SEASON 1 EPISODE 5 with

episode transcript +

The Bank that Cares About Its Customers with Aspiration’s Andrei Cherny Season 1, Episode 5

Guest: Andrei Cherny, co-Founder and CEO of Aspiration

AARON KWITTKEN
Broadcasting from the 10 Hudson Square Building, also home of WNYC Radio in Soho, New York, welcome to the Brand on Purpose podcast. I’m Aaron Kwittken, your host. My guest today is Andrei Cherny.

Andrei is co-founder and CEO of Aspiration. Aspiration is an online financial firm focused on ethical and sustainable banking. Andrei spent much of his career fighting to make the financial system fair, eventually leading him to start Aspiration back in 2013. Giving back is a critical part of the company. Aspiration offers socially conscious and sustainable banking services and investment products so customers can make money while making the world a better place.

Unlike big banks, they don’t use deposits to fund oil pipelines or turn fees into campaign contributions to politicians. Aspiration donates 10% of every dollar they earn to charities devoted towards helping struggling Americans build better lives, making the company the financial industry’s leader in giving back with more than one million customers today.

Prior to founding Aspiration, Andrei had a significant political career that took him all the way to the White House, starting in 1997 as the youngest presidential speechwriter in history for President Clinton. Andrei went on to be an advisor to elected officials and business leaders, ranging from President Barack Obama and Vice President Al Gore to executives at Microsoft and Intel. He also served as chairman of the Arizona Democratic Party in 2011 and Arizona Assistant Attorney General and a criminal prosecutor from 2006-2009, all in addition to running for congress in 2012. And as a criminal prosecutor, not surprisingly, Andrei focused on financial fraud.

In 2006, Andrei founded Democracy, a liberal public policy journal and think tank for which he now serves as President. And this ultimately helped create what is now known today as the Consumer Financial Protection Bureau. He’s also a widely respected author, having published two books, The Next Deal: The Future of Public Life in Information Age, and The Candy Bombers: The Untold Story of the Berlin Airlift in America’s Finest Hour. And if this isn’t enough, Andrei was also a Navy Reserve Officer from 2003-2011.

Recently, in a Reuters interview, Andrei said Aspiration is embarking in its largest ever fundraising round. One source familiar with the plan said that the company seeking upwards of $200mm, which would value it at more than $1 billion, officially a unicorn. Current investors in Aspiration include Leonardo DiCaprio, Orlando Bloom and Doc Rivers, among others, in addition to Allen & Company and Social Impact Finance. Andrei Cherny, welcome to Brand on Purpose.

ANDREI CHERNY Thank you for having me.

AK So, it’s kind of obvious, just looking at your background, given that you’ve had such an incredible career and trajectory in public service, but, what led you to start Aspiration? Why now, or 2013, and what was the inspiration behind Aspiration?

AC It certainly didn’t feel obvious at the time. Sometimes, when you’re going through your career, all these different points along the way don’t necessarily make sense going forward, but sometimes they do looking backwards, and that’s certainly been the case for me. Which is, I have, as you said, done a whole bunch of different things over the course of my life, whether it was in public policy and government or as a prosecutor or working with some of these large businesses and financial institutions. But really the through line of all of that was really around the economic lives of ordinary people. And, what could be done to make their lives better. And certainly wasn’t looking to start a business.

It wasn’t something where it was between starting Aspiration or starting a dating app or a photo sharing app or something else like that. I really cared about these enormous challenges and came to the belief that a financial institution that had these elements at its core, that had a sense of mission and purpose, that had its customers’ best interests at heart and that shared their values could fundamentally move the needle on some of the big challenges that we face in our country today.

And so, I had, really, an ongoing conversation with a guy named Joe Sandberg who I’ve known for many years, and sharing our mutual enthusiasm around these ideas and he was somebody who was investing in start ups and I decided this is something worth doing and so I embarked on this adventure, course not knowing what I was getting myself into, but I guess the best adventures are the kinds where you don’t know that going in.

AK And I imagine that there’s a lot of transferability in things that you’ve learned in your life and devoted towards public policy to being an entrepreneur, right? I mean, there’s challenges in both states, if you will. Can you talk a little bit about that?

