Lab 040: Money Moves

Now, I know last week we told everybody about all the issues with the supply chain.

TT.

Yeah, we told y'all. Okay, y'all are ordering too much stuff. Maybe don't order so much stuff, maybe don't buy anything at all, shop local.

But y'all are showing me your Christmas wishless and so I know you're still buying things.

Y'all are definitely still buying things because I saw some of y'all standing in line for the Black Friday shopping. I'm not gonna name any names, and we saw you on Instagram. We saw and we're not judging. But the landscape has really changed over the past couple of months. When we go back and think about it, there's some new players in the games when it comes to buying gifts.

Now.

Yeah, a lot of these apps are popping up that make shopping very very easy.

And we're ready to talk all about it. I'm TT and I'm Zachiah.

And from Spotify.

This is Dope Labs.

Welcome to Dope Labs, a weekly podcast that mixes hardcore science, pop culture, and a healthy dose of friendship.

This week, we're talking all about Mulah money. Specifically, we're interested in learning more about the financial technology or fintech that's available to help keep your finances in check.

You know, one thing.

We don't really think about that much is how sometimes it costs money to spend money. The most classic example of this is interest, where you pay an extra fee in order to borrow money that you don't have yet.

The banks have been around a long time and they have been scamming us between subprime mortgage crisis, big bank bailouts, YadA YadA YadA.

Biggest scam otters of all time.

So we're really interested in how science and technology are shaking up the landscape and finance. How are we getting new online financial tools which are referred to as fintech or financial technology, and how are those things making finance more accessible for people who want to get their money matters in shape.

So let's get into the recitation.

So what do we know and what do we want to know.

I know that there's a lot of fintech apps out there, so things like zell, Kwarna, after pay, Robinhood, Venmo, cash app, and we use it so much as now incorporated like into you know the zeitgeist in rap songs and cash app me Baby exactly. People are using it in everyday conversation, and a lot of people have their cash app in their bios now so that brandom people could just cash app them.

You know, why not if you can get paid. Hey, do what you gotta do.

We talked a little bit about some of those types of apps in LAP twenty one our fintech episode called New Bank Account.

Who this right?

So if you haven't heard that episode, press pause right now and go check it out, because we really cover a lot.

Yeah, We'll wait.

What else do we know?

Well?

I think we know that fintech apps use data science and algorithm to provide a lot of different services.

And we also know there's been a huge shift in this past decade towards using online financial services and products in general. Remember when you were afraid to put in your credit card info on the web?

My mom still is, But I think generally most people feel okay with putting their card information in on the internet so that they can purchase whatever they want to purchase.

Yes, I think we also know that people need help and access to tools when it comes to managing their finances. There's a wage crisis. Wages have remained pretty much unchanged when you consider.

The rate of inflation.

So people already aren't starting out with receiving a lot of coins, so you're at least going to want to be able to make the best decisions you can with the money.

You do have.

Okay, so what do we want to know? I think I want to know about the state of finance today. It feels like the market and everything I see about the economy is just going up, up, up up, and at some point we're going to fall right And it may not be like the great economic housing collapse that we saw in two thousand and seven to two thousand and eight, but it does feel like we went through something pretty economically significant twenty twenty In twenty twenty one.

Yeah, when I think back to some of the labs that we've done in the past, where we're talking about housing and food and everything like that, I mean money touches all of that feel like touches everything. Yes, I think something that I'm interested in knowing about is how they're using science and technology to create these fintech apps.

Yeah, I want to know who's using this new technology and in which situations are fintech interventions most useful.

That's a really good question.

We know that there are barriers because of socioeconomic factors when it comes to finances. But what are some of the barriers to access with fintech.

I think we're ready to jump into the dissection.

I can't wait, let's do it.

Our guest for today's lab is Natalia Brazenski.

My name is Natalia Brazenski.

I'm kind of strategy for the US for Klarna is a Sweden based shopping app you can use to buy things upfront and then pay for them later in smaller increments over time. You might have heard of the term buy now, pay later. Well, that's essentially what Klarna's for. It comes in really handy for big ticket purchases like furniture, a peloton that you might not be able to afford all at once, and unlike a credit card, it doesn't charge you interest. Similar platforms are like Affirm and after Pay.

