Transcript
Welcome to Money Isn’t Everything. I’m Mary Wisniewski, Cornerstone Advisors editor-at-large. Every other Thursday, we bring on a guest who is shaking up financial services in some way, and we get into the why, how, and possibilities.
My guest this week is Tony Benado. He’s the head of product at Charlie, which is the neobank for the over-62 crowd. We talk about pausing payments to try to reduce fraud, the movie Thelma, where the neobank is courting its customers, and whether or not our parents go to the clubs.
Tony, welcome to the show. Thanks so much for being here.
Yeah, thanks for having me.
Before we get into the heart of the conversation, I want to do a quick-fire round of questions. Just give me thumbs up, thumbs down, unless you want to wax on about anything.
One, two, three. Thumbs up, thumbs down: buy now, pay later payments for consumers?
Buy now, pay later, thumbs down.
Okay. Two more. Fintech bank regulation?
Oh, thumbs up.
And faster payments?
Oh, thumbs down.
See, and that will lead us into the later part of this interview. Thank you. I thought that went through okay.
Charlie was a neobank that got on my radar, I think, about a year ago. I was like, wow, this is seemingly so counterintuitive because here’s a startup focused on the 62-plus crowd. You really don’t see that.
I think partly because there are stereotypes around that, but partly there’s much more going on there.
I know you just went to see this movie that I was just thinking about, Thelma, which takes on the very issue that you’re going after. I thought this would be a perfect way to set the stage.
What is this enormous problem that the over-62 crowd is up against in an unusual way?
Well, I think what we’re seeing at Charlie is the 62-plus community today is really under attack. Fraudsters are trying to take their money at every opportunity.
You can’t check your email, you can’t answer the phone, you can’t read your mail without someone trying to take all of your money.
Charlie is a bank that we designed from the ground up to really be a great experience and a safe experience for this 62-plus community.
Yeah, and this movie, which takes on this theme, it’s about a 90-something-year-old woman getting scammed, right? Except she takes a spin on the typical storyline.
I haven’t seen it. I don’t want to spoil it for people, but I’m pretty sure she goes after the bad guy.
Yes, she does go after the bad guy. That’s right.
But I think most people in situations like this might not go after the bad guy themselves. That’s what Charlie is here for, to try to protect the rest of the non-Thelmas out there that need a bank that is taking care of their needs.
I’m noticing, at least especially with my parents, they’re being targeted with Facebook scams, for example.
I know Cornerstone did some research with Charlie last year, but I still think this is a hard number to put on. How much do people lose every year to these scams, Tony? What’s the range here? What are we talking about?
The current official count is roughly $28 billion a year that this community loses to fraud.
I actually believe that number is significantly undercounting reality.
I’ve probably spoken to over 200 retirees in the last year or so, and almost every one of them had lost between hundreds and thousands of dollars to fraud at some point.
Very few of them told anybody about it because they were embarrassed. They were ashamed.
They didn’t want to tell their adult children about it because they didn’t want them to think that suddenly they couldn’t handle their finances.
This is happening to everybody.
I think one important message to get out is that they’re not alone. This is happening across the board.
So, I think $28 billion is really undercounting the severity of the problem.
I’m so glad you mentioned this shame thing because I was actually going to ask you about that.
I’ve been someone who’s, what does this say about me? Well, I’ve been robbed three times. They all happened in my 20s, but it was physical. My purse was stolen, or someone broke into my place.
I felt not only ill at ease because I was like, wow, this person has all this information on me now, but also like, oh, I don’t really want to open up about this.
Then I imagine, decades on, it might feel even worse because you’re like, oh, this is a sign of my age or something like that.
How do we, and this is a big question because it’s a big problem, help remove the shame? I feel like that’s so critical to also help attack this problem from the good side.
Exactly.
One of the ways that we think about this at Charlie, Charlie is a bank designed for this 62-plus community, and you have to be 62 years or older to sign up.
We offer more ways for you to get more for your money. We keep your money safe and protect you from fraud, and we try to deliver all of that with a relatable, respectful experience.
Just by virtue of doing that, by putting a stake in the ground and saying this community, this huge community, deserves a better bank, we’re addressing a truly universal problem.
I haven’t met a single colleague, friend, or person of our age who has a parent and is not worried about them.
I haven’t talked to a single 62-plus member of that community who isn’t worried about this issue.
But everybody feels like it’s just on them to solve for it.
We think we can actually build a better banking platform to address the issue head-on and let everybody know that they’re not alone.
You almost cued me up for this, but one of the repeating segments we do is “That’s What You Said.”
I listened to another podcast with you, and this is what you said on it: “You don’t want to think that the world is this way. I don’t want to think the world is this way. But unfortunately, American seniors are just under attack from scammers.”
