Podcast appearances and mentions of andres wolberg stok

Linda Jeng, Georgetown University, and Andres Wolberg-Stok, Citi, join us on this episode of FRT to discuss Linda's recently published book, “Open Banking”, which features chapters written by Andres and the IIF's Brad Carr. A multifaceted and interdisciplinary topic, the book covers aspects from economics of data to consumer rights and decentralized finance as they relate to open banking. Andres and Brad discuss their chapters and elaborate on the ever-evolving topic of open banking, discussing its origins, mapping its growth into open data, and emphasizing policymakers and regulators' impact on the competition landscape.

Andres Wolberg-Stok at Citi and Sam Taussig at Kabbage debate openness, privacy, control, and how much say consumers should have over their banking information.

My guest today is Andres Wolberg Stok, Global Head of Policy at Citi Fin Tech. We got to know each other this year on a panel at FinXTech in New York, and something I immediately noticed is that he has a special way of talking about innovation -- a very fresh way with words. It might be because he’s lived all over the world, or because he was once a journalist -- see his biography below for a sampling of his journalism adventures, which sound like plots of action/adventure movies. All large banks have innovation initiatives -- labs, accelerators, incubators and the like. They’re all looking at issues like blockchains, big data, artificial intelligence and human-centered design -- such as, creating a user experience that customers will actually love. Banks have plenty of innovative people, of course -- in our talk, Andres quotes CEO Michael Corbat saying that Citi is actually a technology company with a banking license. However, very few banks of any size have really innovative cultures. This is partly because most are mature organizations, and also because banking has been heavily regulated for so long, which tends to foster conservative, risk-averse cultures and decisionmaking. In today’s world of rapid technological change, banks need innovation (and many innovators need banks as well). It’s important that the big banks are investing in learning how to do this well. Citi Fin Tech was formed in late 2015 to pursue what Andres calls “fintegration.” The impetus was a critical insight: they realized that their customers’ standards had fundamentally changed. Instead of comparing Citi to other banks, there was a new yardstick -- comparison to technology firms. That set a new, high bar. Andres explains how they’re tackling this challenge. He describes the new kinds of skills they hire. He explains their focus on agile methodology and co-creation of products and learning to experiment. He talks about building multidisciplinary teams that work concurrently on initiatives, instead of sequentially in the old waterfall-style process that could divert an innovation from what had originally made it exciting. He talks about obsessing on the consumer experience and doing thousands of focus groups to understand what customers really think. He also talks about how the bank should “feel in the palm of the customer’s hand.” He calls mobile an “exoskeleton” for the human mind, connecting us to all the world’s information, all the time. He talks about the issues ahead in AI, privacy, and data aggregation, including the challenges for regulators. He says the key, for regulators, is to understand the upside benefits of technology, not just the risks. Andres explains how Citi Fin Tech works with innovators, including startups -- note that he invites people to come and work with them using their API’s and data. That site is at https://developer.citi.com. I think my favorite insight is that banks need a new model that’s open, not closed. He says the customer relationship used to be one-to-one between a bank and its customers -- and of course, the regulations are still mostly built for that. Now, though, there are multiple parties -- consumers use apps and “modular” financial relationships. If the bank wants to continue to be at the core of that customer relationship, they will have to build an open model -- and regulators will have to change with it. As you listen, think about how regulators and also community banks could get access to this kind of hands-on experience with financial innovation. The sooner they do, the faster the system and its customers will benefit from, as Andres puts it, “breaking a few windows and letting in fresh air and sunshine.” More on Andres Andres Wolberg-Stok interfaces with regulators and policymakers around the world as the Global Head of Policy for Citi FinTech, a new unit spearheading the transformation of Citi’s Global Consumer Banking business into a mobile-centric “Bank of Tomorrow”. He joined Citi from an international personal finance startup and has served in a variety of digital roles, first for Citi Latin America, then for Citi's U.S. consumer businesses, and now globally. Andres was one of the founders of Citi FinTech from his previous role as Global Head of Emerging Platforms and Services for Citi’s Consumer businesses. In 2015, Andres turned Citi into the world's first bank with an Apple Watch app. Earlier, as Citi Consumer's first global head of mobile banking, he invented Citi Mobile Snapshot, a patented 2014 breakout feature that made Citi the first major U.S. bank to offer no-login account access. Prior to becoming a banker, Andres was an international correspondent and senior news executive. He had tea with mass-murderer military dictators; was driven, blindfolded and at gunpoint, around the capital of Paraguay after midnight; was arrested in Tierra del Fuego on suspicion of being a British spy; and raced in a car at 120 mph along the edge of a minefield in Croatia. He finds most days in banking very manageable. More for our listeners Please remember to review Barefoot Innovation on ITunes, and sign up to get emails that bring you the newest podcast, newsletter, and blog posts, at jsbarefoot.com. Be sure to follow me on twitter and facebook.  