This is really great because the buy now, pay later feature lets you pay for something. Let's say I want to get a four hundred dollars chair.

This is an expensive chair.

It is expensive. Just go with the example. I'm sure it's very comfy.

Clara lets you divide the cost into four equal payments. So now you're making for one hundred dollar payments over time, maybe after you get another paycheck, and you can afford to make that next payment instead of four hundred dollars up front. So it's really cool. It's like providing access. So if you couldn't have afforded that before, you maybe would have had to use a credit card pay interest

That's perfect, like set it and forget it. Yes, it's great for folks who want to think less about everything else.

And that piece about access Natalia really helped us kind of zoom in on that, and she says a lot of what she does with Kwana is informed by growing up with immigrant parents on the South Side of Chicago.

I grew up with communities, including my own home, very much in debt, not speaking the language and also not speaking the financial language. And I saw that all around me there's a payday loan and a loan institution on every.

Block where I grew up. I often joke, you know, I could be a billionaire.

I'm not, but I could be, and I would still have that fear of being.

Broke the next day, because it's just like what you grow up in.

Natalia's worldview and a huge driver for her work is definitely her upbringing, not just where she grew up, but also the influence of women in her household, her mom, who had a full time job, and her grandmother who also worked outside the home.

I saw, you know, raised by a working mom, female breadwarners in my home, grandmother and mother, and they lifted themselves out by understanding money. My mom got her MBAMCPA when I was ten. I remember going to a graduation from night school and being entrepreneurs.

So thinking about what we already know about income, inequality, access to credit. One of the things we wanted to know was who uses Klarna? What are the user demographics? Well, one thing we know is that Clarna is global. Yes, we use Clara here in the US, but it was adopted by other European countries first.

Before Klarna.

I spent you know, ten eleven years or almost my entire adult life focusing on Sweden and Scandinavia and those values because they really looked at tech in a very different way. It was all about transparency and access.

Natalia also pointed out another big difference between the US and Europe when it comes to spending.

It's credit cards.

I was a student studying abroad in Copenhagen, Denmark, and like many of US Americans, we landed this city with a bunch of credit cards.

And I go in to buy something and they're just like, we don't take credit cards.

We do dubit.

And I'm like, what or out of debt? And they said, yes, in Denmark, we only spend what we have.

And that definitely isn't the attitude in the US. You know, in the United States, more than one hundred and ninety one million people have credit cards, and the average cardholder has at least two cards two point seven to be exact. Interestingly, the average American household has over five thousand dollars of credit card debt. So we're definitely not a only spend what we have kind of country.

All of these numbers are so shocking to me.

I didn't have any idea that that was the state of Americans until you literally just said it.

That doesn't even include folks who are under banked or not banked at all, who are using alternative loan sources that can't get credit cards, and are using like payday centers like Natalia was talking about, or getting other types of loans, or pawn shops even you know, to.

Liquidate cash for gold and things like that.

So if we start considering all of that, I think you can understand why the United States is a good market for the buy now, pay later system.

But do you remember when we were kids, Like now we're saying things like, oh, it's just buy now, pay later, But when we were young, it was called lay away, lay away, baby, and you did not want to be putting your stuff on lay away. If anybody found out, everybody was gonna be talking about you, and not in a good way.

I remember lay away, but I think it's in now and it's got another perk. We can lay it away and wear it right away.

Right.

And that's one of the great things about technology, right, is not will you ever come back and finish making these payments? Because we can track you digitally, so we can understand why it's becoming so popular in the United States. And in twenty twenty one, more than forty five million people will use buy now, pay later services. That's an increase of eighty point two percent over the usage in twenty twenty.

And unsurprisingly, it's been young people that have been driving this shift to buy now, pay later. Almost seventy five percent of buy now pay later users in the US are Gen Z or millennials.

