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Jo Ann Barefoot explores how to create fair and inclusive consumer financial services through innovative ideas for industry and regulators

Barefoot Innovation Podcast

The Future of Banking with Chris Skinner

Jo Ann Barefoot

Innovate Finance 2019-009.jpg

We’ve been backlogged on Barefoot Innovation because, as I explained in our last show (and 100th episode) we’ve had a frenzied summer schedule launching our nonprofit, the Alliance for Innovative Regulation (AIR), and hosting the first-ever US financial regulatory hackathon, in collaboration with the UK Financial Conduct Authority. As a result, we’re catching up on some great conservations we recorded last spring.

For this one, my guest is the one-and-only Chris Skinner. Chris, the CEO of the Finanser, began writing a daily blog in 2007. Every single day since then, for twelve solid years, he has written a blog post. It’s said that journalism is the first draft of history. Chris has written that daily first draft of the history of fintech, almost from the start. He’s the bard, or minstrel, or troubadour of fintech, telling its story as it has unfolded in real-time, day by day, with all its twists and turns and surprises. He’s been the one seeing the patterns and understanding what’s happening and what is likely to come next.

He’s based in London, which means that for me (I’m usually in Washington DC) that his daily missive comes with my morning cup of coffee. I read it and, most likely, I tweet it. I have a great deal of company in this: Chris has nearly 50 million followers on Twitter.

Chris and I recorded this conversation last spring during the Innovate Finance Global Summit in London (one of my favorite conferences in the world). We found a reasonably quiet corner of the bustling speakers’ lounge in one of the old Guildhall buildings and talked about the future of banking.

One of the things I love about his insights is that he neither predicts the demise of banks nor sugarcoats the challenges they face. He does believe -- as do I -- that banks that are too slow or aim too low, in digital transformation, aren’t not going to make it. For those that do transform, though, the future is bright.

Chris buckets the banking industry into four categories of positioning on this journey: working out what to do, working out how to do it, doing it, and then doing it better, continuously improving. (For the bankers listening, I urge talking with your colleagues about where your institution falls in that sequence.) 

In our talk he offers a lot of advice on how to advance along this continuum. He points to banks that have redefined themselves as technology companies, and he names names of banks that are doing it well. He says banks need real technology talent -- he says JP Morgan has 50,000 engineers. He says the technology people have to work alongside the business people -- break down the silos. (He says at JP Morgan Chase’s asset management and trading space, every single person has to learn how to code.) He talks about the need for banks to be in the cloud, and to be agile, and to keep those teams small and nimble. He cites Jeff Bezos’s benchmark: if a team needs more than two pizzas for lunch, it’s too big.

Chris also points to banks’ natural, hard-won advantages, including that for certain things, people trust them. They can leverage that. It won’t be enough, though, to keep them competitive in a digital-first, mobile-first world.

I vividly remember the Finanser blog post that I read over my coffee on May 11 of last year. Chris called it Small Bank Thinking. He recounted an event where he’d recently spoken with small bank leaders. They had told him all the many reasons they can’t change quickly and all the reasons they have disadvantages compared with large banks. The post has a “tough love” quality. It’s blunt -- even harsh -- about the traditional banking model and mindset. At the same time, though, it’s profoundly optimistic for small banks that do change. Chris thinks small institutions are not at a disadvantage. He thinks they actually have an advantage over the giant competitors that are trying to turn enormous battleships, while nimble little motorboats could potentially run rings around them. He thinks the answers are much more about mindset than budget.

We also talked about regulation. Chris says the average US technology company must satisfy 27,000 regulations, while the typical US bank has to comply with 128,000. He notes that there are some good reasons for this, but he thinks regulators are going to have to lead on innovation, not follow it.

We also talked about financial inclusion. He says that when he wrote about the unbanked and underbanked a decade ago, he was writing about roughly 4.5 billion people, out of the seven billion on earth. Today, he’s writing about 2.5 billion people. That’s still a huge number, but think about that progress in just 10 years. He ends our conversation with the amazing story of the founder of Paytm, who once was homeless and now is a billionaire in India. That is what this fintech is doing, opening opportunity for everyone, all over the world.

I know you’ll enjoy my conversation with the Finanser, Chris Skinner.



More on Chris

Chris Skinner is widely known as the most influential person in technology in the UK. He is an independent commentator on the financial markets and fintech, through his blog, the Finanser.com and as the author of bestselling books -- Digital Bank, ValueWeb and Digital Human


Chris is Chair of the European networking forum, the Financial Services Club, and Nordic Finance Innovation. He is a Non-Executive Director of the Fintech consultancy firm 11:FS.  He serves on the Advisory Boards of many companies including B-Hive, Bankex, empowr, IoV42, Innovate Finance, Life.SREDA, Moven, Meniga, Pintail, Project Exscudo and the Token Fund, He has been voted Game Changer of the Year and Financial Markets Advisor of the Year by Finance Monthly; CEO of the Year 2018 by CV Magazine; FinTech Speaker of the Year 2018 by TMT Global, FinTech Author of the Year 2018 by Acquisition International; Best Financial Markets Adviser of the Year UK, Global 100 – 2018; Most Influential CEO of the Year 2018 – UK by CV Magazine; Most Dynamic in Finance Advisory Services 2018 – France by Global Business Insight; Best Financial Markets Adviser of the Year 2018 – UK by Corporate USA Today; Best CEO of the Year 2019 - UK by Lawyer International; Best Financial Markets Adviser of the Year 2019 – UK by M&A Today; Most Influential Fintech Advisor 2019 - UK by CV Magazine; Best Financial Markets Adviser of the Year 2019 – UK by Corporate America Today; and Best Fintech Keynote Speaker 2019 – by Global Business Insight. He has been an advisor to the White House, the World Bank, and the World Economic Forum.


Links

Books by Chris Skinner:


More for Our Listeners

I hope you enjoyed today’s show. Remember to leave us a five-star rating on your podcast platform so we can help more listeners find the show. Also come to our website to subscribe to Barefoot Innovation -- our newsletter, podcast and updates, and please follow me on Twitter, LinkedIn, and Facebook, and please send in a contribution to support our efforts to bring you the insights of people like these.

We have great episodes coming up. We’ve talked with Karen Mills of Harvard Business School. This is our second show with Karen, too, and one we were eager to do because she has a new book out on fintech and small business. We recorded a fascinating show with Ida Rademacher of the Aspen Institute alongside Jamie Kalamarides of Prudential.  

We also have a terrific conversation that we recorded in April from the expo hall at LendIt with the cofounders of Kabbage, Rob Frohwein and Kathryn Petralia.

If you’re interested in booking me to speak to your group, contact jay@provokemanagement.com. And I hope to see you at these events:

Some events where I’ll be speaking this fall are:

  • Massachusetts Bankers Association conference, September 26, Stowe Vermont

  • University of Michigan’s Central Bank of the Future Conference, October 2-3, Ann Arbor, MI

  • Money 2020, October 27-30, Las Vegas, NV -- I’ll be chairing the regulatory track again this year and also keynoting the day, which has been moved, happily, to Tuesday. We will have an amazing line up for you in our sessions as well as luminaries on the main stage, so stay tuned!


Also, we have proposed two events for SouthBySouthwest next year, and they have just opened up their “Panel Picker” app to let people vote. We want to hold one on the regulatory “moonshot” -- the unbelievable progress being made in regulation innovation. I also proposed one called “Never Fear,” telling the story of my own transformation from having a pretty traditional career into focusing on technology, and the life changes that accompanied it. Please give our proposals a boost by voting for us. The deadline is August 23rd.

 
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The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

100th Episode: The Race to Regulation Transformation -- Marathon and Sprint

Courtney Cole

On a sunny April morning in 2015, I left my Washington DC apartment, walked along Pennsylvania Avenue over the bridge that spans the ravine carved by Rock Creek, and stopped into a coffee shop in Georgetown. I bought two coffees and, walking a few more blocks, took one of them to my friend Raj Date. Raj had just left his role as Deputy Director of the CFPB to found his new venture, Fenway Summer. They’d leased a tiny townhouse that had stood on its spot since before the War of 1812, when Georgetown was a bustling port for sailing ships. The little wooden building sported a historic marker plaque and faced onto one a stone-paved street that slopes down to the C&O Canal (and my favorite Georgetown cupcake shop), and then onward to the Potomac River. Fenway Summer’s office was still mostly unfurnished, with boxes strewn around, so we met in the basement, where one wall was an ancient arch made of rock and brick. The stone created an echoey space, which I noticed as I placed the coffees -- and my portable microphone -- on the table between me and Raj. I turned on the mic, and we drank coffee and shared ideas, and recorded the very first episode of Barefoot Innovation.

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Today, I’m recording the 100th show. 

If someone had asked me that spring morning -- four years and ninety-nine conversations ago -- to predict the financial regulatory world of today, I’m not sure what I would have said, but I know for sure that it would have been wrong. In my wildest dreams, I could not have envisioned how technology is transforming finance, and financial regulation, in 2019.

We’ve chosen this moment to do the 100th show because last week, something happened in Washington that I think we will view in hindsight as a turning point. My new nonprofit, the Alliance for Innovative Regulation, or AIR (about which you’ll soon hear much more), collaborated with the UK’s Financial Conduct Authority to run the first-ever US regulatory “Tech Sprint.” A tech sprint is a hackathon. It puts subject matter experts together with software developers, lets them form themselves into teams, and has them work side by side -- sometimes day and night -- trying to solve concrete regulatory challenges. By the end of the sprint, typically a few days later, you don’t merely have a report or a memo or a working group. You have computer code. A start on a practical, working solution.

If the solution has potential, it may migrate into an incubator environment where it can be built out for real world deployment.

We held the US sprint as a satellite to a larger one that the FCA ran simultaneously last week in London. All the teams were tasked with developing better technology to combat money laundering. In the regulatory world, we tend to think of anti-money laundering -- AML -- as a compliance issue. We envision white collar, victimless crime. In reality, though, these crimes are among the most evil on earth. Laundered funds are the fuel that pays for terrorism and makes it lucrative to traffick in illegal weapons, drugs, looted antiquities, endangered wildlife, and human beings. Consider these numbers, and the human lives behind them. 

  • 40 million people are held captive today in human slavery -- more than in all the history of the world

  • 10 million are children

  • 1 million children are enslaved for sexual exploitation

How can this happen? Two reasons. First, these crimes are extremely profitable, as long as you can launder the money they generate through the financial system. And second, they are extremely low risk. The UN estimates that global financial crime today has reached over $1.6 trillion a year -- and that we catch less than 1%. 

And why is that? Why aren’t we doing better?

It’s not for lack of commitment. And it’s sure not for lack of resources. The financial industry spends tens of billions of dollars every year on AML compliance, and yet produces this 99% failure rate. How can that be?

The answer is that industry and government are mostly using old, ineffective technology, while the criminals have great technology. Obviously the current system is not scalable -- it can’t possibly be expanded enough to make a dent in the problem. The whole thing needs a redesign using new technology, to make it efficient and effective. 

It also needs technology to solve a very specific problem in AML, which is that criminals and terrorists can and do easily share information -- they buy and sell it on the dark web, among other things -- while the forces of good cannot easily share. That’s because the good side has to protect people’s privacy. Today, major money laundering crimes are driven by big global networks that can only be detected if companies and law enforcement can find the patterns of money flows across huge networks. This is, today, difficult and often impossible, because privacy constraints make data-sharing so difficult. 

The slogan for last week’s tech sprint was, “It takes a network to defeat a network.”

So, in the sprint, we set teams of people to work to solve this problem: can the financial industry and government use new technology, including privacy-enhancing encryption tools, to enable truly safe sharing of information and detection of big data patterns that are red flags for crime, across the boundaries of companies, governments, and countries?

In the Washington sprint, we had five teams work for three days on this challenge. We had three federal agencies actually place people on the “hacker” teams -- the FDIC, the FTC, and the CFPB. Over the course of the week we had about 170 people participate in or observe the process, including over 65 regulatory officials from 17 agencies. 

Did it work? 

It did. 

I’m going to devote later shows to really telling you the story of the sprint. When it was over, I realized that it had turned out to be the most meaningful and, I suspect, most impactful thing I’ve ever done in my career. Watch for future episodes and other postings about it.

And also watch for upcoming shows about our new nonprofit, AIR. I launched it along with my friend, Petal cofounder David Ehrich, with backing from visionary donors led by the Omidyar Network’s Flourish Ventures. We are aiming to help catalyze and shape conversion of the financial regulatory system to a new design that leverages the best technology of the Digital Age, so that regulators can keep pace with exponentially-changing technology as they carry out their crucial mission of keeping the financial system sound, accessible and fair.

For today, though, I’m going to look back over the journey we’ve traveled over the span of the 100 podcasts, and think about how we came to this point. I’m going to tell this story as I’ve experienced it, knowing of course that my vantage point has seen just one tiny facet of the huge global shifts that are now in motion.

Regtech and regulating fintech

When we recorded our first episode in 2015, “regtech” wasn’t even a thing. That was especially so in the United States, which for various reasons lags other parts of the world in regtech development and adoption.

Shortly after we launched Barefoot Innovation, I was invited to go to Harvard for a year as a Senior Fellow in the John F. Kennedy School Center for Business and Government. That one year stretched into two as I worked on a book, and also a series of papers, on financial innovation and how to regulate it.

One morning soon after I arrived on campus, I had breakfast with one of my fellow senior fellows, who introduced me to the concept of “wicked problems.” 

Wicked problems are problems that have very complex causes, and therefore very complex solutions -- so much so that, usually, they can’t be solved. People can’t even agree on what drives them, much less on how to fix them. Think of poverty, or war, or crime. In financial regulation, we’ve had at least two wicked problems, pretty much forever. One is that finance often hurts consumers, either by not allowing them into the system or by harming those who do receive services, such as burdening them with too much debt. The second problem is that, generally speaking, financial regulation can’t be made both highly effective and efficient at the same time. There’s always been a tradeoff between spending more to get better outcomes, or cutting costs but compromising results. And, even more deeply, some aspects of financial regulation are actually both expensive and ineffective, and arguably getting worse. (This is part of what my Harvard papers are about.)

My friend’s insight led me to an epiphany (this kind of thing happens if you go to Harvard and have two years to concentrate on learning and thinking!). I realized that when wicked problems do get solved, it’s often because new technology emerged, something that was not in the original mix of cause and effect. As an example, I myself had polio as a child. A few years later, the US began vaccinating every child, and then nearly all countries did the same, inoculating nearly every child in the world. Today, there is still some polio in the world, but it’s a “normal” type of problem, not an unsolvable one, as epidemic diseases had been before vaccines, for all of human history. 

Thinking about this in the context of my research, I realized that today, innovators are attacking both of these wicked problems in finance and financial regulation. People are using new technologies to try to remedy every cause of consumer financial troubles (other than lack of money itself), to make financial services vastly more accessible, affordable, transparent and fair. I realized, in fact, that some technologies had the potential to help consumers with problems that regulations have been aiming, and failing, to fix for a half-century. (I won’t develop that whole argument for you in today’s podcast -- read the Harvard papers and listen to some of the 99 podcast guests.)

I also realized that the same tech trends driving these changes -- like big data, artificial intelligence, blockchains, cloud computing, voice interface and mobile -- have also potentially opened up a whole new way to do regulation, so that it really could be better and cheaper, at the same time.

But this insight was quickly followed by another. I realized that most of the benefits, for both wicked problems, will probably never materialize. The reason? We will probably get the regulation wrong.

Regular listeners know I’m a former bank regulator. I was Deputy Comptroller of the Currency (actually the first woman in that role). How many times, over our hundred episodes, have I talked to a guest and said some version of, “The regulators have the hardest job in financial innovation, because they have to enable good changes while blocking bad ones that come embedded in them”? How many times have I said that regulatory failures are no one’s fault -- they just reflect the limitations of the tools we had before the Digital Age? All true. We have dedicated and talented regulators, and also Congressional policymakers, still, they face an uphill battle to modernize. The systems we have today were not built to address the mold-breaking, fast-paced change that is now transforming finance. I realized that, somehow,  they will have to... speed up.

So we started doing shows on fintech innovation. We framed the whole program as a “search” for innovation that could help consumers. Often, our conversation went far outside the boundaries of discussing information and expanded into real-time brainstorming. We always included a discussion of the guest’s advice for regulators. And we had many regulators as guests, including numerous agency heads. We’ve also had startup founders. And banks, both large and small. And people with roles ranging from CEO’s to compliance officers to heads of innovation labs. And lawyers and academics and consumer advocates. 

Of the innovators on the show, it’s important to note that quite a few didn’t make it. I won’t call them out individually -- you may know who they are. Some startups just ran out of runway -- their VC funding didn’t last long enough for them to find traction, especially if they were waiting for banks to get the permissions needed to work with them. Some large companies shared innovation initiatives on the show, but later gave up on them. 

This is the very nature of innovation. It always, everywhere, produces some failure. To innovate, you have no alternative but to try things. When you try new things, some won’t work. This means you have to take some risk. This process -- try something, see how it goes, measure results, learn from it, adjust, move forward -- is the pattern of all innovation. It’s a key lesson for the regulatory process. Somehow, we’re going to have to create a safe space for trying things, to bake the routine ability to iterate and test and fail, into the worlds of regulation and compliance.

The failures in fintech innovation, though, are vastly outnumbered by the successes.

More fundamentally, very few of these failures actually discredited the ideas and technologies involved. To the contrary, out of virtually every failed situation, the people involved moved forward to new and better things, and the ideas they incubated and shared have continued to spread outward, infusing the financial and technology ecosystem, changing how everyone thinks.

Along the way, the regulators saw this need for allowing and nurturing innovation and began to respond by setting up their own innovation programs. The first one that I know of was the CFPB’s Project Catalyst. That inspired the FCA to create its Innovate initiative -- a bigger and, I think it’s fair to say, bolder program than Catalyst, but building on the latter’s ideas. Famously, Innovate included creating a Regulatory Sandbox, which in turn went on to inspire dozens of imitators throughout the world. The OCC came next -- we at Harvard were honored that the Comptroller of the Currency, Tom Curry, launched the OCC innovation initiative at an event we held at the Kennedy School

Other agencies, too, began moving ahead. Some had high-profile efforts while others were low-key, but they were all dedicating people to focusing on innovation. The then-Chairman of the CFTC, Christopher Giancarlo, said on Barefoot Innovation that the top priority of “every regulatory agency” is to convert their rule books “from analog to digital” design. He recruited someone from the fintech world, Daniel Gorfine, to run the Commission’s already-extant LabCFTC. 

