The Bank That Lets You 'Pay What You Want'

In the nearly 20 years since he graduated from Harvard, Andrei Cherny has achieved much. He was the youngest White House speechwriter in history, helped form the Consumer Financial Protection Bureau and authored a book about World War II.

During this time, he came across a lot of financial firms, and one thing always stuck with him: Their customers didn’t seem to want to do business with them.

So in 2013, he set out to change that. Two years later, Aspiration was launched. It is, in his words, a financial firm with a conscience.

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“It really started with the notion that there needs to be a financial firm people really like and trust and want to do business with. A lot of the financial industry has given people good reason to not trust the country’s big financial institutions,” he said.

That sounds lofty — and Cherny knows that. So, he’s starting by changing the business model.

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“There used to be a Dean Witter in every Sears in America,” he said. “That model didn’t work. It’s tougher and tougher for [large banks] to make the economics work for the average people in America.

“A lot of the big banks end up losing money on checking accounts. What you’re seeing is a couple of dynamics at play. A lot of that is the business model. What you see today is financial institutions that are more and more going after wealthier and wealthier clients. That is where the money to be made. In response they make higher fees.”

Cherny said he wants to put the bank and customer on the same side of the table. And he’s starting by allowing Aspiration customers to pay what they want.

“We really see that it’s up to us to earn that fee,” he said.

Apparently, it’s working. Cherny said that over 90 percent of Aspiration’s customers choose to pay them, and they’ve been working on building out their product offerings and the connectivity between them.

“That track record gives us confidence that this is really working,” he said.

Recently, they launched a bank account and retirement account, and their checking account, which has no monthly fees or atm fees, was named Best Checking Account by Money Magazine last October. They’ve also launched a sustainable investment fund.

The Customer Base

So, who exactly is using this “pay what you like” bank? According to Cherny, most Aspiration customers are 35 or younger and have been on the sidelines of financial services. The average Aspiration customer has over $70,000 in assets, but about 75 percent have no investments.

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“They haven’t found financial firms that they trust and feel like they share their values,” he said.

Oh, and on top of that, 10 percent of every dollar that Aspiration earns goes to charity.

One and a half years in, Cherny is confident he can make a difference in the traditionally old-fashioned financial services industry.

“The innovation in the financial industry is harder and takes longer than you think, but because of that the opportunity is even bigger than people think.”

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