Black-owned US challenger Greenwood Financial hits 500,000 sign-ups in 100 days

Greenwood Financial, a US-based challenger bank aimed at serving Black and Latinx communities, has amassed 500,000 sign-ups in the first 100 days since opening its waitlist in October.

According to Banking Dive, co-founder and Atlanta-based entrepreneur, Ryan Glover, says the platform, which is expected to launch in May or June, is on track to hit more than 600,000 active accounts by the end of the year.

“We see that there is definitely an appetite for what we’re doing,” says Glover.

“We see that there is definitely an appetite for what we’re doing,” says Glover, who founded the digital bank alongside civil rights leader, Andrew Young, and rapper and activist, Michael “Killer Mike” Render.

The venture, which raised $3 million in seed funding from private investors in October, will launch with spending and savings accounts.

Other features will include virtual debit cards, peer-to-peer transfers, mobile check deposits and free ATM usage in more than 30,000 locations.

Glover says Greenwood plans to add lending in the fourth quarter of 2021, with credit and investing products expected to launch next year.

“We plan on creating, between the summer of this year and the end of 2022, a whole suite of financial services, utilising all of our partners to provide a robust mosaic of banking services for our community — a one-stop shop, if you will,” Glover adds.

Glover says the digital bank was built out of a necessity to provide more financial services options to Black and Latinx communities.

The unbanked rate for Black and Latinx households in 2019 stood at 13.8% and 12.2%, respectively, compared with 2.5% for White households, according to a biennial Federal Deposit Insurance Corp. (FDIC) report.

The disparity comes from a mistrust in the banking system, Glover notes.

“The African-American community has had mistrust, rightly so, for the banking industry for decades. The four biggest banks in America have settled lawsuits for discrimination against Black and Latinx communities, and it’s not a mystery that the African-American community is routinely charged more than other communities for checking accounts, conventional loans and other banking services,” he says.

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The digital bank’s name pays homage to the Tulsa, Oklahoma, district of Greenwood, which was known as “Black Wall Street” in the 1920s.

“In that community, the businesses and the individuals thrived greatly from one of our missions, which is the recirculation of capital,” Glover says. “In the Greenwood district, $1 recirculated 36 times in that community before it left it. Unfortunately, now in the African-American community, specifically, $1 only recirculates for six hours.”

Tulsa’s Greenwood district was burned in a racially motivated riot in 1921, when White residents killed as many as 300 Black people and left 5,000 homeless.

Glover says he was unable to name Greenwood’s banking partners at this time. He notes the start-up has secured partnerships with two (FDIC)-insured financial institutions to offer the accounts.

As part of the neobank’s Greenwood Gives Back Program, customers will have the opportunity to donate to organizations such as the NAACP, the United Negro College Fund (UNCF) or Goodr, a food bank, with every swipe of a debit card.

The bank will also provide a $10,000 grant each month to a Black or Latinx small-business owner who is a Greenwood customer.

First Boulevard – formerly known as Tenth Bank – is another up and coming digital bank for Black Americans based in Kansas, aiming to launch this year.

The US has seen Latino-focused fintechs such as Viva First and Crediverso pop-up in recent months.

UK-based challenger, Atmen, is also set to launch this year, which was founded because there were no Black British-led high street or digital banks.

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