Different demographics often have different banking needs. So it’s no surprise that we have seen a flurry of financial technology startups offering banking services catered to certain populations based on factors such as 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 older members of our society. Enter Charlie, a new startup offering banking services for the 62+ community, which launched today with $7.5 million in funding. 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 their Social Security check, 3% earnings on balances and no monthly fees or minimums. Users will one day also be able to get “frictionless, embarrassment free discounts” just by using their debit cards, Nazemi said, so they don’t have to do things like show an AARP card or their ID to prove they are seniors. Like many fintechs, Charlie is not a bank -- its banking partner is Sutton Bank.
One of the things Charlie is designed to address is the fact that until a person retires, they are accumulating assets. But once they retire, they go into “deaccumulation mode.” That can be scary and challenging. To help older adults adjust, Charlie will let customers withdraw their Social Security benefit up to four weeks early.
While older adults are not typically as tech savvy as younger generations, the COVID-19 pandemic pushed many members of this population to do more things online, including banking, noted Nazemi. Still, the company’s site and app is designed “to make the interface user-friendly 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 (a tech-enabled medical insurance provider backed by Alphabet that went public in March 2021) and Renew Health, a technology-driven health platform focused on retirees. 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 Chief Product Officer Ayokunle Omojola and Gokul Rajaram.
Jake Gibson, founding partner of Better Tomorrow Ventures, believes that the “vast majority of founders, including in fintech, tend to build products for people that look like themselves.”
Charlie co-founder and CEO Kevin Nazemi. Image Credits: Charlie
“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,” he wrote via email. “I've known Kevin for many years, and he's a formidable operator, with experience founding Oscar Health and then Renew, and he's been passionate about this problem 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 seed round.”
It’s not other fintechs that Nazemi sees as Charlie’s biggest competitors, though. It's big banks -- which he said often are designed for people working full-time and generating income -- and community banks, which may offer a better consumer experience but are still “not built for the unique needs of those 62+.”
Down the line, the goal is to build an age-based, risk-tolerance-based deaccumulation ETF, Nazemi said, as well as a product called a home pension, where Charlie can enable users to use a portion of their home equity to supplement their social security check.
“We want to build a solution where we say hey, have 90% of it still go to your legacy, but if you choose to, you can have 10% of it turn into income for you,” he added.
Charlie also plans to release a number of tools around fraud, starting with senior-based transaction monitoring so that it can help “capture fraud before it happens.”
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