investor to do that, whereas now you can invest in startups through like crowdfunding, equity and equity crowdfunding. So there's so many different ways. Real estate, I think there are so many ways that people can build generational wealth that they a lot of it is.
I always tell people they just people just don't know. There's a saying that I say often you don't know what you don't know. And so it's really hard to go into an avenue of building generational wealth when you don't know what avenue to take. And that's the resources in the information. We put out a cap way, and there are so many new avenues, new technologies popping up that are supposedly going to democratize building wealth.
And one of those things is obviously, you know, cryptocurrency is in blockchain technology. Do you think those sorts of technologies can be a way to help the underbanked and unbanked, or is there still this issue of lack of access and education around to that? At this point? I think that cryptocurrencies I think it works. I've seen it work. I've heard great stories of it working in places outside the US. Unfortunately, I don't know if or when it will be something that will truly change an entire generation or culture in the United States. I think maybe I don't think we're I don't think it's going to be like the next year or two though, versus if you see what in why Jay-Z Jack Dorsey and others are doing certain things with cryptocurrencies in like within Africa across the different countries of Africa.
It makes sense. And we've seen it work. But I think based off of just how the financial system is set up in America, I don't know if we're if we're around the corner that working for underserved the underserved in America. But I do think cryptocurrencies have that opportunity to do that. This is maybe a little bit of a philosophical question, but we see these big banks, the incumbent institutions, obviously getting super into cryptocurrencies in the future. Of money, but still doesn't feel like they're focusing in on the underbanked or unbanked.
What do you think is preventing them from creating offerings like Cap Way or having spinoffs that address the issues that you're addressing? Is it because it's not lucrative enough? Why do you think they're not solving it and people like you are necessary still you hit this spot, aren't they think is not lucrative. And, you know, I've had investors who would say like, oh, like, I don't think that's now focusing on underserved folks and on overlook. I don't think that's a very lucrative space.
And then I politely go in poor numbers. You know, there's a reason that there are so many Check-cashing places that payday lenders, they're very lucrative. So they're clearly making a lot of money.
Our audience is also Gen Z because they are typically in that space of being overlooked, underserved, because they will not use the full service of traditional banking dare. They're spending power purchase power is is crazy. So there's plenty of money in the space that we're in.
But honestly, most won't admit it outside of the fact they may think, well, some do think it's not lucrative. Most just don't understand it because they're not they're not in it. They don't most people have it.
They're not exposed to it. Maybe yeah, I've I've really had investors who have asked me questions of like, I don't are that many people in America actually unbanked or is this really a problem? That we face? So is they in a bubble? And when you're running, you know, $1,000,000,000,000 bank or a multi big billion dollar bank and you've never been to the delta of Mississippi or you've only been to South Beach, Miami, I mean, to the other side of Miami where people are financially struggling. If you've only been to North Chicago, now, South Chicago, you all only been to Manhattan.
That's in the Bronx. I mean, there's pockets everywhere. But most people, they don't see it, whether they choose not to see it or their bubble allows them not to see it.
But is there do you find that being who you are in this world, it adds challenges that you wouldn't otherwise have? Yeah, I think that I don't dwell on it, to be quite honest. I don't I don't fall into like a pity party about it. However, I am realistic in saying that it is a huge issue. It's a huge issue. Even today, whether you're talking about raising funds, which black women get less than 1%, whether you're talking about you know, whether you want to call it conscious or unconscious bias, however you choose to look, it is is your thing.
Is there you know, I will say even personally for myself, getting into this whole banking field, in this finance finance field, I would meet people who is I mean, think about it. I'm a black woman with a southern accent from Mississippi walking into and trying to raise money for a digital bank. I'm sure there no one that looks like me who talks like me has walked in and ask for money. For a digital bank.
So because if people want to meet it or not and that if they invest in what they know, what they're comfortable with, whether they have to borrow cold weather days because we both with the Stanford, whether that's because if I got an intro from my friend over here it no firm X whether I want to admit it or not, that's just the case. I think to some degree we all like that. I mean I will laugh myself if I get a call, email I'm probably going nowhere for the most part. But if my friend says, hey, I might the angel you to person X, I'm going to say cool, I'll take a look at her. I'll talk to them. Black women don't have that form of a network, and I always say records that people want to admit or not.
However, you look at the layers of America, black women always ball layers, and it shows when we're trying to raise money, it shows when we're trying to work the skill out companies, it shows across the board, and that is not just a saying it. No show stats show it, data shows it. So I don't honestly though, I don't fall into the pity party of it.
I do. I had to do to grow my company. But is there I understand that I have to be ten times better, a hundred times better every single day.
I understand that when I walk into a room, I got to have a hundred thousand people on my platform to get half of the money that somebody who has 5000 people on their platform and I know that is there. It happens to me today. I talked to an investor today who I know their company might have invested Person X, who has half of our attraction and yet they'll give me the feedback. Oh, you're a little too early. We need to see more traction. If you like what you saw and you like what you heard, you can listen to the entire episode of this podcast Business Casual, anywhere you get your podcasts.
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