Different demographic groups often have different banking needs. So it's no surprise that we've seen a spate of fintech startups offering banking services to certain populations based on factors like age and ethnicity.
For example, numerous fintech startups cater to younger users, from Greenlight to Step to Current and now, Acorns.
But far less common are fintechs dedicated to serving the older members of our society. Charlie, is a new company that provides financial services for the 62+ community, launched with $7,5 million in contributions. The company's goal, according to co-founder and CEO Kevin Nazemi, is to help retirees and soon-to-be retirees "make the most of their limited resources."
Features include faster access to your Social Security check, 3% benefits on balances, and no monthly fees or minimums. Users may one day also be able to get "frictionless discounts" simply by using their debit cards, Nazemi said, so they don't have to do things like show an AARP card or ID to prove they're seniors. Like many fintechs, Charlie is not a bank: its banking partner is Sutton Bank.
Charlie is designed to address the fact that until a person retires, they are accumulating assets. But once they retire, they go into "payout mode." That can be challenging. To help seniors adjust, Charlie will allow clients to withdraw their Social Security benefit up to four weeks early.
While older adults aren't typically as tech-savvy as younger generations, the COVID-19 pandemic pushed many older adults to do more things online, including banking, Nazemi said. Still, the company's site and app are designed "so that the interface is easy to use for those with visual or physical limitations."
The venture marks a new area of interest for Nazemi, who previously co-founded two companies in the healthcare technology space: Oscar Health (an Alphabet-backed tech-enabled health insurance provider that went public in March 2021) and Renew. Health, a retiree-powered health platform. After teaming up with Ivan Nausieda, Ibrahim El Tatawy, Ramesh L. Nori and Richard Kang in 2021 Charlie was born.
Better Tomorrow Ventures led the company's funding round, which included participation from Expa, Carbon Health's chief product officer, Ayokunle Omojola, and Gokul Rajaram.
Jake Gibson, founding partner of Better Tomorrow Ventures, believes that "the vast majority of founders, even in fintech, tend to build products for people who look like them."
“This is why we have so many repetitive neobanks, social investment apps, etc. In the meantime, you can probably count on one hand the number of fintech companies serving the needs of seniors, despite dealing with such a large population,” he wrote. “I have known Kevin for many years, and he is a tremendous operator, with experience in founding Oscar Health and then Renew, and has been passionate about this issue for a long time. When he came to us for advice on the problem, the market, the product approach, etc., we jumped at the chance to lead his round.”
However, it is not other fintechs that Nazemi sees as Charlie's biggest competitors. They are the big banks, which he said are often designed for people who work full time and generate income, and the community banks, which can offer a better consumer experience but are still "not designed for the unique needs of seniors." of 62 years”.
In the future, the goal is to build a payout ETF based on risk tolerance and age, Nazemi said, as well as a product called a homestead pension, where Charlie can allow users to use a portion of their equity housing to supplement your social security check.
“We want to build a solution where we say, hey, keep 90% going to your inheritance, but if you choose, you can have 10% turn into income for you,” he added.
Charlie also plans to launch a number of fraud tools, starting with senior-based transaction monitoring so it can help "catch fraud before it happens."
