Tech Tuesday: The Future of Credit
Meet Michael Broughton. Michael is one of those unique individuals who make an impression. Michael has done so much so that I have directly asked him to be my best friend solely on his coolness factor 🙂 As the youngest board member ever of a financial institution, Michael Broughton brings a young, disruptive mindset to the world of fintech. He is the founder of Perch, a mobile app that allows you to build credit using your common, recurring, subscriptions, such as Netflix, Hulu and Rent. Raising his first round of capital at 20, Michael has set out to build new age fintech products that bridges the gap between disadvantaged communities and financial opportunity. Listen in below as Michael as I discuss the importance of credit on the future of finance, especially for who need credit most.
#TechTuesday Highlight #76: Michael Broughton, Founder & CEO, Perch
How/why did you get into your space?
There is a big gap in the education young adults have on finances and the access to credit/capital that those in need of these solutions actually have. I myself was limited access to financial services when trying to pay for college, such as a student loan or private loan. Given my family financial situation and myself never building credit, I could not seek a loan to help cover my tuition. This made university not only look financially impossible, but is a problem so many other students face and end up not pursuing college for.
This situation motivated me to jump into the fintech space and start building solutions to this problem.
What role do you play in the tech ecosystem and why is that role important?
I believe my role in the tech space is to bring a young mind to old infrastructure. There is currently a major, fundamental change happening in the adoption of tech and new age thought in the basic principles of fintech, from AI/ML to the scoring bases of credit scores. These practices are remodeling a lot of fintech, and it’s important to bring a voice for the next generation to this conversation. For example, there is major discussion around how the data points to monitor someone’s credit score have not changed in more than half a decade. As tech starts to push this narrative, I am pushing conversations around how these data points should reflect the common spend of the younger generation, taking into account how kids spend most of their time and energy toward subscriptions and social media, not churning credit cards and refinancing credit builder loans. It’s important for us to mold this system to a new age generation, one that focuses on social impact, personalization of product, stability and limited need of their time span. We embody this mantra with Perch.
How has technology impacted your industry and why is this important?
Technology is causing an evolution in finance. Technology has brought transparency and user personalization to the forefront of financial solutions. The rise of neo banks is a great example of this. Banking has not only turned 100% online (which we would have never expected 7/10 years ago) but is hyper focused on demographics. There are neo banks focused on latinos, high-class individuals, minorities, african americans, millennials, social celebrities, etc. This level of personalization was never able to be done before, but is now the capstone of new age finance. Tech is causing the evolution of financial services which we could never have guessed would happen.
What do you believe is the most exciting tech trend for 2020 (as it relates to your industry)?
I believe that there is a massive focus on personal finance happening in the crossroads of tech and finance. COVID has highlighted a major importance of managing personal finance and furthermore tech companies are aggressively building solutions around breaking down the barriers that have long existed in this space. Financial institutions were originally very against fintech innovation, but it has now become a necessity.
Who is a person that inspires you in the space and why?
John Hope Bryant has been a personal mentor, an advocate, and leader in the space of financial inclusion and access to credit. His knowledge on the current financial climate and its need for reform is inspiring and motivates me to push forward
What advice would you give to someone who wants to get into your space?
There are millions of ways to disrupt the current fintech industry. What makes you successful in this space is finding the most efficient use of technology to build pipelines to your users. With such a big space comes nearly unlimited competition. Your ability to become priority in your users life is what makes your product stand out from the rest.
#businessunusual #credit #financialinclusion #financialservices #mission #vision #value
Have thoughts on this week’s trends or questions for me or Michael? Post your thoughts in the comment section or share them on Twitter. Please include the hashtag #techtuesday and mention me @ScarlettSieber! Until next week. 🙂
You can connect with Michael on LinkedIn.