Eventually, all the federal agencies developed initiatives or task forces or working groups. So did some of their regional offices. The Federal Reserve Bank of San Francisco, for one, held what I think was the first US regulator-sponsored innovation conference by any US agency, and now has one of the country’s most vibrant programs. Several states also took initiatives, with Arizona creating the nation’s first state sandbox. Agencies were creating both groups working on regulatory issues in fintech innovation, and also projects to develop supervisory technology, sometimes called SupTech or SuperTech (although I advise call it all regtech because supervision and compliance are two sides of the same coin and will need common, integrated technology in the end).

Regtech

In the United States, though, through most of this period, the focus was on how to regulate fintech. Again, that is different from the challenge of how to do regulation better. For the first few years after Barefoot Innovation launched, we still didn’t have the word “regtech.” As it emerged, I began to ask US speech audiences -- including the many speeches I made to regulator groups -- how many people knew the term, regtech. Five or ten percent would raise their hands.

In Europe, meanwhile, and Asia, regtech was on fire.

Some of this was coming from the private sector, including from many of our podcast guests. But globally, the key driver was, again, the FCA. Its sandbox initiative had captured everyone’s attention and was growing fast. The FCA was sending people around the world evangelizing on it. But when I would meet with them in London, I started to see a few people at the table who were working on regtech. I mean, a few. It was, basically, two people, and eventually, three.

Quietly, gradually, that little team began to invent a new way of innovating for regulators themselves. And their genius invention, their breakthrough, was that the FCA should hold hackathons. The FCA will tell you that they’re regulators, so they don’t like the word “hack,” so they created a special new name for these events -- the regtech “tech sprint.” 

The first one they held tackled issues of consumer access to financial services. They invited just a handful of people and kept it very low-profile -- they were trying something new and had no idea if it would work. But, it did work. So they did another, and another, growing the size, widening the range of issues, and hammering out, through trial and error, a whole methodology. The one they held in London last week was their seventh. Two have been on AML. Others have explored issues like pensions and financial services and mental health. Two have been on regulatory reporting.

Along the way, the regtech group came to be led by an FCA official named Nick Cook. Today Nick heads the FCA’s whole innovation division (more on that later), but in the early couple of years, his little regtech team began building a network. I remember making speeches in those days when I would say, the FCA’s regtech team has only seven people, but hundreds of others are helping them. By doing these sprints and sharing what they were learning, they were enlisting some of the world’s top experts in both regulation and technology -- experts from big banks, tech firms, academics and more. Everyone was coming to the table. People began to see the possibility of doing things better, and they wanted to help.

On June 1, 2017, I convened a regtech conference at Harvard. To our surprise and delight, people came from all over the world! We brought together about 60 regulatory and technology experts around one huge open-square table. 

I remember asking for a show of hands on how many of them had ever helped to write financial laws or regulations. Many hands went up. Then I asked how many could write computer code. Again, large numbers of hands were raised. 

And then I asked, how many could do both. One person raised his hand.

We had a lot of very high-powered people in that room. I remember suggesting to them that the regulatory people at the table knew they had a problem with making regulation both effective and efficient, and assumed that, for the most part, it can’t be solved. The tech people in the room, meanwhile, actually had the solution, but they didn’t know about the problem -- or thought that it was a boring problem (which it decidedly is not!). And so...we put them together, to figure out how to combine the best of both. 

Around that time, I started using a slide showing former Congressman Barney Frank, who co-sponsored the Dodd-Frank financial reform law, in the same frame with Steve Jobs. We started asking, what if we could give regulatory problems to people with that mix of expertise, to solve together?

At the Harvard roundtable, we posed this provocative question: might it be possible to issue some regulations not in words, but in the form of computer code, so that compliance could be self-implementing? In June 2017, this seemed to me like a science fiction vision, something that might begin to be possible in, maybe 10 or 20 years.

Nick Cook was at that conference. Five months later, the FCA and the Bank of England, incredibly, tested this very concept in real life.

That November, they ran a tech sprint that is now affectionately known to many of us as the Regulatory Moonshot. It ran for two full weeks. The participants came from the big UK banks, fintech and regtech firms, and distinguished universities in the UK and US. The FCA selected one line of regulatory guidance on reporting requirements for retail loans to work on. They set up a “tech” group and a “text” group of legal people, and then had a group of “translators” bridge the gap between them. They all worked to convert the syntax of the legal requirements into the syntax of code, to run against a set of test data. 

The effort failed several times. People worried that it had been a waste of time. 

On the final day, a late Friday afternoon on December they ran the test.

It worked. Machine-to-machine, the algorithm produced a correct report, in 10 seconds. 

Then they altered the reporting requirement and ran it again. The algorithm produced an adjusted report, correctly, again.

The people in the room that day stood up and cheered -- bankers and regulators together.

The FCA realized that this “model-driven machine-executable” reporting could possibly be applied to areas where reporting processes are expensive and suboptimal, for both industry and government. They began calculating the potential for huge savings, in both the public and private sectors. They also promoted a thought process we had also discussed at Harvard, and that I’ve emphasized in my Harvard papers -- the idea that innovations like this could potentially be opened up to the industry as a voluntary option. Companies could choose to adopt them, or not, depending on what would be most safe and inexpensive for them. This would avoid forcing big tech changes on the whole system, top down, with all the resistance that normally creates. 

In February 2018, the FCA issued a report on this sprint, explaining what they did, how they did it, and what further input they wanted from the public, and also laying out core concepts such as a commitment to creating regulatory technology that is open source.

I think the regulators who ran that sprint are heroes.

As I said earlier, I’m telling this story as I’ve experienced it over the course of our hundred podcasts, but I was doing very little. The big work was being done by others, especially in Europe and Asia.

A regtech infrastructure started to emerge, particularly in those regions. Under the leadership of Ravi Menon, the Monetary Authority of Singapore, MAS, began to put resources into both fintech innovation and regtech. Their innovation head, Sopnendu Mohanty (a two-time guest on our show) was all over the world, telling their story. MAS also began running a “Fintech Festival” that must be, now, the largest financial conference on earth. It attracts 40,000 people a year from all over the world. Think about that -- for a fintech festival sponsored by a central bank.

Abu Dhabi recruited regtech leaders from both the FCA (Barry West) and MAS (Wai-Lum Kwok) and began building a regtech innovation hub in the Middle East. Other countries were innovating too -- I don’t want to start listing them for fear of leaving out important initiatives, but ideas and experiments were spreading.

Two European-based regtech associations were stood up. In London, PJ Di Giammarino founded the Regtech Council, or RTC. Around the same time, the International Regtech Association, or IRTA, started up based in the UK and Switzerland, under the leadership of Subas Roy and Ben Richmond. The IRTA included visionary players like Diana Paredes and Richard Maton, and Richard also founded FIIN, the Financial Institution Innovation Network. (I’m involved with all of these.) Organizations like the International Institute of Finance were also doing research and holding events.

In 2017, I co-founded an AML regtech firm myself, Hummingbird, with four millennial co-founders, three of whom are software developers (many listeners may know that I’m a baby boomer). Suddenly, my learning curve skyrocketed. For the first time in my life, I was being exposed to how technology is created, the techniques that let tech companies innovate so fast, how they work together. My colleagues, most of them in San Francisco, lived in this world where innovation is in the very air. My daily discussions suddenly involve design thinking and human-centered design, agile workflows, standups, cloud computing, what it takes to get a SOC 2 security certification, how to do pen testing or run bug bounties, the power of open source code, the use of feature flags and reversible code to try things in a safe, small-scale way, the need for tech standards for regulatory information, the idea of a regulatory Github, the need to measure everything, the methods of collaborating and “failing fast” and learning from mistakes. I saw first hand how new, digitally-native technology could transform AML.  I’ve learned more from this experience than from all my other efforts, combined.

Regtech had hit the agendas of the international bodies and NGOs dedicated to expanding global financial inclusion. The mobile phone was rapidly extending starter financial services to literally billions of people in the developing world who had never before had access -- people for whom no one was ever going to build and staff a bank branch. The World Bank set the ambitious goal that every adult in the world should have a “bank account” in his or her phone by 2020. People realized that if that was going to happen -- and it will, in the 2020’s -- the world needed a much stronger, nimbler, and more efficient regulatory infrastructure, to safeguard the system and to protect people from harm. This was especially true for protecting consumers who had never had formal financial products before, or even knew anyone who had, and so were vulnerable to exploitation and scams. To do this, regulators were going to need tools that didn’t require building out high headcount. It wasn’t practical to try to mimic the systems and structures of the large economies. Instead, the Global South would leapfrog, through new, digitally-native technology.

Projects were launched by the UN, the International Telecommunications Union, and the World Bank. Philanthropic organizations, especially the Omidyar Network (Pierre Omidyar was the founder of Ebay) and the Gates Foundation, funded regulatory innovation initiatives. One was the Alliance for Financial Inclusion, or AFI, made up of the central banks and financial regulators of the global South -- more than 100 agencies from about 90 countries. Another was R2A, the Regtech for Regulators Accelerator, which under the leadership of Bankable Frontiers’ Simone Di Castri, began working with regulatory bodies in countries like Mexico and the Philippines to solve regulatory challenges through technology. One technique was to put a chatbot on mobile phones so that consumers could report scams directly to the regulators. The bot could collect the complaint information and analyze it for trends to help target scarce human expertise.

In the US, the Omidyar Network funded other work in fintech and regtech. One was the Financial Diaries research and book, along with other support of the Center for Financial Services Innovation (now the Financial Health Network -- I served on and chaired its board).  A second was creation of FinRegLab, led by my friend Melissa Koide. FRL has just put out its first research report, exploring the use of alternative data in credit underwriting (I’m proud to say I chair its board too). A regtech accelerator, RegTechLab, started up around the same time. Regtech conferences were cropping up all over the world and regtech tracks were being added to existing events.

And the Omidyar team, which last year spun off its financial unit as Flourish Ventures, began working with me -- again, driven by the insight that we will have to modernize both financial services and financial regulation if we’re going to achieve global financial inclusion.

With support from Omidyar and others, I had begun traveling the world, seeing and touching the cutting edge of change. London, Paris, Singapore, Manila, Fiji, Jakarta, Geneva, Amsterdam, Nassau. I spoke to the Dutch central bank. I spoke each year at the huge MAS Fintech Festival. I met with the Netherlands Queen Maxima, the UN Special Advocate for Global Financial Inclusion. I spoke to a UN conference. I spoke to a Cambridge University conference of hundreds of African regulators. I briefed the Basel technology subcommittee and the senior bank supervisors of the major economies. I spoke to AFI and the World Bank. In Jakarta, I sat at dinner next to Sanjay Jain and gradually realized he was an architect of India’s Aadhaar project, which has collected biometric identification information on 1.2 billion people, to enable them -- including the women -- to prove who they are so that they can enter the financial system, even if they lack traditional identity papers. I did a podcast with Sanjay the next day. In Manila I met Michael Wiegand, who heads the Gates Foundation’s Financial Services for the Poor. We were both traveling onward to Singapore, and did a podcast there as well. I participated in the Vaduz Roundtable hosted by Prince Michael of Liechtenstein, and recorded a podcast with him in the Alps. In Fiji I recorded three or four shows, including one with AFI CEO Alfred Hannig

In the US, I spoke to most of the regulatory agencies and many of their regional offices. I spoke to the FFIEC’s regional IT examiners. For three years I’ve chaired the regulatory track at Money 2020. I interviewed Ripple chairman Chris Larsen on the main stage at LendIt and also did a podcast with him earlier. I spoke at LendIt in the US and Europe, and at Finovate, and at the wonderful regtech conferences that have mushroomed up. I joined the fintech advisory committees of FINRA, and of the Milken Institute, and the blockchain advisory group for the state of California. Regtech was spreading.

The Tech Sprint and AIR

Last October, Nick Cook visited with a group of about 20 US regulators on his return trip to London after speaking at Money 2020. At the time, the FCA planned to hold the 2019 AML tech sprint with international partners in Abu Dhabi, and so Nick invited the US regulators to come. The officials in the room noted that their budgets generally wouldn’t support travel to Abu Dhabi. And then one of them -- I can’t recall who it was -- asked if perhaps there could be a satellite site for the sprint, in the US. 

Instantly, people were interested. Several agencies followed up with the FCA to explore trying to host such an event, but ultimately couldn’t make it come together. 

Meanwhile I had co-founded AIR -- again, that’s the nonprofit Alliance for Innovative Regulation, with Petal card co-founder David Ehrich. This spring, the FCA asked if AIR would host such a satellite event. And we, of course, said yes.

We really had to sprint, to organize this sprint! Our little team -- David, Lexi Frazier and Amrita Vir -- worked day and night, as did the team at the FCA in London, to put it together.

We lined up participants with the right mix of skills and, about two weeks before the sprint, we held a telephone “boot camp” for them to explain the process. We gave everyone access to each other, and to a tool for getting organized, and to a set of synthetic data created by a UK company called Harbr, in which very realistic financial crime patterns were hidden  We also set up access to cloud computing environments donated by Amazon Web Services and Microsoft Azure. People began thinking about problems to solve and finding teammates.

And then, on Tuesday of last week, we kicked off the sprint live at the Washington office of EY, which provided the facilities. We connected to London for a welcome, managing the five hour time difference. We heard a presentation from US law enforcement, by Mike Loughnane, sharing the perspective of the actual people who use AML information to catch criminals.  

Most of the people on these teams had never met until that Tuesday morning. Some were software developers who knew little about AML. Some were AML compliance officers or regulators who knew little about technology. They came from big and small banks, fintech firms, and consultancies. Again, some came from three US regulatory agencies. They formed themselves into their working groups, with each team recruiting a combination of subject matter experts, front-end and back-end developers, and preferably a designer.  They picked the AML problems they wanted to solve. We provided them with floating “doctors” to guide and problem solve.

And then they got to work, for two and a half days.

On the final day, the Friday, we gathered for a big event, much of which was joint with the FCA. In Washington, we had a keynote speech by FDIC Chairman Jelena McWilliams, simulcast to London, which included her compelling vision for transforming FDIC bank supervision through technology.  From London, meanwhile, we had a simulcast address from US Assistant Treasury Secretary Marshall Billingslea. We also had the benefit of the FCA sending their head of Innovate, Samantha Emery, who had come to the US as a sort of ambassador to our event and spoke eloquently about how regulators must and can change.

Then the “hacker” teams demonstrated their solutions, for which Chairman McWilliams graciously agreed to serve as a judge along with other distinguished leaders. 

Again, I’ll be posting much more information on what happened in the coming weeks. We’ll put information in the show notes for this episode, and you can also start to find material at our partially-built landing page, www.RegulationInnovation.org. When the FCA asked us to host the sprint, AIR was so new that we didn’t -- and still don’t -- even have a logo. We just have a picture of a robot! So keep watching as we post more information, including the exciting follow ups as our sprint teams are invited to demo their innovative tools to US regulatory agencies in the coming weeks.

Again, this event feels to me like the most meaningful thing I’ve been involved with in my career. The response has been overwhelming. The energy is off the chart. Much, much more to come!

Tech Sprint - August 2019-271.jpg

The 100 shows

So, what a journey we’ve had with these hundred conversations on Barefoot Innovation. I remember the day we launched. I was using friends and family-type tech help (some of you can guess who I’m talking about). We had planned to get the show online over a weekend, but Sunday afternoon arrived with nothing done. I remember being on the phone with my tech helper and saying that I assumed we weren’t going to get it done. He said, “yeah we are.” He started emailing me to ask for materials. At one point he told me we needed an “album cover.” I had no idea what that even meant. The only podcast I’d ever heard was the first one by Tim Ferriss -- it’s one where they were drinking a good bit, and he explains that he’d started his show after realizing how much people would love to be a fly on the wall for some of the fascinating conversations he has with people. He had decided to let everyone listen in. And that’s what we’ve done, too.  

So I came up with an album cover, of me walking under a stone arch at Borough Market in London holding bread and coffee, to set the tone of the program. 

An hour or so later, we had a podcast show up on iTunes.

I won’t attempt to talk about my favorite episodes, because that’s too long a list and too slippery a slope. But I will highlight some of the fun, and the mishaps!  I remember having to flee a cloudburst in Palm Springs with Simple CEO Josh Reich. I remember my recording with California banking commissioner Jan Owen on a balcony in Santa Fe, with a big storm gathering and lightning forking down onto the mountains behind her, and the wind blowing our hair around, and finally cutting our talk short to run inside out of the rain. I remember getting thrown out of an empty hotel conference room with my friend Steve Carlson of Ascend, and how we felt tempted (and said so on the show), to blow off a meeting we were about to have with the same person at the CFSI Emerge conference, because we felt like our brainstorming was just about to let us figure the whole thing out.  I remember the little dog on the couch when I talked with Betterment CEO Jon Stein. I remember the AFI conference in Fiji, sitting in the outdoor restaurant out on the beach with eCurrency CEO Jonathan Dharmapalan, with seagulls screaming the whole time. I remember the show I did there with AFI’s leader, Alfred Hannig, as an old fashioned fan clattered in the room the whole time -- my sound editor said the recording sounded like jackhammering. I remember my friend Jen Tescher, CEO of CFSI (now the Financial Health Network) showing up to do the show, and bringing wine.

I remember a London morning with my friend Brett King, recording as we enjoyed a hearty English breakfast. I remember my microphone, and my backup microphone, and actually all my tech totally failing for my conversation with CSBS president John Ryan. I actually had to run back to my apartment to get another microphone, and then rush back to John’s office, and STILL it failed! We had to reschedule. John is the nicest person on earth.

