After the Paris climate agreement was signed in 2015, big banks spent the next three years pouring $1.9 trillion into fossil fuel companies. Aspiration, an online bank, offers “fossil fuel-free” deposits instead. It’s one of several ways that the bank, which has positioned itself as the anti-Wells Fargo, is reimagining more responsible banking.
The company’s differences start with an option for customers to set their own fees on bank or investment accounts (or choose to pay the bank nothing at all). “At the core of the business model for most financial institutions is the fact that they’re doing better when their customers are doing worse,” says Aspiration founder and CEO Andrei Cherny, who previously helped Elizabeth Warren establish the Consumer Financial Protection Bureau as a financial fraud prosecutor. “Their interests are in having their customers have more overdraft fees. More late fees, more service fees. That’s how they make money, and that’s fundamentally broken.”
Since the bank was founded in 2015, it has added more than 1.5 million customers, some of whom are drawn by the fact that the company is selective in how it invests customer deposits. “We live in a time where more and more people are thinking about their own personal responsibility to the planet, to the issues facing their community and their country,” Cherny says. “And these big financial institutions are too often part of the problem rather than part of the solution. When you’re depositing your money at most of them, those deposits are being used to fund the oil and gas pipelines that are killing the planet and the gun manufacturers whose products are killing innocent people.” Aspiration instead puts its deposits into a list of companies it’s vetted for sustainable practices.
The company also encourages customers to support responsible businesses themselves; Aspiration’s debit card offers extra cash-back rewards for purchases made at businesses that it gives a higher social-impact score, and account holders also get their own impact measurement score that tracks how their spending is affecting people and the planet. Purchases at businesses in a smaller “conscience coalition,” including Warby Parker and Toms, earn even higher rewards.
“It’s partly about building up the voices of companies whose bottom line is not just profit, but people and the planet as well,” says Cherny. “Aspiration is really pulling these companies together to not only offer benefits to our customers, but also to magnify our voices and saying there is a better way for business to be run. And that together we can really be building a good economy, one that actually delivers out in a positive way for people and the world around us.”
He argues that the industry needs to be better regulated, even as larger banks have fought to dismantle regulations put in place after the last financial crisis. “In my opinion, the financial industry should be out there championing better regulation,” he says. “The biggest challenge the financial industry faces is that the American people, for some very good reasons, don’t trust us. And that has challenges for the industry overall. So the financial industry should be trying to, to build trust, instead of fighting against these things. I do believe that the government can have a positive impact. I also have seen the government too often is not having that positive impact. Part of what we’re doing with Aspiration is hopefully showing the world that you can run a financial institution in a way that is focused on serving your customers and being in service of a better world in a way that is sustainable—not just from an environmental perspective but an economic one as well.”