Totally.
Very smart person said that, and also a smart person quoting it back.
Very sad.
I think one of the things that we’ve learned since Charlie launched last year was that this is a generation that is just really trusting.
They want to believe that people are who they say they are, and they want to do the right thing.
You have that combined with these fraudsters who are getting more and more sophisticated with AI and other tools to try to steal money from this vulnerable group.
This is what gets us up every day. It’s like this mission of, we’re at war with fraudsters. We have to do a better job of protecting this community.
We just believe in the mission so much.
I’m curious because this would be different than another startup where they’d be trying to find customers.
I know a lot of older adults will bank with a credit union or a bank, but they won’t necessarily have a tailored experience.
How do you go out and acquire these customers? Are you advertising on Facebook, for example? What are some of the unique approaches considering the age?
Sure. That’s a great question.
We think of trust as being paramount. You need to know that your money is in a safe place.
One of our approaches to this is that we partner with Medicare brokerages, unions, pension funds, places that already have an established relationship of trust with this community.
We present ourselves through those avenues just to make sure that someone knows that, well, if they have a relationship with this institution that’s already trustworthy, then I know that my money is in a safe place.
At the same time, this community is on Facebook and Instagram and, surprisingly, is on TikTok more and more.
That’s been a really interesting discovery for us.
We find more and more of our customers through these kinds of avenues, as well as through traditional channels.
How pervasive would you say they are on TikTok? Is it just starting to swing?
It’s just starting. I think it’s the early days of TikTok.
But I would say we find a very robust community on Facebook and Instagram.
We have to step carefully into these channels because these are also places where people are getting defrauded.
There is no such thing as a free iPad, and yet the number of people who click on ads and think they’re going to get a free iPad if they give their account information away, it happens all the time on Facebook.
Yeah. Let’s talk about more of those scams.
For my parents, one was so simple. My dad really likes this local market called Rudy’s in Clarkston, Michigan, and there was an advertisement for, like, enter this contest, get a free mug. But it was a scam.
That’s a mug. What are the other common scams you’re seeing on Facebook specifically? Or we could go broader than that too.
Sure. This is one of the things that, as we were discussing earlier, is one of the reasons we introduced this new product called SpeedBump.
Yes, the pause button. It’s like a pause button for your money.
Exactly.
One of the things scammers love to do on Facebook and in other channels is create artificial urgency, making you make a quick decision.
“This is only available, this iPad’s only available for five minutes.”
Or we see this all the time, and it’s really sad, where someone pretends to be a loving grandmother’s granddaughter.
Someone posing as their granddaughter says, “I lost my wallet. I lost my phone. This is a new phone. Please send me money. I need it right now.”
Of course, this person is going to send them the money because they want to help their granddaughter.
Then they realize a couple of hours later that it really wasn’t their granddaughter.
Again, this is the kind of thing that AI is only going to get better at, creating these scams and creating this urgency.
With SpeedBump, we do three things.
One is we pause money movement where we see typical signals of potential fraud.
If you’ve added a new payee that we haven’t seen before, you add a new device that we haven’t seen before, or you’re moving a large sum of money, we pause the money movement for a few hours.
We then notify you across all of the channels we can, email, text, and in the app.
We send you contextual education while you have this critical moment to just breathe and say, “Do you really know this person that you’re sending the money to? Are you sure about this? Just take a breath.”
The studies show that if you teach someone what a scam looks like, they’re 80% less likely to fall for it.
We want to make sure you really know this is the person you’re sending the money to and give you that space for calm.
SpeedBump does that. It just gives you a moment to say, “Oh, wait. This is actually not okay.”
Then you can cancel the transaction.
It’s just a little bit of a pause, and we hope that’s going to create a tremendous opportunity to stop fraud before it happens.
Tony, this is so interesting, and this would be really interesting to wider banking circles too.
Usually, you hear, “Speed up the payment. Speed up the payment.” But you gave that the thumbs down.
Do you think the industry should be putting in these pause buttons?
I love that question, Mary.
I’m excited that we are, I think, ahead of the game here and being the first people to release this kind of product.
But I also have a sense that maybe in the next few years, people are going to start wondering, “Why doesn’t every bank do this?”
We let the payments go through.
Eventually, once you’re through that pause, that SpeedBump period, the money still goes through.
We’re not interfering in the banking experience and the money movement experience.
It’s that undo button, or that pause button you said earlier, that just gives you that little bit of a moment to breathe.
We think, with that education, it’s going to be a really powerful way to stop fraud before it happens.
I think people are going to start picking this up in other banking circles.
Yeah, because I’ve always thought, “Oh, I want the oopsie button. I didn’t mean to buy that.”