AC Absolutely, I think being an entrepreneur is really about problem solving on an everyday basis, on an hour to hour basis. It’s trying to create something out of nothing. And doing so with limited resources, of time, of people, of money and that’s the challenge. And that’s not dissimilar to a lot of the things that I’ve done in other parts of my career.

And so, this certainly, those are muscles that had to some extent already developed but really for us we were pulled along by our mission at Aspiration. Around thinking about, ok, how do we actually solve problems for people? And if we do solve those problems, and do it right, we’ll build a really valuable business in many senses of the word. But, first and foremost, focus around that customer. And how we can actually serve them. And do so in a way that is going to be sustainable in all senses.

AK From reading past reports, it sounds like you have first-hand knowledge to be that customer, right? I mean, I read somewhere that you grew up on food stamps. You had a kind of economically challenge childhood and you saw first hand how hard it is for either, if you’re unbanked or you’re being underserved by your bank. I imagine that had a lot to do with the founding and the vision that you had and have for Aspiration.

AC Well, absolutely. My parents were and are immigrants. I know you have a similar background, as well. And like a lot of immigrants, my parents worked, and probably hard, but struggled economically. I think what that left me with was an understanding of the real economic challenges that so many people face everyday and a passion around making a difference there. And so, I think we were able to marry those things together in Aspiration with a real sense of commitment about how to do things in a way that is more fair and more just and in a way that is actually going to be accretive to the lives of millions of people.

It’s, to me, really a privilege and I’m enormously grateful that I get to wake up everyday and ask myself, and have the rest of our team ask themselves, what can we do today to make people’s lives better? To put more money in their pocket, to help make the world a better place by taking a different stance towards how we treat their deposits, how we enable them to make better spending decisions. All of those things together are, again, something for which I’m really grateful to be able to work on.

AK So I’m a big believer in that people, especially today, buy from good companies, not just necessarily good products. And what struck me about Aspiration is that you have both. It’s a great company and you also have a great product and the product does good. And, I’m sorry if I’m misstating these as products, but can you talk a little bit about the 10% giveback, pay what is fair, the AIM product or program or service? Because I think those are very—not only are they creative and unique and innovative and distinctive, separate from these big banks—but they’re very meaningful and very genuine. They’re real. It’s not just talk. It’s not just vision, it’s action.

AC I think that’s absolutely right. What we describe ourselves is: Aspiration is Do Well and Do Good. And that’s really our way of approaching our work, our way of approaching our company, and way of approaching our products. And so I’ll just describe what we do.

Our core product, our main product is what we call Aspiration Spend and Save account. As the name applies, it’s a way to spend and save. It’s a replacement for your traditional bank checking account. Offers 2% interest, so about 200 times higher interest than what you’re getting from an account at one of the big banks. Of course, FDIC Insured. Your deposits are fossil fuel free, as opposed to traditional banks that are taking their customers deposits and lending them back out to fossil fuel exploration and oil drilling and pipelines to the tune of hundreds of billions of dollars a year. Your deposits at Aspiration are fossil fuel free. Cash back rewards on every debit card purchase you make with your Aspiration debit card. So something pretty special for debit cards these days. You’ll see some of that on credit cards but less on debit cards. Extra rewards for spending at businesses with a conscience.

So, something that really allows you, again, to both have more money, make more money, save more money but also make a positive impact in the world. Part of that way that we allow you to get those extra rewards at spending at those socially conscious businesses is through AIM, as you described, the Aspiration Impact Measurement. And what AIM does is, really for the first time ever, allow you to see your own personal daily sustainable score. How are you doing when it comes to people and the planet? You see your score, you see the score of the different places where you’re shopping and the score of other similar businesses. So that means that if I’m making a decision to buy something at Rite-Aid or Walgreens or CVS, I can decide not just based on the cost or the which one’s closest but based on conscience, as well. And see that in real time and see that score and see how I’m doing and then, and make spending decisions based on that. And then, for those business that are best of the best, get rewarded for doing so and get an incentive to continue spending at those businesses that are better for their employees, better for the environment.