I remember having an even worse fail with Treliant’s Lyn Farrell, because the mic never recorded at all and we had to do a whole new episode. It was lucky for me that she’s the only person I did that with, because for one thing, she’s my dear, dear friend, and for another, I got her to come to Harvard, speak to our student group, and record another in my Boston apartment, overlooking a beautiful sunset on Boston Harbor before we walked to dinner in Seaport. In that second one, we brainstormed an entirely new idea that neither of us had had, and maybe wouldn’t ever have come to, if we hadn’t been talking about compliance innovation for the show.

I remember an early show that forced me to decide whether to edit my guests, because one said something very inflammatory about a well-known bank. I agonized over this a bit. Then my colleague pointed out to me that my website quotes Carl Sagan saying, “If it can be destroyed by the truth, it deserves to be destroyed by the truth.” So, just disclaimers. No editing.

In that vein, I also remember putting a PG-13 warning on our show with Digit CEO Ethan Bloch, who used a few words that arise in public more often in Silicon Valley than in, say, Washington DC. I remember being inspired by both the content and the Alps backdrop in my talk with Prince Michael, in Liechtenstein.  I remember talking with my outrageous, cheeky friend Dave Birch in London, in the old Guild Hall building, with a fire in the grate, right before Christmas, and also one I haven’t even posted yet, also from London, with the great Chris Skinner.  I remember my five amazing guests for our episode on women in fintech

I remember so many episodes with background noise. There was one in my neighborhood coffee shop with Petal CEO Jason Gross, in which loud music unexpectedly started. I remember recording from the convention floors at the ABA Regulatory Compliance Conference and, at LendIt, with Rob Frowheim and Kathryn Petralia of Kabbage, and with Alloy’s Laura Spiekerman at Comply. So much noise!

I remember both podcasts with Sopnendu Mohanty, including when I suggested to him that Singapore has an easier challenge than the US because we have so many regulators and thousands of banks. I’ve never forgotten what Sop said: “Yes, Jo Ann, but the US has the talent.” 

I remember our longest show, with one of my favorite renegades, Global ID’s Greg Kidd. And I remember inviting listeners to contact me if they wanted equal time to respond to the extremely provocative comments of Bill Harris at Personal Capital.

I remember seeing Pepper the robot at Wells Fargo, with Braden More.

I remember all the agency heads, all needing to be careful, as agency heads must, but still laying out compelling visions -- Tom Curry, Rich Cordray, two shows with Chris Giancarlo, and we’ll have shows coming up with FDIC Chairman Jelena Mc Williams and Comptroller of the Currency Joseph Otting. I remember my conversation with Congressman Gregory Meeks. I actually thought our 100th episode was going to be with a European head of state. Think of that -- a prime minister interested in talking to us about how technology is changing finance and financial policy. I won’t tell you who it is, because I hope we’ll still get to do it at a time when the schedules work better.

And of course, I remember our episodes with the FCA -- one with Chris Woolard, one with Nick Cook, and -- yes, possibly my favorite -- the one with both of them together, immediately after the 2018 AML sprint in London. Everyone was exhausted that night, and everyone was elated. We’ll do another with Nick about the 2019 sprint.

And we’ll get his perspective from the new vantage point he has now, heading a full FCA division.

Now think about this. The FCA this year elevated its innovation group into a full-fledged division. It contains innovate, regtech, and data sciences. It already has more than 100 people, and within a year, will have 200. This is regulatory transformation.

And it’s happened in less than five years. It’s been built in large part around sprints. We all know that regulatory modernization is a marathon. It will take years. Still, it needs to start now because, as the FCA has said, if regulators don’t move forward in this exponentially-changing tech world, they will be “accelerating backwards.”

Today people listen to Barefoot Innovation all over the world. People are listening from London to San Francisco, Kansas City to Tokyo and Melbourne, Buenos Aires to Kiev. We have quite a few listeners in Togo. Our metrics are partial, but we have tens of thousands of people listening, on every populated continent. I was once at a conference in London and a man walked up to me and asked if I was “the podcast lady.”  When I said yes, he introduced himself as an avid fan of the show. He was a member of the Brazil legislature. Everywhere I go, and with nearly every new connection I make, people tell me they listen.

I’m so grateful to you all.

As I said at the start, if someone had told me there would be such a thing as AIR, or a tech sprint, or even regtech, when we recorded that first show, I wouldn’t have known what they were talking about. And look where we are now.

People tell me all the time that regulatory systems can only change at a glacial pace. I understand the headwinds as well as anyone. I’m a former Deputy Comptroller of the Currency. I’ve worked with regulation and compliance for more than four decades, inside government and out. I’m close to regulators and policy makers and also to compliance people. It’s a deliberate, careful, risk-averse system. That’s a feature, not a bug. It’s designed that way, for good reason.

But still, it will have to change faster, to keep up with technology. 

And, it already is. It is accelerating forward, more every day.

The road ahead a marathon, and a sprint. A great many of us are running them, together.

support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

Agile Regulation -- CFTC Chairman Chris Giancarlo

Courtney Cole

I’m calling today’s show “agile regulation.” I know that sounds like an oxymoron, but today, agile regulation is actually on its way.

Financial regulators all over the world are realizing that they will have to update their tools, digitize their information and, above all, speed up, to keep pace with the exponential rate of technology change in the industry they regulate. In the United States, the leading voice in this new vision has been our guest today -- the Chairman of the Commodity Futures Trading Commission, Christopher Giancarlo. This is the second time we have had Chairman Giancarlo with us, and we are posting this one right before he leaves office.

This conversation builds on the first. I think it might be the most interesting and thought provoking discussion we’ve ever had on Barefoot Innovation.

The agency’s name -- the Commodity Futures Trading Commission -- may not clearly conjure its role in our economy as the regulator of derivatives. That responsibility puts the CFTC at the forefront in addressing mold-breaking innovation in finance, and Chris Giancarlo has, perhaps more than any US regulator, been thinking deeply about the challenge that regulators face as a result. Late last year he gave a speech at Georgetown University Law School for FinTech Week, called Quantitative Regulation, Effective Market Regulation in a Digital Era, raising themes that we discussed in depth in our conversation.

We talked about the need to digitize regulation. We talked about the need for new data analytics and artificial intelligence -- he tells a great story on how algorithms are changing the marketplace, and how the CFTC has responded by creating a whole Market Intelligence branch. We talked about how regulators can attract top talent into these kinds of roles. They have appointed a Chief Market Intelligence Officer who is a former partner from Goldman Sachs, and they converted a University of Chicago professor from being a skeptic to a believer who now encourages his PhD students to consider working at an agency like the CFTC, because it is doing “cutting-edge work.” 

We also talked about the need for interagency coordination. The Chairman is one of the few people I know who doesn’t think we have too many federal financial agencies, but he emphasizes that they have to work together more than ever. He says he and SEC Chairman Clayton are focused on harmonizing rules, and he describes how the Commission is working with the Treasury Department (see my previous podcast with Counselor of the Secretary of the Treasury, Craig Phillips). 

As you listen, notice the tone of urgency that pervades this conversation. It’s a tone we don’t usually hear from regulators. It fits with the Chairman’s Georgetown Law School speech where he coined the term “agile regulation.” He talks about agencies spending months studying issues that, going forward, they will have to figure out in weeks. He says regulators are at risk of falling behind and that, in an era of exponential rates of change, “if you don't keep up... the falling behind moves at an exponential rate as well.” How to avoid that danger is the subject of today’s show.

Links

Barefoot Innovation Podcast: Counselor to the Secretary of the Treasury, Craig Phillips

Chairman Giancarlo’s Speech: “Quantitative Regulation:  Effective Market Regulation in a Digital Era”

Barefoot Innovation Podcast: From Analog to Digital Regulation - CFTC Acting Chairman Christopher Giancarlo

Barefoot Innovation Podcast: Regulatory Challenger: LabCFTC and Daniel Gorfine

LabCFTC

Mark Yallop interviewed in “The 25-year cycle of misconduct in financial markets and how to break it”


More for Our Listeners

Remember to leave us a five-star rating on your podcast platform so we can help more listeners find the show. Also come to our website to subscribe to Barefoot Innovation -- our newsletter, podcast and updates, and please follow me on Twitter, LinkedIn, and Facebook.

We have great episodes coming up. We will talk with Karen Mills of Harvard Business School. This is our second show with Karen, too, and one we were eager to do because she has a new book out on fintech and small business. We recorded a fascinating show with Ida Rademacher of the Aspen Institute alongside Jamie Kalamarides of Prudential.  And we have one from London with the great Chris Skinner.

We also have a terrific conversation that we recorded from the expo hall at LendIt with the cofounders of Kabbage, Rob Frohwein and Kathryn Petralia.

If you’re interested in booking me to speak to your group, contact jay@provokemanagement.com

We’re into the summer quiet time on conferences, but I’ll hope to see you at these in the fall:

University of Michigan’s Central Bank of the Future Conference, October 2-3, Ann Arbor, MI

Money 2020, October 27-30, Las Vegas, NV -- I’ll be chairing the regulatory track again this year and also keynoting the day, which has been moved, happily, to Tuesday.

Last but not least, listen next time for our very special 100th episode of Barefoot Innovation.

support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

Fighting Financial Crime with Science: Giant Oak CEO Gary Shiffman

Courtney Cole

We know that the money launderers are winning. We know that law enforcement is losing. By now, you’ve probably heard the UN’s statistics on this, that we catch less than 1% of these crimes, which add up to an estimated $1.6 trillion a year. At the heart of this problem is asymmetrical technology. The bad guys have sophisticated, networked, rapidly improving technologies, and the good guys are stuck in the past.

Happily, that is starting to change, and no one is doing more to change it than today’s guest. Giant Oak CEO Gary Shiffman is a behavioral scientist. He and his colleagues are combining behavioral modeling techniques, deep knowledge of illicit activity, and analysis built on AI and machine learning, to try to turn the tide on financial crime. As he puts it, they are democratizing their expertise by converting it into software that everyone can use.

Many patterns of financial crime, including identity authentication issues, can quite easily be found by machines scanning large sets of data, but are hard to detect by humans who are running Google searches to meet AML Know-Your-Customer requirements. These kinds of machine learning techniques are in use every day in other parts of the economy. They are how Amazon or Google guess at what we want to shop for, or Netflix predicts what movie we might like. Now, they are coming into the great fight against financial crime.

In our conversation, Gary describes GOST, which stands for the Giant Oak Search Technology that does large scale screening, vetting, and continuous monitoring of data, and front loads these searches so that risk signals are caught at the start, at the stage of customer screening, rather than after a suspicious situation has arisen and needs investigation. Gary calls this process “reindexing of the internet” -- curating vastly more online information than is captured in a normal search.

He also uses a term I’ve been quoting ever since our conversation -- the “traveling algorithm.” It captures an emerging AML concept we’ve discussed in past shows, which is the idea that instead of bringing the data to the technology in a central place that make it a target for cyberattack, we should take the technology to the data. We can leave it decentralized where it’s safer, and just have everyone share algorithms that can find the big patterns.

When he’s not at Giant Oak, Gary is a professor at Georgetown University here in Washington, D.C., where he teaches a course called, “The Economics of Organized Violence.” Later this year he will have a book coming out on that topic, and you’ll be fascinated to hear him talk about the economics of criminal ventures.

Gary shares my optimism about the regulators’ role in support of AI and machine learning. He points to the interagency statement released by the financial regulators and FinCEN late last year at the ABA Financial Crimes Conference, which proactively encourages the industry to adopt and to test regtech for AML. Since we talked, FinCEN has launched its new innovation initiative and “office hours” program. Like me, Gary believes we need hackathons, experiments, and lots of testing to find out what works, fix weaknesses, and accelerate learning and sharing.

Like me, also, he is confident that this technology will succeed and that we will change the world.

Links

Link to full transcript

https://twitter.com/Giant_Oak

https://www.linkedin.com/company/giant-oak

https://www.giantoak.com/

Barefoot Innovation Podcast Episode - Regulation Revolution:The Financial Conduct Authority and Digitally-Native Regulatory Design

Barefoot Innovation Podcast Episode - Regulation Innovation: The FCA’s Christopher Woolard

Barefoot Innovation Podcast Episode - The Future of Regulation: The FCA’s Regtech Leader Nick Cook

Joint Statement on Innovative Efforts to Combat Money Laundering and Terrorist Financing


More on Dr. Gary Shiffman

Dr. Gary Shiffman is an expert in the economics of national security and is passionate about using social science and cutting-edge network and data analysis to protect the world from illicit actors. His goal is to make it more difficult for criminals and terrorists to accomplish their goals. In order to do this, Dr. Shiffman focuses on understanding institutions and individuals engaged in the non-random production of violence, and then on creating innovative ways to undermine these activities and networks.

In addition to his work as the founder and CEO of Giant Oak, Dr. Shiffman has been a professor at Georgetown University since 2002. His past professional experiences have positioned him as an expert in the unique intersection between the social sciences, big data, business, and national security concerns. These include service as Managing Director of the Chertoff Group, Senior Vice President and General Manager of the Risk Management Solutions business unit at L-3 Communications, and Chief of Staff at U.S. Customs and Border Protection. He has also worked on anti-terrorism and homeland defense issues at an international law firm, advised US Senators as a National Security and Senior Policy Adviser to the US Senate Leadership, and served in policy, planning, and operational positions in the U.S. Department of Defense.

Gary proudly served his country and is a decorated US Navy Gulf War veteran. He earned his Ph.D. in Economics from George Mason University, his MA from Georgetown University in Security Studies and his BA in Psychology from the University of Colorado.

More for Our Listeners

I hope you enjoyed today’s show. Remember to leave us a five-star rating on your podcast platform so we can help more listeners find the show. Also come to our website to subscribe to Barefoot Innovation -- our newsletter, podcast and updates, and please follow me on Twitter, LinkedIn, and Facebook.

We have great episodes coming up. We’ve talked with the outgoing Chairman of the CFTC, Chris Giancarlo -- his second show with us and one of the most thought-provoking we’ve ever done on the future of financial regulation. We have a show coming up with Karen Mills of Harvard Business School. This is our second with Karen, too, and one we were eager to do because she has a new book out on fintech and small business. We recorded a fascinating show with Ida Rademacher of the Aspen Institute alongside Jamie Kalamarides of Prudential.  And we have one from London with the great Chris Skinner.

We also have a terrific conversation that we recorded in April from the expo hall at LendIt with the cofounders of Kabbage, Rob Frohwein and Kathryn Petralia.

If you’re interested in booking me to speak to your group, contact jay@provokemanagement.com. And I hope to see you at these events:

American Banker Association’s Regulatory Compliance Conference, June 9-12, New Orleans, LA

Bank Director's Bank Audit & Risk Committees Conference, June 12, Chicago, IL

Money 2020, in October in Las Vegas -- I’ll be chairing the regulatory track again this year and also keynoting the day, which has been moved, happily, to Tuesday.

support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

The Promise of Digital ID: David Shrier of Distilled Identity and MIT Media Lab

Courtney Cole

There are some challenges in fintech and regtech that transcend the others -- problems that have to be solved in order to “unstick” numerous other kinds of exciting innovation. Of these core enabling solutions, none is more important than digital identity.

A few months ago I sat down with one of the people leading the work in this field. David Shrier is founder and CEO of Distilled Identity, an AI biometric software company that helps financial institutions and governments build better identity profiles. David is also affiliated with Oxford University and the MIT Media Lab.

The challenge of identity authentication bedevils numerous aspects of both finance and regulation. It impacts the Know Your Customer mandates under anti-money laundering. It impacts fraud management, cybersecurity, privacy protection, and the move toward instant, easy payments. It has a huge impact on financial inclusion, since many of the most vulnerable consumers have trouble easily proving who they are. That’s especially true in the developing world, but it also affects countries like the US where it can be hard to prove identity if you are, say, a new immigrant or a young person not yet rooted in your job or home address or bill-paying routines. If you have a roommate who pays the rent and utility bills and you repay your share via Venmo, you may have trouble proving who you are -- or at least, proving it in a quick, efficient, trustworthy way that will make a financial provider willing to do business with you.

The financial inclusion difficulties arising from lack of ID documents have been on the radar for years for governments and NGOs. An example we explored in the past was our episode with Sanjay Jain on the India Aadhaar project that has collected biometric ID on over a billion people in India. Today, though, there is growing recognition of a second problem in identity, arising from the exact opposite problem. People who have always been able to identify themselves easily through traditional means are now suddenly vulnerable to having their ID information stolen or otherwise compromised. Document-based systems like social security cards, drivers licenses, and passports were all invented in the analog age -- i.e., on paper. Today the information they contain is widely for sale on the dark web. In fact, systems built on traditional documents may actually leave people more vulnerable than those without them, if the latter leapfrog straight to modern digital ID.

No one is more expert in all this than David Shrier. In this episode, he notes that identity systems that barely evolved for decades are suddenly generating new strategies grounded in understanding individual behavior and biometrics. (He explains, in fact, how his cofounder Alex Pentland created facial biometrics in the late 1980s and invented the technology that now powers the Aadhaar project.)

Like me, David is optimistic that digital identity is going to foster consumer financial health, much as a fitness step counter creates useful data on physical health. At the same time, he takes us through the challenges. He talks about the needed enabling technologies for digital ID, including assuring that everyone -- and especially women -- get smartphones. He talks about privacy, including Europe’s new General Data Protection Regulation, or GDPR. He predicts that we’re heading toward a system where people will own our data and be paid to let companies use it, which he thinks may create the need for a new class of data custodians or agents, to help us protect and manage our information.

Here are links to two of our earlier shows on identity -- Greg Kidd of GlobaliD and Dave Birch of Consult Hyperion.

We recorded this show during a terrific fintech conference in New York earlier this year sponsored by FINRA, the securities industry’s self-regulatory body, for which David and I both serve on the Fintech Advisory Committee. FINRA has been at the forefront of some kinds of regtech innovation in the US and recently announced the creation of a new innovation program under the leadership of Haimera Workie. Keep an eye on that for some really interesting developments.