I want this on my bank now.
I’m like, why doesn’t my bank have it? I can’t sign up for Charlie yet, but I’m getting closer every day.
Now I want my bank to have it.
What about, how did you come up with that six-hour window?
If you add a new payee, it’s a six-hour SpeedBump.
We feel like that’s the right amount of time.
I’ll take a step back.
You add a new payee, or we detect a payment from, or someone trying to access your account from, a new device, which could be a signal of account takeover, for example.
In both of these situations, we give you a six-hour window because we feel like that’s enough time for you to either address the problem yourself or call our customer support line so we can help you through it and fix the problem.
If it’s all okay, then after six hours the money will leave your account and go through, and everything’s fine.
You don’t have to do anything extra.
But you do have just the amount of time to actually address the problem if there is one.
You brought up your customer service line, and I remember thinking when I first came across Charlie, this was interesting to me because it’s U.S.-based.
You don’t always see that necessarily.
What’s the significance there of making sure, even putting it in the marketing materials, “This is a U.S.-based number”?
When we were doing the initial customer research for Charlie, asking what we could be doing better than a traditional bank for this community, the number one requested feature, by a long shot, was U.S.-based customer support.
I always root this in terms of my mom.
My mom was one of the first customers of Charlie. She lives in New York. I live in California.
She has a hard enough time understanding me on the phone, but you introduce any kind of cultural or linguistic barrier, it’s not that she thinks the person on the other end of the line can’t do their job.
It makes her feel like she’s missing something, that she’s old and can’t do it right.
With the opportunity of U.S.-based customer support, you just know you have someone who is going to understand you, you’re going to understand them, and you have all the cultural context that will make sure that you’re getting a great experience.
Tony, I don’t know why this just made my mind go this way, but it went this way, so we’ll go this way.
More broadly, I’ve been seeing fintech apps try to use their apps to foster community, either with, “Hey, we’re going to have this live chat at this time, come join us,” or just letting community members chat with each other to get financial advice in some way.
I’m wondering, would that be something interesting to Charlie in any way?
We love the idea.
We think, and we’ve seen this in the research, the 62-plus community’s social networks are very strong. They’re very tight.
People talk to each other. People like to share information, share wisdom.
In the coming weeks and months, just a little bit of a hint out there, but I can’t say too much, we are thinking about new ways to actually allow our customers to share that wisdom.
One thing I can say now is that we’re already using this feedback loop.
Anytime a customer experiences fraud, or they share a fraud story with us, they’re coming from another bank, they’ve signed up for Charlie, and they share a story with us, we put those stories in our newsletter, in our FraudWatch newsletter.
We tell all of our other members, “Listen to this story. This is what happened to one of our members.”
We try to maximize the awareness of that because we think that shared wisdom is another way that we can really empower our customers.
We’ve already started to do that with saving money too.
Charlie Saves is a newsletter that we publish, and we let people share tips about savings that they found at their local stores, the grocery store, or local merchants.
We want to be able to protect money and help people make their money go further.
I want to get into that a bit more because I’m thinking about, maybe I’ve even read about this, but a fraud alert would look different for your customer type.
I think I’ve seen it referenced, like if someone is going to the ATM in the middle of the night, that would be a weirder thing for most older adults.
But I don’t know what my parents do at night.
The joke I often make is, “I don’t think my mom is out clubbing on a Friday night,” but I don’t know and probably don’t want to know.
Yeah.
One feature that we offer is called Sleep Mode.
You can set your schedule for your Charlie card to go to sleep when you go to sleep.
We won’t let any transactions go through in the middle of the night unless it’s a recurring transaction that you’ve said is okay.
This is another feature where we thought about this community, their needs, and their behavior patterns, and it’s just a feature that makes sense.
Another feature that we’re really excited about is called Copilot.
You can actually add a trusted loved one to your suspicious activity alerts.
I get the same alerts that my mom gets, and she has this incredible peace of mind knowing that she has a second set of eyes on her account activity, only when something might be going wrong.
We can work on that together if there’s any kind of issue.
This is probably two questions in one, but I think it’s really cool that you’re building something for this audience at a time when the stereotypes are shifting.
What was 40, 20 years ago feels very different from how 40 is portrayed now.
I’m just thinking about all the things. I know when you’re in your early 20s, you might think, “Ah, that’s the end of times.”
I recently was on this yoga thing, and one of the social people there had done a post about how to do yoga after 40. It was simple things, like trying to touch your toes or something.
It was not well received by the audience because there’s a disconnect.
But it also points to people living longer, or being projected to live longer.
This is the two-part question.
What kind of ripple effects does that have when the media story is changing around older people for Charlie?
