Ian’s Tech Travels: Never get stitched up again on a tour
Most of us have a friend, let’s call him Dave, who shuts up when our turn comes to get the pints. Everyone pays diligently but Dave squirms, every penny per prisoner. When do you fall out with Dave?
According to a study published by the Bank of America in 2017, our tolerance for Dave is low. The Friends Again report, as it was called, found that almost half of respondents said money was a cause of stress in their friendships. 53 percent had seen a friendship end because of money owed, and nearly three-quarters would end a friendship for an exceptional sum of $ 500 or less.
Stress is not just a consequence of burning bridges. 48% of those surveyed felt uncomfortable when they asked to settle a debt, and nearly one in five people had avoided someone they owed money. If only we could smooth this process out.
This is where Flank, founded by CJ Tayeh in 2019, comes in. Flank is an app-based payment system that monitors amounts owed between friends and acts as an impartial arbiter to facilitate payment, while providing useful and user-friendly user interfaces for both parties.
Flank’s impact could be substantial. The Friends Again report found that 33% of respondents believe that sending money through an app helps ease social friction, and this feeling is heightened among younger generations. 41% of millennials say managing debt with mobile apps would improve relationships with friends.
It’s time to leave the pub now, as Flank doesn’t just settle the feuds at the bar. Rather, the application mainly aims to help people in difficult financial situations. By facilitating “compassionate loans,” involving low interest or no interest loans, Flank enables people to manage and pay off unpaid debts. Tayeh explains the thinking behind the app and some of the common misconceptions in microfinance.
CJ Tayeh, founder of Flank
“I have tried using a few budgeting apps and I have been blatantly unsuccessful,” she says. Often the miscalculation of designers is that the rich are good at budgeting and the poor are not. It is completely misguided. If a rich person spends more than £ 500, they might not buy a new jacket next week. If a poor person spends more than £ 5, it could be the train ticket home.
Tayeh clarifies the importance of having a thoughtful third party involved. “There’s a really strong power dynamic that we’re trying to get out of it, and these little things have come from working with people with lived experiences of debt issues. We also know that financial distress can make you act less rationally. It’s like being deprived of sleep.
“We’ve built little nudges and fun pieces along the way that help people come together and nurture relationships. The main goal for us is that these transactions are a source of relational strength, that they improve relationships and show that people can be vulnerable, but also cared for and loved.
Tayeh, who aspired to be a human rights lawyer when she was younger, says the pandemic prompted her to develop Flank. “I thought to myself, ‘people are going to need it more than ever.’ Many of my peers were going back to real jobs. I thought, “That must be it.” ‘
The inspiration to create Flank happened before the lockdown. “I was in London as part of the Year Here’s Social Innovation Fellowship, working in a homeless shelter. There was no money in my pocket, yet I knew I could go to a cafe with a friend who offered to buy me a coffee.
“My education and previous work opportunities had given me a network, which could afford to be generous. I realized that it doesn’t matter what the individual has. We should talk more about how we use the resources of our social safety net. Your ability to sleep on a friend’s couch, borrow a friend’s car, and offer them a drink is important. ‘
Tayeh intends to lend better with friends, to build confidence in the process and the loan. The journey has only just begun. Ultimately, Tayeh wants to apply Open Banking and give borrowers better advice on how to repay. Flank is also working on a mediation process for escalating debt disputes.
As for the business model, Flank is considering subscription fees later and is currently receiving funding from two of the UK’s largest mutuals. Given that Flank is offering an evolution of community lending, this seems appropriate.
Budgeting can be demoralizing for those in financial trouble, and I hope apps like Flank empower and support people, rather than offering punitive reminders of their finances. More frivolously, one can also hope that Dave, and let’s call him that because that’s literally his name and I’ll send him a link to this article, stays up to date on the Peroni tab.
If you have an idea for an upcoming tech trip, send a note to Ian at [email protected] If he owes you money, try another address.