And it makes sense, you know, this type of financial model gains a lot of traction because it offers flexibility and autonomy to purchasers. It's also good for small businesses that won't have to deal with credit card fees, which will significantly drop, you know what they get to take home, and it opens up the market for people who they may want to sell to but can't afford it upfront too.

We act Natalia, what the greatest misconceptions are right now about people who use Klarna.

I think the greatest misconception is like we are getting young people in debt.

It comes from both sides of political structure.

You know, some people say their services to buy more fast fashion from China and like put twelve year olds in debt. I mean it's just a lack of education actually, because we see that our users are actually college educated or more. They're looking for interesting budget tools. They're actually really innovative. Often like professional women just entering the workforce who are not satisfied with the with the tools out there right now.

So the folks you think are using Klara are not the folks that are using Klarana the.

Most and low key.

Sounds pretty smart to use something that gives me greater flexibility and autonomy.

With no interest. It sounds like a genius option.

But I'm really interested, you know. Like we said, there were some yes, negative connotations around by now pay later, or the old school version of it, which was layaway. But what's causing the shift Is it that everybody's just spreading word of mouth. Hey affirm, Klarna and all these other apps will work for me.

You should use them too.

Natalia says, is that while the pandemic has definitely played a role in changing spending habits, it's also about generational change catching up our generation.

We came to the workforce in our financial crisis, in a banking crisis. Basically, you've been chaos since the last ten years, like our adulthood has been so chaotic, so people want to take control of that, and money is the number one way.

I think she's right, First you get the money, then you get the power, that's what they say.

Then you get the power, then you get the respect.

That's right, little t T. Let's take a break and when we come back, we're going to talk about what it means to be financially healthy and how wider access to fintech can actually help. Before we dive back into the dissection, ZE talk about what we've got come in.

In next week's lab.

We're talking all about birth control. Now, this is something that affects all of us, not just half the population. We're covering how birth control basically hasn't been changed since the sixties, and some of the new potential with personalized medicine.

Okay, let's give back to fintech. We're talking to Natalia Brazinski, the head of strategy in the US for Klarna.

I think I read a stat that said only thirty percent of the US population was considered financially healthy.

That's crazy. So three out of ten people are financially healthy.

Yeah, and so when we consider that, TT, we got to figure out how do we bridge some of these gaps. You take that thirty percent of people being financially healthy, you combine that with what we already know about income inequality. You combine that with what we know about the things that are systemically disenfranchising folks from access to credit and access to housing. We need solutions, and that's where fintech could maybe play a role.

That is crazy, But what does it really mean to be financially healthy.

Let's take a definition from a twenty twenty study from the Urban Institute. They consider someone to be financially healthy when their daily financial systems enable them to be resilient and pursue opportunities. So this is like having the ability to spend safe, borrow, and plan effectively. What they found in that study was that in general, financially healthy people

Right, So you got to make sure that your finances are eating their vegetables and drinking enough water and all the working out doing push ups and sit ups and make sure it can handle everything that's coming at it. It's like, oh, you want to purchase a car, I'm ready. That's a lot though.

It's a lot.

I mean, when I think about my own personal health, it is exhausting, and having to think about all these little things that contribute to financial health, I'm just like, that's a lot to consider.

And knowing the current state of the economy, that requires a lot of cars to line up in your favor. Absolutely, And so when we think about that, leverage and fintech is a crucial part of helping some people become really financially healthy.

We're not going to beat people over the head with you know, we know how to do things and this is how you should act responsibly. But I think if you give people the tools and the awareness and the education, then then you make.

Your own decisions.

And because of COVID, well really because of the recession, it.

Really kind of feels like maybe because of society.

And really because of just life in general, the universe existing breathing. When you take all of that, When you take all of that, younger generations are especially vulnerable when it comes to access and education.

I think we're gonna have a gen Z, you know.

Unfortunately that is less equal, less access, like unless we make up that lost time of like now you know, two years of physical school, but like probably four to five years really, and we really need these tech platforms, Like everybody's got to be doing as much as they can to drive education and awareness and change and access because it's gonna be tough.

You know.

I hadn't really thought about the idea of there being less equity among gen Zers, you know, or them having less access either.