Links

Link to the full transcription

Barefoot Innovation Podcast: Access for All: CIEE’s Sanjay Jain and the India Stack

ID 2020

David Shrier’s Book, Trust Data

OPAL Project

Trust.mit.edu

Frontiers of Financial Technology

Distilledidentity.com

David Shrier’s blog on Forbes

More on David

David Shrier is a globally recognized authority on financial innovation who works with corporations and governments to generate economic expansion.  He specializes in helping organizations build new revenue and new markets, having developed $8.5 billion of growth opportunities with C-suite executives for Dun & Bradstreet, Wolters Kluwer, Ernst & Young, The Massachusetts Institute of Technology, GE/NBC, The Walt Disney Company, AOL Verizon, and Starwood, as well as private equity and VC funds. He has led a number of private equity and venture capital-backed companies as CEO, CFO or COO.  

David also leads the University of Oxford's online programmes, Oxford Fintech and Oxford Blockchain Strategy, as well as MIT’s Future Commerce (the first graduate fintech class in North America), driving entrepreneurial action in over 100 countries to build the new financial ecosystem. He has published multiple books on fintech, blockchain and cybersecurity.

David is the CEO of Distilled Identity, a VC-backed AI biometrics software company that builds better identity profiles for financial institutions to help with credit, fraud, and payments; Vice Chairman of Endor, a blockchain-enabled crowd intelligence platform; and Chairman of Riff Learning, an AI-driven collaboration technology platform provider.  His current academic appointments include Associate Fellow with the Saïd Business School, University of Oxford; Lecturer at the MIT Media Lab; and Fellow with the Payne Institute at the Colorado School of Mines.

He presently counsels Millennium Advisors, a middle market $120 million revenue credit liquidity provider, on growth strategy, corporate culture, and technology trends. He previously has advised the Government of Dubai on blockchain and digital identity; the OECD, on blockchain policy and standards; Ripple on regulatory strategy; and the European Commission on commercializing innovation with a focus on digital technology.  

David is presently a member of the FinTech Industry Committee for FINRA, the U.S. securities industry's self-regulatory body. He serves on the Fintech Trade & Investment Steering Board for the UK Government’s Department of International Trade.  He also informally engages with the European Parliament, European Commission, OECD, Bank of England, FCA, SEC, US Treasury, and FDIC on innovation, cybersecurity, digital identity, blockchain, and AI. David is on the advisory board of WorldQuant University, a program offering a totally-free, accredited, online Master’s degree in financial engineering.  

David and MIT Professor Alex “Sandy” Pentland have published books including Frontiers of Financial Technology, New Solutions for Cybersecurity, and Trust::Data.  The European Parliament and European Commission have asked him to author a chapter on the distributed data economy in their book Disintermediation Economics (2019, Palgrave Macmillan).  David is a Forbes contributor, has been published in Newsweek and CNBC.com, and also co-edits, with Professor Pentland, the Connection Science imprint of MIT Press. He was named 2018 Global Fintech Person of the Year by Fintech Galaxy, and listed on One World Identity’s Top 100 People for 2017.  He received an Sc.B. from Brown University in Biology and Theatre, and worked professionally as a dramaturg and director after college.

More for Our Listeners

I hope you enjoyed today’s show. Come to our website to subscribe to Barefoot Innovation -- the newsletter, podcast and updates, and please follow me on Twitter, LinkedIn, and Facebook.

And please be sure to leave a five-star rating on your favorite podcast platform, to help people find our show!

We have great episodes coming up. We’ve recorded a second show with the outgoing Chairman of the CFTC, Chris Giancarlo -- one of the most thought-provoking we’ve ever done on the future of financial regulation. We also have a second show with Karen Mills of Harvard Business School, who has a new book out on fintech and small business. We have episodes coming up the Gary Schifman of Giant Oak; Dale Nirvani Pfeifer of Goodworld; Vinny Lingham of Civic; and Ida Rademacher of the Aspen Institute alongside Jamie Kalamarides of Prudential.  And in London last month, I recorded a wonderful conversation with thought-leader and uber-blogger, the great Chris Skinner.

We also have a fascinating conversation that we recorded in April from the expo hall at LendIt, which erected a special stage for podcasters, and where I sat down to talk with the cofounders of Kabbage, Rob Frohwein and Kathryn Petralia. And there’s much more in the queue.

I’m excited to say we are also coming up to our 100th episode. We’re planning something extra special for that milestone!

I’ll be speaking at quite a few private events this spring. If you’re interested in booking me, contact jay@provokemanagement.com. Some of the public places I’m going to be are:

IIF Digital Finance Symposium, May 29, Washington, DC

American Banker Association’s Regulatory Compliance Conference, June 9-12, New Orleans, LA

Bank Director's Bank Audit & Risk Committees Conference, June 12, Chicago, IL

Money 2020, October 27-30, Las Vegas, NV -- I’ll be keynoting the regulatory day and also chairing it again this year -- and I’m happy to say that this year it will be on Tuesday, not Sunday!

I’ll hope to see you there!

Support our Podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

Counselor to the Secretary of the Treasury, Craig Phillips

Courtney Cole

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Our conversations on Barefoot Innovation always grapple with the regulatory challenges arising as technology transforms finance. Most of our guests have good ideas about this, but very few are in a position to make things happen. Today’s guest is different.

He is Craig Phillips, who is the Counselor to the US Secretary of the Treasury, Steven Mnuchin. The Counselor role spans everything from fiscal operations to America’s debt management, but for our audience he is best-known for leading the office that issued last year’s landmark Treasury report on fintech.

The fintech report was part of the Trump Administration’s larger review of the US financial regulatory framework, which in turn ties into the Counselor’s remit in aligning innovation and technology with a pro-growth economic policy. The financial review project has also produced three other papers: Banks and Credit Unions, Capital Markets, and Asset Management.

The reports have all been excellent, and the fintech one, in particular, has been very widely acclaimed for its comprehensive scope, thoughtful analysis, and concrete recommendations. If you haven’t read it, I strongly commend it to you. If you have, you will find this discussion really interesting not only in hearing Counselor Phillips’ thoughts on the key issues, but also in updating us on progress and plans since the report came out last year.

As he notes, the US has the world’s largest economy, is growing rapidly, and has enviable strengths in technology innovation, and yet, we face real challenges in financial innovation. These trace directly to our uniquely complex regulatory framework, which has multiple federal regulatory agencies in addition to those in the 50 states.

Among other things, this complexity makes it difficult to move quickly, which is exactly what regulators will increasingly need to be able to do as technology-driven change continues to accelerate, leaving policymakers and regulators ever-more challenged to keep up.

Much of the solution on regulatory velocity centers on making the system more nimble and efficient. In our conversation, we talk about methods for doing that. One is the Comptroller of the Currency’s proposal to create a special national bank charter for those fintechs that would prefer a national charter over state-by-state licencing. Another strategy aims to increase interagency coordination and rationalizing and dovetailing of roles. And another is Treasury’s strong support for agencies using so-called “sandboxes,” or labs or pilots, that enable them to accelerate their own learning curves and industry feedback loops by creating controlled, contained testing environments, much as the private sector does when it undertakes innovation.

(In that vein, between the time we recorded this discussion and the time we are posting it, the OCC released its request for public comment on its approach to this testing objective, which is to create a program that will run pilot projects. They are hoping for extensive input. Here is that link.)

Beyond the regulatory agility issues, today’s conversation covers a lot of ground, from digital identity to data aggregation, to use of artificial intelligence, APIs and cloud computing, to regulation of credit reporting, to data vulnerability and the possibility of federal legislation requiring consumer notification on data breaches.

We also spoke about blockchains and distributed ledger technology. These were not included in Treasury’s fintech report, and in our conversation, Counselor Phillips shares updated information on how the Administration is viewing regulation of these emerging products and markets, including through coordination of the SEC and CFTC.

Links

Link to Full Transcription

Treasury Releases Report on Nonbank Financials, Fintech, and Innovation

Barefoot Innovation Podcast: Banks and Community: CSBS President John Ryan CSBS

Barefoot Innovation Podcast: From Analog to Digital Regulation - CFTC Acting Chairman Christopher Giancarlo


More on Craig Phillips

Mr. Phillips joined the Treasury in January 2017 and serves as Counselor to the Secretary. He assists the Secretary in a range of matters including domestic finance, domestic financial institution policy and housing finance policy and regulatory reform.

Since 2008 Mr. Phillips served as a Managing Director and Member of the Global Operating Committee of BlackRock, Inc. Mr. Phillips was the global head of the Financial Markets Advisory Group in BlackRock Solutions, which provided analytical and risk consulting services to a wide range of private and public sector organizations globally. Clients included central banks, banking supervisors and multilateral organizations around the world.

Mr. Phillips previously held leadership positions at Morgan Stanley and Credit Suisse First Boston, where he managed global securitized product platforms.

Mr. Phillips holds a BA in Economics and Business Administration from Vanderbilt University.

More for Our Listeners

I hope you enjoyed today’s show. Remember to leave us a five-star rating on your podcast platform so we can help more listeners find the show. Also come to our website to subscribe to Barefoot Innovation -- the newsletter, podcast and updates, and please follow me on Twitter, LinkedIn, and Facebook.

We have great episodes coming up. We’ve talked with the outgoing Chairman of the CFTC, Chris Giancarlo -- his second show with us and one of the most thought-provoking we’ve ever done on the future of financial regulation. We have shows coming up with MIT’s David Shrier; Gary Shiffman of Giant Oak; and Karen Mills of Harvard Business School, who has a new book out on fintech and small business. We’ll also talk with Dale Nirvani Pfeifer of Goodworld; Vinny Lingham of Civic; and Ida Rademacher of the Aspen Institute alongside Jamie Kalamarides of Prudential.  And in London last month, I recorded a wonderful conversation with thought-leader and uber-blogger, with the great Chris Skinner.

In addition, we’ll have a fascinating conversation we recorded in April from the floor of the expo hall at LendIt, which erected a special stage for podcasters, and where I sat down to talk with the cofounders of Kabbage, Rob Frohwein and Kathryn Petralia.

I also had the pleasure of being a podcast guest while at LendIt -- I was interviewed by Zach Pettet, VP of Fintech Strategy at NBKC Bank for his new podcast For Fintech’s Sake, which I must say is a great format. Zach asked me many questions that have never come up in interviews before, and the conversation was tremendous fun. Everyone should subscribe to the show.

Finally, guess what -- we’re coming up to our 100th episode on Barefoot Innovation. We’re planning something extra special for that milestone!

Some of the forums where I’ll be speaking this year include:

Comply 2019, May 14-15, New York, NY

International Organization of Supreme Audit Institutions, GAO/INTOSAI Annual Meeting on Financial Modernization and Regulatory Reform, May 16, Washington, DC

Bank Director's Bank Audit & Risk Committees Conference, June 12, Chicago, IL

American Banker Association’s Regulatory Compliance Conference, June 9-12, New Orleans, LA

And I’m pleased to say I’ll be chairing the regulatory track again this year at Money 2020, in October in Las Vegas. I’m also very pleased to say they have moved it from Sunday, as in the past, to Tuesday. It’s not too early to make plans to come.

I’ll also be speaking at quite a few private events this spring. If you’re interested in booking me, you can contact jay@provokemanagement.com.

I’ll hope to see you soon!

Support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

Prince Michael of Liechtenstein: Imagining Finance in 2030

Courtney Cole

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Bill Gates famously said, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don't let yourself be lulled into inaction.”

That gets quoted often these days, because it so well captures the times we live in.

In that vein, it was a special pleasure to be invited recently to a roundtable aimed at envisioning the financial system of 2030. The event was the second in a series hosted by Prince Michael of Liechtenstein, a three day conversation with incredibly thoughtful people drawn from banks, fintech companies, cryptocurrency, global NGOs, technologists, and regulators, from all over the world. It was organized by Dr. Thomas Puschmann, Director of the Swiss FinTech Innovation Lab at the University of Zurich.

We were in the historic and picturesque city of Vaduz, the capital of the Principality of Liechtenstein. It was my first trip there, and a thrill to see the Alps and the Rhine Valley. We met in a graceful rustic building with a big fireplace and a balcony overlooking the snowy mountainside. It was there, during a lunch break, that I had a chance to sit down with Prince Michael, to talk about how he sees the future.

He shared insights across a wide range of topics, from macroeconomics to demographics to how aging populations will finance pensions and rising healthcare costs.  We talked about blockchains and cryptocurrency. We talked about privacy -- the new European Data Protection Regulation, or GDPR, and what it will mean for financial innovation and consumer protection. And of course, we talked about the extraordinary challenge facing regulators, who will be expected to enable all the good innovation to flourish and to prevent all the possible harm -- a goal that Prince Michael notes is actually impossible. I especially appreciated his observation that when things go wrong, the regulators will get the blame and when things go right, they will not likely get any credit. It’s a tough job.

On Saturday evening, our little group climbed a steep path through the princely vineyard Herawingert to have dinner at the restaurant Torkel, which has been owned by the Liechtenstein family since 1712. The interior is dominated by an enormous old wooden wine press and one of the largest Torkel trees in Europe. As we enjoyed our first course, Prince Michael rose to share some of the long history of Liechtenstein. It’s a small country, strategically situated in the mountains between Austria and Germany to the north and east, and Italy to the south. Buffeted by shifting power alignments over the centuries, the country developed a close alignment with its western neighbor, Switzerland (we flew into Zurich), and built a diverse economy rooted in the ability to adapt to change. Our gathering was steeped in this rich history, and it proved to be a perfect backdrop to our efforts to envision the high-tech future of finance ten years out.

Prince Michael thinks this future will be a good one -- better than what we have today. I share his optimism, and more so after spending time with this remarkable group of leaders and thinkers.

Links

Link to Full Transcription

www.iuf.li

www.gisreportsonline.com

www.gisadvisory.com

More About Prince Michael

Prince Michael is an entrepreneur and financier. He is President of the European Center of Austrian Economics Foundation and President at Industrie- und Finanzkontor. He studied commerce at the Vienna University of Economics and Business.

More for our Listeners
I hope you enjoyed today’s show. Remember to leave us a five-star rating on your podcast platform so we can help more listeners find the show. Also come to our website to subscribe to Barefoot Innovation -- the newsletter, podcast and updates, and please follow me on Twitter, LinkedIn, and Facebook.

We have great episodes coming up. We’ve talked with Counselor to the Secretary of the Treasury, Craig Phillips; with the outgoing Chairman of the CFTC, Chris Giancarlo -- his second show with us; MIT’s David Shrier; and Gary Shiffman of Giant Oak. We’ll talk with Dale Nirvani Pfeifer of Goodworld; Vinny Lingham of Civic; Karen Mills with Harvard; as well as Ida Rademacher with Aspen Institute alongside Jamie Kalamarides with Prudential.  We also have a fascinating conversation that we recorded this month from the expo hall at LendIt, which erected a special stage for podcasters, and where I sat down to talk with the cofounders of Kabbage, Rob Frohwein and Kathryn Petralia. And there’s much more in the queue.

I also got the chance to be a podcast guest while at LendIt -- I was interviewed by Zach Pettet, VP of Fintech Strategy at NBKC Bank for his podcast For Fintech’s Sake. Check it out!

And guess what -- we’re coming up to our 100th episode. We’re planning something extra special for that milestone!

I’ll be speaking at quite a few private events this spring. If you’re interested in booking me, contact jay@provokemanagement.com. Some of the public places I’ll hope to see our listeners include:

The Innovate Finance Global Summit, April 29-20, London

Comply 2019, May 14-15, New York, NY

GAO/INTOSAI Annual Meeting on Financial Modernization and Regulatory Reform, May 16, Washington, DC

Bank Director's Bank Audit & Risk Committees Conference, June 12, Chicago, IL

American Banker Association’s Regulatory Compliance Conference, June 9-12, New Orleans, LA

Support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

A New Breed of Community Bank: My Fun and Fascinating Conversation with NBKC

Courtney Cole

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If you’re ready for a breath of fresh air, today’s show is for you. It’s fun, it’s fascinating, and it’s filled to the brim with ideas that many of us haven’t heard before.

NBKC bank is a community bank that thinks and acts like a start-up company.  My guests are its CEO, Brian Unruh, and Zach Pettet, who is the bank’s Fintech Strategist and who heads its Fountain City Fintech affiliate, which is the first “partnership accelerator” run by a community bank.

We were nowhere near Silicon Valley or New York, or London, or Singapore. The KC in NBKC stands for Kansas City. That’s in Missouri. As our US listeners know, that’s in the American midwest, the heartland. It’s more than a thousand miles from either the Pacific coast or the Atlantic coast. And the bank isn’t big, as banks go. It isn’t new, either. It’s been there for a long time.

And yet, and yet, NBKC is completely overhauling its business model, its strategy, its culture, and its future, for the digital age. And in the process, as our conversation clearly shows, they are having a very good time.

Part of their strategy is that they’ve joined the growing ranks of partner banks that are supporting fintechs. Some time back, we did an episode with Gilles Gade, CEO of Cross River Bank, which is a leader in that space as well. NBKC has developed an original format for this work, by launching a fintech accelerator as part of the strategy. Zach explains that he talked with about 150 start-ups within the first few months in his role. Part of what he heard were what he and Brian call the “horror stories” of start-ups trying to work with large banks. Big bank diligence and onboarding processes often leave these companies waiting a year or more for approval, while their capital dwindles and their runway disappears. (We’ve done two shows with large bank accelerators that are also working on this challenge). At Fountain City, NBKC is solving it with the accelerator. It enables them to attract the most interesting companies, understand them quickly, help them address any weaknesses, and either move them into a partnership relationship or, alternatively, reject them, especially if the company doesn’t take regulatory mandates seriously. Zach takes pride in getting to no very rapidly, if no is going to be the answer, to conserve innovators’ precious time.

We talked about their 2018 cohort in the accelerator, and what they are looking for in their next round -- again, they’ve been partnering with some of the most exciting companies in the space. They share extensively about how they designed and run the program, with help from a law firm and in consultation with their regulators. Brian attributes their success in this to the bank’s transparency about what they are trying to accomplish, and to their authenticity in working with these partners.

One fun fact -- Zach has recently launched a podcast show of his own, called For Fintech’s Sake, and has asked me to be a guest on it. So be sure to watch for that and follow his show.

