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Marty Young Of Buckle On How They Are Helping To Promote Financial Inclusion

An Interview With Orlando Zayas

Understand the difference between credit and equity risk, then structure your products accordingly. If you are using credit to take equity risk, you will eventually go out of business. If you are using equity to take on equity risk, then you are perpetuating the problem of predatory lending.

Most of us take it for granted that we can open a bank or a credit card. But the truth is, according to the World Bank, close to one-third of adults — 1.7 billion — are still unbanked, and have no access to a transaction account. About half of unbanked people include women in poor households in rural areas or out of the workforce. What can be done and what is being done to promote more financial inclusion? To address this Authority Magazine started a new series about Companies Helping To Promote Financial Inclusion. As part of this series, I had the pleasure to interview Marty Young.

Marty Young is the co-founder and CEO of Buckle, the inclusive digital financial services company serving the rising middle class and providers to the gig economy. In addition to insuretech and fintech strategies, Marty leads Buckle in mergers and acquisitions execution. He is a globally recognized Wall Street professional with 20+ years of special situations experience in executing 75+ transactions worth $30+ billion as a trusted financial advisor and executive officer. Marty graduated from the United States Military Academy at West Point and was commissioned as a U.S. Army Infantry Officer. After 9/11, he transitioned into and continues to serve as a U.S. Army Chaplain in the National Guard. He serves on the Advisory Board of the School of Industrial and Systems Engineering of the Georgia Institute of Technology, where he obtained a master’s degree in Operations Research. Marty has an MBA from the NYU Stern School of Business and is a graduate of the U.S. Army Command and General Staff College.

Thank you so much for doing this with us! Before we dig in, our readers would like to ‘get to know you’. Can you tell us a bit about how you grew up?

I grew up in the western suburbs of Philadelphia, closer to Wilmington than Philly. My dad had a 38-year career with DuPont, as many of the kids I grew up with were DuPont families. In 1989, I matriculated into the United States Military Academy at West Point, toward the end of the Cold War. After graduation in 1993, I received a Regular Army Commission as an Infantry Officer. After I left regular service, I had the amazing privilege of joining the team that created AutoNation, including launching Greenfield used car retailers and rolling up new car dealerships. Because of this experience, my partner Dustin Walsey and I were able to bootstrap and launch Greenfield Collision Repair Centers in Atlanta, Georgia in the late nineties, which are still in business today. It was through that experience that I got a “PhD” in PhysDam, having owned and operated DRP (direct repair program) shops with State Farm, Allstate, Progressive, Farmers, USAA, etc.

I’ve spent the majority of my career in and around “special situations,” in both executive and financial advisory roles, restructuring companies, and even entire industries, across 75+ transactions with $30+ billion in transaction value. I have had the privilege to serve in the National Guard as a Chaplain and have served in Massachusetts, New York, and now Delaware.

Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?

Yes, the Book of James (in the Bible). In fact, my wife and I named our first born after Jesus’ brother, James. I find the entire book compelling on so many levels, particularly:

  • James 1:27: “Religion that is pure and undefiled before God and the Father is this: to visit orphans and widows in their affliction and to keep oneself unstained from the world.”
  • James 2:5–7: “Listen, my dear brothers and sisters: Has not God chosen those who are poor in the eyes of the world to be rich in faith and to inherit the kingdom he promised those who love him? But you have dishonored the poor. Is it not the rich who are exploiting you? Are they not the ones who are dragging you into court? Are they not the ones who are blaspheming the noble name of him to whom you belong?”
  • James 2:14–17: “What good is it, my brothers and sisters, if someone claims to have faith but has no deeds? Can such faith save them? Suppose a brother or a sister is without clothes and daily food. If one of you says to them, ‘Go in peace; keep warm and well fed,’ but does nothing about their physical needs, what good is it? In the same way, faith by itself, if it is not accompanied by action, is dead.”
  • James 4:13–16: “Now listen, you who say, ‘Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.’ Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes. Instead, you ought to say, ‘If it is the Lord’s will, we will live and do this or that.’ As it is, you boast in your arrogant schemes. All such boasting is evil.”

Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?