Really less anything. It feels like the world is conforming to what gen Z wants. But Natalia brought up a good point.

So if we're considering less access, even though we think of gen Z as this like connected generation, because they're always finding, you know, new ways to exchange ideas and information. Think TikTok they coming up with all the crazy dances. We had AOL instant messenger and we weren't sharing anything of significance.

Okay, no, we were just talking about age, sex locations.

And I think the thing to remember is that there are these disparities as far as who's connected to the web, who's not, who has high speed internet access who doesn't. And even if you do have a con that alone doesn't set you up for success.

Right when it comes to financial health, it's really important to give everyone the tools and access to set goals and take control of their own money.

And even when we think younger generations, older generations too. Even if you have all of those things, do you have the skills to navigate and know how to use the app store and what to download? And are you downloading the right apps? Is it safe or are you

I was literally just talking about this last night. Like every time a hurricane comes and hits a part of the United States, people are like, why'd you stay? Like, just get out of there. I'm like, first of all, some of these people, this is the only home they've ever known, and they need to try and protect it because if they have to rebuild or purchase a new home, it's not happening. They don't have the funds to be

Like, there's a lot of barriers in place. Money in a.

Capitalistic society is the ruler of all things. Yes, And so as much as we want to tell ourselves like, oh, money doesn't rule my life, I do things that make me happy that da da da da da dah, no, Like, this capitalistic society is definitely driving this bus.

And there's so much emotional connection to money too, right or shame around money that can then further exclude people or keep them from even looking into the state of their finances.

Emotion drives everything. I mean, how many women do you know.

That have stayed and abusive relationships because of money.

Or have been forced to do things for money?

I mean, unfortunately, you can't feel free unless.

You control that.

Money gives you wings from crawling to flying.

Right, money is the red bull. Trying to become financially healthy if you consider yourself not financially healthy, can be embarrassing. Like imagine you have a credit score that's low, and trying to rebuild can be a daunting task.

It's really difficult.

We've seen credit scores get weaponized against different groups, right when we think back to predatory loans and things like that. Yes, and that leads people not to trust institutions. I think I saw a few research studies recently that showed us increasingly the public does not trust large institutions as much as they used to. And I think that's because some people don't feel safe, and they don't feel safe with

I want to feel safe.

You know.

I want to feel safe personally. I want to feel safe in relationships. I want to feel safe, especially with how I spend my heart earned money that I've sacrificed a lot for. We don't have that safety or trust, not in America. I think consumer protection is going to be a major focus of Congress, and rightfully so, you know, there should be more regulation in some sense.

And I think we're also in.

A moment where we recognize that we're a fifty billion dollar company, we're seventeen years old.

We need to do something with our platform.

We need to use it for change, we need to use it to drive and act. So you're gonna see a lot of that coming out of us, especially in the US as well, Like we just launched a lot of sustainability work. So you know, overnight on Earth Day, all of our users over ninety million.

You see your CO two.

Footprint net checkout, do you really want to buy those pants from you know, shean. We've seen it actually causing users to reflect down like hey, do I really need that lipstick?

But honestly, money can also make you very happy.

I mean there were times where it was so low and lonely during this period that like that new lipstick and putting it on, even to myself, like really really freaking made me feel good.

Like if that makes me.

Feel beautiful, If I'm having a tough time, like I'm gonna do it, and if something can help me do that in a responsible way.

Like why not, Like we all need a little damn joy.

Yeah, you know what I mean.

Like sometimes you having a bad day and you want to stop by and get a scuba ice cream from your favorite ice cream shit.

A sprite from McDonald's with all the fizz.

Let me tell you, sprite from McDonald's is just built different. It's not like any other sprite from any other place. Sometimes you need that nice fizzy treat.

You need that level of effervescence to keep you going. When I think about fintech, the options feel limitless. The potential to do good feels limitless to me. Right when I think about the flexibility that it gives folks. Yeah, you know, there are things when I look back on it now and I'm like fintech micro loans, go fund me apps like Clara that allow you to pay an installments. Imagine if you could do that at the grocery store.

