An interview with Jason Hartman, Medium.
The way we bank has changed dramatically over the last decade. It was not too long ago when you had to wait in line in a bank to deposit money. Today things are totally different. You can do your banking without ever walking into a bank. In addition, the whole concept of money has changed. In the recent past, money usually meant bills and coins. But today, the concept of money has expanded to include digital currency and NFTs. What other innovations should we expect to see in banking in the short and medium term?
To address this, we are talking to leaders in the banking, finance, and fintech worlds, to discuss the future of banking and money over the next few years. As a part of this series, I had the pleasure of interviewing Charlie Hernandez.
Charlie has a background in finance and law. He is an accredited attorney in California. Charlie graduated simultaneously with a JD from Harvard Law School and an MBA from Harvard Business School. Prior to that, Charlie graduated from Harvard College, where he received the Harvard College Scholarship, awarded to students whose grades place them in the top 10% of the class. He was born in a Mexican family in Los Angeles, where he attended high school in the Pico Union neighborhood. Charlie’s family has long worked in the Latino community: his mother is the Vice Chair of the Smithsonian National Latino Board, and his father was the Chairman and CEO of Telemundo.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started in this industry?
Igrew up in a community in Los Angeles that was made up of many recent immigrants. While most of the families had immigrated to the U.S. from Mexico, we knew families from almost every country in Central and South America. Regardless of where they were from, I began to notice at an early age that recent immigrants faced challenges that other members of the community did not. I would later realize that these challenges stemmed from documentation issues, language issues, and even problems around accessing credit, but at the time I just knew that if I could, I wanted to help my community face these challenges. This led me to focus my early career on developing an awareness of the financial and legal frameworks that I would later have to navigate to address these challenges. I had the opportunity to attend Harvard Law School and Harvard Business School at the same time and study under some amazing professors there. I spent time working at law firms in Mexico City and ultimately took the bar exam in California. I took a finance job that had me traveling to a different country in Latin America nearly every week for about two years. Spending time in Colombia, Brazil, Chile, and Peru, I developed an understanding of the way the financial and regulatory systems in those countries worked and how nascent technologies were improving access to financial products. Eventually, I began to realize that solutions to many of the challenges I’d observed in my own communities could be found through financial technology, and that’s when I began incubating FinTech start-up ideas.
Can you share the most interesting story that happened to you since you began your career?
When we first went to Silicon Valley to raise venture capital for Crediverso, I was a first-time founder. We were building something that wasn’t being done by anyone else, and we were doing it for a community that had long been underserved — some might say overlooked, even forgotten. You’d think these factors would be enough to keep investors away from our company. But the opposite happened — our seed round was heavily oversubscribed, with interest from top tier funds. This was the most exciting, most interesting thing that had happened to me in my career because it showed me there were others out there that believed what I believed. There were investors that were willing to put not only their dollars behind this vision but their time, their reputations, and their insights. This invigorated me with a renewed sense of purpose and an expanded scope of what I thought was possible.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
I’ve always admired people who focus themselves on a singular idea and dedicate all their energy towards solving one problem. Bruce Lee once said “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.” I’ve known for a long time that the kick I want to practice 10,000 times, metaphorically speaking, is finding a way improve the lives of immigrants in the U.S. Thinking of this quote helps me maintain a laser focus towards solving that problem.
Ok wonderful. Let’s now shift to the main focus of our interview. Can you tell our readers about the most interesting projects you are working on now?
With Crediverso, we’ve built a solution for the unbanked and underbanked Hispanic families in our country. Crediverso offers a fee-free, FDIC insured checking account and debit card that is fully available in Spanish, including the customer support, and that is designed to bank family members who aren’t fully documented citizens. This is the first solution that really addresses the needs of this community, and I am unbelievably excited at the positive change we are going to make here.
How do you think this might change the world?
We spent a long time trying to understand the needs of the Hispanic community in the United States. The challenges are many, and they are different, but they begin at a common first step: moving from a cash and check economy to the formal financial ecosystem. Many families are either entirely unbanked — meaning they don’t have access to financial products at all — or are underbanked — meaning they might have a bank account but are using things like pawn shops and payday lenders instead of much healthier low-APR loans and credit cards. We’ve built an app that is designed to be the first bank account for someone who moves to this country. This gives people a safe place to keep their money. It gives them a debit card they can use to shop online for the first time. It gives them the comfort of knowing that they are a part of the U.S. financial system without having to worry their information will be shared with immigration services. It helps families get close to achieving their American Dream — the same dream that brought them to move to the U.S. in the first place. And given the relevance of the Hispanic economy within our larger economy, improving that community positively impacts all Americans.
What most excites you about the banking or payments industry as it is today? Can you explain what you mean?
The opportunity for innovation in banking has never been greater than it is now. The advent of new technologies in open banking, banking-as-a-service, and payment processing over the past 2–3 years has expanded by multiples the possibilities to creatively solve big problems. If leveraged correctly, these technologies have the potential to greatly improve access to financial services and products in ways that did not exist just a few years ago. We’ve partnered with a banking-as-a-service company called Rize that is a perfect example of this. Through their platform, we are able to partner with a licensed bank to offer banking products that are purpose-built for our consumers.
What most concerns you about the banking or payments industry as it is today? What would you suggest needs to be done to address that?
