Piermont Bank founder Wendy Cai-Lee talks about the digital lender she set up to serve small US entrepreneurs.
After more than two decades in financial services, including time at JPMorgan and the East West Bank, Wendy Cai-Lee saw “the same type of inefficiency and the same complaints from customers” repeated across the industry. So, in 2019, she set up her own bank, Piermont Bank, a New York-based digital lender, to focus on small businesses – which, she says, means working with women and ethnic minority clients.
Why the focus on women and minorities?
Small and medium-sized businesses are the foundation of the US economy, and guess who are the people who start those businesses and own and run those businesses, those multi-generation family businesses? [Often they are] immigrant minorities and women — and they tend to have the hardest time in getting bank finance.
We all have our own biases – I don’t know anybody who’s completely objective towards everything
Does bias play a role here?
We all have our own biases – I don’t know anybody who’s completely objective towards everything. We all have life experience that shapes who we are. Historically, more men than women handle finances, run businesses, start businesses. There’s a certain style, a certain way of negotiation that [bankers, who are often men themselves] are used to. I think it’s a relatability issue. On a personal level, I think that being a woman and from a minority has helped me in some way because I was able to relate to a certain demographic, while some of my colleagues couldn’t. In many instances, however, I can tell you that it did not help me very much.
Does technology actually make a difference?
With Piermont, I’m trying to use machines to allow humans to spend more time with the client. That, at the end of the day, helps with reducing non-performing assets [and dealing with clients, like small businesses, that are considered riskier]. The more you get to know your clients, how they run their business, the easier it is to manage your credit risk. It’s actually common sense, but I think in the banking industry, an industry that has been around for hundreds of years, we have forgotten what people actually need, what makes sense.
