Nearly 25% of U.S. households were unbanked or underbanked in 2017, according to data from the Federal Deposit Insurance Corp. (FDIC). 

When broken down by ethnicity, the FDIC's data shows that, in 2017, 17% of Black households and 14% of Hispanic households were underbanked, compared to just 3% of White households, highlighting the racial gap associated with a lack of access to financial services. 

The data represents a reality that fintechs like Mobility Capital Finance hope to change. 

The New York City and Newark, New Jersey-based challenger bank, also known as MoCaFi, was founded by Wole Coaxum, a former managing director in JPMorgan Chase's business banking unit.

"We're trying to tackle an intractable issue in this country, which is financial inclusion and wealth creation for Black and Brown communities," said Coaxum, who launched the startup in 2016. "The banks are great, but they are not in a position to really address some of these fundamental issues, because it runs counter to their business model."

Coaxum's career started in traditional banking, first at Commercial Credit, where some of his former colleagues included JPMorgan Chase CEO Jamie Dimon and Wells Fargo CEO Charlie Scharf.

"My journey began very serendipitously, working with people who would evolve into some of the titans of financial services," Coaxum said.

Commercial Credit would eventually become Citigroup.

Coaxum's career path, however, has taken him from megabank to challenger bank with a goal to serve a market he says is all too often overlooked by the banking establishment.

It was the 2014 death of Michael Brown, a Black man killed at the hands of police in Ferguson, Missouri, that spurred Coaxum to rethink his career trajectory and ultimately leave JPMorgan Chase for his own venture.

"I had my 'George Floyd' moment," Coaxum said. "I was one of the most senior African Americans at JPMorgan and felt that I wanted to be a part of a national conversation to address the lack of access to financial services products that I thought was a big problem, in terms of the social justice agenda not having a really solid economic justice plan."

MoCaFi, which claims to have more than 25,000 users, partners with Sunrise Banks to offer debit cards and FDIC-insured accounts.

The platform provides users with a free ATM network through its partnership with AllPoint, and a mobile app check-cash feature is on its way, Coaxum said.

Like most challenger banks, MoCaFi doesn’t have physical bank branches. Through a partnership with VanillaDirect, consumers can deposit cash into their accounts at 80,000 retail locations.

"We'll have Walmart coming online and CVS, where they can put cash into their account for free instantaneously," Coaxum said. "We're turning the places where people live into low-cost bank branches."

MoCaFi also allows users to build their credit score through rent payments. Users can pay rent from their MoCaFi debit card and opt in to have those payments reported to Equifax and TransUnion.

Coaxum said the company, which has 15 employees, leverages social media and various partnerships to grow users.

"Our social media channels are a pretty powerful one where we can reach people at a pretty low price point. And it allows us to do it at scale," he said. "We've had good success with Facebook, and we think of them as a strategic partner in our efforts. And that has been a great way for us to build our brand."

Coaxum said the company has also found success leveraging the strength of brands that have a similar mission.

"We have partnerships with organizations that want to serve the people that we want to serve," said Coaxum, listing its partnership with the community development corporation Bedford Stuyvesant Restoration Corp. as an example. 

"They're trying to provide financial benefits to folks in Brooklyn. They don't have bank accounts and they're using our platform to do it," he said.

Through a partnership with the YWCA in Chicago, MoCaFi also hosts events focused on financial empowerment. 

MoCaFi also has a "city strategy" in the works, a method of growing its brand through partnering with local governments. The company is rolling out public-private partnerships with two major yet-to-be-announced cities in the next several months, Coaxum said.

"We have a really interesting strategy around working with cities and creating new and innovative models to have public-private partnerships that allows cities to distribute benefits and other services to their constituents," he said. "These are major cities who have large numbers of unbanked or underbanked people in their communities and we're positioning ourselves to be able to serve them."

Amid the ongoing civil unrest sparked by the killing of George Floyd and the coronavirus’s disproportionate impact on nonwhite communities, Coaxum said recent events in the country highlight fintechs' critical role in reaching the unbanked.

"We never saw this happening. We couldn't have called this moment, but it highlights why MoCaFi is so important, because you see what happens if you have reliance on the traditional financial services segment," Coaxum said. "We still have people who are waiting to get their $600, or $1,200 check from the government because they've been outside of the financial system for so long.

"Fintechs have an opportunity to bring high-quality products to a large market that's otherwise been underserved," he said.