I remember when Square came out that felt revolutionary to me. And so imagine something like Klarina at the grocery store where it's like you can guarantee food for somebody and they don't necessarily have to have all the money up front for paying installments, rather than going to the grocery store and not being able to feed your whole family because you don't have them all of the money right then, And then think about what it means you don't have

Of your pay in fees. It means that you are also in some cases able to build some type of financial credibility that could be then converted into boosting your credit score if you aren't able to do that under traditional methods or means.

I think a really important note is that these tools, these buy now, pay later tools that are put out there are meant to help us. But with anything like this that deals with our money, we have to also be very, very careful because if not used in the right way, these tools that were put out there to help us become more financially healthy can make us more

I mean, I think the Internet, you know, if you look at it, it's just like the sun. You look at it too long, not good for you. But I think it can be used for good. And it just seems like combining that with finances, which seem to be the key to unlocking everything in this capitalistic society.

Like you saidt tt yeah, giving people access to every part of society, regardless of their income, I think is really important in having a better, happier, healthier society. People can afford better food, fruits and vegetables. Fast food in the United States of America is very inexpensive, but an apple or grapes or a watermelon or lettuce is very expensive, and we need to be giving people the ability to have options. I want to have something healthy, I can

And I think it also just can help us open the door at the level of decisions I'm making day to day about groceries, about gas, about my basics, and decisions I'm making about my long term financial health. You know this thing I've seen where they say, if you pay this much right now, you avoid this much in interest charges, you know, or if you continue to pay this, this is how much you will pay over time, or this is how long it'll take. Just informing people of how these systems work.

Let me know what I'm getting myself into.

Well, I for one, can't wait to see what's next. It feels like this area keeps growing and I'm like more, more, please, let's see it.

Yes, technology is taking us to the next level. I don't heard enough word.

All right, it's time for this week's one thing. Tt My one thing is really one person. I am enjoying the art of Ashley Johnson. You can find Ashley on Instagram at hiaj or you can go to a website hiaj dot Co. I am loving Ashley's art and just her whole curation of life on her Instagram page, there's food, art, things about communication. It is beautiful and I am into it.

I love that.

So my one thing is this app that I was told about by a friend. It's called I Talkie, and on I Talkie you can learn pretty much any language. It's not like other language apps where you know, you kind of just type things in and you're listening. It actually pairs you with someone who is fluent in the language that you are interested in learning. So for me,

I've tried a lot of different.

Ways to learn earn languages over the years, and especially at the age that I'm at now, this big age is really difficult. But I Talkie because they're pairing you with an actual person who can cater lessons to you and go at the speed that you need. It's perfect. I feel like I am learning the language at a pace that works for me, and it's sticking because she's such an amazing teacher. If you're thinking about learning a language and you want to learn from a person, I talk.

He is the way to go. And it's spelled I T A L K I.

So that's what you're looking for in the app store. Nope Cabs is a Spotify original production from Mega Owned Media Group. Our producers are Jenny Radlan Mask and Lydia Smith of Wave Runner Studios.

Editing and sound design by Rob.

Smerciak, Mixing by Hannes Brown.

Original music composed and produced by Taka Yasuzawa and Alex.

Suguer from Spotify. Our executive producer is Gina Yack and creative producers are Baron Farmer and Candice Benriquez Friends.

Special thanks to Shirley Ramos, Yasmin a Fifi Camu Alolia, Till Krackkee and Brian Marquis.

Executive producers from Mega Own Media Group are us T. T Show, Dia and Zakiah Wattie.

Do you like Baja Blast from Taco Bell.

No, I'm saying no, but I've never had it.

It's probably one of the best sodas I've ever had in my life. I've been drinking Baja Blast for very many years, and I swear by it like I even prefer it over McDonald's Sprite, which.

Really my top drink is actually McDonald's Doctor Pepper.

Oh for real, Mine is Baja Blast from Taco Bell, a coke from McDonald's, then sprite for McDonald's.

Yes, I do remember coke from McDonald's in grad school. I do remember that if you.

Cut me, I was bleeding coke from McDonald's. It kept me going, it did

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