Brian says NBKC has always been entrepreneurial. They actually banned traditional banking conferences for their executives a while back, in favor of attending technology conferences like Finovate. I laughed out loud at their description of what goes through their minds when they see someone at the bank wearing a suit.

Links

Link to full transcription

Finovate

Fountain City Fintech

NBKC.com

Barefoot Innovation Podcast: How to Digitize a Bank: Citizen’s Lamont Young

Barefoot Innovation Podcast: Innovation at a Small Bank: Radius CEO Mike Butler

Barefoot Innovation Podcast: Innovation and Community Banks: Eastern Bank CEO Bob Rivers

Onward

American Banker Article: What This Community Bank Learned From Its Fintech Accelerator

Twitter: @brianunruh @zachpettet

Emails:  zach.pettet@NBKC.com, brian.unruh@nbkc.com

More on Brian Unruh - Co-founder of NBKC 20 years ago

More on Zach Pettet

More for our Listeners
I hope you enjoyed today’s show. Remember to leave us a five-star rating on your podcast platform so we can help more listeners find the show. Also come to our website to subscribe to Barefoot Innovation -- the newsletter, podcast and updates, and please follow me on Twitter, LinkedIn, and Facebook.

We have great episodes coming up. We have an amazing conversation with Prince Michael of Liechtenstein. We recorded with Rob Frohwein and Kathryn Petralia of Kabbage at LendIt. We’re talking with Counselor to the Secretary of the Treasury, Craig Phillips, and with the outgoing Chairman of the CFTC, Chris Giancarlo -- his second show with us. We’ll talk with MIT’s David Shrier; with Gary Shiffman of Giant Oak; with Dale Nirvani Pfeifer of Goodworld; Vinny Lingham of Civic; Karen Mills with Harvard, as well as the Aspen Institute and Prudential.  

And guess what -- we’re coming up to our 100th episode. We’re planning something extra special for that milestone!

I’ll be speaking at quite a few private events this spring. If you’re interested in booking me, contact jay@provokemanagement.com.  Some of the public places I’ll hope to see our listeners include:

LendIt FinTech USA, April 8-9, San Francisco, CA -- I’ll be on the main stage doing a fireside chat with CFPB Innovation head Paul Watkins and outgoing head of the California Department of Business Oversight, Jan Owen.

Santa Fe Group’s 12th Annual Shared Assessments Third Party Risk Summit, April 10-11, Washington, DC

The Innovate Finance Global Summit, April 29-30, London

Comply 2019, May 14-15, New York, NY

Bank Director's Bank Audit & Risk Committees Conference, June 12, Chicago, IL

American Banker Association’s Regulatory Compliance Conference, June 9-12, New Orleans, LA

support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

Bonus Episode: Futurist Brett King

Courtney Cole

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Today’s show is a bonus episode, and an extra-special one, because I sat down with my friend, the futurist and financial technology guru Brett King.

This is our second show with Brett -- we also had one we recorded over a delightful breakfast in London a while back. We wanted to talk again because he’s put out his new book, Bank 4.0, for which I co-wrote the chapter on financial regulation. We made that chapter 2 of the book, right after the opening, because regulation has become absolutely central to the question of whether technology is going to make banking better, or worse, than what we have today.

This time, Brett and I sat down on a wet afternoon in New York. Limited only by the time we had, we talked about pretty much everything.

Brett has done deep research on technology, reaching far beyond the financial field to understand the big forces of change and where they will take us. He’s a fintech founder himself, having launched Moven a few years back. And he also travels the world -- he’s in huge global demand as a speech-maker (by the way, we also share a speakers’ bureau that Brett set up, which represents a number of us who speak widely on financial tech). He has all-encompassing scope and depth, plus insight, plus Australian wit, that make him completely unique.

In our talk, Brett goes to the big truths, the ones people overlook or underestimate. He says these tech changes are coming, whether we’re ready or not, whether we want them or not.  He says it just will not work for banks to try to update outmoded products and processes by sticking some new technology on top of them -- that in most cases, it is absolutely necessary to start over from scratch. (In my work on regtech, we call this being “digitally-native.”)  He says financial services won’t be about products anymore but instead, like everything in our tech-centered world, will be about the customer’s “experiences.” He talks about the role of voice technology. He talks about how privacy concerns ebb and flow over time, and how we should be thinking of different types of data in different ways. We talk about the urgent need to update the world’s “identity infrastructure” both to enable financial access and to protect ourselves. We talked about how AI will shift the economy’s basic supply and demand curve, and also how it will change labor markets and income inequality. Brett is a pessimist on the latter and advocates for bold public policy overhaul.

Brett has spent a lot of time in China and -- no surprise -- says its financial system is far ahead of the West. He notes that $22 trillion in mobile payments moved through China's ecosystem last year -- more than the aggregate of all the card companies for the entire world. Listeners everywhere need to understand the breathtaking size and speed of the financial transformation in China, which is essentially 100% mobile, and which is expanding in Asia and to other parts of the world. We should not lose sight of the fact that the unprecedented growth of these goliaths, like Ant Financial and Alipay, and Tencent’s WeChat, is happening partly because they did, in fact, start from scratch.

Brett is a storyteller, and the new book reflects it. He shares a narrative that contains a lot I didn’t know about Jack Ma, the founder of Alibaba and Ant Financial in China. There’s also a gripping story in the first chapter on the atomic physicist, Wernher von Braun. The book is a page turner, as are Brett’s previous books (see the links below).

Of course, Barefoot Innovation being what it is, we also talked about regulation. Again, we co-wrote the new book’s regulatory chapter, arguing that financial regulation is going to change profoundly, and sharing our views on what shape this must take.

Brett focuses on a barrier I encounter all the time, which is that bankers can see that tech will change their businesses, but they have no idea where to start to try to “transform.” He has concrete advice. He says, just take your top five customer interactions, and try building them again completely from scratch. Design them again, using today’s technology, with absolutely no bias about how you do things now. You will not only create some superior products, but you’ll begin to learn how to innovate, and therefore how to compete in the digital market.

I should mention that Brett is a member of the board of directors of the Center for Financial Services Innovation, which I chair. We are so fortunate to have his wise counsel at CFSI, and I’m happy to be able to share this bonus episode today.

Links

Link to Full Transcription

Brett King’s Books:

Bank 4.0

Augmented

Breaking Banks

Bank 3.0

Bank 2.0

Barefoot Innovation Podcast - Breakfast with the Best - Brett King

Barefoot Innovation Podcast - Regulation Revolution: The Financial Conduct Authority and Digitally Native Regulatory Design

Barefoot Innovation Podcast - The Future of Regulation: The FCA’s Regtech Leader Nick Cook

Barefoot Innovation Podcast - Try Something New: Lend Academy and Lendit Founder Peter Renton

CFSInnovation.org

Brettking.com

Moven.com

Provokemanagement.com

Breakingbanks.com

Twitter @brettking

More about Brett King

Brett King is a futurist, an Amazon bestselling author, an award winning speaker, host of a globally recognized radio show, and CEO of Moven. In his spare time enjoys flying as an IFR pilot, scuba diving, motor racing, and gaming (mostly FPS) and Sci-Fi. He advised the Obama administration on the Future of Banking, and has spoken on the future in 50 countries in the last 3 years.

Brett focuses on how technology is disrupting business, changing behaviour and influencing society. He has fronted TED conferences and given opening keynotes for Wired, Singularity University’s Exponential Finance,The Economist, SIBOS and many more. He appears as a commentator on CNBC and has appeared regularly on the likes of BBC, ABC, FOX, Bloomberg and more.

He is the CEO and Founder of Moven, a $200m mobile bank start-up with the world’s first smart bank account. Moven’s app is used around the globe by over a million people. Brett’s radio show, Breaking Banks, began in May 2013. It was the first global show and podcast on FinTech, and has grown to be the most popular with an audience in 177 countries and 6.5 million listeners.

More for our Listeners
Please leave us a five-star rating on your podcast platform so we can help more listeners find the show, and also come to our website to subscribe to Barefoot Innovation -- the newsletter, podcast and updates, and follow me on Twitter, LinkedIn, and Facebook.

We have great episodes coming up. We will talk with MIT’s David Shrier. I’ll have a terrific discussion with the fascinating community bank, NBKC. We’ll have a show with Counselor to the Secretary of the Treasury, Craig Phillips, and one with the outgoing Chairman of the CFTC, Chris Giancarlo. We have a fascinating conversation with Gary Shiffman of Giant Oak. And we’ll have an amazing conversation with Prince Michael of Liechtenstein.

Some of the places I’ll be this spring include:

Alliance for Financial Inclusion’s 17th Consumer Empowerment & Market Conduct (CEMC) and Digital Financial Services (DFS) Group Meeting in Nassau, Bahamas (invitation only)

LendIt FinTech USA, April 9-10, San Francisco, CA

Santa Fe Group’s 12th Annual Shared Assessments Third Party Risk Summit, April 10-11, Washington, DC

The Innovate Finance Global Summit, April 29-20, London

Bank Director's Bank Audit & Risk Committees Conference, June 12, Chicago, IL

American Banker Association’s Regulatory Compliance Conference, June 9-12, New Orleans, LA

support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

Talking Cryptocurrency with Brian Brooks of Coinbase

Courtney Cole

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I have a real treat for you today. Brian Brooks is the Chief Legal Officer of Coinbase and is also one of the smartest and most thoughtful people anywhere in the financial world. His past roles include being General Counsel at Fannie Mae and Vice Chairman of OneWest Bank, where he worked with both now-Treasury Secretary Steve Mnuchin and now-Comptroller of the Currency Joseph Otting. If his name seems familiar, it may be because he was in headlines a while back as a short-list candidate to be Deputy Treasury Secretary, or Director of the Consumer Financial Protection Bureau, or White House Counsel.

Instead, Brian headed to the other coast, plunging into San Francisco’s crypto world at Coinbase, the world’s largest cryptocurrency exchange. That’s where we sat down for this talk. It showcases his gift for making the crypto world clear for those who don’t follow it closely, and also his gift for provoking really stimulating ideas among those who do.

In our conversation, Brian explains the distinct types of cryptocurrencies and crypto exchanges, in the US and globally. He describes the efforts underway to build infrastructure for the crypto world as an alternative payments channel in which crypto can function like an internet of value -- a universal, free, instant, decentralized payments system. Brian describes the scenario -- imagine if he could pay me with no bank involved, just sending me currency from his phone to my phone, with no one taking a cut, and no delay -- instantaneous payment. And imagine if he could attach features to the payment that a regular check or a wire transfer wouldn’t have. Again, it can be instant, and can reach anyone, and be essentially free -- like the internet.

Brian also shares thoughts on the regulatory challenges with this technology, which just doesn’t fit neatly into the old regulatory boxes. We discuss how, or even whether, to regulate crypto’s various forms, depending on whether it’s functioning like a security, a currency, or something else.  He talks about how regulators look at this world through their own lenses and all want a piece of it. He asks if it makes sense to try to address it using standards like the 60 year old Supreme Court ruling that produced the Howey test.

Brian points out that there will soon be a Treasury report on crypto and blockchain, which may be a breakthrough in this regulatory thinking. He also sees a breakthrough in the recent emergence of the “stable coin,” in which every unit is backed by a dollar so that its value doesn’t fluctuate. And he predicts that agencies are going to be using crypto to do their “day jobs.”

We also talk about the contrast in what’s happening in highly-regulated countries and those with few rules -- and the fact that crypto is available from places that are not regulated has risen from basically 0% market share a couple of years ago to roughly half today, which says something about the regulatory climate in the United States, for good or ill. We discuss how cryptocurrency could help solve inflationary crises and currency volatility in many economies. And we discuss how, contrary to conventional wisdom, it can also help fight money laundering, since it’s far more traceable than cash.

Brian argues that we can’t regulate cryptocurrency like we’ve regulated anything in the past -- that we need new models. This is an issue that is on my mind a lot these days -- whether to create regulatory or quasi-regulatory standards bodies that sit outside the regulatory agencies, maybe something like ICANN’s governance of internet domains. I think we’re going to need these, not just for crypto but for a lot of regulatory modernization. We’ll have more on that issue in future shows.

Here are two past episodes that also dealt with crypto -- one with Chris Larsen, chairman of Ripple, and one with Jeremy Allaire, CEO of Circle.

Brian reminds us that the internet looked like a small, niche activity in 1992...and then it changed everything about how we live. Cryptocurrency is small today, but it has huge potential. This is one of our shows that is just dense with high-value ideas. I predict many people will listen more than once!

Links

Link to full transcription

Coinbase.com

LinkedIn  

NY Times Article, America Could Lead the Transition to a Digital Currency

Barefoot Innovation Podcast: Transforming Payments: Circle CEO Jeremy Allaire

Barefoot Innovation Podcast:  Remaking the Financial Rails: Ripple CEO Chris Larsen

More on Brian Brooks

Brian is a noted financial services lawyer with a record of leadership in innovation and in crisis turnarounds. He has had senior roles at O'Melveny & Myers, where he chaired the firm's financial services practice; OneWest Bank, where he was Vice Chairman and worked with future Treasury Secretary Steven Mnuchin and future Comptroller of the Currency Joseph Otting to turn around the failed Indymac Bank platform; Fannie Mae, where he served as general counsel and helped create Fannie Mae's fintech platform; and Coinbase, where he is currently chief legal officer.  Brian also serves as a member of the board of directors of Avant Inc., a multibillion dollar marketplace lender; as an advisor of Spring Labs, a blockchain-based consumer loan registry and credit bureau platform; as a seed investor in Grasshopper Bancorp; and as a Series A investor in FlyHomes Inc. He is also a board member of FinRegLab and has been prominently mentioned as a shortlist candidate to be Deputy Treasury Secretary, Director of the Consumer Financial Protection Bureau, and White House Counsel.

More for our Listeners

Please leave us a five-star rating on your podcast platform so we can help more listeners find the show, and also come to our website to subscribe to Barefoot Innovation -- the newsletter, podcast and updates, and follow me on Twitter, LinkedIn, and Facebook.


We have great episodes coming up. One is with Prince Michael of Liechtenstein, which we recorded at the roundtable he hosted in Vaduz on envisioning the financial services world of 2030. We’ll talk with MIT’s David Shrier. We’ll have a terrific discussion with the fascinating community bank, NBKC. We’ll have a show with  Counselor to the Secretary of the Treasury, Craig Phillips, and one with the Chairman of the CFTC, Chris Giancarlo, both of which will deal with crypto issues, among other things. We have a show coming up with futurist Brett King on his new book, Bank 4.0, for which I co-wrote the regulatory chapter. And we have a fascinating conversation with Gary Shiffman of Giant Oak.

Some of the places I’ll be this spring include:

UNC Law's Banking Institute, presenting the Clifford Lecture this week, in Charlotte, NC

Alliance for Financial Inclusion’s 17th Consumer Empowerment & Market Conduct (CEMC) and Digital Financial Services (DFS) Working Group Meeting  in Nassau, Bahamas (invitation only)

LendIt FinTech USA, April 9-10, San Francisco, CA

Santa Fe Group’s 12th Annual Shared Assessments Third Party Risk Summit, April 10-11, Washington, DC

The Innovate Finance Global Summit, April 29-20, London

Bank Director's Bank Audit & Risk Committees Conference, June 12, Chicago, IL

American Banker Association’s Regulatory Compliance Conference, June 9-12, New Orleans, LA


SUPPORT OUR PODCAST

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

Bonus Episode: Women in Fintech

Mallory Kwiatkowski

Today is International Women’s Day, and we’re honoring it with a very special bonus episode of Barefoot Innovation, on Women in Fintech...and with Women in Fintech. My four guests are Laura Spiekerman, the CRO of Alloy, Melissa van Kluyve, Associate at Clocktower Technology Ventures, Zoe Chaves, the Product Manager of Splitwise, and Lyn Farrell, the Regulatory Strategy Advisor of Hummingbird Regtech. We had also planned to speak with Reetika Grewal, the Head of Payments Strategy and Solutions of Silicon Valley Bank, but she had travel complications and couldn’t join us.

The seed for doing this show was planted at Money 20/20 in Las Vegas last fall. This group of women organized a reception there for women in fintech -- an idea that they, in turn, originally came up with at Money 20/20 the year before -- they’ll tell that story in our conversation. At the reception, I was chatting with Ana Hernandez of Affirm (whom we had also hoped to include in this show but had schedule conflicts), and I realized that our audience would love to hear the perspective of these fascinating women.

So, in today’s episode, we talk the whole thing over. Why do the tech and fintech sectors need diversity -- why will it make them better companies? Why don’t we have more diversity? What are the keys to recruiting more women and people of color? What are the keys to retaining them and creating thriving, diverse work environments? How can we develop more women founders? What’s the role of men in making all this work better? How can people learn to see their own unconscious bias?

One note on Lyn Farrell being with Hummingbird Regtech. As regular listeners know, I’m a cofounder of Hummingbird and as I mention in today’s discussion, we are recruiting now for our growing tech team in the Bay Area. We’re specifically trying to build diversity, and to that end, one of our male co-founders wrote Our Diversity Manifesto, which we’ve posted on our website. We would love feedback on it, as well as recruits!

Listeners often tell me that what they love most about Barefoot Innovation is the feeling of being a fly on the wall for a conversation that they never otherwise would have heard. That’s sometimes about hearing from someone you might never meet, or hearing people thinking in depth about important problems, or hearing candor --  truth -- that might never have been expressed in another setting. Today’s show is a great example.

More on our guests’ companies

Alloy offers Identity verification APIs that make KYC/AML effective and simple. It works with many sources of data, any custom workflow, one API.

Clocktower partners with entrepreneurs to reinvent financial services, investing from the earliest seeds of startup life to businesses scaling for growth. It supports leading companies across all sectors of financial services, including lending, payments, insurance, asset management, personal finance, and capital markets.

Splitwise is an app for managing shared expenses.

Hummingbird is a modern platform for anti-money laundering, aiming to make AML investigations agile, lightweight, and intelligent.

