Totem is an Oklahoma-based neobank offering financial services and wealth-building solutions to Native Americans. Founded in 2022, Totem has raised more than $2.4 million in venture funding, including a $2.2 million pre-Seed round in November 2022, which saw participation from Raven Indigenous Capital Partners, Debut Capital, and Alloy Alchemist Fund.

Totem publicly launched its app on July 3rd, offering customers access to a debit card, mobile wallet, and direct deposit system, as well as financial resources for Native consumers. Tribal nations partnering with Totem also receive a portion of Totem’s revenues.

In an interview with The Financial Revolutionist, Amber Buker, Founder & CEO of Totem, outlines Totem’s founding story, describes the neobank’s partnership efforts with tribal nations, and differentiates its operations and sales from those of banking giants.

This interview has been edited for length and clarity.

The Financial Revolutionist: Why did you start Totem?

Amber Buker: I’m a member of the Choctaw Nation, and I built Totem out of personal experience from things that I encountered trying to access and make my way through the world as an Indigenous person, trying to move through the modern financial services landscape. I’m a first-generation college student, and the first person in my immediate family to try to buy a home.

When I started to experience life in other places, it kind of came as a shock how little people knew about our people, our experiences, or even the fact that we still exist in a lot of ways. And particularly when it came to financial services. Totem’s founding story has a lot to do with my journey to homeownership, which was really painful, because not only was it hard to access the programs that my tribe offered (a down payment assistance program), but the bank had no idea how to approach that. They weren't super keen to help me figure out how to use a program like that. No one ever mentioned to me that we have HUD Section 184 mortgages that are for Native Americans and have a lower down payment.

You know, a lot of people don't realize we have just as many barriers to financial services—and actually more—than any other racial demographic group in the US. We're the largest group of unbanked people for a reason. So similar to Black or Latinx populations that have a lot of barriers to access, but we have all of those, but we also have a lot of things that are unique to us. So because of the reservation system, for example, Natives often live in very rural areas, and that has a lot of implications. One is that we travel three times further to get to a bank than other Americans. So we have to rely on retail locations and systems that are set up to provide access in different places.

But there are also really insidious things that you don't even realize that that impacts. So, for example, a lot of reservations are so rural that they don't have an address that's deliverable for the US Postal Service. Well, at most banks, it’s a fraud vector to send a debit card to a PO box, so they just won't do it. So we had to get special dispensation and work with our community bank partner to create a new policy and make sure that we were able to mail those. Things like that are just not visible at the same level as they are for other populations.

The flip side to that is that we also have something that none of those other populations have either, which is tribal nations that are sovereign tribal governments that provide millions of dollars. Even a small 3,000-member tribe here in Oklahoma will disperse $4 million to $6 million a year in benefits. And those could look like down payment help, emergency assistance to help make sure you can pay a light bill quickly, it could be help buying school supplies or school clothes. But again, those are also invisible to the financial services realm. And so people don't realize what a huge untapped market this is. There's no one specifically catering to tribes to help with this really massive payments vertical. Today, most tribes are using paper checks and prepaid cards to issue payments. If a 3,000 member tribe put that all on prepaid cards—that typically have a 3% breakage rate—they could have lost $300,000 in money that should have been going into the pockets of their users. And that's to say nothing of all the fees that are involved in those cards that then get passed on to the user as well.

I've worked with banks long enough to know that interchange is subject to change and not something that you want to be building an entire financial model on. So when we were looking at how we can create something that is more meaningful and more of a value-add than just a digital bank, we chose to be sustainable and integrated into the lived experience of our people by partnering with tribes. Since we launched the app on July 3, we've started to have conversations with our tribal partners about doing a payments proof of concept where they would leverage us—instead of buying a bunch of prepaids or sending out a bunch of checks—to send ACH payments directly into Totem accounts, which are FDIC-insured accounts with no fees, no balance minimums. By doing that, we're able to tap into that payments landscape, process those events for tribes on a fee basis, and then build that relationship with them that we hope will eventually lead to white-label versions of the app as well, so that each tribe can have their own branded version of Totem that can not only be a hub for benefit, disbursement, and financial services, but also accessing information about all of those programs that you want to know about, so that you make sure that tribal members aren't missing out on opportunities.

What kinds of conversations have you had with tribal partners about infrastructure and accessibility—age, geography, access to digital tools, broadband, WiFi, etc.?

You're right, broadband access is a huge issue on the reservation, but I’ll caveat that by saying that 70% of Native Americans today don't live on rez. So while we always need to build for the use case that does need that special access, it's not the majority of our market. It's really interesting—people always ask me about broadband, but what does that have to do with your cell phone service?

I meant that as an example of gaps in infrastructure rather than as a direct use case.

There certainly are gaps. We've heard, anecdotally, a lot of people that say they can't always log into online banking, but they can drive down the road with their cell phone and get access at a certain spot, and access the phone network there. So I don't think that there's anything that we've had to build in from a technical perspective to make that more accessible. It's more just the idea of having a mobile banking app that actually addresses a lot of those cash-based needs that we have.

The other issue with infrastructure is that the people that do live on a reservation travel so far to access financial services, so that impacted our options in terms of the vendors that we chose. So we went with the Allpoint ATM network, for example, that has locations Targets and CVSes. We added Green Dot for cash loads, so that people can load cash at those same retail locations if they need to. It’s about being conscious of those issues, whilst not over-investing in areas that just a smaller portion of our audience has issues with.

Thank you for explaining that. It sounds as though, in driving down the street versus driving a long distance to a retail location, the convenience is pretty clear, relatively speaking. On a different note, given that tribes are sovereign nations and have their own legal codes, to what extent do those legal codes extend to financial regulations?

