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From Affinity to a Major Market Shift: How Banking is Changing from Inclusion to Action

In our industry, we’ve long talked about the phenomenon of “affinity banking,” a concept tied more to marketing than to actual service of a community’s interests.

In recent years, thankfully, we’re seeing a slight shift from thinking about our customers as niche markets for us to tap into and toward seeing a community we can be part of and serve through our companies. At Daylight, we’re proud to be on the frontlines of this shift, pulling the banking industry forward with us.

Technology and the changing way we live our lives have changed the meaning of the word “community.” 

A community bank used to be the one down the road from your house. Now we have an opportunity to create a banking community through a platform that serves the types of people who need it most. In our case, that means banking for the queer community — wherever you are.

Our COO, Billie Simmons, recently sat on a panel about this shift in banking at Money Experience Summit alongside fellow founders Yemi Rose of OfColor and Andrei Cherny of Aspiration.

Riding the waves of social change

The uprising following George Floyd’s murder in 2020 was a long-awaited wake-up call for many companies and corporations to finally realize the importance of social responsibility — at least, the appearance of it.

And that created an opportunity for financial startups, which rely on the larger banking industry and infrastructure.

“That has sort of worked to allow startup founders to get a leg up and to start to partner with some of these organizations,” Billie said.

We have no illusions that these corporations partner with community-focused companies like ours out of the goodness of their hearts. They understand it looks good in a press release and they understand that inclusivity is an actual business advantage.

“I think that’s fine,” Billie said. “If that’s what they get out of it, we can also get a ton out of it, too. And if we can empower our community financially, using the opportunities that are available to us, then great, that’s fine.”

Banking like a gay bar

We’re clear at Daylight that everyone is welcome — as long as you’re not a dick. You don’t have to be a member of the LGBTQ community to use our platform or to support the financial success of queer folks.

So how do we maintain a safe space for the community we serve while welcoming allies who want to join us?

“It’s like a gay bar,” Billie said. “Anyone can go into a gay bar. If you’re going to be an asshole, we will kick you out. If you’re going to be cool, and support everyone there, then that’s great. You can join.”

Doing the most good

Despite an onslaught of companies that want to clean up their image by supporting LGBTQ causes, we face an unfortunate reality: We literally aren’t able to restrict who we work with to organizations that have never worked against the LGBTQ community. 

Put simply: Not enough of them exist.

For centuries, we’ve lived in a world where it’s been socially acceptable to be outwardly homphobic and transphobic, and that’s only slowly changing in a few areas. 

So how do we operate in a way that serves our community and aligns with our values?

“It’s about taking a nuanced view,” Billie said, “how can we do the most good for our community, while understanding that there are always going to be tradeoffs? Where can we refuse to make those tradeoffs? Where can we drive change from within?”

Building community through storytelling

All of us who provide banking platforms for communities who’ve been historically underserved by banks and financial institutions know we face a challenge when it comes to building trust, even within our own communities.

Here? We do it by sharing our own stories.

Billie shared hers: “I started Daylight because I am a trans woman who transitioned in America, and it was a fucking nightmare to change my name on all of my debit cards, on my bank accounts, and I still have one credit card that I have never updated my legal name on because it was so hard to do.”

We share the stories of our founders, our majority-LGBTQ team, our customers and our partners. Because we know those stories matter.

We know they matter, because they drive the kinds of services we offer, and we hear from our customers how that affects their lives.

When customers tell us how important it’s been to be able to use their chosen name on their debit card, so when they get coffee with coworkers the barista calls out the correct name from their receipt, those stories are powerful. That’s more than putting a rainbow on a card. That’s having an impact on someone’s daily life.

“Particularly for the trans community, money is the gateway through which we self actualize,” Billie noted. “It costs a lot of money to transition [medically]. And that is really emotional. I think the only way we can [build that trust] is just by telling our stories.”

It’s more than a marketing campaign

Andrei called out a recent study that showed 25% of Americans think first about issues like sustainability when they choose a financial product, before details like interest rates.

The three biggest banks in the country each have about 10% market share — which means the “niche” for affinity banking is bigger than any of them. 

And when you factor in the size of the LGBTQ community, the BIPOC community and millions of other folks underserved by traditional banking, that adds up to a big need for platforms focused on serving communities.

That means community is no longer just a way to market our services. Serving our community is fundamental to the way we operate — and we’re hellbent on moving the industry forward with us.

“There’s still some idealism in me,” Billie said. “I think I can actually make some change with some of these large organizations. … There’s 30 million LGBTQ Americans, and all of those people have friends, have supporters, have families, have children, and there are the parents of queer children.  There’s actually a huge, huge community of people who are committed to LGBTQ liberation.”

Dana Sitar is a personal finance writer, editor, writing teacher and owner of Dana Media. She’s written about work and money for Forbes, the New York Times, CNBC and Inc. Magazine. She founded Healthy Rich to publish stories that illuminate the diversity of our relationships with work and money.

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