As an immigrant, I was failed by U.S. banks. So I started my own neobank

Too many banks are failing underserved communities—but used correctly, financial technology can make a positive contribution.

Underserved communities usually pay excessive bank fees or even get completely pushed out of traditional banking services. That’s not acceptable, and mission-driven neobanks like mine are working to make real change for the better.

Neobanks are becoming the face of modern banking, particularly for those who haven’t been well-served by traditional financial institutions. Many of these online and mobile-first fintech companies promise low fees and transparency and are presented in a user-friendly interface. Plus, the latest mission-driven neobanks take on an additional challenge: addressing the particular and wide-ranging needs of underserved communities.

For example, Cheese aims to serve Asian American customers, and Daylight offers banking for the LGBTQ+ community. Fair, the banking platform that my team and I launched this year, is the first halal-certified neobank in the United States. Amongst other innovations, we’re introducing a membership-based platform that does away with traditional bank fees. Think Costco, but for banking.

I came to the U.S. from India with $100 in my pocket, and eventually founded a tech firm, AMSYS Group, that’s now worth over $350 million. But I will never forget how difficult it was as a new immigrant to use the U.S. banking system. I clearly recall how just opening a bank account and getting a loan was a serious challenge.

After all, bank accounts and loan agreements are complicated and loaded with fine print. Many people have trouble understanding it all and often end up just skipping the process entirely. Plus, when contracts aren’t in your native language and the entire system is foreign, as in my case, it’s hard to know when someone is trying to take advantage of you.

These banking challenges are real and measurable. For example, in 2020, a Bankrate survey found Black and Hispanic respondents paying twice as much in banking fees as white respondents. That’s unacceptable and unnecessary, and I’m excited by the opportunity that neobanks have to address these disparities.

For example, at Fair, we’ve created a membership-based platform that’s easy to understand. A monthly or annual membership provides access to a wide range of banking services without countless fees.

Beyond banking deserts

When banks shut down branches in poor neighborhoods, the resulting banking deserts leave residents with few alternatives. Unfortunately, nearby check-cashing stores are often the most convenient—but costly—option. Plus, the lack of local banking services means less access to capital, making it difficult to start or grow a business.

Neobanks offer a convenient and user-friendly mobile experience, a major step in the right direction for populations. In 2019, the Pew Research Center found approximately 25% of Hispanic and Black Americans are only able to access the internet at home with their smartphones. Only 12% of white Americans are in the same situation.

It’s also heartening to see how neobanks are expanding beyond basic banking services to create personal finance platforms. You can get key budgeting, investing, and lending tools built right into the same mobile app where your paycheck arrives.

From a personal perspective, I know that our approach led us to new ways to help our customers. For example, we are certified with the Accounting and Auditing Organization for Islamic Financial Institutions and comply with the standards outlined in both Sharia and Jewish law. Of course, our services, such as international money orders and free debit cards for children, are aimed at secular customers as well.

Later this year, complying with Islamic law, which forbids charging interest, we’ll launch interest-free home, auto, and small business loan products. Plus, we’re building a “robo-advisor” to help members save for the future with socially responsible investing (SRI) options. And I expect that our new wealth building investment feature that can return annual dividends of up to 4% for members will be popular.

I believe a mindful focus on intent and impact is required for fintech companies to genuinely help underserved communities. To me, that means doing more than just creating a nice aesthetic on top of a white-labeled banking product.

By listening to customers, you can truly invest in technology that directly addresses their specific needs. But you must have the humility and flexibility to adjust course as necessary for the consumer’s benefit. Finally, you must be nimble: The ability to act quickly is an advantage many neobanks have over traditional brick-and-mortar shops.


Khalid Parekh founded and ran the technology company AMSYS. He launched Fair in 2021 to help provide convenient and cutting-edge financial services to underserved Americans.

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Khalid Parekh