The only fees at Aspiration are what you call, Pay What is Fair. That means there’s no overdraft fees, no monthly service fees, no ATM fees. The only fee you’ll pay is the fee that you choose and you can choose zero. If you think we deserve zero as a fee for the work we’re doing for you and the services we’re providing for you, then that probably means we need to be doing a lot better job for you. And, the truth is the vast majority of our customers choose to pay, which means they’re paying a fee to, in essence, their bank, even though they could be paying zero and that’s pretty, pretty unusual in this day in age. But it speaks to the kind of trust that we’re building with our customers and the relationship that we’re building with them. And then we take 10% of what we earn and apply it towards charitable giving. So way in excess of any other financial institution that’s similar or out there.

And so that really forms those elements. The best of the best financial products, fossil fuel free, the rewards for socially conscious spending, the Pay what is Fair aspect, the 10% to charity, that really forms a really different experience for people. And a financial institution that is unlike what’s ever been available to people before. Really a socially conscious, sustainable, consumer financial institution for the first time in history. And so, I think that’s something that we’ve certainly been excited about building, but we’re seeing many hundreds of thousands of people every month be really excited about joining.

AK And I’m just kind of laughing, you can’t see me laughing, because socially conscious and transparent and sustainable typically are not in the same sentence as financial institution.

AC Yeah, well that’s the problem. That’s a problem we’re seeking to solve. It should be the case. I mean, that’s the- that’s the thing, our financials should be the most beloved institutions in the country. If you’re doing things right, they’re helping you meet your hopes, your dreams, your aspirations, right? They’re the places that should be about helping you reach that next level in your life. And putting your money to good use. And investing in your future and in the future of your community and the country. That’s what financial institutions should be about. Somewhere along the way, the industry lost its way. And, in many cases, what we’re trying to do is put things back on track to create a relationship of trust, of shared values, of us being on the same side of the table and having your back, and putting our customers first instead of trying to jack up profits off of them. Those are things that should be expected, but that’s not the case.

AK Well, it’s not improbable, do you think its possible that the likes of the Wells Fargo, of a Chase or a Citi can even at this stage, pivot and become like Aspiration, without having to buy you, obviously?

AC Well, we’re not for sale.

AK I know.

AC I’d like to think so. I mean, a part of me would like to see that be the case and, look, the way I judge our success is not how many millions of people do we have and what does Aspiration look like, but, frankly, I’ll say we’ve made it as a company on the day where I look around at everybody else and see that they’ve changed the way they do business. That they’ve said, ok, we can’t make money based on fees for when the financial situation is messed up for people. When they have an overdraft, when they have a late fee, when they don’t have enough to not make their monthly minimums and have a service fee, and ATM fees. But we make money based on really making our customers successful and I’ll look around and say we’re at a point where it’s no longer acceptable for financial solutions to take their customers deposits and lend it back out to big oil companies or lend it back out to gun manufacturers. And to the NRA. That’s the day we’ll be successful.

Do I really think that these big financial institutions are going to be able to change the way they do business given how addicted they are they are to the kinds of ways they make their incredible profits? I think it’s unlikely. I think it’s more likely that there’s going to be new companies that come up and change the landscape of the financial industry, whether it’s Aspiration or others, as well. But for me what’s most important is how our customers are being treated and I think that that’s where we’re aiming for. The day where the things we do are seen as industry standard.

AK And it’s incredibly comforting to know, I’m sure, and there’s going to be more of this, that there are current and future investors and real investment companies out there who are willing to put money behind your business model. And stay true to their north star.

AC I think that’s true. It hasn’t always been an easy road. But you can imagine when we first started, as you said, 2012-2013, and I would go around to some of these investors and say…

AK And you were 41, you should say, not necessarily a young man. Not a 23 year old, bright-eyed bushy-tailed guy, right?

