There are few things as irritating to the average smartphone user as the login moment that poses the dreaded prompt: “Verify your identity.”
This extra hurdle is one of the inconveniences that prevents most Americans from switching banks, even if another bank or credit union offers lower fees or higher interest rates. A 2022 Bankrate survey found that Americans hold onto their bank accounts — both checking and savings — for an average of 17 years, citing reasons like it’s “too much of a hassle to switch.”
GEN Z AND MILLENNIALS PAY THE MOST
A Bankrate survey published in 2022 found that, although most respondents said they paid nothing in monthly fees for their checking accounts, those who did pay a fee were paying an average of nearly $400 per year. The following differences were found in the monthly amount paid by age group:
- Gen Z (18-25): $19.13
- Millennials (26-41): $15.55
- Gen X (42-57): $4.48
- Baby boomers (58-76): $2.21
- Silent generation (77 and up): $1.32
These results show that younger Americans, who could be putting the money toward investments that set up a healthy financial future, are paying the most in checking account fees.
Product Engineering Manager Aaron Pelz and his peers at Pinwheel aim to reduce the bank-switching hassle. Their newest solution, Pinwheel Prime, focuses on the specific hassle of switching direct deposits. Pinwheel Prime matches bank customers with their payroll files without requiring them to provide personal information — a process that is not only a hassle but could also open them up to fraud — offering a more seamless, secure user experience.
Pelz said that the direct-deposit-switching process, typically defined by three general steps — identifying one’s payroll platform, authenticating their account and executing a switch — is one that often stops people in their tracks.
“Before we created Pinwheel Prime, the vast majority of users weren’t making it past the first two steps,” Pelz said.
To get Pinwheel Prime across the finish line, Pelz explained, he and his teammates were compelled to navigate the nuances of working cadences, develop a shared language for their systems and much more.
“It wouldn’t have been possible without our engineers stepping up and taking on a lot of that project management work,” he said. “This product has been a long-standing company goal, and turning that into a reality has been a massive motivator for the team, which really makes the hard work worthwhile.”
And according to Pelz, all of this hard work is merely the first phase of an ongoing journey toward carving out a more efficient future for the fintech space and those who benefit from its solutions.
“Bringing together fintechs, banks and payroll providers to enable real-time income connectivity will unleash a wave of innovation that will positively impact the entire financial ecosystem, which in turn will deliver better financial futures for consumers,” he said.
Read on to learn more about how Pelz and his peers brought Pinwheel Prime to life, the impact it has on customers and what sets the company apart from others in its industry when it comes to building and launching new products.
‘A FAIRER FINANCIAL SYSTEM’
Pinwheel is guided by the mission to “create a fairer financial system.” The company’s payroll connectivity software enables financial institutions to securely update direct deposits and access income data, granting them the insight needed to build solutions that will more effectively support consumers.
What led you to develop Pinwheel Prime?
Pinwheel helps banks win primacy with innovative customer activation and lifecycle management solutions. Our flagship deposit-switch product made it possible for banks to digitize and expedite a burdensome, paper-based process that used to take consumers more than a month to complete, which helped increase the user net promoter score and direct deposit conversion.
Pinwheel has always aggregated data across payroll providers, gig platforms, government benefit systems and employer portals — yet it relies on users identifying their payroll platforms and remembering their credentials.
That’s why our team is so thrilled to launch Pinwheel Prime, the industry’s first and only entirely credential-less deposit-switching experience. We’ve spent the last few years partnering with the leading U.S. payroll providers to develop a new way to proactively match bank customers with their payroll files.
Now, we’re able to offer a frictionless, two-click switch experience without requiring any personal data at all from the end user. Eliminating the transmission of personally identifiable information or login credentials has also taken the security of our solution to the next level while our seamless user interface design has doubled user conversion.
What impact will Pinwheel Prime’s launch have on consumers?
