If you were to look at fintech apps at random, you’d quickly spot ones that help you collect your paycheck earlier, settle up IOUs and invest your money. If you spent a little more time digging, you might uncover banking apps designed for immigrants, Black Americans and the LGBTQ community. What you likely wouldn’t notice are products built for the formerly incarcerated. Until recently.
Stretch, an early-stage fintech startup, is now making the audience its sole focus in an attempt to win over a group of people who are up against all kinds of financial challenges, including securing work.
“Having spent 10-plus years in the industry, we saw a very overlooked demographic with so much need to get the right solution and service,” says Yasaman Hadjibashi, founder and co-CEO at Stretch and a former group chief innovation director at Barclays. “It has been literally unserved or underserved.”
If Stretch has its way, that is bound to change for the 600,000 or so individuals released from U.S. state and federal prisons every year.
Digital banking, job leads for individuals with criminal records
Right now, the Dallas startup partners with Evolve Bank & Trust to offer a no-monthly fee account with features you’d expect like debit cards and free ATM access. But the bank account is secondary to another feature in the web app: job leads at companies that hire individuals with criminal records.
“Yes, you have a free checking account, but the main thing is being able to find that job so you have a place to put that paycheck,” says Keith Armstrong, founder and co-CEO at Stretch, which works with Honest Jobs to collect job leads.
While more employers are open to hiring the formerly incarcerated given the tight labor market, these individuals are still up against much higher unemployment rates compared to the general population, and observers say it got worse during the pandemic. So the idea is for them to use Stretch as an antidote.
In October, Stretch started courting its first customers through a partnership with the Anti-Recidivism Coalition (ARC), a nonprofit in Los Angeles that helps the formerly incarcerated rebuild their lives across California. Stretch is one of the first challenger banks to pursue the demographic and its soft launch represents part of a larger trend of bank accounts becoming ever-more targeted to help underrepresented groups.
It won’t be the last.
A grant for nonprofit-fintech partnerships seeking to help the formerly incarcerated
Stretch and the ARC are among the 2021 grantee winners of a program run by the Financial Health Network’s Financial Solutions Lab. The program is currently focused on projects designed to help …….
Source: https://www.bankrate.com/banking/bank-accounts-for-people-leaving-prison/