More on Laura Spiekerman    Laura is the cofounder and CRO at Alloy. Alloy's API enables financial services companies to better manage their digital onboarding and identity requirements, increasing conversion and reducing fraud for banks and fintechs alike. The company provides access to both traditional and alternative data sources in order to convert more customers. Prior to Alloy, Laura served as the Head of Business Development and Strategic Partnerships at Knox Payments and a Research & Investment Analyst in Emerging Markets at Imprint Capital Advisors.

More on Laura Spiekerman

Laura is the cofounder and CRO at Alloy. Alloy's API enables financial services companies to better manage their digital onboarding and identity requirements, increasing conversion and reducing fraud for banks and fintechs alike. The company provides access to both traditional and alternative data sources in order to convert more customers. Prior to Alloy, Laura served as the Head of Business Development and Strategic Partnerships at Knox Payments and a Research & Investment Analyst in Emerging Markets at Imprint Capital Advisors.

More on Zoe Chaves    Zoe is the product manager at Splitwise. She's passionate about protecting relationships from money stress, and building an awesome, inclusive team:  https://www.splitwise.com/jobs

More on Zoe Chaves

Zoe is the product manager at Splitwise. She's passionate about protecting relationships from money stress, and building an awesome, inclusive team: https://www.splitwise.com/jobs

More on Lyn Farrell    Lyn is a financial regulatory compliance and banking law executive with 30 + years of experience as legal counsel, chief compliance officer and compliance consultant to the financial services industry. She is the Regulatory Strategy Advisor for Hummingbird, a RegTech company offering AML solutions. Lyn was previously a managing director at Treliant, LLC where she led the regulatory compliance practice and developed the Treliant Institute for Strategic Compliance Leadership. She is the author of the ABA’s Reference Guide to Regulatory Compliance, and has updated this guide for 28 years. She is a specialist in federal consumer protection laws and regulations and has been a speaker at numerous bank and fintech conferences for many years.

More on Lyn Farrell

Lyn is a financial regulatory compliance and banking law executive with 30 + years of experience as legal counsel, chief compliance officer and compliance consultant to the financial services industry. She is the Regulatory Strategy Advisor for Hummingbird, a RegTech company offering AML solutions. Lyn was previously a managing director at Treliant, LLC where she led the regulatory compliance practice and developed the Treliant Institute for Strategic Compliance Leadership. She is the author of the ABA’s
Reference Guide to Regulatory Compliance, and has updated this guide for 28 years. She is a specialist in federal consumer protection laws and regulations and has been a speaker at numerous bank and fintech conferences for many years.

More on Melissa van Kluyve    Melissa manages platform for Clocktower Technology Ventures portfolio companies. She also helps manage the CTV fundraising process and supports investor relations.  Prior to joining the firm, Melissa led go-to-market for new products developed through the Deloitte Ventures Incubator in London. Melissa holds an MBA from Regent’s University London and a BS in Management & Marketing from Missouri State University.

More on Melissa van Kluyve

Melissa manages platform for Clocktower Technology Ventures portfolio companies. She also helps manage the CTV fundraising process and supports investor relations.

Prior to joining the firm, Melissa led go-to-market for new products developed through the Deloitte Ventures Incubator in London. Melissa holds an MBA from Regent’s University London and a BS in Management & Marketing from Missouri State University.

More on Reetika Grewal  

Reetika is the Head of Payments Strategy and Solutions at Silicon Valley Bank, the bank of the world’s most innovative companies and their investors. She joined the company in 2012 to lead the Payments Strategy team, which focuses on internal payments strategy and development as well as working collaboratively with clients and partners to help deliver their solutions to market. Reetika leads SVB’s partnership with First Data to run Commerce.Innovated., a startup accelerator, helping early-stage companies innovating across the commerce space.

Reetika sits on the board of directors for the Electronics Transactions Association, the leading trade association for the payments industry, and is also a member of the strategic advisory board for FTV Capital, a leading growth equity investor. She has been recognized as among the most influential women in payments by PaymentsSource from 2015 through 2017.

Prior to SVB, Reetika was at JPMorgan Chase where she worked in the Payments Strategy Group and led strategy and partnerships at Clairmail (later acquired by Monitise). She has also held similar positions at Wells Fargo and Sapient. She earned her bachelor’s degree from the University of Michigan and her MBA from Washington University.

Links

Link to full transcription

https://www.svb.com/

https://www.allraise.org/

https://girlswhocode.com/

https://www.womenintechnology.org/

Barefoot Innovation Podcast: Know Your Customer: Alloy CRO Laura Spiekerman

Medium Article: Meet the Women Who Are Making Sure Blockchain Is Inclusive

Medium Report: Jane VC Founder Survey Reveals Inequities in Tech Start Early

American Banker Article: How this digital-only bank lowers risk of sign-up fraud

American Banker Article: Fintech partnerships can work (see: Radius Bank)

More for our Listeners
Be sure to subscribe to Barefoot Innovation on your favorite podcast platform and leave a five-star rating, so we can help more listeners find conversations like this one. Also remember to come to our website to subscribe to Barefoot Innovation -- the newsletter, podcast and updates, and follow me on Twitter, LinkedIn, and Facebook.

We have some amazing episodes coming up. One is with Prince Michael of Liechtenstein, which we recorded at the roundtable he hosted in Vaduz on envisioning the financial services world of 2030. We’ll talk with MIT’s David Shrier. We’ll have a terrific discussion with the fascinating community bank, NBKC. We’ll have a show with  Counselor to the Secretary of the Treasury, Craig Phillips and one with the Chairman of the CFTC, Chris Giancarlo. We’ll have Brian Brooks of Coinbase. We have a show coming up with the great Brett King on his new book, Bank 4.0, for which I co-wrote the regulatory chapter. And we have a fascinating conversation with Gary Shiffman of Giant Oak.

I’ll hope to see you at some of these events this spring:

SXSW, March 8-17, Austin, TX

UNC Law's Banking Institute, presenting the Clifford Lecture on March 22, Charlotte, NC

LendIt, April 9-10, San Francisco, CA

Santa Fe Group 12th Annual Shared Assessments Third Party Risk Summit, April 10-11, Washington, DC

The Innovate Finance Global Summit, April 29-20, London

Bank Director Magazine Conference, June 12, Chicago

Support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

How to Digitize a Bank: Citizen’s Lamont Young

Mallory Kwiatkowski

young.png

I love how technology is bringing new kinds of people into finance. Today’s guest, Lamont Young, is a great example. He started his career in the fashion industry. Today, he is at Citizens Bank, as the Head of Digital and Multi-Channel Marketing.  

Lamont and I sat down together at their headquarters in Boston. Citizens is the 13th largest retail bank in the country and has branches in 11 states. Lamont is leading the mission of transforming it to a digital company.

At the heart of that challenge are two things. The first is deeply understanding customers as individuals, by having much more data and leveraging it to meet their unique needs. For that, he explains how the bank has successfully recruited a team of data scientists affiliated with universities. The second is transforming the customer experience, or user experience -- the CX or UX. Lamont talks about how customers are changing -- how a new generation of digitally-native customers will be the future of the bank, and how existing customers, already, expect great technology from their bank, just as they do from everything else.

In our talk, Lamont shares the secrets to success in pulling off this kind of “smart bank” transformation. He explains that changing a bank’s human systems is much more important than just changing its tech, and offers ideas on how to do it. He talks about how to recruit and retain top talent from tech fields, and the essential role of the bank’s leaders.

Lamont also describes the centrality of Citizen’s strategy for partnering with fintechs. Where some banks still view startups mainly as disruptors and sometimes threats, Citizens put the emphasis on partnering with them, in the many situations where a great fintech can bring something to the bank better, and faster, than building it from scratch. Lamont has advice on how to do this well, including the pitfalls to avoid.

We also talk about Citizens participation with tech accelerators. One is Mass Challenge, which is a consortium of FinTech and startups that pairs startups with companies like Citizens to accelerate their growth. The bank also partners with QC FinTech in the Charlotte North Carolina area.

On regulatory challenges, Lamont is one of a growing group of bankers who realize that the same digital technology that will drive a new generation of user experience will transform regulatory compliance, too. It’s about getting all the information into digital form, where you can really use it -- can do more, with less, faster, and better.

Links

Link to full transcription

www.citizensbank.com

https://masschallenge.org/

https://www.qcfintech.co/

https://www.sigfig.com

https://fundation.com/

https://www.plugandplaytechcenter.com/

https://www.ibm.com/talent-management/career-coach

Barefoot Innovation Podcast: The CFPB Innovation Director Paul Watkins

Twitter @digitalsince99

More on Lamont Young

After graduating from Penn State, Lamont knew he wanted to work in marketing. He moved to New York and started at Lugz, an urban footwear and apparel brand. He says “it was there by sheer dumb luck that I fell in love with digital.” The firm had no web presence, so he asked the company’s president if he thought it was a good idea to create a site. Lamont led that project and found his calling. He launched Lugz.com in 1999 and the rest is history.

Less than two years later, Lamont founded a start-up dedicated to web development and digital branding for small and emerging businesses. This experience eventually led him to his first banking job, at Bank of America, overseeing several significant programs, including creating and publishing BofA's small business magazine "Business 24/7" and serving on the core team that launched  the bank's small business social spaces site - Small Business Online Community.

Today he is the Head of Digital and Multi-Channel Marketing at Citizens Bank, leveraging his  entrepreneurial streak and digital expertise. He is responsible for the bank’s corporate digital strategy, mobile and web application development, digital and emerging payments, digital sales, and social media.

More for our Listeners
Be sure to subscribe to Barefoot Innovation on your favorite podcast platform and leave a five-star rating, so we can help more customers find conversations like this one. Also remember to come to our website to subscribe to Barefoot Innovation -- the newsletter, podcast and updates, and follow me on Twitter, LinkedIn, and Facebook.

We have some amazing episodes coming up. One is with Prince Michael of Liechtenstein, which we recorded at the roundtable he hosted in Vaduz on envisioning the financial services world of 2030. We’ll talk with Brian Brooks, General Counsel of Coinbase, and with MIT’s David Shrier. We’ll  have a terrific discussion with the fascinating community bank, NBKC. We’ll have a show with Counselor to the Secretary of the Treasury, Craig Phillips and one with the Chairman of the CFTC, Chris Giancarlo.

We’ll also have a special episode on Women in Fintech, with a very thoughtful group of women in fintech.

In the coming weeks, I’ll hope to see you at some of these events:

The Honest Talks for AI on Regtech, February 27, New York (invitation only)

SXSW, March 8-17, Austin, TX

UNC Law's Banking Institute, March 22, Charlotte, NC

LendIt, April 9-10, San Francisco, CA

Santa Fe Group 12th Annual Shared Assessments Third Party Risk Summit, April 10-11, Washington, DC

The Innovate Finance Global Summit, April 29-20, London

Bank Director Magazine’s Conference, June 12, Chicago

support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

AI’s Potential and Perils for Finance: Steve Cohen of Basis Technology

Mallory Kwiatkowski

cohen.png

I had a fascinating conversation in Boston this winter with Steve Cohen, who is Cofounder, EVP, and COO of Basis Technology. Basis is a world-leading innovator in text analytics and the branch of artificial intelligence known as natural language processing. Over the last two decades. they have built a suite of tools that can analyze information produced by people in text form, in virtually any language, and distill patterns that reveal meaning and connections.

In our talk, Steve explains how AI already shapes our daily lives, starting with the seemingly simple example of Amazon’s voice assistant, Alexa. AI can gather data of massive scale and complexity, beyond what any human brain can assimilate. It can analyze that information and then, without guidance from a human expert, can learn on its own as it goes, getting more and more “smart.”

Basis focuses heavily on intelligence issues, serving a mix of government and commercial clients. As Steve explains, many online search engines use Basis technology to find relevant information stored in text. Its work is central to emerging high-tech tools for detecting money laundering and financial crime. And, If we don’t develop those better tools, put simply, we will fail. As we have discussed in other episodes, the UN estimates an annual level of $1.6 to $2 trillion in financial crime and that we catch less than one percent of it. That’s because data on these activities is proliferating, criminals and terrorists use increasingly sophisticated technology, and governments and the financial industry currently fight back with antiquated tools that are slow and that mainly find simple, bottom-rung crime, which is the least important.

Steve explains that he came to this work because it sits at the intersection of his two passions --  technology and language. We talked about how language translation is improving thanks to AI, but he makes the more profound point that this work is not about translating languages into English. It’s about integrating all languages -- with all their incredible complexity of dialects and spellings and formats and vernaculars -- into a new analytics framework.

Steve raises one of my favorite questions for people who emphasize the risks and drawbacks of new technology, namely, “compared to what?” Obviously new technology in general and AI in particular raise many risks -- from opacity to privacy issues to potential bias. We should ask, though, how well our current, human-centered tools work in solving those problems. Often, not so well -- partly because we’re so often dealing with small fragments of information. AI can help us see much more.

Links

Link to full transcription

https://www.basistech.com

Twitter @basistechnology

Steve’s Twitter @stevec22

Basis Technology Handbook - Integrating AI in Highly Regulated Industries

Wired Article - Don’t Make Artificial Intelligence Stupid in the Name of Transparency

Barefoot Innovation Podcast - Regulation Revolution: The Financial Conduct Authority and Digitally Native Regulatory Design

Barefoot Innovation Podcast - The Future of Regulation: The FCA’s Regtech Leader Nick Cook

More about Steve Cohen

Steve is responsible for worldwide sales and the planning and operations of Basis Technology’s linguistic product research and development. Before starting Basis Technology with Carl Hoffman, Steve was engineering manager for Cognex Corporation’s Tokyo office and development manager for SMT device inspection. He has also consulted on software internationalization engineering and developed software for embedded systems and electronic test equipment. Steve earned a bachelor’s degree in electrical engineering from MIT and studied at Waseda University in Tokyo.

More for our Listeners
Remember to subscribe to Barefoot Innovation for the newsletter, podcast and updates, and follow me on Twitter, LinkedIn, and Facebook. And be sure to subscribe to Barefoot Innovation on your favorite podcast platform and leave a 5 star review to help us grow the show.

We have great podcast episodes in the queue. We have another episode from Boston with Lamont Young, who’s leading digital innovation at Citizens Bank. We’ll talk with one of the most thoughtful people in finance, Brian Brooks, General Counsel of Coinbase and with global financial inclusion expert David Shrier. We’ll also have a special episode on Women in Fintech, and a terrific discussion with the fascinating community bank, NBKC. And we have a wonderful talk I recorded with Prince Michael of Liechtenstein, from the roundtable he hosted in Vaduz predicting the financial services world of 2030.

We also have three great shows coming up with Washington officials. One is with Counselor to the Secretary of the Treasury, Craig Phillips, whose team issued the Treasury fintech report last year. And we’re excited to have a second episode coming up with the Chairman of the CFTC, Chris Giancarlo. We also recorded a show in New York last month with Brett King about his new book, Bank 4.0 (available now on Amazon). I co-wrote the regulatory chapter with Brett and love the book -- it’s an amazing read.

Some of the places I’ll be in the coming weeks are:

The Honest Talks for AI on Regtech, February 27, New York (invitation only)

UNC Law's Banking Institute, March 22, Charlotte, NC

LendIt, April 9-10, San Francisco, CA

Santa Fe Group 12th Annual Shared Assessments Third Party Risk Summit, April 10-11, Washington, DC

And of course, the global summit of Innovate Finance in London, SXSW, and the ABA’s RCC, to name a few.

support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

Crossing Party Lines with Fintech Foxes Jon Bouker, Dan Renberg and Kate Flocken of Arent Fox

Mallory Kwiatkowski

What if, even amidst all the acrimony inflaming our politics these days, we really could all get along -- at least about some things? What if, while holding true to our varied, principled views, we could communicate, civilly, across the partisan divide? What if, in fact, we could even enjoy doing that?

Might it be possible to get some things done?  

We’re posting today’s show the day after President Trump’s State of the Union address, and just a few weeks into the tenure of the very unique 116th Congress. We’ve just gone through the holidays with families worrying that political debates might ruin their dinner gatherings. We’ve just gone through the government shutdown, and now the deadline for avoiding the next one is just a week away. It feels like half the country is arguing about politics and the other half has tuned out, figuring, why bother, since Washington is gridlocked and nothing can get done anyway.

Amidst all the collective angst about our political discourse, I found myself, one afternoon last fall, in a meeting with the leadership team of the government affairs group at the law firm, Arent Fox. One partner, Jon Bouker, is a Democrat. Another, Dan Renberg, is a Republican. And as we talked, they kept making me laugh. Watching them interact, watching them brainstorm together, watching them riff on each other’s points, I realized we could all use a little more of whatever makes them effective.

So I asked them to come on the show, along with fintech expert Kate Flocken from the firm’s emerging technologies group, to share with you, our listeners, the secrets of how to get things done in a polarized and partisan environment. We recorded it, actually, on Day 32 of the 35 day shutdown.

Their first piece of advice is to forget the notion that nothing can get done. As Dan pointed out, the House has about 100 new members, and that is more than 20% of the total institution. This makes it a whole new organization, full of opportunities for fresh starts. Also, for those of us working in technology, we suddenly have a huge new cohort of members of Congress who are digitally-native -- who grew up with technology as a core part of their lives. We’ve never had this before. It can make whole new debates possible. And as my guests say, we’re even seeing the Congressional rules start to modernize.

Beyond that, my guests shared insights on how to be effective with policymakers and regulators -- especially for startups.  Is it best to lie low and hope the government won’t notice you? Or is it smarter to go talk with them -- state or federal regulators, and legislators? Should you get to know your members of Congress and their staffs? If so, how do you do that? Who should you reach out to? Why would they want to talk with you? And what would happen if, sometime soon, you suddenly face a crisis, a regulatory or enforcement issue, and your company’s very first government interactions have you on defense, dealing with people who don’t understand you? Kate shares a great story about that scenario. And Jon makes a memorable point that every former member of Congress has a story about what they’re most proud of, that almost always began with talking with one person.

We also had a far-ranging discussion of the policy outlook this year for tech and fintech. Will there be privacy legislation? How are policymakers thinking about consumer data protection? Or alternative data in credit underwriting? What are the dangers that Congress or regulators might accidentally strangle innovation that could help consumers? How do ideas on big topics like these gestate over time in the policymaking process? Can they sometimes seem stuck, be stuck, and then suddenly move? (The answer to that is yes, they definitely can.) And of course, Dan helpfully compares and contrasts real life with House of Cards.