Then, two, in theory you’d have more of a limited lifetime with these customers, but at the same time people are living longer.
How do you think about these two things?
That’s a really interesting question.
I think the reason that we’re probably the first people to market with a bank specifically designed for this community is that there are a lot of stereotypes in the media right now about who the typical 62-year-old is.
But when you think about it, a 62-year-old today has been living with the internet for over 25 years, with mobile for over 15 years.
The vast majority of our customers are on mobile phones and only ever access our service from mobile phones.
It’s a very savvy audience, and I think that’s something people underestimate about the community and where it stands today.
Every day, there are 10,000 people retiring in the United States.
Every day, those retirees get savvier and savvier with technology.
We think that leading with a service that is digital-first, this audience is now ready for this.
When we think about the longevity of this audience, I would say we don’t really think about that too much because this is an underserved audience that has really acute problems.
The opportunity to serve that audience, to do a better job at protecting them and their money, is the thing that animates us every day and gets us out of bed.
We think that there are many, many years ahead of us to do a great job of creating a great experience for them.
Yeah, I definitely think it’s an underserved audience.
I can’t remember the stat, but maybe you do, about how it can be an audience where they’re struggling to afford the prescription bill.
Of course, that matters so much.
That’s right.
The typical retiree today is living paycheck to paycheck off of Social Security, which is about $1,800 a month.
When we talk about fraud, we often say it’s fraud of thousands of dollars or tens of thousands of dollars, or the stories you hear about in the news.
Those are terrible stories, but much more common is fraud under $1,000.
These hundreds of dollars are getting lost.
When you’re on a fixed income and you’re only taking in $1,800 a month, losing $1,000 is a catastrophic event.
That’s where we think protecting every dollar that these customers have is paramount.
Tony, I know we talked about how we could both see a broader use of the pause payment for other banking apps.
Is there anything else you would advocate for a bank or credit union person, or another fintech company, to do that would help this audience?
I think just recognizing that this is an audience that is trusting, that does want to believe in the people that are contacting them.
Every day, we are committed at Charlie to thinking about, what does this community need?
I think most traditional banks are just focused on accumulators. It’s a much larger audience, and they perceive it as a much more financially lucrative audience.
Our audience is decumulators. They’re on a fixed income. It’s a very different set of challenges.
I would challenge other banks to really be thinking about that audience and what their specific needs are.
But I honestly don’t expect it to happen.
That’s why we’re doing what we’re doing. It’s an audience that the market is not responding to right now and not taking care of.
You’re just making me think of all the websites I’ve seen with maybe a 60- or 70-year-old walking down the beach or playing golf.
It’s much more varied than that.
More varied than that, exactly.
It’s over 60 million retirees out there in America today. Another 36 million are going to be retiring in the next 10 years.
It’s a huge swath of the population.
We’re excited about all the ways we think we can do a better job of giving them a great banking experience.
You’re just making me think, one of my dearest friends is in her 80s, and I’m going to a beach festival with her coming up.
There’s a perfect example. She’s driving that. She wanted to be there.
Very nice.
That illustrates it.
Tony, I have one last question for you, but before I do that, I wanted to open it up to make sure we covered everything you wanted to, or if there’s anything you wanted to say, and where one ought to find you or Charlie.
Great. You can go to Charlie.com on your web browser or download our app in either the iOS or Android app stores and sign up.
Signing up is free. There are no fees, no minimums.
You do have to be 62 years or older to sign up for Charlie.
We’re here to serve.
Awesome.
Tony, last question then. What is the photo on your phone’s lock screen?
The photo on my phone’s lock screen?
Yeah. Do I show it?
Yeah, show it too. Sometimes it doesn’t render that well.
It is my... Oh, actually, I probably don’t want to put it up. It’s my daughter.
Oh, beautiful.
It’s a photo of my daughter. It’s her class photo. She just graduated from elementary school, and it’s just the most beautiful photo.
They’re growing up so fast.
Having that, it makes me happy every time I see it.
Well, Tony, congratulations to you and to her.
Thank you so much, Mary.
Yeah, and thanks so much for being on Money Isn’t Everything. Really appreciate it.
This is great. I really enjoyed the conversation. Thank you.
Thank you.
So, here’s what stood out to me the most from my conversation with Tony.
Shame is among the reasons why we don’t know about all the cases involving elder financial fraud.
Also, living longer is something tech really needs to zoom in on and help build products for.
If you haven’t subscribed to the show already, please do. I don’t want you to miss the next episode.
Two weeks from now, I sit down with Kelly Fryer, who’s the executive director at the FinTech Sandbox, which is a nonprofit that gives fintech companies access to data for free for a handful of months.
We talk about creativity and what fintech entrepreneurs are working on right now.
See you then.
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