Financial Inclusion – the Blockchain Way: with Entrepreneur David Derryck
This week we have the pleasure of chatting with David Derryck, serial entrepreneur. We met David in his role as Chief Impact Officer at SaverLife.org, a non-profit fintech that employs gamification and behavioral science to build savings habits for low to moderate income individuals. Most recently, David launched BuyBlack.org to drive traffic and revenue to Black-owned businesses using web3 tools. Today we talk about both.
David Derryck, you’re a mission-driven guy. Your recent career spans the realms of private capital and venture, insurance services, and a host of impact-oriented businesses. How can we increase financial inclusion?
As an entrepreneur-in-residence with the Aspen Institute's Financial Security Program, I've been working in the blockchain space. One of the exciting things we've been discussing with various participants and leaders in this area is how to address the issue of financial inclusion. Instead of focusing solely on financial access, which many people in the US already have through mobile devices and the internet, we're exploring the potential of blockchain and decentralized finance to provide a solution that requires only a computer or mobile phone.
When it comes to blockchain, the technology is essentially running in the background while you access it through mainstream devices like your browser or mobile phone. What excites me is that people are now able to break down financial services into individual components and reassemble them according to their needs, much like building with Lego blocks. This concept is often referred to as 'programmable money' and it allows for a more modular approach to financial management.
Interesting – what are some of the ways this can work?
One example of this modularity is an hourly worker who is paid every couple of weeks at a retail department store. Traditionally, when this worker needs a loan, they may turn to a company that can provide an advance or an actual loan. Recently, financial institutions have also been offering to provide the worker's money a few days earlier. However, on the blockchain, there are new ideas emerging, such as the concept of streaming a paycheck.
For example, what if paychecks were deposited by the minute instead of every two weeks, which would give people access to their money more quickly? This could potentially eliminate the need for loans and allow for bills, such as mortgages, to be paid in real time, resulting in a reduction in interest expenses. This is an exciting development for financial inclusion and decentralization through blockchain technology.
From a decentralized perspective, there are interesting developments on the blockchain in terms of identity. When opening a bank account, for example, there are often anti-money laundering and know your customer checks that are repeated each time. Recently, I had lunch with a friend who was retiring and looking into applying for medical and Medicare programs. They mentioned having to repeat the same information to multiple agencies, which highlights the redundancies and inefficiencies in the current system. Decentralizing these processes can empower individuals to control their own data and allow governmental institutions to access the necessary information in a more efficient and cost-effective manner.
Can you envision a future where a portion of our hourly wages automatically goes into our retirement account, without us having to do anything?
Yes, I believe that we can use blockchain technology to automate savings and retirement contributions. With smart contracts, it's possible to specify that a portion of an hourly wage goes towards retirement, another portion towards emergency savings, and another towards a checking account, for example. This can be particularly useful for those who work at multiple hourly jobs, as they can direct all their direct deposits to be split and automated in the desired way with one financial provider. It could also potentially lower costs for financial providers.
What are some of the other ways to expand inclusion.
To increase financial inclusion, more companies need to implement blockchain technology, which makes new financial service capabilities and reach available. However, currently only a few companies are testing and trying out different components of the blockchain. Some companies that have made access to cryptocurrencies and blockchain easy include Cash App, Venmo, PayPal, and Robinhood. These companies have tens of millions of users in the US and have a button for crypto in their user interface. The availability of blockchain technology is already accessible to a wide range of the population.
The decentralized finance world is currently unregulated, which poses a challenge. While there are risks associated with investing in cryptocurrencies, some people see it as a way to earn better returns. However, we may need to balance what people want versus what is good for them. Currently, only wealthy investors have access to high-risk investments, while most people rely on retirement accounts or individual stock investments. In 2021, many people jumped into the cryptocurrency market due to its upward trend, but it's important to note that it can also experience downturns. More evidence needs to be collected to determine what safeguards should be put in place.
What are some of your goals in 2023 for BuyBlack.org?
BuyBlack.org is exactly what it sounds like: a way to find, connect with, and purchase from Black-owned businesses across a wide range of product categories.
In 2023, the main goal is to expand the current 50,000 listings of the directory and make it open source for other companies to use. The aim is to build the membership program and increase overall engagement by having members work with merchants to co-create designs and increase sales. The ultimate goal is to answer the question of whether NFTs can reduce revenue disparity and be able to say yes, even with an asterisk, at the end of the year.
… and you’re launching a new BuyBlack.org NFT!
We have been exploring the concept of participant commerce, which involves creating an environment where consumers and merchants can collaborate and co-create products, as well as think about distribution. WEB3 technology enables us to connect individuals with brands more closely. Our NFT program functions as our membership program, replacing the traditional membership card with an NFT that unlocks different activities as it's used.
In our participant realm, users can provide feedback and rate our platform, suggesting industries they would like us to partner with. We use this feedback to connect with retailers, manufacturers, and other creators. Instead of traditional points or coupons, we provide new NFTs as rewards for these activities. Users don't need a crypto wallet, just a phone number and an email address. This allows us to build a full WEB3 wallet in the background for each user, so they receive a unique NFT token. We can track users' activities and reward them for participating in other merchants' activities.
Our goal is to encourage black creators to become new creators on the platform, in areas such as art and music. By receiving NFTs, users can practice using them and get a sense of what's to come in the future. We recently launched the program, and although it's still early days, we've had good signups, and we're excited to see how our hypotheses play out in the coming months.
David Derryck, we appreciate your vision and commitment. Thank you for sharing both! You can connect with David Derryck on LinkedIn, and by email. You can follow his serial engagements at the links below.
About David Derryck
I've always been interested in entrepreneurship and the world of business. After finishing college, I had the rare opportunity to work as a junior member in a private equity firm, where I was able to participate in partner discussions and gain a better understanding of finance. Through this experience, I realized that I was more interested in being an operator than an investor. After attending business school, I started my own international trade startup, which did okay, but didn't reach the heights of the dotcom boom.
I then transitioned to working in the insurance industry, where I had the opportunity to see the mixture of business and philanthropy in a project we had in Kenya where we developed a community to house grandparents and children who were affected by the AIDS epidemic. This was a turning point for me, as I realized the potential of combining the two fields. Since then, I've worked with a variety of social enterprises, either helping them get off the ground or turn their businesses around. About five years ago, I moved to a non-profit FinTech company called SaverLife, where the goal was to help one million people become better savers using technology. During my tenure, we were able to help over 600,000 consumers and employees.
The events of 2020, particularly the murder of George Floyd, made me re-evaluate what I was doing to address wealth inequality and the state of black-owned businesses in the United States. I started BuyBlack.org, which aims to drive traffic and revenue to black-owned businesses, using technology such as data aggregation and blockchain. Overall, my career has been focused on the intersection of business and social impact, and finding ways to use technology to improve people's lives.
This piece was featured in the February 23, 2023, edition of Retirement Security Matters. For more fresh thinking on retirement savings innovation, check out the newsletter here
