How to compare cause-driven neobanks in the U.S.
Mighty Deposits Guide, 2023 Edition
Aspiration, Greenwood, One…
A number of new cause-driven neobanks have been launching in recent years, from digital banks for Black America to banking that fights climate change.
Often, these neobanks aren’t actually banks but rather fintech apps that partner with banks behind the scenes to store, insure and use your money, while the fintech app controls your digital banking experience.
For people interested in the social and environmental impact of their bank deposits, neobanks can lead to a unique set of questions about the ultimate trajectory of money.
Tips for evaluating digital banks, for mission-driven consumers
When considering a neobank, determine if the neobank is itself a bank, or if it partners with a bank. This information is usually in the fine print of the neobank’s website. Knowing this information can give you insight into what company or companies have control in deciding the trajectory of your money, and to what extent.
Questions to ask:
What partner bank(s) does your money with the neobank actually end up with?
How does the neobank define its standards for partnering with banks?
Are there any commitments regarding what your deposits will or will not fund with a partner bank? The biggest social and environmental impacts of a bank come from how it lends out money, not donations, special features, nor impact perks.
If you have a question about how a neobank approaches a specific social issue that matters to you, don’t be afraid to ask them directly.
Trends in the mission-driven neobank space
Community is increasingly formed via affinity for social causes or connection to personal identities, rather than geography. Unlike some traditional community financial institutions, neobanks typically lack geographic limitations, offering accounts to residents of all 50 states.
Addressing climate change and serving Black Americans are two popular areas of focus for mission-driven neobanks in 2020 and 2021. These neobanks join an existing values-based banking ecosystem that includes 20+ Black-owned or Black-led community banks, and 20+ credit unions and community banks that do not invest in fossil fuels.
Several neobanks are offering impact scoring for customer’s everyday spending decisions. Though understanding the social/environmental impact of one’s shopping can be helpful, socially-conscious consumers may want to pay attention to whether this shopping impact score is coupled with transparency about the bank’s own money choices (like whom they lend to or invest in).
Neobanks often are capitalizing on marketing technology opportunities where many community banks are falling short, and then partnering with these community banks to do the actual back-end banking. This means neobanks are often good marketers, first, with additional attention warranted for how they’re steering their own business practices, from the banks they partner with to how they run their own companies. The end result is people having a banking relationship with a fintech app, versus the back-end bank. Many community banks without fintech partners are highly impactful banks with competitive technology, albeit maybe a bit ugly and not as sleek design as neobanks are offering.
It’s up to you if you prefer to bank with a neobank or directly with the bank itself. Win-win scenario, in either case, is getting a digital experience that works for you and your money stewarded by an impactful bank that you feel great about.
Comparing mission-driven neobanks
The information about impact compiled below covers eight neobanks in the U.S. There are additional companies, not included in this comparison, emerging with a specific debit card or credit card product, such as Treecard, a wooden debit card that promises to plant trees with each purchase, along with Carbon Zero and Buy with Impact, two credit cards that promise to purchase carbon offsets with each swipe. The information below was sourced from neobank websites; please vist neobank websites for most up-to-date information.*
Green neobanks currently offering a banking product in the U.S.
Ando Money
“Fee-Free Digital Banking That Fights Climate Change”
What deposits do/don’t fund
“100% of our investments will actively reduce emissions.”
“Ando partners with banking service providers and partner banks to utilize customer deposits in order to fund Green Assets. Green Assets are any loans or securities whose proceeds are used to fund solutions which emit less emissions than traditional solutions.”