AC Yeah, I was. I was knocking on the door of 40, and had a career and, or careers, and done a bunch of things. But I’d walk into these meetings and say, ok here’s what we’re going to do, we’re going to create a financial institution for everybody and not just for wealthy people. We’re going to focus on socially conscious, sustainable financial products at a time that that was still seen as something kind of weird, as opposed to where it is today. We’re going to let people pay us whatever they want, even if it’s zero, and trust them to treat us fairly. And then, we’re going to take 10% of what we earn and give it away to charity. And so, it made for some short meetings.

But look, now we’re 6 years into it and we have a track record. And we are able to show, look, you can trust people to pay you fairly if you treat them fairly. People are looking for this kind of approach in financial services. They’re not just looking for the bank account that’s going to charge them the very highest interest rate and you have to only compete on that front. And so on and so forth. They’re going to look for something really different and if you offer something really different, people will want to join and be part of it. And so, I think, it’s certainly a lot easier to tell that story now with four years of active work under our belts than it was when we first started.

AK Yeah, and I imagine that timing is everything and, I’m sure you’ve asked this question before, but, is it coincidence or is it the Trump Bump that you had a surge in customers signing up right around 2016. And through arguably the divisive and times of animus that we’ve seen, at least in our history.

AC I’d say, number one is there is this long-term trend. We’ve seen the rise of ESG and sustainable investing that’s been going on for 15-20 years. And it was really taking off in 2012 and 2013 and 2014 and that trend line has continued. You see the rise of conscious consumers, of people who are thinking about values and morals and ethics when it comes to what kind of milk they’re going to drink, and what kind of eggs they’re gonna buy, and what kind of clothes they’re gonna wear and what kind of car they’re gonna drive and what kind of coffee they’re going to drink and what kind of cup they’re going to drink it in and that was happening long before 2012, as well.

And those consumers, especially people under 40 but even those a little bit older, have very different patterns when it comes to how they live their everyday lives and are now looking for that kind of thing in their financial life, as well. So all those things are true, but I’d also say that we have seen, since 2016, an acceleration of a lot of that. And I think, people are asking themselves the question, what can I do? What can I do to make the world a better place?

And so you see that in people showing up to marches and you see that in people talking about where they’re going to leave their money and put their money. And you see that in voting. But the truth is people have, of course, incredible power every two years when they walk into that voting booth. And you know, as somebody who’s spent a chunk of my life involved in public service, I believe that very deeply. But, the other truth is, we as American consumers spend $36 billion dollars a day. Everyday $36 billion dollars. And if we’re making spending decisions based on how those companies are treating people and how they’re treating the planet, that gives us enormous power every single day, not just on election day.

And when there’s trillions of dollars being put into banks and we’re saying, we’re going to move those deposits into banks that aren’t lending money out in ways that destroy the planet, then no matter what happens with the Paris Accords, we have enormous power. If we say we’re going to move our money to banks who aren’t lending to gun manufacturers, which means that they’re funding the NRA, as well, then no matter what Congress does around gun safety legislation, then we have enormous power, as well. So I think there has been an awakening that has been a long time in coming that didn’t just start up in 2016, but that has definitely been accelerating every single day.

AK As a marketer, I just have to ask the question, how are you working to get the word out? I do feel like in the last couple of years there’s been an acceleration of marketing and PR, especially advertising. Actually, the way I found out about Aspiration was old school. I was on a treadmill and I saw a commercial and I made a note to myself because, you know, we do a lot with purpose driven brands, we’re a purpose driven agency as well and we’d like to be a b-corp one day, that’s our goal.

AC Uh-huh.

AK And, I just made a note to myself, I’m like, I got to reach out to this guy at some point, so I’m just wondering what else are you doing to help tell the story? I do think it’s an under told an untold story and, obviously, being on an awesome podcast like this helps. But what are the other plans whether it’s media spend or social. Can you talk a little bit about that?

AC Yeah, well we are trying to tell the story in every way we can. So, we’ve long been on social media, both organically and in terms of buying ads on Facebook, and so on, to tell the story. And what we see is people get really excited about it. That story, they get excited about us as a company and about what they can do and how we can help make their lives better. And so, they’ll very often share with their friends and share with their family and neighbors and coworkers, and so we have hundreds of thousands of followers on social media, but those people are really very much evangelists to tell others as well about what we’re doing.

