Starting a neobank means reading any and every report you come across on the future of financial services. So, we can say this with confidence: none are more entertaining or more insightful than Nonfiction Research’s THE SECRET FINANCIAL LIVES OF AMERICANS.

Nonfiction’s Gunny Scarfo and Ben Zeidler spent two years speaking with Americans about their relationship with money and with their banks — they also interviewed Wall Street traders and shopping addicts, bank executives and bank robbers. Their report, released in 2018, showed a startling gap between the public and private financial lives of Americans. At a time when the travel industry and the real estate market was booming, Americans were accruing debt at record highs and saving at record lows. They found that 52% of Americans had cried because they didn’t have enough money at the time.

Scarfo was shocked and saddened. His peers were posting Instagram shots from Greek islands while hiding the fact they had just $8 in their savings account. “Americans are essentially borrowing from their private lives to fund their public lives,” he tells us. “The whole thing is snowballing in the darkness.”

Scarfo and Zeidler shared their research with an incumbent bank CEO and found that it fell on deaf ears. They realized the traditional institutions simply weren’t interested in providing the services their customers wanted. The Big Banks would offer upgraded banking services — a new app, online bill pay, extended hours at their branches — but not upgrades that could actually improve the way their customers interacted with their money. It simply wasn’t worth the cost or the effort. As the incumbent bank CEO told Scarfo: “You have to torture people pretty hard before they leave a bank.”

Unifimoney: Take me through the research process for the report. How did you come to the project? What did you expect to find?

Ben Zeidler: We knew we were going to launch with this piece, so we wanted to make sure that it was done right and that it felt really different from all the other shit that you see out there about The Future of Financial Services, which is always the same report written 80 different ways. Instead of looking at banks and services, we went bottom-up and looked at the relationship between people and their money and what that has to tell us about the future of financial services. We didn’t want to be like, ‘Well, what does Wells Fargo have to tell people about money?’ We’ve been playing that game for a while and it’s not going great. So, we took this other approach.

We knew that we needed to interview people about money and we knew that we were going to have to do some large, nationwide quantitative survey about money, but when we started, we didn’t know that we were going to talk to shopping addicts; we didn’t know that we were going to talk to both bank CEOs and two convicted bank robbers. You start with the question in mind about understanding the relationship between people and their money, and then you see, as the project unravels, the weird rabbit holes it takes you down.

Unifimoney: Tell me about the bank robber interview. How did you think to reach out to him? What was the most revelatory thing he told you?

Zeidler: When you’re hunting for a bank robber, you can’t just put out a general call for bank robbers. I had to identify a couple bank robbers who had served time, had finished their sentence, and who were open to being a public voice for this sort of thing. The better of the two, Clay Tumey, I found a quote from him in some article and I went to hunt him down. I couldn’t find him anywhere; he’d been in prison, so he didn’t have a Twitter or Instagram or Facebook. But I finally tracked him down on Reddit in a personal finance Subreddit giving financial advice to people. Legitimately helpful financial advice.

Scarfo: That conversation with Clay was, for us, the lynchpin of the entire research. It was the same week we spoke with the Bank CEO. We asked Clay, ‘Why did you rob banks? Of all the things you could have robbed or of all the illicit activities you could have engaged in that may have even been more lucrative, why banks?’ He had a few reasons, but one of them was that he resented banks because he felt that they understand how money works, and rather than giving that to their customers, they use it to take advantage of their customers.

It was a moment of moral clarity and the contrast between the Bank Robber and the Bank CEO could not have been more clear. We felt, in that moment, that Clay gave us a roadmap for the rest of the research and, arguably, for the future of financial services.

Zeidler: It’s scary when you talk to a Bank CEO and a Bank Robber and you walk away from the set of conversations thinking, ‘Wow, that Bank Robber, he really understands this stuff.’ It was the Bank Robber who provided the moral imperative for the whole thing. It didn’t come from the Bank. That’s not a great sign for the industry.

Unifimoney: Your report showed a huge chasm between what customers wanted and what banks offered. What were some of the services customers wanted that aren’t offered?

Scarfo: When you stop asking bank customers about banking and you simply talk to them about money, you start discovering this other set of needs that not only isn’t addressed by mainstream financial institutions but doesn’t really even seem to be on the agenda. When you talk to people about money, the real needs that people will tell you are: ‘I don’t know if I’m being paid fairly’; ‘I don’t know if I should be making more or if my colleagues are making more’; ‘How do I maximize what I’m earning in my life?’; ‘How do I make moves two steps or three steps ahead to maximize what I can earn while still being able to look myself in the mirror and be happy?’; ‘Am I spending too much or am I saving enough?’; ‘How much debt should I be carrying?’; ‘How do I know how much to spend on a vacation?’; ‘Are my friends living better than me?’; ‘Should I be doing better?’