When I was a new lieutenant in the U.S. Army, my non-commissioned officers (NCOs) would take the new, married recruits to get food stamps, WIC, and other public benefits. The quote, “taking care of Soldiers” meant something, and much deeper to me. A lot of this ethos built USAA, and we apply the same principals at Buckle, where I am CEO. Buckle is an inclusive digital financial services company serving the rising middle class and providers to the gig economy.

How do you define “Leadership”? Can you explain what you mean or give an example?

The essence of leadership is identifying a problem, articulating it well to gather the political will to solve it, and then solving it. It’s that simple — and so I believe good leadership is essential at all levels and sizes of human organization. “Popular leaders” throughout history are what I and the Bible often call anti-christs — they aren’t actually solving problems but perpetuating and exacerbating problems for their own egotistical purposes. So, I generally despise discussions in and around “leadership styles,” having learned Augustus,’ the Apostle Paul’s, Napoleon’s, and General Patton’s perspective on such false notions at a young age. These men were very focused on addressing major shifts in the zeitgeists of their time and understood they had a role to play in building enduring organizations from all levels of society and so they had to be “all things to all people” but to achieve the greater end. In other words, Patton would have changed his “leadership style” on a dime if he had to, and in the middle of WWII he did, as did the others in their times. We need to reorient the discussion, empower people at all levels to be leaders and then encourage them to both lead and follow depending on the situation.

Can you share the most interesting story that happened to you since you began your career?

There are so many. I would say I’ve looked for inspiration from great military leaders, street-smart automotive retailers, well-known and effective church planters, and Wall Street masters of the universe. Many of my stories come from working under them like an apprentice. Because of this, I am extremely apprenticeship oriented. What’s not understood well is that the most successful leaders in all those niches I mentioned had deeply apprenticed under someone who had made the investments in time and money to teach them the craft and help them grow. As I think about my leadership concept, I am looking for people who can apprentice and be shaped into true masters and perpetuate key professions.

Ok, thank you for all that. Now let’s move to the main focus of our interview. Let’s start with a basic definition so that all of our readers are on the same page. What exactly is Financial Inclusion?

Financial inclusion means that all have access to comprehensive and affordable financial products and services to help meet their needs — transactions, payments, savings, credit and insurance, regardless of personal net worth.

What does it mean to be “unbanked”?

Banks perform two functions: safeguarding deposits and providing credit from such deposits. To be unbanked is to have neither deposits nor credit.

For the benefit of our readers, can you explain some of the typical reasons why a person might be unbanked? Why can’t they just walk into the local bank and open an account? Why can’t they simply open an account online?

The short answer is they do not have any money to make a deposit. Without money to make deposits, then credit isn’t available either. However, the problem isn’t being able to open an account or not; the problem is having enough money to open an account and enough stability in cash balances to create credit. The most unbanked populations have neither money to open an account, nor enough stability in cash flow to create a stable balance from which credit may be generated by the bank to give to the account holder.

So, the primary financial inclusion problem is credit. Cheap access to credit is what enables human flourishing, such as buying a home or income producing assets (like a car) that allow the accumulation of wealth. Unless one can keep a positive sum average balance, banks aren’t going to solve the credit problem. However, for the unbanked unable to maintain positive cash balances, an insurance company offers a different approach to providing credit. This is something Warren Buffet figured out decades ago with GEICO. We are applying the same principles.

Can you tell our readers a bit about your work to promote Financial Inclusion? Without saying names, can you share a story about a person who was helped by your initiative?

The purpose of Buckle is to help gig economy workers achieve economic freedom, which means they should be able to 1) work when they want, 2) for how much they want, 3) doing what they want, and 4) for whom they want. The folks who want this economic freedom are the rising middle class and members of the gig economy. The mainstream financial infrastructure works really well in scale, if one has two years of W-2 income and a good credit score, as it was designed for mass employment. However, if you are the working non-prime and a member of the gig economy, there is no financial infrastructure, other than highly localized lenders and insurers that are operating in the worlds of subprime lending and non-standard insurance.

