Neobanks build on efforts to call trans users by their chosen names

Changing his name and gender markers was an expensive, time-consuming process for Charlie Hunts. Dealing with his bank was one of the most exhausting parts of the ordeal.

“Banks tend to require the most amount of paperwork and offer the least amount of empathy,” he said.

That experience inspired Hunts — a trans man who runs the community and partner marketing program at the digital bank One Finance — to make changes at One that go beyond Mastercard’s True Name program, which issues cards bearing customers’ preferred name. Instead, he wanted to extend the recognition of a trans or nonbinary customer’s name and identity across all touchpoints including bank statements and customer support.

True Name is offered by Citigroup, BMO Harris Bank in Chicago, Republic Bank in Louisville, Kentucky, and a handful of others. But there are typically still gaps at the issuing financial institutions, from the greeting customers see upon sign-in to the bank’s app and website to the name that customer service agents use to address them. Confronting trans customers with their deadnames can be painful, embarrassing or dangerous because it may out them as trans and jeopardize their safety.

Charlie Hunts (left), who runs the community and partner marketing program at the digital bank One Finance. Billie Simmons (right), the co-founder and chief operating officer of Daylight.
“As a trans person, when I see the company is making a concerted effort to meet me where I am, that’s what matters," said Charlie Hunts, left, who runs the community and partner marketing program at the digital bank One Finance. Billie Simmons, right, is the co-founder and chief operating officer of LGBT neobank Daylight.

A Gallup poll from February found that 5.6% of U.S. adults identify as LGBT, up from 4.5% in Gallup’s previous update in 2017. Within this group, 11.3% identified as transgender.

Several challenger banks require the customers’ legal name for the know-your-customer process but request their preferred name as well and apply it to all other aspects of banking. This could include online and mobile interactions, statements, written communications and customer support.

The experience of Caroline Vahrenkamp, the program manager of the research insights group at the analytics company Raddon, illustrates the value of such measures.

Vahrenkamp, a trans woman, gravitated to the $166.2 billion-asset BMO Harris, a unit of BMO Financial Group, because it offered True Name. BMO Harris was the first bank to do so.

“It’s a huge relief from a quality of life standpoint because there is nothing worse than having a name that doesn’t match you when you go to the store,” she said. “All you get are stares and questions.”

At the same time, credit card statements and online and mobile banking still bear her legal name. “BMO Harris loves being friendly so every time I log in, it’s ‘Good morning, Old Name!’ which is not ideal,” she said. She had to explain Mastercard’s True Name program to the customer service agent when she called to get her debit card replaced with the True Name version.

“We continue to look for ways to remove barriers to inclusion for members of the transgender and nonbinary communities, including making technology enhancements that would enable greater personalization,” BMO said in a statement. “It’s an ongoing journey, and launching the True Name feature for all of BMO’s consumer and business debit and credit cards was an important step.”

Brian Riley, director of the credit advisory practice at Mercator Advisory Group, said that financial institutions must meet the regulatory hurdles for knowing their customer.

“The account has to be anchored to a true, natural person,” he said. True Name authorizes cards under a preferred name while the account is set up under the full legal name.

One Finance, which was founded by former executives of Capital One Financial and PayPal, launched its My Name program in June. Customers submit a request to update their first names, which are reviewed manually, and One’s software applies the name change across all customer-facing products as well as internal customer service tools. In the future, customers will be able to change their first names on their own during onboarding or once they are a customer. The company uses Mastercard’s True Name feature for its debit cards.

“We will limit the exposure to any kind of legal documents during onboarding and at the same time ask you what your chosen name is,” Hunts said. “As a trans person, when I see the company is making a concerted effort to meet me where I am, that’s what matters.”

Furthermore, One does not collect gender markers such as male or female, and uses gender-neutral pronouns to refer to customers internally. Hunts says that One’s “Pockets,” or pools of money that users can set aside and share with friends or family, are a friendlier form of joint accounts for people with nontraditional family structures.

Daylight is a digital bank designed for the LGBT community that also lets customers set their chosen names and restricts legal name usage to know-your-customer vetting.

“It was technologically simple and emotionally or logistically complex,” said Billie Simmons, co-founder and chief operating officer of Daylight.

From a technical standpoint, the changes amounted to an additional data field for chosen names. But Daylight had to discuss the idea, stress the importance and conduct risk assessments with its partners — MetaBank, its sponsor bank and a unit of Meta Financial Group in Sioux Falls, South Dakota; its banking-as-a-service provider, Marqeta; and its card issuer, Visa — to ensure name changes could be updated across their systems as well.

In a statement, Visa said that “existing rules and standards have always provided issuers the flexibility to offer their customers the option to choose the preferred name that will appear on their Visa card, even if it does not match their legal ID.”

Daylight has several hundred beta testers and 100,000 people on its waitlist.

Bliss is an app that helps transgender individuals save for their transition costs with the help of the banking-as-a-service provider Jiko. It collects the user’s chosen name as the first step in registration and recognizes them by this name in all communications thereafter. Like One Finance and Daylight, Bliss will only request the user’s legal name for know-your-customer reviews.

“Bliss uses the [chosen name] field to speak to the user, whereas the legal name is better thought of as a data point that gets passed forward to Jiko,” said Kate Anthony, CEO of Euphoria.LGBT, the company that created Bliss and other apps for the transgender community.

Transgender customers feel a difference with empathy and intent when institutions restrict legal name usage to when it is necessary.

“There is a loyalty opportunity that banks are missing out on,” Vahrenkmap said. “The opportunity to be recognized as yourself in an industry that generally frowns on that is huge.”

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