U.S. regulatory frameworks will face continuously mounting pressure to evolve to reflect the needs of people who are not highly visible within the system. Underbanked and unbanked consumers, recent immigrants, and those living below the poverty line lack representation in the policy-making process, and without a voice at the table their needs can easily fall through the cracks. Luckily, this represents an opportunity for FinTech firms. I tell every new hire at Crediverso that one of the reasons I believe in our company is that I’ve never before seen such an alignment of incentives between the public good and the business case: if we do our jobs correctly, by building a growing, scalable and profitable company we will simultaneously be directly helping members of our community in a very meaningful way.
How would you articulate how the concept of money has changed in recent times? Is it really a change? How is it still the same? Can you explain what you mean?
It is no surprise that fiat currencies have become increasingly digital. In many parts of the country, you don’t need a wallet anymore as long as you have your cell phone. Unfortunately, many banking and technology deserts still exist, especially in immigrant communities, where both consumers and small businesses don’t have the same access to payments or point of sale technologies. So much innovation has occurred in spaces like frictionless checkout and BNPL that has not yet been extended to small businesses in immigrant communities. We want to extend this innovation. This is a major missed economic opportunity and I see a large white space to empower the small business and democratize financial accessibility.
Based on your vantage point as an insider in the finance industry, what innovations should we expect to see in banking in the short and medium term?
I think we can expect continued innovation in the fields of verticalized finance and product personalization. Classic retail banking required a one size fits all model for the products and services a bank offered in order to appeal to enough people to justify a high street retail location in the middle of the downtown central business district. If your product offerings didn’t attract enough people in your area, you couldn’t maintain that location. The byproduct of this approach was that if you lived in a community that wasn’t large enough to warrant its own bespoke product or marketing approach, you had to make do with the generic product. Now, while your community might be too small to garner attention from the incumbents in each individual market, on a national aggregate basis those communities represent massive markets. FinTech products can address these groups in aggregate, finally offering them bespoke products built for their specific pain points in a way that solves problems for the consumer and creates a massive market opportunity for the FinTech.
How has the pandemic changed the way banks interact and engage with their customers?
While there has certainly been an accelerated shift towards mobile and contactless payments as consumers changed the way they purchased items, I think the more important shift has been in in how banks have had to approach reaching their customers. Higher customer acquisition costs via digital channels have necessitated more innovative distribution channels, especially offline. This has led us to double-down on our efforts to be embedded deeply within the communities we operate.
In your particular experience, how has the pandemic changed the way you interact with, and engage your customers?
We began designing solutions for the U.S. Hispanic demographic because we saw a need amongst these communities. However, due to the pandemic, where there was need before there is even greater need now. As small businesses and immigrant communities bore much of the brunt of COVID lockdowns, the wealth gap has continued to increase. Communities are facing higher relative levels of unemployment and are in need of solutions even more urgently than before.
I’m very interested in the importance of user experience. How much of your interactions have moved to digital such as chatbots, encrypted messaging apps, phone, or video calls? How has this shift impacted the user and customer experience? What challenges do these apps present when used as a customer engagement tool?
We service a community that communicates primarily through word of mouth, and almost exclusively via a handful of messaging apps. This has led us to focus on ease of interaction and shareability across these platforms. You always want to meet customers where they are. The challenge here is that not all these platforms are 100% developed yet to do what we need them to do, so we are often faced with the need to build add-on services on top of them. This requires flexibility and problem solving on behalf of our product team.
If you could design the perfect communication feature or system to help your business, what would it be?
Legacy banking has historically relied on a notoriously “one to one” model. But our community doesn’t engage with financial products that way — our community is heavily family driven, with decisions being made at a family unit level that requires involvement from multiple parties. This is a “one to many” model, and it necessitates a communications and UX platform that can accommodate that collaboration across different parties.
Fantastic. Here is the main question of our interview. What are your “5 Things You Need To Create A Highly Successful Career In The Modern Finance, Banking and Fintech industries? (Please share a story or example for each.)
- Deep awareness of regulatory frameworks and trends. We’ve seen competitors struggle and even go out of business because they were caught off guard by serious, if predictable, actions from regulatory bodies. This is a fundamental component to this business that should not be ignored or discounted.
- Deep consumer understanding. A successful career begins with a successful product, and a successful product requires you to know your consumer better than anyone else. We are excited about this opportunity because our team is literally built out of our consumers — our Head of Product is a Cuban immigrant, our top engineers are from El Salvador and Morocco, and our Head of Marketing is a Brazilian immigrant. It is a lot easier to build for someone when that person is your neighbor!
- Communication skills. This is a field with many stakeholders — team members, investors, consumers, regulatory agencies. You have to be able to define a vision for yourself and communicate it to others, ultimately making it their vision too.
- Vision execution. The future of banking will be driven by startups entrepreneurs and innovators. This is a field filled with big ideas and grand dreams. But banking inherently requires a heavy focus on architecture and infrastructure, meaning that perhaps even more than most other fields these dreams need execution.
- Problem solving nature. As times change, the needs of consumers change, and this will require new solutions from bankers. No matter what, things are going to go wrong. You need to problem solve constantly and surround yourself with people who have the same mentality.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
Crediverso was built to democratize access to financial products, services and education. Ultimately this is designed to provide people with the tools to create generational wealth. Our communities are remarkably entrepreneurial and driven, and we just need to provide them with the same tools that have been available to others for generations so they can truly thrive. Our goal is to bring this segment of the population into the formal financial economy and enable all the wonderful growth and ideas that will come with that. By giving a family their first bank account, maybe we can set them on a path to their first mortgage, their children’s first student loans, and so forth. Our mission seeks true positive change.
How can our readers further follow your work online?
The best place to learn about the new things we’re building is at our website, www.crediverso.com.