Traditional banks are missing the mark when it comes to supporting their customers. It’s a fact Paras Chitrakar, co-founder and CTO of Dave, learned the hard way when he first arrived in the United States.
“I immigrated to America from Nepal, one of the poorest countries in the world, when I was a teenager with just $1,300 to my name,” Chitrakar said. “Every day was a struggle. I would have loved to have Dave as an app back then.”
That’s because Dave isn’t a typical banking app. Unlike most banks, Dave doesn’t charge fees for overdrafting or receiving small advances. Users can also get paid two days early, manage their budget and build credit through the app — all services that enable users to avoid predatory lending services while growing their financial literacy.
In a world where the deck is stacked against those barely making ends meet, Dave offers resources that aren’t often given freely. Chitrakar himself said it took him around a decade of living frugally and a lucky break in the field of programming to finally pull himself out of economic hardship. And while his success finally afforded him the stability he’d long dreamt of, he one day realized he’d forgotten just how difficult his journey had been.
“During the early days of Dave, I was reading through customer inquiries to figure out what was wrong with our underwriting,” Chitrakar said. “That’s when I saw several heart-wrenching stories from our members who weren't able to get cash advances. Since I had created the underwriting algorithm, I knew that the code I wrote was responsible for whether or not someone got the advance.”
In that lightning bolt moment, he reinvested in his commitment to creating a more equitable way to bank. Today, that same commitment is supported by nearly 300 employees working to improve the financial health of over 10 million users. And while “banking” and “empathy” aren’t often used in the same sentence, Dave’s team is out to change that.
“I decided that I wanted to help people with my skills, not just look at things like a technical problem to solve,” Chitrakar said. “I am more determined than ever to help people during my life. Dave has given me the opportunity to do so.”
Tell us a bit about Dave’s place in the industry. How has the company evolved since its founding?
Dave was an early innovator in short-term credit. Our business started with giving our users the money they needed without requiring the credit checks and tedious, time-consuming employment checks banks typically require. We meet our members where they are and develop our products to help them first and foremost.
Since launching in 2017, we’ve saved members over $1 billion in overdraft fees. We’re upending the fintech industry and proving that traditional banks and financial institutions are going to have to evolve and do more than just store their members’ money. The future of banking is providing tools that empower members to earn, manage and grow their money.
Hitting the ground running
What differentiates Dave from other companies in this industry?
Other leaders working in this space recognize that people deserve more, and they’re all actively working to provide a useful product to meet those needs. We’re in a highly competitive space with people who have invested large sums of money on these products.
At Dave, our products are motivated by our goal to give everyone access to financial opportunities. We want to empower people to reach their personal financial goals, no matter how big or small, which feeds into our mission to build products that level the financial playing field. For the majority of Americans, living paycheck to paycheck is a reality, and inequities in the banking system result in an unequal playing field. People who need financial education the most are denied access to resources that could help them become financially healthy.
For the majority of Americans, living paycheck to paycheck is a reality, and inequities in the banking system result in an unequal playing field.”
If you think about what Dave has already been doing with its products, like Extra Cash, Dave Banking, Side Hustle and more, we’ve been tackling the barriers that millions of people face when it comes to financial opportunity. I’m proud to work with a team that is highly motivated and socially driven.
The last two years have been full of ups and downs — for people and businesses alike. What has the pandemic meant in terms of Dave’s mission?
If the pandemic taught us anything, it’s that people need help now more than ever. Millions lost their jobs, struggled to make ends meet and could not support themselves or their families. The pandemic really proved that the traditional banking system is just not working.
Companies in the fintech industry, like Dave, are upending this system and providing the tools to help those who have been financially vulnerable reach their goals. I see a lot of opportunity on the horizon for us to provide access to affordable, reliable and intuitive products for millions of people everywhere.
What inspired you to co-found a fintech?
Co-founding Dave was my first venture into the fintech industry. Prior to Dave, I worked in adtech, and before that, I was always drawn to opportunities where I would be able to make a huge impact on people’s lives for the better.
As someone who has struggled to make ends meet himself, I experienced firsthand the lack of support that people with fewer resources receive when it comes to finances. I’ve also seen that underrepresented groups are disproportionately affected. When we first started Dave, we knew that this was an industry where we could still make a positive impact on people’s lives and provide people with opportunities they never knew they could have.
When we first started Dave, we knew that this was an industry where we could still make a positive impact on people’s lives.”
Speaking of your background, how have your experiences impacted your approach to growing Dave’s company culture?
Dave’s culture is very special. Our people are extremely values- and mission-driven, which helps us stay motivated on the road ahead. I make sure that I share my stories of struggle as a poor immigrant and the motivation behind our mission so our employees never lose sight of the impact we’re making.
We also check in on team engagement frequently. People who come to Dave can expect to work on fulfilling projects that support their professional growth, while also making a significant impact on the community. We’ve grown a lot since 2017, and I couldn't be more proud of the team that we have today.
What lasting impact has Dave had on the world of finance?
Dave changed the way people think about banking and what they need to become financially healthy. Since we started in 2017, short-term credit has become more readily available to the public, and other neobanks have followed suit with fee-free cash advances without credit checks. We’ve seen overdraft revenues for banks decline, which means people are opting for products like Dave, which help them budget better, plan their expenses and get a cash advance if they’re ever stuck in a rut.
We are completely changing the industry and making it more people-focused rather than revenue-oriented.