On radio, we’re talking to people in so many different ways, telling the story. We launched MovetoGreenMoney.com, that’s about getting people to commit to move their money from fossil fuel banking into fossil fuel free banking, no matter whether they use Aspiration or use a local credit union or whatever else it is and having an animated cartoons on there talking about the importance of this. So, we’re really trying to tell that story in so many different ways. But it’s interesting, even in this day in age, when we first started, our ads on television found that we were breaking through in ways we hadn’t before.

So, even as much as everybody says how passé television is, it’s still is one of the important ways people get information. And that you can break through to tell a story that is one that requires people to think a little bit and to ask some deeper questions about what they’re doing with their money and how they could be doing it better for themselves and for those around them.

AK So, and the scary part about me watching that ad at first, I was like, is this an SNL Skit? I mean that actually as a compliment because I thought it couldn’t be real because I’ve never seen anything like this before.

AC That’s the biggest challenge we face. And it really is something that we as a company face on a daily basis. The number one question we get from perspective customers who are hesitating about whether to open an account or not is, it sounds too good to be true. Or, what’s the catch? And so on and I get it, but it depresses me. It means people’s expectations have been so beaten down from their bank, from their financial institution, that if we’re offering a respectful interest rate, we’re not taking advantage of them, we’re treating them like an actual human being and trusting them, we’re not taking their money and using it to destroy our planet or to fund guns flooding our streets, that it sounds like it’s a joke. Then, man, we, as a country, need to be doing a lot better. And so, a lot of what we’re doing is really about education. In saying, no, you can expect more. You should expect more. You need to expect more. And that’s a longer-term challenge, I think, for all of us.

AK So on that note of education, I imagine that part of the plan will be to, as you aggregate and can prove more investment back into charities and helping people lead better lives, more fulfilled lives, telling that story, right, quantifying it and doing some good old-fashioned storytelling and how that 10% has changed people’s lives.

AC Absolutely. Absolutely. I think there’s just so many stories around that. Whether it’s the 10% to charity, whether it’s storytelling and the ability to show our customers, and others, about the impact that it’s making on people’s lives of having an Aspiration account.

Look, aside from the charitable impact, aside from that sustainable impact, the fact of the matter is for the average person, switching from a big bank checking account into an Aspiration Spend and Save account will put an extra $545 a year into their pocket. Now, half the country right now can’t come up with at $400 emergency expense. If they have a car that’s broken down, if their child falls and breaks their arm on the playground and has to go to the hospital, and they’re seeing an out-of-pocket cost, they don’t have that cushion. So $545 in people’s pockets makes an enormous difference, right?

I think back to that apartment that I grew up in with my parents and what that would mean for people’s lives. There’s a lot more that we want to tell people and bring that to life. And there’s a lot more to tell people about what Aspiration is doing in terms of- in terms of saving our planet. I think there’s- one of the things that I think has happened since 2016 and even before, is an awakening around the challenge of climate change.

I worked for a number of years for Al Gore in the White House and during his campaign. I remember traveling the country with him talking about this challenge of climate change and global warming. I remember standing there as he’s showing charts to audiences in places all over America around CO2 levels in the Antarctic core and people just nodding off and saying gosh, this is completely irrelevant to my life, and that’s changed.

People get the crisis that we’re in and the truth, though, is that a lot of people that are out there who are saying, I’m going to drive a vehicle that’s better on gas. I’m going to think about the environment when I decide what to buy in the store. And what kind of packaging that I’m going to be looking for, and so on, still think nothing of the fact of I’m going to, then, pay for that with a Wells Fargo debit card. I think this continuing education challenge around that, as well.

AK How do you find purpose in your daily life, so outside of work, I know that the two are completely intertwined. You know, we all have our routines, whether it’s to decompress or to give back. I do a lot in the sports community, I do a lot with my temple, I do a lot with mentoring and my alma mater at GW and what not, and I feel better about that than I do even my own company. And I’m proud of my company, but that’s what makes me feel good. So what do you do outside of Aspiration, I know that a lot of it is all consuming right now.

