Originally published on Blend. Written by Nima Ghamsari, Head of Blend.
One of Blend’s core beliefs is that there’s a future that includes “better banking, for all.” When we say “all,” we truly mean all. We strive daily to improve the efficiency and quality of banking experiences for consumers everywhere, including those that are underbanked.
Around a year ago, I joined Blend’s Head of Diversity, Inclusion, and Belonging, Ulysses Smith, on the virtual stage at one of our partner’s annual events, Tech Inclusion 2020: The Next Wave of Leadership, alongside the former President of the National Bankers Association (NBA), Kim Saunders. While we were planning for the event, there was a number that Kim shared with us that I had to ask her to repeat for me.
The data she shared was from a 2020 report from Citigroup. It showed that if the financial inequality gap was closed, the U.S. would add $5 trillion in gross domestic product over the next five years. Inequity, like lacking access to loans for small businesses and high rates on mortgages, not only hurts underbanked communities — the repercussions impact everyone.
At Blend, we recognize that access to financial services is the key to a car, a home, and a better life for people and their loved ones. We also recognize that not everyone in the United States has been given this chance to build generational wealth for their families. A year ago, we started exploring the question: what does an equitable ecosystem look like? And how can Blend, our leadership, and our employees make a positive impact on the communities in which we live?
Today, I’m excited to share that conversation has inspired us to launch Blend Impact, our program for increasing access and equity in housing and financial services through our products, our time, and our partnerships.
Using technology to expand access where it counts
Throughout our history, we have focused on developing technology that minimizes the hurdles consumers face on the path to financial wellness. For example, we have simplified historically inscrutable processes, and we have created tools that allow people to apply for banking products on their preferred devices at any hour of the day or night. For those who aren’t able to access a bank easily — those who live far from a branch, or who work during a bank’s operating hours, or who for a myriad of other reasons are missing out on this basic access — this technology-led approach provides a new hope. But our work doesn’t stop there — because accessibility doesn’t stop there either.
Through partnerships with organizations that serve the underbanked — like the National Bankers Association (NBA) and HomeFree USA — we got insight into some of the systemic challenges that limit access to capital. We learned that financial institutions focused on serving underbanked communities — Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs) — are often underfunded, limiting access to new technology, hamstringing staffing, and ultimately resulting in fewer product offerings for consumers.
As technologists, our first thought was to address the lack of technology. We now offer these institutions free access to our cloud banking platform, and we are continuously looking at ways in which we can help MDIs and CDFIs to better adopt the Blend technology.
It then became clear that Blend was in a position to bring together our customers, partners, and industry relationships under the Equitable Ecosystem Initiative (EEI) to further push the impact of our technology. We have expanded our focus, seeking long-term solutions to help increase access to pivotal resources that enable financial inclusion and economic opportunity.
With our partners listed above and customers including DHI Mortgage, we’re looking at what it takes to create homebuyer education courses, add support for additional languages to our platform, and utilize alternative data sources for credit underwriting.
This work is just the beginning, and it’s hard to express just how grateful we are for the customers and partners who are building this program with us. Because of their trust, expertise, and guidance, we are more confident than ever that we are working to build the equitable lending ecosystem of the future.
A focus on social good from the inside out
Driving positive change through our technology is just one piece of the puzzle. In May 2021, Blend signed on to the Pledge 1% commitment. This framework helps us to structure our thinking around how we allocate our time developing equitable products and resources that will serve underrepresented minorities and communities. In that same pledge, we also committed to allocating one percent of our product and employee time to supporting our Equitable Ecosystem Initiative.
“Blend Gives Back” provides the foundation for this community service: employees are encouraged to dedicate 24 hours of their own choosing to causes and volunteer work within their communities. Because of our employee-first policy — which allows most employees to work in the office or remotely, as they wish — employees will be able to volunteer across the United States for causes that most impact their local communities. On top of that, Blend will also designate a day of service each year for a cause that affects the financial services industry. This year, the company has rallied to provide support for homeless individuals, and we took a day in June to volunteer with organizations focused on serving the needs of homeless people across the country.
Over the course of the pandemic, Blend has also allocated over $450,000 to groups that work to address socio-economic, systemic, and social issues throughout the United States. Some of this money went to donating to organizations and nonprofits including the NAACP Legal Defense Fund, National Alliance to End Homelessness, National Urban League, Asian Pacific Fund, Asian American Legal Defense & Education Fund, and Indian Red Cross. Blend also helps fund organizations affecting change for the underbanked through partnerships with the National Bankers Association (NBA), HomeFree USA, and TechEquity Collaborative.
Blend has also deposited $5M into a bank with a plan to invest all interest on the money into the bank’s MDI Initiative, directly benefiting an MDI the bank has partnered with.
At Blend, it’s important that our decisions about how we spend time, build products, or give money are influenced by the people we employ, the causes they care about, and the communities they live in. I’m excited to see how Blend employees continue heralding the changes they wish to see in the industry and the impact they advance through continued work with our partners.
The future of Blend’s impact
“Better banking, for all” isn’t going to happen overnight, and it can’t happen without the help of even more partners and customers — leaders who are willing to challenge systemic inequities within the financial services industry and work to mend the pieces that are broken. Moving forward, we will continue to examine other areas where Blend can make distinct and effective changes, specifically in the areas of corporate governance and environmental impact, in addition to the work we’re launching today around social good. We are excited to begin the work it takes to build an equitable ecosystem to serve people across every financial milestone of their lives, and I hope that in time, we’ll have even more organizations joining this important cause to build the equitable financial ecosystem of the future.