Gig workers do not meet the underwriting models used by most insurance companies — salaried employees with good credit who have predictable incomes and behaviors. Using credit score to underwrite insurance penalizes gig workers because they have poor or no credit, leaving them with high premiums and little options. Buckle underwrites auto insurance for rideshare, delivery, and Transportation Network Company (TNC) drivers, using non-traditional data sources like driving track records, crowdsourced from thousands of trips. This way, Buckle is able to deliver a better, more comprehensive and affordable auto insurance solution to help U.S. gig workers achieve financial freedom.

Buckle is happy to be closing the gap that conventional insurance policies create for these gig workers.

We have plenty of examples where we have saved people as much as 50% on their insurance and auto finance payments, resulting in increasing take home pay by 5–30%. Some of them are spokespeople on our website.

This may be obvious to you, but it will be helpful to spell this out. Can you articulate to our readers a few reasons why it is so important for businesses to promote financial inclusion?

If everyone has access to affordable and comprehensive financial products and services that they need to live, then poverty is reduced. It means having a better, healthier lifestyle. If there is no access to money, insurance, or credit, this sets people up for failure, which many times can lead to a life of crime. Access to credit also means investing in your future prosperity.

Ok. Here is the main question of our discussion. You are an influential business leader. Can you please share your “5 Steps Businesses Should Take To Promote Financial Inclusion”. Kindly share a story or example for each.

  1. Focus on a market that is under served by the major banks and insurance companies, due to regulatory constraints. For example, after the 2008 financial crisis, we knew the banks weren’t going to serve the working non-prime and members of the gig economy. The federal government won’t let them make sub-prime loans ever again. The same principal is true with the major insurers; they aren’t going to drop credit score because it would create a similar financial crisis in the insurance industry. Oddly, Buckle doesn’t have any meaningful competition from major banks and insurers for this reason.
  2. Have a cost of capital roadmap that ultimately ends in the bank conduits. Securitization offers the cheapest capital available. If you can’t get the cheapest capital available, then you and your customers will end up paying for it. This also means that you need to hire people that know how to get there.
  3. Understand the difference between credit and equity risk, then structure your products accordingly. If you are using credit to take equity risk, you will eventually go out of business. If you are using equity to take on equity risk, then you are perpetuating the problem of predatory lending.
  4. Go back to underwriting models, before there was credit score. The science hasn’t changed in 5,000 years. Your underwriting should be clear to both you and your prospective borrower or insured so that interests are nicely aligned. At Buckle, we underwrite both insurance and credit based on various streams of income and the risk of earning that income; this is what banks used to do before there was credit score.
  5. Leverage government programs, wherever possible to offset or eliminate equity risk. Governments want to help the working poor. Help the working poor get government aid and help governments deliver aid. In 2020, Buckle helped its insured members get more money from the federal government than they paid in insurance premiums. In May 2020, we launched Buckle CARES, a pro-bono program to help rideshare and delivery drivers access the grants and loans of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. At no charge, Buckle assisted its insurance policy holders, automating the Economic Injury Disaster Loan (EIDL) application so they could easily submit and receive critical funding. Buckle piloted Buckle CARES with 100 of its insurance policy owners. Applicants reduced the average application time from over two hours to less than five minutes, including checking driver’s eligibility for stimulus funding and populating the form using data from the driver’s Buckle and rideshare accounts. We assisted drivers in receiving an average of $3,810 in grants and loans received per applicant.

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

Support for gig economy workers as the rising middle class. If the people who work in the gig economy aren’t in the middle class, this country may not have a middle class, which means I don’t know if this country will survive. We need a middle class. Over 4 million rideshare and delivery drivers have emerged over the last five years, as the pandemic ignited a massive demand for delivery services. The gig economy is exploding. We need to support them, as well as the almost 50 million other people doing side hustles and gig work to make the household budget work.

Is there a person in the world, or in the US, with whom you would like to have a private breakfast or lunch, and why? He or she might just see this, especially if we tag them. 🙂

No, no one comes to mind, but it’s an interesting thought.

How can our readers further follow your work online?

https://www.linkedin.com/in/martinsyoung/

https://www.linkedin.com/company/buckledup/

https://twitter.com/getbuckle

This was very meaningful, thank you so much. We wish you only continued success on your great work!


Marty Young Of Buckle On How They Are Helping To Promote Financial Inclusion was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.