AC Yeah.

AK How do you lead a purpose driven life and what advice would you have for listeners and how they can lead a more purpose driven life?

AC Well, I’m sure the people who are listening to your podcast is already a self-selecting group, so I’d probably look to their advice as opposed to give them advice.

AK By self-selecting group you mean seven people, but I do appreciate group, that’s nice.

AC Well, it’ll be eight because my mom will listen as well.

AK Nice.

AC No, I’m joking. As you said, I have Aspiration and building a fast growing company, that takes up a lot of time. And then, I spend time with my family. I have two young children. But one of the things we really try to do with them is to find opportunities to do service on a regular basis. And to do things as a family and I think that’s really important. They’re two great kids and I couldn’t be prouder of them, but they’re growing up in a very different lifestyle than I grew up in. Certainly we’re not anything ostentatious, but we’re also not, as a family, worried about where our next meal’s going to come from. Or how we’re going to pay the rent on our home, or anything else like that.

And so, I want them to understand, both how fortunate they are, but also the responsibilities we have to each other and I feel really grateful that they do and that they do care about those things deeply. But I think that’s something that I really look for in my own life, in this moment of my life, is how can I do things with them that help pass on the values that I grew up with to them and for them to be able to live that same sense of purpose as they go forward.

AK Yeah, it’s hard because, not to quote Dr. Phil and I’m not sure if I heard it from him, but I think he said, you raise adults, you don’t raise kids. And its hard because, you know, we’re able to give our kids financial security but we also have to give them a sensibility that goes along with it. And a commitment to engagement in community and it’s very tough.

And it only comes with, I think, repetition and very deliberate choices even if they, and I’m sure you get this, I don’t know how old your kids are, mine are 18 and 15 now, and I still get eye rolls. I think it’s going to happen forever, but you have to stick with it because they will, they might not like it, but 10-15 years from now, they’re going to remember what you said, they’re going to remember that moment and they might not like it but you just imprinted. Because you imprint every time you engage with them.

AC Yeah. No, that’s absolutely true.

AK So one last, kind of fun question. I read somewhere that you’re a big fan, like me, of the bacon egg and cheese, or at least a breakfast sandwich. I think it was in FastCompany because you gave a shout out, I think it was to Hamilton, not the show but the manufacturer of some sort of a breakfast sandwich press that, by the way, I’m going to go purchase now. In the most sustainable way, of course. Talk a little bit about that though, because I love breakfast sandwiches.

AC How can you not? I need to work out some sort of deal cause there’s been a few people after that interview that let me know that they bought that. But it’s a- it’s a breakfast sandwich maker. It’s the best appliance I ever bought. It’s pretty small, they have ones that make more than one at a time but we have a single serving one. And you put your English muffin bottom in. There’s another layer and you crack an egg on the pan and you put some cheese on top, if you’d like, and then you put the other half of the English muffin on top and you close it and it cooks the egg and toasts the English muffin all at the same time. And you slide it out 2 minutes later and you have a balanced breakfast right there.

AK Love it.

AC And it’s fun to make too.

AK Love it.

AC I need to work out a deal to get a percentage.

AK And hopefully, I can put some sliced avocado in there and that wont, like, mess it up too much, right?

AC No, it everybody has to personalize it your own way, you may want to put it on afterwards unless you like it really melted.

AK Probably, probably. So, Andrei, it’s been a pleasure speaking with you, I really appreciate you taking the time to be our guest today. How can our listeners find you or could they follow you on social, or would you prefer they follow you on social?

AC I would love to hear from them so I am @AndreiCherny on twitter. But, first and foremost, hope they’ll go to @aspiration on Twitter and follow us on Facebook. And most of all, I hope they go to aspiration.com or download our Aspiration app and open up an account and join us on this journey where we’re going to offer them a great financial product, and a chance to make the world a better place at the same time. And I think, as we build this movement, there’s really a huge amount of good we can do.

AK Well, Andrei, thank you for all you do and I wish you only the very best for the future of Aspiration.

AC Likewise. Thank you, thanks for having me.