When you talk to people about financial services, they will talk to you about their accountant and about their financial advisor if they have one. They will talk to you in these specializations. When you talk to people about money, they will tell you: ‘I don’t have a person to talk to about money.’ What struck us about that was that when you look at medicine, you have a primary care doctor. That person’s job is not to be your surgeon, it’s not to be your orthopedic expert, to be your oncologist. That person’s job is to take care of preventative stuff and then to coordinate your care across all these different specialists so that it’s coherent and holistic. In the financial services industry, there’s no such thing. There’s no such thing.

Zeidler: We asked people, ‘Do you have a financial advisor that you can talk to about money outside of taxes?’ and then later in the survey, we asked people, ‘Do you feel like you have anyone you can talk to about money’ We asked it those two ways. 64% of people with financial advisors said they had nobody to talk to about money! That would be like people with therapists saying that they don’t have anybody to talk to about their emotions. No, you’re paying that person literally just for that purpose! That’s not just a one-off. There’s a deep misunderstanding of the role that experts are supposed to play in helping people with their money. Financial advisors are a part of that. Banks are a part of that.

Unifimoney: The quote that jumped out to me was “You have to torture people pretty hard before they leave a bank.” How shocked were you to learn that’s how bankers view their customers? In what context did he say that?

Zeidler: We were talking to the Bank CEO about adding those kinds of services and he was not interested. “There are 8 unmet needs. Americans are saying that they want these things. What do you say, Bank CEO?”

Scarfo: And what did he say, Ben?

Zeidler: ‘That’s not what we do.’

Scarfo: That was the thing that I think shocked me more than the quote about torturing customers. That idea that: ‘It’s not our job to actually help the customer progress in their financial lives.’

Zeidler: Here’s the fucked up part: the right answer for anyone running any business would be to say, ‘That’s not what we do now. But if you’re telling me that there are 8 unmet needs that financial services don’t meet, well, I better look into that. Who else did you tell about this? Who else knows about this? I’m going to go build two or three of them right now.’ But that was not his reaction. There was no interest in it really.

The deep systemic failure of the financial services industry to help people was shocking to me. I knew it was going to be bad and I knew the tropes about people hating their bank or whatever. But I gotta tell you: you look at bank services and you look at what people want and there’s a total mismatch. That’s a problem.

Unifimoney: We’ve been shocked to find the incredible amount of money that the incumbent banks spend on marketing. They could either spend on creating a better product, educating their customers, or just hire a new celebrity spokesperson. It feels like they’ve always chosen Door #3. Do you guys view that as part of the problem?

Zeidler: I do. I think they need some management consultants up in there. I was watching COVID hit and all the commercials were these beautiful art-directed commercials that they probably spent a million dollars on placing. They’re like, ‘We’re here for you at a time of need.’ And then I went to that same bank’s site, because I bank with them, and what’s at the top? ‘Call times might be longer than normal due to COVID.’ I’m like, ‘You guys don’t need more commercials! You need more motherfuckers picking up phones and helping people.’ But I know that one is easier than the other. You have a marketing firm on retainer and you tell them to make a COVID ad. It’s easy.

I think banks need to do the really hard churning work of figuring out how to give people the things they really want. And it’s going to take a total reinvention of the bank, which is why you see smaller players doing a better job of it. Some of the things you guys are doing are better than what I’ve seen out of any bank. Grove is up there; SoFi is up there. It just doesn’t seem like the Big Banks can move the boat fast enough.

Scarfo: The real thing that’s missing is a spirit to start something and to say, ‘This isn’t meant to simply follow in the footsteps in banks that have come before me. This is meant to empower our customers to lead smarter financial lives.’ Now, every bank would say that already. There’s no bank you would talk to that would deny that that is their intention. But I think when you look at their actions, you often fail to find that spirit.

It’s our belief that there’s a race right now for the future of financial services, because the current model can’t last. So, now it’s a race between the upstarts for whom it’ll be easier to have that spirit but harder to scale it into something bigger and the giants for whom scalability and capital is second nature but for whom the spirit might not ever be real or genuine. And we can’t wait to see who wins.