And please send in your “buck a show” to keep Barefoot Innovation going. Support our Podcast It was great seeing lots of you at the Online Lending Policy Summit this week in Washington. I’ll hope to see many more of you at upcoming events: Source Media’s RegTech: Compliance Transformed, October 3-4th, Brooklyn, NY BAI Beacon/Fintech Stage, October 4-5, Atlanta, GA CFSI Network Summit, Fireside Chat with Thomas Curry, October 5, Chicago, IL FISCA, October 5-8th, Las Vegas, NV Money 20/20, October 25th, Las Vegas, NV Central Bank Summit on blockchain and digital currency, October 30 in New York Regtech Rising, November 2, London Monetary Authority of Singapore Fintech Festival, November 13-17, Singapore University of Michigan, November 17, Ann Arbor, MI RegTech Enable, November 27-29th, Washington, DC UN/ITU conference on financial inclusion in Bangalore (invitation only) Fintech Connect Live, December 6th, London S&P’s Fintech Intel, December 13, New York Dutch Central Bank, December 20, Amsterdam We have wonderful shows coming up. One is with Braden More, who leads an innovation payments initiative at Wells Fargo. Another is with Giles Gade, CEO of Cross River Bank. And we’ll have several from Money 2020, including Nerd Wallet CEO Tim Chen and the FCA’s Chris Woolard, whom I’ll also be talking with there in a fireside chat. Speaking of Money 2020, I’m excited that the AML regtech firm I’ve cofounded, Hummingbird, has been selected to do a startup pitch there. Be sure to come and watch! See you there! Subscribe Sign up with your email address to receive news and updates. Email Address Sign Up We respect your privacy. Thank you!

This episode is a special treat because it’s both fascinating and fun. My guest is Miles Reidy, partner at QED Investors in Alexandria, Virginia. Many people know that QED was founded by former leaders of Capital One, including Cap One co-founder Nigel Morris. They have a terrific track record of investing, focused mainly especially on fintech. Miles and I discussed two topics. One is the outlook for regtech, which he’s excited about and so am I. The other, which I know is going to be an audience favorite, is how to find and work with a venture capital firm. On regtech, Miles talks about the technology that’s about to make compliance both more accurate and less expensive, at the same time. He talks about compliance costs rising at 20% a year, the impossibility of traditional compliance systems preventing human errors, and how we can now move beyond old sampling-based compliance processes to 100%, real-time data that enables a financial company to know, for sure, if it’s compliance or not. I’m excited about it too, because technology is breaking the old binary choice between spending more for better results, or spending less and sacrificing performance. Innovators are making it possible to be better and cheaper, both. On regtech, he also has a cautionary note for the U.S., where our regulatory complexity creates headwinds for innovation. The second half of the show is about working with VC’s. I talk all the time with venture firms and have done some angel investing myself, but most of Miles’ insights were new to me. He shares what he’s learned, especially, from seeing people do all these things wrong, at every stage, from how to approach a VC firm cold (he describes one thing to be sure NOT to do), to how the startup should evaluate the VC, to how to work with the VC when your firm hits problems, which it will.   He’s especially interesting, I think, on what questions to ask a VC directly, from where their funding comes from and where the fund is in its maturity cycle, to how it handles adversity (he describes the four typical scenarios, three of which are bad!). He also has advice on truly doing diligence on them, including by talking with their companies. The typical startup is so eager for money that it gets seduced by it, and can pick the wrong firm.   Miles also explains how he evaluates potential investments. Which factors count more than others? What key metric does he want to see that the founders totally understand?  What weaknesses are fatal? And once the company is funded, what are the common mistakes? What mistake is most dangerous for a young CEO? How do you avoid the death trap of hitting the end of the funding runway before you can take off (hint: “sip” on your funds). After we turned off the mic, I asked one more question that people often raise, which is whether fintech and financial regtech firms should focus on the great east coast VC’s that specialize in the field -- Miles mentions several in the episode -- or try to get backing from the big, famous firms in the Bay Area. There are pros and cons to each, in terms of sector knowledge, sector network, reputation “glamor,” and drawing in talent. Miles has the answer:  get both. If we were scoring shows by how many times the guest makes me laugh, I think this one might be the winner. I know you’ll enjoy my fascinating conversation with Miles Reidy. More about the episode This is the November conference QED is co-sponsoring (I’ll be speaking) RegTech Enable Here is the past podcast I mentioned with Sanjay Jain on the India Stack Sanjay Jain Podcast And here’s more on Miles: Miles Reidy is a Partner at QED. Previously he was the Chief Financial Officer for Audax Health, Inc., which offered a digital health engagement product.Miles reoriented the business strategy, built out the analytics functions, raised capital, and oversaw the sale of the company to United Health/Optum.  