My guests even take on the big question: if you’re going to meet with regulators or legislators in some marble-columned building in Washington, do you -- or don’t you -- have to wear a suit?

Links

Link to full transcription

https://www.arentfox.com/

Twitter:   @arentfoxfintech and @arentfox  

More for our Listeners

Remember to subscribe to Barefoot Innovation for the newsletter, podcast and updates, and follow me on Twitter, LinkedIn, and Facebook. And be sure to subscribe to Barefoot Innovation on your favorite podcast platform and leave a 5 star review to help us grow the show.

We have great podcast episodes in the queue. We’ll have one with Steve Cohen of Basis Technology on artificial intelligence and another from Boston with Lamont Young, who’s leading digital innovation at Citizens Bank. And we’ll talk with one of the most thoughtful people in finance, Brian Brooks, General Counsel of Coinbase.  We’ll also have a special episode on Women in Fintech, and a terrific discussion with the fascinating community bank, NBKC.

We also have three great shows coming up with Washington officials. One is with Counselor to the Secretary of the Treasury, Craig Phillips, whose team issued the Treasury fintech report last year. And we’re excited to have a second episode coming up with the Chairman of the CFTC, Chris Giancarlo. We also recorded a show in New York last month with Brett King about his new book, Bank 4.0 (available now on Amazon). I co-wrote the regulatory chapter with Brett and love the book -- it’s an amazing read.

Some of the places I’ll be the coming weeks are:

Vaduz Roundtable, "The Financial System 2030", February 15-17, Liechtenstein (invitation only)
The Honest Talks for AI on Regtech, February 27, New York (invitation only)
UNC Law's Banking Institute, March 22, Charlotte, NC
Santa Fe Group 12th Annual Shared Assessments Third Party Risk Summit, April 10-11, Washington, DC

And of course, the global summit of Innovate Finance in London, SXSW, LendIt, and the ABA’s RCC, to name a few.

I’ll hope to see you!

Support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

Bonus Episode: The CFPB Innovation Director Paul Watkins

Mallory Kwiatkowski

Today’s show is a bonus episode that we added to the schedule because it has a deadline connected with it. My guest is Paul Watkins, Assistant Director of the Consumer Federal Protection Bureau (CFPB) and Director of its new Office of Innovation. And the deadline is February 11, which is the last day that the CFPB will be accepting public comment letters on its proposals for organizing a Product Sandbox and for issuing No-Action Letters on innovative products and practices. The Bureau is very interested in hearing from as many people as possible, and I really encourage all our listeners to submit input.

Few initiatives are more important to financial innovation. The Bureau has the lead with consumer protection regulation in the US and these initiatives will shape policy that will can make or break innovative solutions for consumers.

I think you’ll agree with me that Paul is as eloquent as anyone we’ve ever had on the show about why, and how, we should expand financial inclusion through innovative technology. Our listeners know that I think regulators need to have testing environments for fintech and regtech. Some agencies, like the CFPB and the UK Financial Conduct Authority, call them sandboxes. Others call them labs or pilot programs. The key is that these testbeds enable regulators to examine cutting edge innovation up close, in depth, and hands on -- something that’s very hard to do through traditional regulatory channels. The pace of tech change today is simply too fast to keep up, without new tools.

However, sandboxes are not easy to design. Consumer advocates worry that these labs could open a channel through which harmful financial products could bypass consumer protection regulations. There’s also some concern that labs and sandboxes can imply a regulatory seal of approval that would confer a competitive advantage to companies that participate in them.

Concerns also arise regarding the No-Action Letter mechanism, in which financial providers can show regulators their plans for a new product or practice and the agency, while not giving a stamp of approval, can send a letter indicating that they would not take action against the proposed activity. These NAL’s can greatly reduce the regulatory uncertainty that chills so much innovation. The current version of the CFPB’s no action letter has hardly been used, and the Bureau thinks that’s because it was designed with too little upside and too many drawbacks. Their proposal seeks to address that.

As a former bank regulator, I think these agencies have the hardest role to play in innovation. If they get the balance wrong -- by being either too heavy-handed or too lax -- consumers will pay the price. As they innovate, they will need to be building consumer safeguards into all they do -- including sandboxes and no-action letters. And they’re going to have to build up a reservoir of trust that their efforts will help, and not hurt financial customers. You’ll be interested in Paul’s thoughts on how to achieve those goals.

By the way, speaking of labs, let me encourage everyone to follow the work of FinRegLab, a nonprofit that is running sandbox-type experiments in fintech innovation. I chair FRL’s board of directors and, under its CEO Melissa Koide, it’s doing exciting work.

My conversation with Paul is wide-ranging. He talks about the CFPB’s participation in the Global Financial Innovation Network, or GFIN (the Bureau is the only US agency involved so far). He has a very thought-provoking anecdote about seeing consumer disclosures in Times Square. And mostly, he talks with great insight about how we should be doing better for consumers.

He says, innovation isn’t just useful to consumer protection. It’s central to it.

Links

Link to full transcription

https://www.consumerfinance.gov/

https://www.consumerfinance.gov/about-us/innovation/

Policy on No- Action letters and the BCFP product sandbox, Requests to Comment

The Global Financial Innovation Network

Barefoot Innovation Podcast Episode - Regulation Revolution:The Financial Conduct Authority and Digitally-Native Regulatory Design

Barefoot Innovation Podcast Episode - Regulation Innovation: The FCA’s Christopher Woolard

Barefoot Innovation Podcast Episode - The Future of Regulation: The FCA’s Regtech Leader Nick Cook

More on Paul Watkins

Paul Watkins is Director of the Office of Innovation at the Consumer Financial Protection Bureau. He oversees the Bureau’s efforts to facilitate innovation, competition, and consumer access in the markets for financial products and services. Watkins was previously the Civil Litigation Division Chief at the Arizona Office of the Attorney General, where he managed the state’s litigation in areas such as consumer fraud, antitrust, and civil rights.  In Arizona, he drafted and advocated for legislation establishing the first FinTech Sandbox in the country. Previously, Watkins practiced law at Covington & Burling LLP in San Francisco, and at Simpson, Thacher & Bartlett LLP in Palo Alto, California. He is a graduate of Hillsdale College and Harvard Law School, and a former clerk for Judge Dennis W. Shedd on the United States Court of Appeals for the Fourth Circuit.

More for our Listeners

We also have two more great shows coming up with Washington officials. One is with Counselor to the Secretary of the Treasury, Craig Phillips, whose team issued the Treasury fintech report last year. And we’re excited to have a second episode coming up with the Chairman of the CFTC, Christopher Giancarlo.

We have other fascinating episodes in the queue as we’ll have a show with Steve Cohen of Basis Technologies on artificial intelligence and another from Boston with Lamont Young, who’s leading digital innovation at Citizens Bank. We’ll talk with one of the most thoughtful people in finance, Brian Brooks, General Counsel of Coinbase. And we’ll have a special one about, and with, women in fintech.

We’ll be posting a show with Brett King on his new book, Bank 4.0. I co-wrote the regulatory chapter, and the book is a great read -- find it here on Amazon.

Some of the places I’ll be the coming weeks are:

Vaduz Roundtable, "The Financial System 2030", February 15-17, Liechtenstein (invitation only)

The Honest Talks for AI on Regtech, February 27, New York (invitation only)

SXSW, March 8-17, Austin

UNC Law's Banking Institute, March 22, Charlotte, NC

Santa Fe Group 12th Annual Shared Assessments Third Party Risk Summit, April 10-11, Washington, DC

And of course, the global summit of Innovate Finance in London, LendIt, and the ABA’s RCC, to name a few.

Remember, it’s really important that you subscribe to Barefoot Innovation on your favorite podcast platform and very importantly, that you leave a 5 star review to help us grow the show. I hope you’ll also follow along with me on Twitter, LinkedIn, and Facebook. Come to jsbarefoot.com for more information and to subscribe to the newsletter and get the latest podcasts as soon as they come out.

support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.



Making Hard Things Easy and Boring Things Fun with Acorns Co-founder Walter Cruttenden

Mallory Kwiatkowski

Today’s guest is Walter Cruttenden, cofounder of Acorns and founder of the gaming company, Blast.

Walter founded Acorns with his son Jeff, the company’s CEO, and Mark Dru in 2012. Acorns offers an app that enables people to round up their purchases and channel the extra money -- the “spare change” -- into a choice of investment vehicles.

The key, Walter says, is its simplicity. It’s easy to sign up, easy to understand, and easy to use. He and Jeff had an intuition that this ease factor, combined with the small amounts of money involved, would help investors at all income levels. As with robo-advisory firms like Betterment and Wealthfront (here’s a link to our episode with Betterment CEO Jon Stein), Acorns aims to use technology to profitably reach people at lower levels of wealth than are traditionally served by wealth managers. By combining the automated investment technology with a mobile-first app, Acorns has been especially successful in attracting customers in their 20’s. And of course, the earlier in life people start to save, the more they will save over in their lifetimes. We also had a great show with Ethan Bloch, CEO of Digit, which takes a different approach to savings but grounds it in the same logic -- appealing to younger savers by keeping it all very simple.

Walter is an avid gamer, and that passion inspired him in 2017 to found a new company, based on the same ideas about easy micro-investing concept. Blast is aiming to help the world’s 2.6 billion gamers save and earn money by playing their favorite games -- as the company’s site says, “In the future, we will micro-earn in a thousand ways.”

In our conversation, Walter explains how both firms work, how they make money, and how they hope to reshape their sectors. He also shares his thinking on the financial regulatory environment, whose hurdles initially dismayed him but which he has since grown to appreciate for the stability it brings to markets.

Solidifying his claim to being a Renaissance Man, Walter is also an amateur expert on the history of the solar system. His book, Lost Star of Myth and Time, has been made into a documentary.

Links

Link to full transcription

https://www.acorns.com/

https://blast.com/

Comcast & NBCUniversal invest in fintech app Acorns with a deal to produce content through CNBC

Book - Lost Star of Myth and Time

Documentary - The Great Year

More on Walter Cruttenden

Walter Cruttenden is a financial services innovator. He founded Roth Capital, a leader in funding emerging growth companies, before founding E*Trade’s iBank, which became the number one provider of online IPOs prior to its sale. Walter then invented “micro-investing,” founding Acorns with his son Jeff. On the side, he founded and took public SRS Labs, an acoustics technology, before its sale, and authored the books Lost Star of Myth and Time and The Great Year Adventures with Tommy the Time-Traveling Turtle. He wrote and produced the award winning documentary The Great Year.

Cruttenden currently serves as Chairman of Acorns, sits on its Investment Committee, acts as Director of the Binary Research Institute, and is CEO of Blast, an app that turns games into micro-savings tools.

More for our Listeners

Here is my January newsletter on regulation revolution, inspired by my “world tour” at the end of last year. And here are some other recent articles. Remember to subscribe to Barefoot Innovation for the newsletter, podcast and updates, and follow me on Twitter, LinkedIn, and Facebook. And be sure to subscribe to Barefoot Innovation on your favorite podcast platform and that you leave a 5 star review to help us grow the show.

We have great podcast episodes in the queue. We’ll have one with Steve Cohen of Basis Technology on artificial intelligence and another from Boston with Lamont Young, who’s leading digital innovation at Citizens Bank. And we’ll talk with one of the most thoughtful people in finance, Brian Brooks, General Counsel of Coinbase.  We’ll also have a special episode on Women in Fintech.

We also have three great shows coming up with Washington officials. One is with Counselor to the Secretary of the Treasury, Craig Phillips, whose team issued the Treasury fintech report last year. And we’re excited to have a second episode coming up with the Chairman of the CFTC, Chris Giancarlo, as well as one with Paul Watkins, who heads innovation at the CFPB. We recorded a show in New York this month with Brett King on his new book, Bank 4.0 (available now on Amazon). I co-wrote the regulatory chapter with him and love the book -- it’s an amazing read. And we’ll have a wonderfully entertaining and inspiring show with the CEO and innovation accelerator head of NBKC, on innovation for community banks.

Some of the places I’ll be the coming weeks are:

Vaduz Roundtable, "The Financial System 2030", February 15-17, Liechtenstein (invitation only)

The Honest Talks for AI on Regtech, February 27, New York

UNC Law's Banking Institute, March 22, Charlotte, NC

Santa Fe Group 12th Annual Shared Assessments Third Party Risk Summit, April 10-11, Washington, DC

And of course, the global summit of Innovate Finance in London, SXSW, LendIt, and the ABA’s RCC, to name a few.

I’ll hope to see you!

support our podcast

The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.




Biometrics, Blockchains, and Bots with David Birch

Mallory Kwiatkowski

birch.png

Today’s show is a special treat because my guest is brilliant and funny and original, and he’s also a friend. Dave Birch is a London-based author, advisor and commentator on digital financial services and Global Ambassador for Consult Hyperion. We often run into each other in different parts of the world, and in December we found time to sit down and catch up in London’s old City.

As I told Dave, I talk with people on these topics all the time, but a lot of what he says in this conversation is either different, or is said in a more compelling way, than what we normally hear. He’s definitely one of the most entertaining guests we’ve had on the show!

In our conversation, Dave explains that he’s obsessed with digital money and especially with digital identity. Echoing the episode we recorded last year with Greg Kidd of globaliD, Dave believes that our identities should be controlled by us as individuals, rather than issued to us by governments. He thinks we should be able to have multiple digital identities that we can use selectively in different ways, so that we can reveal less or more information about ourselves, tailored to the needs of each given situation. He gives great examples (I’m pretty sure this is the first time the topic of internet dating has come up on the show!)

One intriguing result of the system Dave envisions is that it might afford an opportunity for banks to become the main keepers of trusted identity. They seem uniquely positioned for that role (which, among other things, could help them stay relevant in the digital age). Dave has ideas on how banks should be able to share KYC information. He has ideas on tokens. He has thoughts on open banking. And he’s skeptical that crypto and blockchains will solve all the problems people are dreaming of for them.

As we talked, Dave kept saying, “I used to think that, but now I think this.” That way of talking captures the intensity of the learning journey he is on. He’s grappling with the hardest issue ahead of us all, namely privacy. We know our current methods of protecting privacy are not fit for today’s technology, and we don’t really know what to do about that. Dave is trying to figure that out -- to envision how to redesign the system with new ways for people to be able to protect their own information and, at the same time, to be able to use it to unlock new opportunities for themselves. And with new ways to make that happen within a system in which everyone’s information is accurate and secure.

Dave and I recorded our talk in London, in the Armourers Hall following up a great event there on insurance innovation sponsored by the Centre for the Study of Financial Innovation, or CSFI. I hope everyone listening will try to go to London this spring for Innovate Finance’s global fintech summit, which is held in these same buildings in the old Guildhall. That’s in the old City, near St. Paul’s Cathedral and the Bank of England, and the remnants of the City’s old Roman wall. I often find that thinking about new technology in ancient places like these somehow makes me learn better. Dave and I had our conversation on a cold afternoon, sitting in a draughty little room without central heating, but with a lovely fireplace keeping it warm. I found myself learning something every minute.

Links

Link to full transcript

Podcast with Greg Kidd of Global ID

Podcast with Sanjay Jain

India’s Top Court Limits Sweep of Biometric DC Program - Court case involving Aadhaar

Books Published by David Birch:

Before Babylon, Beyond Bitcoin

Identity is the New Money

Digital Identity Management

Blockchain: A Legacy of Transparency by David Birch

Scott Galloway's book, The Four

Pivot Podcast

Financial Times Article by David Birch, One Virtual Account Number to Rule Them All

Could bank account numbers be portable like mobile numbers? by David Birch

Podcast with Anne Boden of Starling Bank

More information on David Birch at www.DGWBirch.com and blog.dgwbirch.com

More on David Birch

David G.W. Birch is an author, advisor and commentator on digital financial services. He is Global Ambassador for Consult Hyperion (the secure electronic transactions consultancy that he helped to found), as well as Technology Fellow at the Centre for the Study of Financial Innovation (the London-based think tank) and a Visiting Professor at the University of Surrey Business School. An internationally-recognised thought leader in digital identity and digital money he was named one of the global top 15 favourite sources of business information by Wired magazine and one of the top ten most influential voices in banking by Financial Brand; created one of the top 25 “must read” financial IT blogs. His Twitter account was found by PR Daily to be one of the top ten followed by innovators (along with Bill Gates and Richard Branson). He was also rated Europe’s most influential commentator on emerging payments by Total Payments, and he was recently awarded “Contributor of the Year” by the Emerging Payments Association.

Dave’s last book “Before Babylon, Beyond Bitcoin: From money we understand to money that understands us,” was cited in the LSE Review of Books as one that should be “widely read by graduate students of finance, financial law and related topics as well as policy makers involved in financial regulation".

Dave graduated from the University of Southampton with a B.Sc (Hons) in Physics.

More for our Listeners

We have great podcast episodes in the queue. We’ll talk with with Walter Cruttenden, Co-Founder of Acorns and Co-founder and CEO of Blast. We’ll have one with Steve Cohen of Basis Technologies on artificial intelligence and another from Boston with Lamont Young, who’s leading digital innovation at Citizens Bank. And we’ll talk with one of the most thoughtful people in finance, Brian Brooks, General Counsel of Coinbase.

We also have three great shows coming up with Washington officials. One is with Counselor to the Secretary of the Treasury, Craig Phillips, whose team issued the Treasury fintech report last year. We’ll have a conversation with Paul Watkins, who is leading the innovation initiative at the CFPB. And we’re excited to have a second episode coming up with the Chairman of the CFTC, Chris Giancarlo.

Brett King’s new book, Bank 4.0 (available now on Amazon) will be the subject of another show -- I co-wrote the regulatory chapter with him.

Remember, it’s really important that you subscribe to Barefoot Innovation on your favorite podcast platform and very importantly, that you leave a 5 star review to help us grow the show. I hope you’ll also follow along with me on Twitter, LinkedIn, and Facebook. Come to jsbarefoot.com for more information and to subscribe to the newsletter and get the latest podcasts as soon as they come out.

support our podcast

*The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.

