FinX: Putting the Customer First

by Arjan Schütte

Why is it that at every financial services conference I’ve attended the past decade, someone implores attendees to ‘put the customer first’? I presume it’s because the business community by and large doesn’t, despite thinking we do. We struggle putting customers first because oftentimes we don’t adequately understand them.

While we’ve all heard of the underbanked, very few in the financial services industry have a clue how they manage their financial lives. Most assume the un- and underbanked are a small minority, instead of nearly a third of everyday Americans who spend nearly $150 billion per year on interest and fees for basic financial services.

Dating back to my time with the Center for Financial Services Innovation (CFSI), they have been leading teams on the equivalent of financial services safaris with the very purpose of putting the customer first. Covering regions from the South Bronx to Johannesburg, South Africa, early tours were informal, taking a team through low-income neighborhoods to visit a check casher (gasp), learning about how many financial offerings local convenience stores provide beyond the obvious selection of Kit Kat bars. Several years ago, CFSI turned these excursions into a science, dubbing the experience as FinX.

This past May during Core’s Annual Limited Partner Meeting in New York City, we took our investors on a CFSI-guided FinX in-the-field workshop, replete with permission slips and maps. At Core, we are committed to putting the customer so far ahead that the products and services of our portfolio companies have reached over 25 million everyday and underserved Americans, saving them $18 billion since Core’s inception six years ago. My partner Kathleen and I wanted to share the FinX experience with our limited partners because of the relevance to our mission, and the results were more varied than one might expect.

The expectation is that alternative financial services for low-income populations are terrible: dirty, bullet-proof glass, long lines, and expensive to boot. With a few exceptions, these pre-conceived notions were true. We divided our investors and Core team members into groups of three, with each group sent out into Manhattan with a paycheck for $80 and a list of instructions prepared by CFSI. Assignments included cashing a paycheck, paying a bill, purchasing and depositing funds onto a prepaid card, etc. Being a timed exercise (with a competitive element, rewarding teams with the most tasks completed within the timeframe), we received plenty of feedback as to how long everything takes, and truly how arduous the ‘Know Your Customer’ process is.

But more interestingly, during this particular FinX, the results were more mixed. Some teams were surprised by how efficient the process was to complete each assignment. For example, a bank branch does not explicitly list their fees clear-as-day on a board in the lobby, while check cashers do. The relevant financial services locations are also incredibly convenient to where people work. Many people don’t even notice them without being directed to seek them out. In Manhattan, check cashers are almost as common as bank branches with the distinction that they keep longer business hours, as noted by one of our FinX teams.

When everyone returned to our meeting conference room 90 minutes after being dispatched, the mood was optimistic. Placing yourself in someone else’s shoes is something we do so rarely and yet is oddly satisfying; essential to the business world’s oft-repeated mantra of ‘putting the customer first’. Special thanks to our limited partners for accompanying us for our FinX journey, and to CFSI for making it possible.

Core Innovation Capital is a fintech venture capital firm investing in companies committed to empowering small businesses and everyday Americans. Our portfolio companies deliver more efficient, well-designed solutions that save people time and money, create upward mobility, and scale broadly — driving both profit margins and consumer value.

Working Your Core

Core Innovation Capital is a fintech venture capital firm investing in companies committed to empowering small businesses and everyday Americans. Learn more about us at corevc.com.

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Core Innovation Capital

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Investing in economic stability and upward mobility for everyday Americans. #CoreVC

Working Your Core

Core Innovation Capital is a fintech venture capital firm investing in companies committed to empowering small businesses and everyday Americans. Learn more about us at corevc.com.

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