Banking While Black: Digital Banking and the Black Community

It may not be the return of Black Wall Street. But from veteran bankers leading their institutions into the digital future to celebrities and athletes, who are leveraging their fame to encourage African Americans to take advantage of digital financial tools, the challenger banking revolution that is sweeping the globe is also creating new opportunities for banking in African American communities.

As part of our Black History Month commemoration, we’re taking a look at three, digital-first neobanks – and another that was a digital pioneer ahead of its peers – that were founded and are run by African Americans. It is especially interesting to see how all of these financial institutions both respond to the financial wellness needs of the individual while also working support African American small businesses.

It should be noted that digital banking customers who want to support black-owned banks also have the option of signing up for the online offerings of the more than 40 brick and mortar black-owned banks in the U.S. that provide digital banking services.

First Boulevard – Headquartered in Overland Park, Kansas, First Boulevard offers “Unapologetic Banking Built for Black America.” In addition to a contactless Visa debit card and P2P payments, First Boulevard also includes programs such as Early Payday, which enables account holders to get paid up to two days early, and rewards program called “Cash Back for Buying Black.” This program gives First Boulevard accountholders up to 5% cash back at participating African-American businesses.

First Boulevard charges no overdraft or monthly fees, and has no minimum balance requirements. The bank’s app features PFM tools that enable users to round up purchases to store away extra savings, as well as provie spending recommendations and real-time insights based on the user’s purchases.

Initially introduced as Tenth last fall, First Boulevard has raised $5 million in funding. The challenger bank made fintech headlines earlier this month on news that it had partnered with Visa to pilot the payments giant’s new suite of cryptocurrency APIs.

“(First Boulevard’s) mission is to help Black America build wealth,” said CEO Donald Hawkins. Hawkins co-founded First Boulevard along with COO Asya Bradley, who was recently recognized as an “Inspiring FinTech Female” by NYC FinTech Women. “We are thrilled to partner with the leader in digital payments, Visa, and leverage their crypto APIs to provide another channel for the Black community to access crypto as a new asset class that can help build Black wealth,” he said.

Greenwood Financial – Founded by a host of African American notables including Civil Rights leader Andrew J. Young, rapper and activist Michael “Killer Mike” Render, and Bounce TV Network founder Ryan Glover, Greenwood Financial blends “best-in-class” online banking services with innovative strategies to support black and Latino-oriented causes and SMEs.

Greenwood borrows its name from the Greenwood District of Tulsa, Oklahoma, which featured what was called “Black Wall Street” of early 20th century black-owned financial institutions established in the wake of the Reconstruction Era.

The firm’s C-suite includes Aparicio Giddins, President and Chief Technology Officer, a former executive at both Bank of America and TD with years of work in mobile product and emerging platform management – experience that will prove critical in helping Greenwood grow.

“I wanted to start a bank out of college,” Giddens told ABC News in an interview earlier this year, adding that he was motivated in part by the fact that he observed so few African Americans in banking. In Greenwood, he recognizes the opportunity not just to increase African American representation in the industry, but to bolster the community by using black-owned banks to “recirculate dollars” back into the community.

Greenwood Financial raised $3 million in seed funding back in October. Last month, the platform announced that it has topped 500,000 sign-ups for its virtual banking solutions in its first 100 days. Greenwood’s offering includes savings and spending accounts, virtual debit cards, P2P transfers, mobile check deposit, and no-hidden-fee ATMs in more than 30,000 locations.

OneUnited Bank – In addition to being the largest African-American owned, FDIC-insured bank, OneUnited Bank also has the distinction of being a pioneer in Internet banking among black-owned banks. Founded in 1968 as Unity Bank and Trust Company with $1.2 million in capital, OneUnited Bank has grown into a multi-branch bank and community development financial institution (CDFI) with more than $680 million in total assets. And with offices in Los Angeles, Boston, and Miami, OneUnited Bank has financed more than $100 million in loans over the past two years.

This month, the institution announced its OneTransaction Campaign. In partnership with Visa, and including a free virtual financial conference on Junetheenth of this year (June 19), the initiative is geared toward convincing African Americans to choose one transaction in 2021 to improve their financial net worth. Ideas range from getting life insurance to starting an automatic savings plan to get rid of high-interest debt.

“The reality is the racial wealth gap for each family can be closed by one strategic transaction,” OneUnited Bank Chairman and CEO Kevin Cohee explained. “By encouraging our community to accomplish One Transaction in 2021, we can make financial literacy a core value of the Black community and create generational wealth.”

Last fall, OneUnited Bank announced a $10 million deposit from international biotech company Biogen. “This deposit is one of many ways we are delivering on our enhanced Diversity, Equity, and Inclusion strategy,” Biogen EVP for Global Product Strategy and Commercialization Chirfi Guindo said. “But for OneUnited’s customers, this deposit could mean allowing them to pursue their dreams or strengthening underrepresented minority businesses.”

MoCaFi – Headquartered in New York, MoCaFi (which stands for Mobility Capital Finance) is a black-owned mobile banking platform that specializes in helping members of underserved communities benefit from digital financial services. Founded in 2015 by CEO Wole Coaxum, MoCaFi combines 21st century financial wellness solutions with an equally contemporary awareness that – in many communities – both physical money and physical banking locations are a major part of the financial ecosystem. The company partners with retail stores to enable MoCaFi account holders to deposit and withdraw money from their accounts without fee.

Last fall, MoCaFi announced a partnership with Finovate alum InComm that will give members of the black-owned neobank the ability to load their MoCaFi Mobility Debit Mastercard cash at physical retail locations around the country. InComm Payments SVP of Sales Tim Richardson praised MoCaFi as “one of the fastest growing mobile banking platforms in the country” and highlighted the company’s ability to close the “cashless” payments gap for many underbanked consumers that do not have a traditional credit or debit card.

“We already know that Blacks and Hispanics spend at least 50% more on banking services than their white counterparts,” Coaxum said last summer as the company launched its upgraded banking platform. “This is not acceptable. MoCaFi is addressing structural failures in our financial system by reimagining services that ensure that all Americans have access to safe, secure, affordable, and convenient products and services.”

MoCaFi has raised $5.3 million in funding. The firm’s investors include Radicle Impact and Partnership Fund for New York City.

Photo by Christina Morillo from Pexels