Fintech in China and Around the World: Anju Patwardhan of CreditEase

Mallory Kwiatkowski

patwardhan.png

Happy New Year everyone! I am thrilled to be doing our first show of 2019, which I predict is going to be the breakthrough year for regtech in the United States, especially on the regulator side. So much is going on, and I’m excited to be able to help share that story with you as the year goes forward.

I want to thank everyone who has been listening to the show -- we’re actually coming up on our fourth anniversary this spring -- and also I want to invite you to help us continue growing it. If you enjoy listening, please subscribe to Barefoot Innovation wherever you listen to your podcasts and, importantly, please leave a 5-star review. That will help more people find us, which in turn will help us continue to connect and build this community of amazing people, including our guests and our listeners, whose innovations are changing the world of finance. Something I realized in 2018 is that the people driving financial innovation really are a community -- a movement. A big part of what Barefoot Innovation does is to help everyone find each other, and get to know each other. So, the more the better!

Our first 2019 show brings us a global perspective on fintech. My guest is Anju Patwardhan, Managing Director of the CreditEase FinTech VC Fund. Anju has an incredible background. I first met her when she was starting at Stanford as a Fulbright Fellow and visiting scholar, at a time when I was a senior fellow at Harvard. We made an instant connection and since then, we’ve often run into each other in interesting places around the world. Late last summer, we finally found time to sit down and talk at her office in San Francisco.

CreditEase is a Chinese company that incubates and invests in fintech, with an emphasis on expanding financial inclusion. China of course has been leading the whole world in the growth of consumer fintech, partly because of the ubiquity of mobile phones as a distribution channel. As Anju says (and as Peter Renton said in our show with him), the entire country is cashless.

In our conversation, she talks about these technologies creating potent new business models that can profitably reach massive new markets throughout the developing world. As we’ve discussed in other episodes (Podcast with Harish Natarajan, Podcast with Laura Spiekerman, Podcast with Greg Kidd), these markets are simply enormous. Anju talks about how “financial inclusion” used to be viewed as a nice goal for government and nonprofits but -- as she learned firsthand as a senior executive in two global banks -- some of these markets used to be too risky to be profitable. No more. These markets are the growth engines of today. Some of our listeners may underestimate the breathtaking scale and speed of the changes underway, including the potential for innovations in China to disrupt businesses throughout the world. Remember, these huge Chinese companies, and the B2C fintech sector there, were born digital. They can move really fast.

In our discussion, Anju zeros in on the need for fintech to reach beyond serving the “unbanked” and focus on bringing the full suite of financial services to the huge swath of the world that is “underbanked,” in that they now have access to a payments account but not yet to other financial products like loans, wealth management and insurance. This, she says, will be the next frontier of fintech growth, now that the phone has already, in essence, put a bank branch in everyone’s hand.

Anju co-authored a report called Financial Inclusion in the Digital Age, which shares a list of 100 leading technology companies promoting financial inclusion.

You’ll enjoy hearing Anju’s surprise at discovering how slow payments are in the US, and you will enjoy her musings about our regulatory structure. And I know you’ll be fascinated by her thoughts on how fintech is changing the lives of women throughout the world.

Links

Link to Full Transcription

Financial Inclusion in the Digital Age, report co-authored by Anju Patwardhan

The Global Findex Database Report

Yirendai - The first company to do lending using a mobile app

Podcast with Sanjay Jain

Fair - A mobile app for car leasing

Branch - Micro-lending in Africa using mobile phones

Upgrade - Consumer lending, education, and literacy

A Financial System That Creates Economic Opportunities, US Department of the Treasury report

CreditEase Fintech Fund

CreditEase

Twitter @crediteasecorp @anjupatwardhan

More on Anju

Anju Patwardhan is Managing Director at CreditEase for its global Fintech Investment Fund and Fund of Funds. CreditEase, established in 2006, is a leading fintech company in China, specializing in Wealth Management, Asset Management, and Marketplace Lending.

Anju is a Fellow at Stanford University’s Distinguished Careers Institute (DCI). She was also a 2016 Fulbright Fellow and Visiting Scholar from ASEAN at Stanford, where her research focused on use of technology to support financial inclusion. She is a member of the World Economic Forum steering committee on ‘Disruptive Innovation in Financial Services.’ She has also served as FinTech Industry Expert at UC Berkeley (SCET) and on the advisory board of Government of Estonia’s e-Residency program. She is an experienced board member and has served on boards of banks, fintech companies, and nonprofit entities.

An alumna of the Indian Institute of Technology and Indian Institute of Management, Anju has over 25 years of banking experience with Citibank and Standard Chartered Bank (SCB) in global and regional leadership roles, including as Chief Operating Officer, Chief Risk Officer, and Digital Banking Head. Her last role at SCB was as the Global Chief Innovation Officer. She was a member of SCB’s global executive leadership team, member of its Global Technology & Operations Management Group, and member of the Global Risk Management Group.

We have wonderful shows coming up.

We’re going to have a special one on women in fintech, with some of the leading women in the industry.  We will have a lively (and funny) talk I recorded in London with my friend Dave Birch. We’ll talk with Walter Cruttenden, Co-Founder of Acorns and Co-founder and CEO of Blast. We’ll have two from Boston -- one on artificial intelligence with Steve Cohen of Basis Technologies and one with Lamont Young, who’s leading digital innovation at Citizens Bank. And we’ll have a fascinating talk with Brian Brooks, General Counsel of Coinbase.

We also have three great shows coming up with Washington officials. One is with Counselor to the Secretary of the Treasury, Craig Phillips, whose team issued the Treasury fintech report last year. We’ll have a conversation with Paul Watkins, who is leading the innovation initiative at the CFPB. And we’re excited to have a second episode coming up with the Chairman of the CFTC, Chris Giancarlo.

I’ll be speaking next week at the  FINRA Regtech Conference, on January 17th in New York.

Brett King’s new book, Bank 4.0, is out and can be bought on Amazon. I co-wrote the regulatory chapter with Brett, and we’ll have a show and events on that as well.

Again, please subscribe to Barefoot Innovation on your favorite podcast platform and very importantly, please please leave a 5 star review if you enjoy the show. I hope you’ll also follow along with me on Twitter, LinkedIn, and Facebook. Come to jsbarefoot.com for more information and to subscribe to the newsletter and get the latest podcasts as soon as they come out.

Until next time, keep innovating!

support our podcast

*The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.



The Human Side of Technology -- Sopnendu Mohanty, Chief Fintech Officer of the Monetary Authority of Singapore

Mallory Kwiatkowski

mohanty.png

This is our second show with Sopnendu Mohanty, Chief Fintech Officer of the Monetary Authority of Singapore.  We recorded it at the MAS annual fintech festival in Singapore, which is a remarkable event. I think it’s probably the world’s largest financial conference, with an incredible 45,000 people attending this year from all over the world. Maybe even more surprisingly, it’s a “fintech festival” that is sponsored by a central bank!

That captures the essence of the extraordinary global role being played by MAS, by its visionary managing director Ravi Menon, and by Sopnendu, in creating a new model of financial regulation. They have staked out a unique position as world leaders in fintech and regtech innovation, not only making Singapore a magnet for fintech innovators throughout Asia and the world, but also leading on pretty much every modernizing idea that regulators, themselves, can undertake.

If you think about the kinds of innovation initiatives that regulators have been inventing around the world, MAS might be the regulator that’s the most. They have a sandbox. They have a Singapore “tech stack” to ease software development, security and interoperability. They have a robust set of multinational and bilateral agreements, including some for passporting fintech licenses between countries. They launched Project Ubin which explores use of Distributed Ledger Technology (DLT) for clearing and settling payments and securities. They have experimented with reforming the anti-money laundering Know-Your-Customer process by building a government utility-style database instead of making every bank conduct an individual KYC review. This has worked for individuals, who can now easily and instantly open bank accounts with full verification through a national infrastructure called “My Info,” because the government collected data for all residents and enables banks to share and verify information online. The KYC effort turned out to be harder for corporations -- something that MAS has been quick to acknowledge. The acknowledgement is, itself, yet another model for how modern regulators should lead today, being proactive in trying things out while realizing that some things won’t work, and that therefore, testing is critical.

Take a moment to picture this enormous conference with its massive exhibit hall, with huge, high-tech display booths from all the world’s leading financial and technology companies, and picture the throngs of people trying to navigate it. To make that easier, the conference suspended huge signs from the ceiling, easily seen from far away. I was struck by the fact that this year, one of those signs read, “Regulators.” Below it were innovative regulators from all over the world.

I often think about, and often quote, something Sop said to me in our earlier podcast. That episode is called, We Have Less Time Than We Think, and we recorded it at an international regulators conference in Jakarta sponsored by the Omidyar Network and the Gates Foundation. During that talk, I was expressing admiration for the many initiatives MAS was taking, but I observed -- as Americans often do on this topic -- that Singapore has an easier challenge than we do, because they basically have one regulator and just a handful of banks, whereas we have dozens of regulatory bodies and thousands of banks. Sop answered me by saying, “but the US has the talent.” He said that we, in the US, should be able to lead the world in regulatory modernization, given the abundance of world-class talent in our tech and financial and regulatory sectors.

I think he’s right, and I’m excited to say that, as we reach the end of 2018, the US regulators are clearly moving forward in innovation leadership. We’ll have more on those exciting developments in upcoming podcasts!

Sop, of course, was the busiest person at the MAS festival, and, given its size, that’s saying something! To record this talk, we ducked into a private VIP lounge away from the hubbub, except that people were lining up outside hoping to get his attention. Recording as we did in the moment, on the festival’s last day, the talk captures the excitement in his voice about the progress MAS is making, and his powerful insight that as their work in regulatory innovation matures, they have come to focus on the human side of technology. Not tech for tech’s sake, or for the financial industry’s sake, but for solving people’s real problems. He talks about the need to fix the trust deficit, in finance and technology, and to make new tech truly work for people, and not hurt them.

I first met Sop on a panel I moderated at MIT’s fintech conference while I was at Harvard a few years back. These days, I see him every few months in some setting around the world. This fall I saw him at Money 2020 in October, and at the MAS festival in November, and at a meeting in Seattle in December. Every time I encounter him, I can see that he’s pulling even further away from the “pack” -- all the rest of us -- in his thinking. He explains in the podcast that the secret to this is that he is constantly listening to and learning from people, throughout the whole financial ecosystem, all over the world.

So, that makes us all incredibly fortunate to be able to listen to, and learn, from him.

Links

LINK TO FULL TRANSCRIPTION

Podcast with Sopnendu Mohanty published on August 16, 2017

Ravi Menon, Managing Director of MAS, Speech at SFF

Podcast with Sanjay Jain, CIO at CIIE on Aadhaar and the India Stack

More on Sopnendu Mohanty

Sopnendu Mohanty is the Chief Financial Technology (Fintech) Officer of the Monetary Authority of Singapore (MAS). He is responsible for creating development strategies and regulatory policies around technology innovation to “better manage risks, enhance efficiency and strengthen competitiveness in the financial sector.” Prior to joining MAS, Mohanty was with Citibank as their Global Head of the Consumer Lab Network and Programs, which included driving innovation programs and managing innovation labs across multiple geographies globally.

Mohanty has spent 20 years in the APAC region and held various roles in technology, finance, productivity, and business development. He was Citibank’s APAC regional head of Branch operations along with heading the Consumer Innovation Lab in Singapore. He spent a significant time in Japan, where he was Citibank’s Retail Business Development head and also did leadership stints in various functions within operations and technology. Globally, he played a significant subject matter expert role in driving Citibank’s global smart banking program, to transform the bank’s physical network into a digital-first, smart, innovative, client centric and delightful customer engagement center.

Mohanty has co-authored various patented work in area of retail distribution in the financial sector. He is based in Singapore, loves traveling, reads history and pursues culinary innovation as a hobby.


More for our listeners

We have more great podcast episodes in the queue. We’ll talk with Anju Patwardhan of CreditEase and Stanford University, and with Walter Cruttenden, Co-Founder of Acorns and Co-founder and CEO of Blast. We’ll have two from Boston -- one on AI with Steve Cohen of Basis Technologies and one with Lamont Young, who’s leading digital innovation at Citizens Bank. And we’ll have an especially provocative and entertaining show I recorded in London, in the old City at Armourers Hall, with my friend Dave Birch.

Next year’s calendar is filling up.  My first speaking event of 2019 will be the  FINRA Regtech Conference on January 17th in New York.

Also watch for upcoming information on my collaboration with Brett King on his new book, Bank 4.0, which you can now buy on Amazon. I co-wrote the regulatory chapter with Brett, and we’ll have a show and events on that as well.

If you enjoy listening to Barefoot Innovation, please be sure to post a review! It will help new listeners find us. Please also follow along with me on Twitter, LinkedIn, and Facebook. Come to jsbarefoot.com for more information and to subscribe to my newsletter and get the latest podcasts as soon as they come out. And don’t forget to send in your dollar a show, to keep it all going.

Finally, as we close the year, let me share my excitement about the breakthroughs we’re seeing in fintech and regtech, and let me express my gratitude to all of you -- for listening to the show and for sharing your ideas and energy. I think we’re building a community of people who see the chance to do better for financial customers through innovation, and are joining together, and are leading the way.

I’ll look forward to seeing you in 2019!

Support our podcast



The American Dreamers: Earnup Cofounders Matthew Cooper and Nadim Homsany

Mallory Kwiatkowski

EarnUp - Matthew Cooper.jpg
EarnUp - Nadim Homsany-.jpg

One of the things I love about our Barefoot Innovation conversations -- and about fintech, for that matter -- is the passion you find in so many founders, these people who really believe they can do better for consumers. You hear it in the voices of many of the guests we’ve had on the show, the note of excitement, the sense that they can almost see a better future. They’re often people from the technology world who looked at some traditional, stuck feature of the financial system and said to themselves, I can do better than this. Today’s guests are wonderful examples. They are Matthew Cooper and Nadim Homsany, cofounders of EarnUp.

EarnUp is a fintech platform that intelligently automates loan payments, to help people pay on time, manage their finances more easily, and build financial health. It lets consumers put funds aside when they can afford to, and then makes their loan payments for them, allocating funds in the way that will get the person out of debt most quickly. Matthew and Nadim say 200 million Americans have debt, and that they owe $20,000,000,000,000 -- I promised them to write that out so we can all ponder those 13 zeros. They say 60-70% of Americans live paycheck to paycheck, and they think 70% of delinquencies are avoidable, caused by the complexity of bill paying and money management. They have found, so far, that EarnUp reduces delinquencies by 30% and saved their customers $400 million as of when we recorded this conversation, last summer.

I was especially interested in an EarnUp feature they call Smoke and Fire -- when they see the early warning signs of “smoke” that someone is in danger of paying late, they squash it quickly, before it becomes a fire. That’s a powerful idea, considering the high share of financial expense that many people pay just for being late. I did a podcast with Al Ko of Mint last year, who made a similar point.

In our talk, Matthew and Nadim talked about the regulatory environment for businesses like theirs and how to improve it. They described their business model, which is B2B2C, signing up customers through banks and financial companies like Freddie Mac, Framework Homeownership, and GreenPath Financial Wellness. They also explained that the business model is double-bottom line, aiming for both profit and social good. They were 2016 participants in the Financial Solutions Lab of the Center for Financial Services Innovation -- something I’m delighted to report since I chair the CFSI board.

We’ve had a lot of guests who are working on this thorny, but solvable problem -- how to make it just flat EASIER to keep up with the bills, find the smartest way to pay them off, and figure out how to plan for financial wellness and health. EarnUp has a fascinating solution.

Links

Link to full transcription

Podcast with CSBS President John Ryan

More on Matthew and Nadim

Matthew is EarnUp’s Co-Founder & CEO. He is the son of a minister and a teacher and has lifelong passion for supporting marginalized communities through volunteer work and advocacy. Matthew previously worked at Clearlake Capital, a $3B private equity firm focused on software and financial services industries. Prior to Clearlake, Matthew worked with NCB Capital, a $12B asset manager, leading private equity investments in the emerging markets. Before that, Matthew was at McKinsey & Company counseling Fortune 500 clients in the financial services and retail industries. He graduated magna cum laude from Princeton University. His Twitter handle is @MatthewWins.

Nadim is the son of immigrants who arrived in the US with virtually nothing. His upbringing instilled in him a passion for helping people build financial resilience and independence. Prior to EarnUp, Nadim worked at Serent Capital, a $600M private equity firm, focused on tech-enabled services. Nadim previously led investments with NCB Capital, a $12B asset manager and worked at McKinsey & Company, advising large banks.

Nadim also practiced IP and technology law at Kirkland & Ellis. He holds a JD degree from Harvard Law School and graduated with highest honors from Rutgers University. He’s on Twitter @nhomsany.


More for our listeners

We have more great podcast episodes in the queue. We’ll talk with Anju Patwardhan of CreditEase and Stanford University, and with Walter Cruttenden, Co-Founder of Acorns and Co-founder and CEO of Blast. We’ll have an extended talk we recorded in Singapore with Sopnendu Mohanty, the Chief Fintech Officer of the Monetary Authority of Singapore. We’ll have two from Boston -- one with Steve Cohen of Basis Technologies and one with Lamont Young, who’s leading digital innovation at Citizens Bank. And we’ll have an especially provocative and entertaining show I recorded last week in London, in the old City at Armourers Hall, with my friend Dave Birch.

I completed the last public event of my 2018 fall “world-tour” yesterday with the Boston Regtech Meetup. Next year is already getting busy. Among other things, I’ll be at the FINRA Regtech Conference on January 17th in New York.

Also watch for upcoming information on my collaboration with Brett King on his new book, Bank 4.0, which you can now buy on Amazon. I co-wrote the regulatory chapter with Brett, and we’ll have a show and events on that as well.

If you enjoy listening to Barefoot Innovation, please be sure to post a review! It will help new listeners find us. Please also follow along with me on Twitter, LinkedIn, and Facebook and come to jsbarefoot.com for more information and to subscribe to my newsletter and get the latest podcasts as soon as they come out. And don’t forget to send in your dollar a show, to keep it all going.

Until next time, keep innovating!

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