Recent years have seen the launch of many fintech (financial technology) startups but more recently, such ventures have been targeted towards a more specific demographic in terms of race, ethnicity, and age. This is due to founders branching away from the usual target audience group and regarding the underserved market.
Founders are looking at the other demographics
As of May 2023, research by Statistica shows that there are 11,651 fintech startups in the Americas most of which serve young people aged between 27 and 42 years. This has created a lot of congestion in the market for fintech services to millennials while leaving other age groups and races unattended.
Jake Gibson, founding partner of Better Tomorrow Ventures, told TechCrunch that he believes the “vast majority of founders, including in fintech, tend to build products for people that look like themselves.”
That’s why we have so many repetitive neobanks, social investing apps, etc. Meanwhile, you can probably count on one hand the number of fintech companies serving the needs of seniors, despite that being such a huge population.
And since this demographic bias creates a lucrative market for fintech products and services to the underserved market, it should come as no surprise that a number of financial technology businesses have sprung up, offering banking services tailored to specific demographics based on characteristics like age and race.
Fintech for over 62s
One such fintech startup is Charlie, a new startup offering banking services for customers over the age of 62. With $7.5 million from a funding round led by Better Tomorrow Ventures, the startup launched last week in order to help retirees and those who will soon enter retirement “make the most of their limited resources,” says co-founder and CEO Kevin Nazemi.
While this age group is not fond of fintech solutions and services due to skepticism about online banking, the COVID-19 pandemic convinced many of them otherwise due to its simplicity and convenience.
Additionally, such customers have very few digital banking options and so despite some of them having trouble trusting such services most will welcome any solution catered to them.
Another example is Greenwood whose target market is Blacks and Latinos. Named after the Greenwood neighborhood in Tulsa, Oklahoma, which had previously been known as Black Wall Street before being completely destroyed in a massacre in 1921, the bank is established not only to serve the two races but also to support them in their businesses and growth.
Each month, Greenwood said it will provide a $10,000 grant to a Black or Latino small business owner that uses the company’s financial services.
Additionally, every time a customer uses a Greenwood debit card, the bank pledges to make a donation to either the United Negro College Fund, Goodr (an organization that addresses food insecurity), or the National Association for the Advancement of Colored People.
While the bank is no longer a startup, it has captured the Black and Latino market and has even gained the support of major players in the financial industry including Bank of America, PNC, JPMorgan Chase, Wells Fargo, and Truist.
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