Prior to Audax, Miles was Chief Operating Officer and Chief Financial Officer for Network Solutions, one of the largest domestic providers of Internet hosting and marketing services to small businesses, and Executive Vice President and Chief Financial Officer for Sears Holdings Corporation. Miles spent almost a decade in several executive roles at Capital One Financial Corporation, including Executive in Charge of Banking Integration, Chief Corporate Planning / Financial Strategy Officer and Chief Financial Officer of Capital One Bank and Credit Card. His responsibilities included development and implementation of the corporation’s capital and financial strategies, oversight of the card businesses’ financials and consumer analytics, and strategic planning. Miles serves on the Boards of the Royal Bank of Canada, US, Heinz School of Public Policy at Carnegie Mellon University, and the Easter Seals of Baltimore/Washington. He is also a investor in Fenway Summer. He holds a B.S. from Georgetown University and a M.S. from Carnegie-Mellon University. More for our listeners Please remember to review Barefoot Innovation on ITunes, and sign up to get emails that bring you the newest podcast, newsletter, and blog posts, at jsbarefoot.com. Be sure to follow me on twitter and facebook.  And please send in your “buck a show” to keep Barefoot Innovation going. Support our Podcast I’ll hope to see you at the events where I’ll be speaking this fall: Online Lending Policy Summit, September 25, Washington, DC RegTech: Compliance Transformed, October 3-4th, Brooklyn, NY BAI Beacon/Fintech Stage, October 4-5, Atlanta, GA CFSI Network Summit, Fireside Chat with Thomas Curry, October 5, Chicago, IL FISCA, October 5-8th, Las Vegas, NV Money 20/20, October 25th, Las Vegas, NV (I’ll MC the Sunday regulatory track, host a town hall with senior regulators, moderate a panel, and do a fireside chat with the FCA’s Chris Woolard. Be sure to come for Sunday!) Regtech Rising, November 2, London Monetary Authority of Singapore Fintech Festival, November 13-17, Singapore University of Michigan, November 17, Ann Arbor, MI RegTech Enable, November 27-29th, Washington, DC UN/ITU conference on financial inclusion in Bangalore (invitation only) Fintech Connect Live, December 6th, London S&P’s Fintech Intel, December 13, New York Dutch Central Bank, December 20, Amsterdam We have wonderful shows coming up. I’ll be talking with Andres Wolberg-Stok of Citi Fin Tech. We’ll have a show based on my recent fascinating experience with a U.S. Army Threatcasting exercise, learning how to creatively imagine cyber risk and then pinpoint how to prevent it. At Money 2020 I’ll record a show with Christopher Woolard, who heads strategy for the U.K. Financial Conduct Authority, and one with Nerd Wallet CEO Tim Chen.                                                                                                                                                     I’m very proud to say that the firm I co-founded, Hummingbird Regtech, has been selected to present at Money 2020 in the startup pitch session. Be sure to come and watch! Meanwhile, keep innovating! Subscribe Sign up with your email address to receive news and updates. Email Address Sign Up We respect your privacy. Thank you!

I love having guests on the show who look at something that everyone takes for granted and said, why do we do it that way? That’s what today’s guest, Jason Gross, has done with credit cards. Jason is the CEO of Petal. He and his co-founders have designed a card that has a different business model and aims at a different market. Credit cards have always sparked mixed feelings among consumer advocates and policymakers. On the upside, they provide incredible convenience and safety, over cash. On the down side, critics worry that that convenience factor is a double edged sword -- making spending too convenient and fueling over-consumption and under-saving. People also worry that cards are hard to understand. For decades, policymakers have tried repeatedly to solve that by regulating card disclosures and practices with requirements to  disclose the annual percentage rate and fees; make key information prominent in the so-called Schumer Box (named after New York Senator Charles Schumer); require a grace period; bar retroactive raising of interest rates; limit marketing to college students; disclose the long-term costs of paying only the minimum balance and much more. Concern about credit cards prompted Senator Elizabeth Warren, back when she was a Harvard Law professor, to begin fighting what she called “tricks and traps” in financial products, and also business models that rely on penalty fees or interest for their profitability. That concern led to the CARD Act of 2009, and then to the creation of the CFPB itself. The Petal card is trying to solve these challenges. It’s offering simpler, more transparent terms. It addresses the overspending problem by designing the card to encourage customers to pay the full balance each month, rather than revolve. And it’s tackling a third problem, which is reaching the tens of millions of people who don’t have a credit card. For most people, these cards are the first rung on the ladder to building a credit record so that they can later get a car loan or mortgage. Millennials have tended to avoid them, partly due to coming of age in the financial crisis and becoming leery about incurring