Switching a user’s direct deposit requires three general steps: identifying one’s payroll platform, authenticating in and executing a switch. Many Americans have an arms-length relationship with their payroll system since they don’t interact with it day to day. They know who they work for, but they aren’t necessarily familiar with which payroll company processes their paycheck. Then there’s the matter of remembering the username and password to actually access a payroll account, which is nearly impossible for a platform a typical user may have only ever engaged with once or twice.
We invented Prime to address these specific friction points, which drive nearly 90 percent of the drop-off in the industry standard digital deposit switch flow. Our next-generation user experience is a seamless, two-click flow, changing the game on a process that has long been sited by users as a burdensome friction point preventing them from changing to a new bank that better meets their needs. In fact, 72 percent of consumers we user-tested in February said that they would be more likely to make a bank their primary bank if they offered the Pinwheel Prime experience.
“72% of consumers we user-tested in February said that they would be more likely to make a bank their primary bank if they offered the Pinwheel Prime experience.”
Who played a key role in developing and launching Pinwheel Prime?
Bringing Pinwheel Prime to life was a team effort involving a dozen or so engineers across product engineering, integrations engineering and our foundation engineering groups. At Pinwheel, individual contributors lead projects, while managers help unblock and play supporting roles. The true heroes here are tech lead Sam Bieler, Mike Aboody, Demetri Shargani, Cole Rutledge, Paul Lee, Abby Walker, Octavio Roscioli, Joey O’Donnell, Carly Spiering, Steve Kekacs, Kelly Steele, Ke Jiang, Ben Foster, Alex Wendland, Sean Sperte and others.
PUTTING THE PIECES TOGETHER
Pelz and his peers leveraged some of the industry’s latest tools and technologies to bring Pinwheel Prime to fruition. He said the new product fit well into the company’s React frontend and Python microservice processors that use FastAPI, Celery, gRPC, DynamoDB and Aurora — but the team still saw an opportunity to enhance their approach.
“To continuously improve our handling of sensitive data, we added a new Golang tokenization service, built payload encryption for key endpoints and enabled mTLS authentication across network hops,” he shared.
What obstacles did you encounter during the development phase?
One of our biggest technical problems was building a scalable system that could asynchronously fan out to look up users at our payroll partners. Each partner has a unique stack and integration mechanism, so managing nuances in authentication, latency and data normalization was non-trivial. We ended up building a system that uses our Redis cluster as a Celery broker to parallelize the lookups.
Another technical challenge we faced was continuing to increase our security posture to make absolutely sure user data cannot be compromised, adopting best practices from leading security and financial institutions around mutual transport layer security, payload encryption and tokenization. Besides evolving our processes for effective coordination and co-building with partners, we had to figure out working cadences, how to track work with dependencies across companies and how to develop a shared language for our systems — in addition to testing and scheduling.
Which teams collaborated together to get Pinwheel Prime across the finish line, and what strategies were employed to ensure smooth teamwork?
It all started with Brian Karimi-Pashaki, our partnerships lead who spearheaded our external efforts to bring payroll providers online as official partners.
Internally, it was a team effort involving team members across product engineering, integrations engineering and our foundation engineering groups. Product engineering led the product design and buildout, integrations engineering worked with our payroll partners to build and test each integration, and foundations engineering — data, infrastructure, security and services and frameworks — handled a lot of the back-end plumbing and scalability work. We relied heavily on design documents to architect and record decisions, regular stand-ups to prioritize work and coordinate pair-programming opportunities and healthy chatter in Slack so people could share questions and ideas and give out some kudos (the 🔥 emoji is a team favorite).
How does Pinwheel compare to other companies in the fintech space when it comes to building and launching new products?
We give individual contributors a lot of freedom and responsibility, especially when it comes to working directly with customers and partners. Pinwheel’s IC engineers lead technical design and play a direct role in demoing and collecting feedback from customers. This scales our ability to build products, helps engineers deeply understand customer problems — and make more decisions autonomously in turn — and tightens feedback loops when debugging externally.
It takes a lot of trust in your team and some up-front investment to build up enough context, but that investment compounds into faster and smarter engineers over time. Plus, it’s more fun to own the work end to end than to have just a sliver.
