In recent years, there has been a noticeable increase in various workplace banking products, signaling a shift in how financial services are being integrated within employment environments. Workplace banking generally involves offering a suite of financial services through employers, which includes products such as savings and checking accounts, loans, and credit facilities. These services are designed to be more accessible for employees, often featuring better rates or lower fees than those available on the wider market. The integration of these services within workplaces provides a convenient way for employees to manage their finances directly through payroll deposits and on-site banking services or digital platforms.
Parallel to this trend is the concept of “shadow banking,” originally used to describe financial activities similar to traditional banking but operating outside regular banking regulations. Shadow banking involves non-bank financial intermediaries providing services akin to those of traditional banks without being subject to the same regulatory oversight.
Merging these two concepts, “Workplace Shadow Banking” is a term introduced by Jason Lee, a former banker and serial fintech entrepreneur. Jason founded his first company, DailyPay, in 2015, and now it’s a leader in the On-Demand-Pay industry. He is currently the founder and CEO of Salt Labs, an employee rewards and incentives platform for frontline workers. The term he came up with refers to the integration of banking products within the workplace benefits framework.
The rise of “Workplace Shadow Banking” reflects an adaptation to the financial needs and circumstances of employees, particularly those not well-served by traditional financial systems.
The Future of Workplace Banking
At DailyPay Jason Lee developed products aimed at addressing specific gaps. One such product is the “Pay Balance,” which shows the amount of net pay an employee has earned in real-time, a significant departure from traditional checking accounts that might not accommodate the day-to-day financial fluctuations of many workers. This product, recognized as one of Time’s Best Inventions in 2021, represents a shift towards more dynamic financial tools within the workplace.
Lee, with deep experience in financial derivatives and the creation of banking products, is uniquely positioned to structure such complicated products into simple, elegant technology solutions that can efficiently be delivered through distribution channels such as HR.
Lee’s latest venture, Salt Labs, harnesses the power of technology and financial engineering to introduce a unique savings balance called Salt. This groundbreaking asset, similar to loyalty points, not only accumulates but also appreciates in value over time, serving as a dependable long-term savings source for hourly workers.
Lee’s vision is to empower everyday Americans to achieve genuine financial security and to equip HR departments with a comprehensive benefits package that caters to every aspect of workers’ financial needs. “I envision a future where these products will be integrated within a bank, allowing you to view your checking and savings balance, along with your Pay, Salt, and other assets, all in one seamless user experience as you clock out from work.”
Greg Grzesiak is an Entrepreneur-In-Residence and Columnist at Grit Daily. As CEO of Grzesiak Growth LLC, Greg dedicates his time to helping CEOs influencers and entrepreneurs make the appearances that will grow their following in their reach globally. Over the years he has built strong partnerships with high profile educators and influencers in Youtube and traditional finance space. Greg is a University of Florida graduate with years of experience in marketing and journalism.
