Democratizing Access to Financial Tools

About you

I’m Alex Rossbach and I’m currently the Platform Product Manager at TaskRabbit where I get to work on really interesting payments related projects (among other things) and solve problems for millions of users around the world. Prior to TaskRabbit I was a Product Manager at Liftopia, a dynamic pricing tech company, where I worked on payments, API products and integrations for ski resorts in the US, Canada and Europe. I have a degree in Political Science and Economics so I’ve always had a soft spot for payments and financial infrastructure.

What does democratizing access to financial tools mean for you in practice?

For me, democratizing access to financial tools means bridging the product and services gap between the underbanked/unbanked and the rest of the financial world. There’s a lot of capital being thrown around for financial services and products that are focused on solving the problems of the banked middle and upper-middle class however there’s comparatively little capital allocated to providing services and products to the underbanked and unbanked.

In America alone 23% of adults are considered underbanked or unbanked^[1] by the Federal Reserve which makes that audience a huge social and financial opportunity. We have this product desert for the underbanked and unbanked where a lot of predatory and unregulated businesses and products spring up that take advantage of people who lack the financial resources or experience to utilize more traditional and regulated businesses and products.

For me in practice that means regularly tackling problems outside of my comfort zone. I think a lot of people get comfortable solving problems they’ve personally experienced and tend to discount problems they haven’t. Just because we haven’t experienced these problems doesn’t make them invalid or less worthy of solving.

Just because we haven’t experienced these problems doesn’t make them invalid or less worthy of solving.

I think that if we want to really democratize access to financial tools we need to be more inclusive, empathetic and more aware of the problems that affect people who are traditionally outside the scope of existing financial products. We need to grow the industry by appealing to more people not continuing to monetize and solve problems for our existing audience.

Personally I’d love to see a startup take on payday loans or used auto loans. Those are two very profitable industries that rely on predatory interest rates, opaque financing terms and the fact that the underbanked and unbanked don’t have better alternatives available to them. That opportunity seems ripe for disruption (apologies for using that dirty word) and could sustain a really successful business model while providing a lot of value to folks who are frequently taken advantage of by existing companies.

I like using the underbanked and unbanked population in the US as an example because it’s shockingly large. However, we can apply the same standards to a multitude of different groups that tend to be outside the purview of existing financial tech companies and startups. At the end of the day if we want to improve people's lives and finances we need to broaden our audience and start solving problems that traditionally have been ignored by the incumbent financial tech industry.

Can you share an example of a problem you’ve tackled to cater to those outside the typical audience?

A couple years ago I worked as a product advisor/volunteer PM with a now defunct startup called The Gift of Education whose goal was to make it easier for parents to automatically save for their children's college tuition via 529 contributions.

We had a moderately sized user base of passionate customers who had set up monthly contributions and would share our product with their friends and family. We tried time and time again to expand our user base by utilizing these passionate customers but weren’t very successful.

One day we discovered that we had a very large group of customers who registered but would drop off when we asked for their 529 account information. Once we started talking to those registrants it quickly came to light that these parents loved the idea of automatically saving for college but weren’t familiar with 529 college savings accounts and saw themselves as unready or unqualified to utilize financial products.

After that learning came to light we built a tool that answered commonly asked questions about 529 plans and provided step by step instructions for opening a 529 plan based on their home state. Once we launched the tool we saw our registration conversion and customer base grow quite significantly.

Our core team, with our background in tech and finance, were blindsided by the fact that a portion of our potential customers didn’t know what a 529 college savings account is. We unknowingly uncovered our bias and were thankfully able to course correct by building additional features that catered to customers that didn’t currently have a 529 account.

What are some ways we can exercise inclusiveness and empathy in the payments world?

Get out of your comfort zone! I think we all have a desire to be comfortable and only focus on problems that we’ve faced, but that leads us to build products and services in an echo chamber. People are more confident solving problems they’ve directly faced but it’s important to remember that there’s nothing stopping us from solving problems we haven’t experienced first-hand! It is a little more difficult but it is definitely possible.

Building on that I believe having a diverse group of potential customers and spending the time to listen to them and understand their struggles is key to building inclusiveness and empathy in the payments world.

A really great example I like to use is Steam. For those unfamiliar with Steam, it’s the world's largest digital store-front for PC games that services countries all over the world. In India Steam supports cash payments for digital PC game downloads. If you want to pay with cash they’ll send someone to your house to collect the cash and once the transaction is logged you’re able to download the PC game. It solves a problem most of us in the west wouldn’t think about as it’s not a traditional use-case but in India it’s a huge value-add and helps open up Steam to a whole group of customers who don’t have credit cards or bank accounts.

Considering that TaskRabbit functions as a marketplace, do you think there are similar opportunities in that domain?

Of course! I believe that all marketplace businesses have an obligation to help their contract workers and entrepreneurs build a sustainable and long-term business on top of the platform.

With so many Americans underbanked or unbanked there’s a significant subset of people who don’t have access to affordable capital. One thing I would like to see is for these marketplaces to offer low-interest loans and other financial planning tools to their workers and entrepreneurs to help them grow their businesses and skills on the platforms.

A good example of this is what Kiva and Etsy are doing with microloans to entrepreneurs on the Etsy marketplace (https://www.kiva.org/etsy).

A marketplace lives or dies by the quality of the workers on the platform. So this arrangement actually makes a lot of business sense since offering affordable capital and financial planning tools helps workers offer a better service to customers and increases retention on the platform.

Having more marketplaces offer similar services would benefit both the marketplace as well as the workers and entrepreneurs that list their services and products.

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1. The Federal Reserve. “Report on the Economic Well-Being of U.S.
   Households in 2018 - May 2019.” The Federal Reserve, 2019, https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-banking-and-credit.htm ↩︎