How technology can help women and minority-led businesses
After more than two decades in financial services, including time at JPMorgan and the East West Bank, Wendy Cai-Lee saw “the same type of inefficiency and the same complaints from customers” repeated across the industry. So, in 2019, she set up her own bank, Piermont Bank, a New York-based digital lender, to focus on small businesses – which, she says, means working with women and ethnic minority clients.
Why the focus on women and minorities?
Small and medium-sized businesses are the foundation of the US economy, and guess who are the people who start those businesses and own and run those businesses, those multi-generation family businesses? [Often they are] immigrant minorities and women — and they tend to have the hardest time in getting bank finance.
Does bias play a role here?
We all have our own bias – I don’t know anybody who’s completely objective towards everything. We all have life experience that shapes who we are. Historically, more men than women handle finances, run businesses, start businesses. There’s a certain style, a certain way of negotiation that [bankers, who are often men themselves] are used to. I think it’s a relatability issue. On a personal level, I think that being a woman and from a minority has helped me in some way because I was able to relate to a certain demographic, while some of my colleagues couldn’t. In many instances, however, I can tell you that it did not help me very much.
Does technology actually make a difference?
With Piermont, I’m trying to use machines to allow humans to spend more time with the client. That, at the end of the day, helps with reducing non-performing assets [and dealing with clients, like small businesses, that are considered riskier]. The more you get to know your clients, how they run their business, the easier it is to manage your credit risk. It’s actually common sense, but I think in the banking industry, an industry that has been around for hundreds of years, we have forgotten what people actually need, what makes sense.