We're not to the point where we're entering into commercial relationships with tribes. All of our relationships so far have been partnerships. like co-marketing partners, for example. We’re actually kicking off this month with our first tribal partner, where we're saying, You help us spread the word, and we’ll give you a percentage of our interchange share for all of the purchases that your tribal members make. So we haven't run into any of those sort of sovereignty-related issues around jurisdiction and waivers and things like that.

But I would say that there's nothing that I've seen so far in terms of tribal codes that's given me pause at all. In fact, a lot of tribes have uniform commercial codes that they've adopted, just like states have.

What were conversations like with tribal partners when it came to co-marketing? Was this more of an outbound or inbound effort?

Banking is something that's really difficult for our people, but actually our first tribal partner is a majority owner of a local community bank. They already can access ACH payments to do disbursements, but, given fees charged by other banks, and given how many tribal members are unbanked, they’d rather offer their people a single solution that they can access that they’re confident is safe and free.

Tribes are a lot like many other industries. I feel like once you get a couple on board, things really snowball. We're already definitely seeing signs of that. The only one that we can share publicly is the Eastern Shawnee Tribe, but we've got several others now, and the most recent one that came to us was inbound. It was our first inbound tribe, and they reached out because they heard that we can help them digitize their payroll for their tribal employees, which is a part of that disbursements play that we talked about. It's not just benefits, but also payroll for tribally owned enterprises, which employ 1.1 million people a year. The opportunity there is pretty significant. Since they came to us proactively, that sales cycle was drastically shortened, and that they came specifically for the payments piece was really exciting.

I actually just got off an impromptu call from someone who runs a casino that's run by a tribe. They said, Hey, we always have trouble getting people to get on direct deposit so that we can pay them the way that's convenient for us. They said, We usually give them materials about Chase and Green Dot, but when we heard about what you guys are doing, we would much rather give them your solution than all of these other ones, which are contributing to the extractive nature of financial services as a whole for our people. We're getting some really exciting inbound calls, not just from the tribes themselves, but their enterprises saying, Hey, we need to figure out a way to get these products in the hands of our people to make our lives easier.

When you have communications that reach an end user, such as someone who would sign up for direct deposit, what does that look like? How do you differentiate yourself from a Chase or a Green Dot?

When we did really early concept testing, we wanted to know how people were banking today, because we wanted to know if this was something that was actually needed. It was amazing how directly it correlated with the FDIC’s information. So 15.6% of our respondents were completely unbanked, which matches the 16% that the FDIC had for its 2019 survey. And 13% were already using a digital-only solution, something generic like an Ally. And the rest are split 50-50 between community banks and credit unions on one end and big financial services players like Chase and Wells Fargo on the other. The people banking at those big institutions told us consistently, Listen, I only bank here because I need access to my money anywhere and a good app, and if you can give me those without all of the extractive practices that are counter and sometimes directly harmful to Indigenous populations, I would much rather bank with you.

So when we look at who we're really targeting in terms of that direct-to-consumer play, we're not trying to steal people away from community banks. We're trying to win them from these morally bankrupt large financial institutions, because we have something really different for them. So we've seen some of that play out, where there is a real moral proposition of people wanting not just to get away from the fees and things like that, but also supporting their tribe because if a tribe is a partner, every time a consumer swipes their debit card, that money is staying in the Native community.

We actually have the ability to send money from Totem customer to Totem customer completely free and instantly. That’s really important to us, because it lifts up Native values around money. We want to take care of our basics, and then we want to take care of the people around us, and so having a person-to-person payment system creates a closed loop. In addition, we have a ‘Resources’ tab that is open for anyone to use that has lots of information about tribal enrollment, health care, scholarships, all of this content that you can find that's actually curated by people who know. When I was trying to find information for myself about my own tribe’s benefits, there was so much wrong information on the internet. So that's another really unique value-add that literally no one else has that we're able to hang our hat on.

And we're doing a lot in terms of feature development. We're doing a lot of development on our stash-cash feature, which we’re hoping will come out before the end of the year. That's based entirely on customer research, which told us the traditional kind of checking and savings bundle wasn't working for them.

We also get multiple inquiries every week asking if we do business accounts. Many Native people have side hustles, micro businesses, things like that, and don’t want to pay the fees for banking products that are meant for small businesses. Concrete mixers, bakers, podcasts hosts—we've had so many people asking us, and so that's another really exciting opportunity that we think we have.

Who are the typical point people for your tribal partnership efforts? Is there a CFO or something equivalent that you reach out to consistently?

It depends on the tribe. There are 574 federally recognized tribes in the US, and that's not even counting Native Hawaiians and other groups. They have a ton of variety in terms of their size and their governance structure. Sometimes our contact is the tribal chairman, but where we're finding our sweet spot is that, as we're moving into this payments play, tribal administrators and treasurers and CFOs are definitely helpful, because they're the ones feeling that day-to-day pain of disbursements.

Any concluding thoughts?

I guess in terms of diversity, you know, the fundraising process was really eye opening, because that was like death by 1000 cuts. I cannot tell you how many times a conversation that I thought was going to be about our business model turned out to be me giving “Indian 101” lessons. It was just another example of a time in my life where I was taken aback by how invisible Native people and our issues and our benefits really are, particularly in financial services, particularly in venture capital.

Fundraising was a really painful process. That changed when we met Raven Indigenous Capital Partners, which is our lead, where they have a mandate to understand what those underserved needs are. I guess for your audience, it would be good for them to know: Please don't just use me as your check-the-box, “Yes, I talked to a diverse founder this week,” if you don't actually want to invest in the business.