Friday, December 04, 2015

Another reason why I’d make a lousy Millennial

Rather than continuing to read about nihilistic bastards murdering their colleagues at a holiday get together, I thought I’d graze around the business press for a bit of lightening up. After all, even the most dire of news from business and industry beats mass murder, no?

Anyway, there, on Bloomberg, I found an article on Social Finance, an outfit that specializes in making loans to twenty- and thirty-somethings. SoFi started out its life as a non-bank doing refinancing of college loans. It then decided to branch out to personal loans and mortgages.

The company’s mission: disrupt the boring, crappy old banking industry. In the words of Mike Cagney, the CEO, they’re out to “kill banks:”

“We can do some things that really get you to start to rethink how your relationship with a financial-services firm should work.” If he has his way, banks as we know them will someday be extinct. “We’re trying to make these guys dinosaurs,” Cagney says. “And hopefully I’m the meteor by which they all die.” (Source: Bloomberg)

Personally, I think getting struck by a meteor would be one kick-ass way to go, as long as I didn’t have to put up with Wolf Blitzer predicting where it was going to hit – and how much havoc it would wreak – for weeks in advance. But I digress…

SoFi’s shtick is putting the social in finance. They do so by hosting events – 45 parties in the last year – so that their customers can get to know each other.

One such event was recently held in Manhattan, at a cocktail lounge called the Happiest Hour. There, SoFi customers lined up for free sliders and vodka-cucumber cocktails.

[Azdar] Baghirov was invited because several months earlier he decided to take out a personal loan from Social Finance…“I never expected an event from a lender, to call me and say, ‘Come hang out with us, we are building community,’ ” said Baghirov, an IT system administrator. “Honestly, this is unbelievable.”

Honestly, Azdar, it is unbelievable. Not that SoFi would try this gambit. But that people would show up for it.

As compelling as the thought of free sliders and vodka-cucumber cocktails might be, I can’t imagine receiving or responding to an invite from BofA to come meet other folks with, say, checking accounts there.

But millennials, as we are so often told, are different.

In utero, they heard their parents announcing the pregnancy on a cellphone. They have no notion of pre-Internet life. (“You mean, like you had to write someone, like, a letter, on like paper? LOL”) They don’t use cash. (“You mean, like, you used to carry ‘money’ in a ‘wallet’. ROFLMAO.”) They embrace all things social, and are even breaking up with their boos via text message. (C ya.)

Hey, maybe it’s all this virtual social “engagement” that so makes them want to have small-f facetime with actual human beings that’s hoisting them out of their nose-in-smartphone zone at the behest of an entity with which they have a commercial relationship.

Other than that, I JUST DON’T GET IT.

I mean, when I go to Fidelity’s offices, I will take a bottle of water or a mini-Hershey bar. And I may nod to other customers sitting there waiting for whatever. But socialize?

Anyway, SoFi is

…soon planning to roll out a wealth-management tool, insurance products, and something that resembles a checking account.

Thus, their trying to connect with their customers (and solidify that lifetime relationship value) with sliders and Hendricks gin.

While all the while trying to stay an unbank so that those nasty Fed regulators can’t get anywhere near them.

Now that I think of it, given how inept the bank regulators have been over the past couple of crises, why not let the unregulated give it a try? Caveat millennials and all that, but if you’re willing to use something that “resembles a checking account”, have at it. (Say, why would a millennial even need a checking account?Other than paying my contractor for the reno work, even I – abn old geezer if ever – find that the only checks I’ve written in the last couple of years are as gifts and to my cleaning folks.)

Beyond offering checking accounts or not, SoFi has an interesting (smart) model. They’re choosy about their customers’ professions, looking to lend to those who are in good (read: lucrative) professions and/or earn a steady paycheck (think: nursing). And:

..when borrowers lose their jobs, SoFi allows them to stop making payments temporarily and lands them interviews with potential employers. If a customer wants to start a business, SoFi provides a six-month break from loan payments—and makes introductions to venture capitalists.


The company is betting that by making millennials feel as if they belong to an exclusive club, it can turn an entire generation into lifelong customers.The company is also counting on its members to start organizing themselves. After a recent event in Philadelphia, a group of borrowers got together to go bowling, all on their own. Another in Berkeley created a Facebook page to stay in touch after dinner.

Well, that would be the day. Then again, I’d make a really lousy millennial…

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