Other impact details
Allows customers to see where deposits are allocated across five categories (like clean energy and sustainable transportation)
Where money is held/insured
“Banking services provided by Community Federal Savings Bank, member FDIC.” See bank profile on Mighty
Aspiration
“Financial services and investment products that put our customers, their conscience, and the planet first”
What deposits do/don’t fund
“Deposits won't fund fossil fuel exploration or production”
Other impact details
Donates 10% of every dollar customers pay to charities
Personal impact score to help you shop to match your values
Options to plant a tree with every roundup and purchase carbon offsets
Where money is held/insured
“Cash Balance will be held at one or more of the following: Coastal Community Bank, Bremer Bank NA, Ion Bank, ProgressBank, Bank of New Hampshire, Eaglebank, Manufacturers Bank, C3Bank NA, The Freedom Bank of Virginia, Bridgewater Bank, Nano Banc” (click any link to see bank profile on Mighty)
ATMOS
“Banking for a climate positive future”
What deposits do/don’t fund
“Atmos sends its deposits to various FDIC-insured banking institutions around the country. While those banks may have a diverse portfolio of loans, we make sure your Atmos deposits are only funding climate-positive infrastructure… ”
“What we will support: Renewable Energy, Regenerative Agriculture, Electric Transportation, Weather Resilience, Building Electrification, Energy Efficiency Overhauls”
“What we won't support: Fossil Fuel Extraction, Clean energy projects that displace Black, Indigenous, or other other Frontline Communities, Fast Fashion Clothing, Industrial Agriculture, Industrial Livestock Production, Generic Real Estate, Everything Else…”
Other impact details
Customers can support a non-profit organization when opening an account
Customers can earn a higher interest rate by making recurring donations
Were money is held/insured
“Through our bank partner, Evolve Bank & Trust, Atmos sends its deposits to various FDIC-insured banking institutions around the country.” See bank profile on Mighty
Other neobanks currently offering a banking product in the U.S.
One
“All-in-one banking to support your life, goals, and people.”
What deposits do/don’t fund?
“Fossil fuel free deposits”
Other impact details
None
Where money is held/insured
“Your One account is FDIC-insured through our bank partner, Coastal Community Bank, Member FDIC” See bank profile on Mighty
Black neobanks currently in formation or waitlist only
First Boulevard
“Transparent Banking Built for Black America”
What deposits do/don’t fund
No commitments currently listed on website
Other impact details
Offers “up to 15% cashback when you make purchases at participating Black-owned businesses”
Where money is held/insured
“The First Boulevard Deposit Account is established by Central Bank of Kansas City, Member FDIC.” See bank profile on Mighty
“Your account is entitled to up to $250,000 of pass-through deposit insurance coverage from the FDIC through our issuing bank, Choice Financial Group.” See bank profile on Mighty
Greenwood
“Modern Banking for the Culture. A digital mobile banking experience made for Black and Latino customers.”
What deposits do/don’t fund
No commitments currently listed on website
Other impact details
Allows customers to make donations to non-profits through a spare change round-up program
Gifts $10,000 every month to a Black or Latino business
Where money is held/insured
“Banking services provided by Coastal Community Bank, Member FDIC.” See bank profile on Mighty
Other cause-driven neobanks currently in formation or waitlist only
Daylight
“Banking for LGBT+ people, by LGBT+ people”
What deposits do/don’t fund
No commitments currently listed on website
Other impact details
Offers a “mobile-first account with your chosen name (no matter what your ID says)”
Provides “content tailored to LGBT+ people, not just ‘friendly’ to them”
Where money is held/insured
“The Daylight Visa® Prepaid Card is issued by MetaBank®, N.A., Member FDIC” See bank profile on Mighty
Good Money
“Good Money is a revolutionary banking platform that is democratizing access to wealth creation for all Americans through its Equity Back™ and Shares Back™ programs.”
What deposits do/don’t fund
No commitments currently listed on website
Other impact details
Pledges to “share the profits banks normally make with you in the form of a minimum of 1% equity that is automatically earned by you”
Where money is held/insured
Not currently listed on website
Purpose Banking
“Ethical banking made easy”
https://www.purposebanking.com/
What deposits do/don’t fund
“Your deposits never fund fossil fuels, factory farming, or private prisons.”
Other impact details
Promises to “dedicate a percentage of each transaction to support a non-profit organization of your choice”
App will offer an impact score for purchases and “cash back and flash deals on products that are better for people, animals, and the planet”
Where money is held/insured
“Banking services are provided by Piermont Bank, Member FDIC.” See bank profile on Mighty
We expect the number of neobanks to increase as businesses look to combine the best of technology, design, and banking. Mighty will continue to monitor the industry and help you compare the impact of your full set of banking options, whether with a bank, a neobank, or other banking solution.
Questions or comments? Contact us.