debt. Jason notes that some young people are “sponsored” into the system by parents who provided them with cards, but for those who aren’t, it’s hard to build credit. That’s a catch 22 -- you can’t get a card because you don’t have a credit record, and you can’t build a credit record because you don’t have a card. Petal is solving that with one of the most important kinds of innovations underway in finance, namely, use of alternative data to evaluate risk. They are looking at the person’s own payment and income history, as reflected in their bank account, to determine ability to pay. Accessing that information has become controversial, as banks worry about allowing a third party to see this data even with the consumer’s permission, in case something goes wrong. However, the ability of consumers to allow such access is the life’s blood of most of the innovation underway in consumer finance. The CFPB is evaluating the issues arising around this, including questions like who really “owns” consumers’ bank account data, whether third parties’ data uses should be regulated, and whether we need to clarify where liability should fall in the event data is misused or breached. A lot of people are working on this issue. Solving it is one of the most important steps we can take toward making finance more inclusive. Listeners have often heard me say that I’ve spent most of my career working with efforts to promote consumer financial health and inclusion by regulating the financial industry, and that I think the results have been mixed at best! A few years ago, I realized that technology could do most of what we’ve been trying to do through policy (if we get the policy right). Petal is trying to do that -- use new data and technology to offer a product that they think will be highly profitable -- despite leaving some kinds of revenue on the table -- because consumers will choose it. Watching them will be fascinating. More information Articles on Petal’s September launch: https://www.paymentssource.com/organization/simple https://bankinnovation.net/2017/09/no-credit-score-say-hello-to-petal-card/ http://paybefore.com/finance-and-strategy/petal-uses-machine-learning-underwrite-credit-without-credit-score/ http://www.thisisgoingtobebig.com/blog/2017/9/8/introducing-petal-providing-access-to-credit-to-thin-file-consumers https://www.nytimes.com/2017/09/08/your-money/new-credit-card-option-for-those-with-scant-credit-histories.html?mcubz=1&_r=0 Jason's Article in Medium: https://medium.com/@jasonbgross_/petal-ba2bb74718f4 My podcast with Digit CEO Ethan Block (another example of innovators leveraging bank account data) http://www.jsbarefoot.com/podcasts/2016/2/25/effortless-saving-digit-ceo-ethan-bloch More for our listeners Please remember to review Barefoot Innovation on ITunes, and sign up to get emails that bring you the newest podcast, newsletter, and blog posts, at jsbarefoot.com. Be sure to follow me on twitter and facebook.  And please send in your “buck a show” to keep Barefoot Innovation going. Support our Podcast I’ll hope to see you at the events where I’ll be speaking this fall: Finovate, September 13th, New York City RegTech: Compliance Transformed, October 3-4th, Brooklyn, NY BAI Beacon/Fintech Stage, October 4-5, Atlanta, GA CFSI Network Summit, Fireside Chat with Thomas Curry, October 5, Chicago, IL FISCA, October 5-8th, Las Vegas, NV Money 20/20, October 25th, Las Vegas, NV Monetary Authority of Singapore Fintech Festival, November 13-17, Singapore RegTech Enable, November 27-29th, Washington, DC UN/ITU conference on financial inclusion in Bangalore (invitation only) Fintech Connect Live, December 6th, London S&P’s Fintech Intel, December 13, New York I’ll also be speaking in December to the Dutch Central Bank on financial innovation in December. I do many presentations for regulators and welcome those invitations. Regulators, in my view, have the hardest and most important role to play in financial innovation. We have wonderful shows coming up. I’ll be talking with Andres Wolberg-Stok of Citi Fin Tech. And I’m going to do one on one of the most fascinating experiences I’ve had in years -- I participated this month in the U.S. Army’s Threatcasting exercise  -- sort of a war-gaming process where we “threatcast” technology risks ten years into the future, and then “backcast” thinking about what we could do, today, to prevent the problem. It was off the chart fascinating.                                                                                                                                                                                                                                                                                                    We also have a show coming up with Miles Reidy, Partner at the venture firm QED. Miles and I had a fun and fascinating talk about two topics -- the investment outlook for regtech, and then how to find and work with a venture capital firm. Speaking of RegTech, we’re going to have a show with Merlon Intelligence, an AML regtech firm, and also a special show with my own co-founders -- at Hummingbird RegTech. I’m proud to say that Hummingbird has been selected to present at Money 2020 in the startup pitch session. Be sure to come and watch! Meanwhile, keep innovating! Subscribe Sign up with your email address to receive news and updates. Email Address Sign Up We respect your privacy. Thank you!

Fintech is no longer a matter of anti-bank disruption, and sometimes it takes a former entrepreneur in the space to best communicate that message. Andres Wolberg-Stok, who serves as Citi Fintech's global head of policy, shares how his bank makes high-tech work for in-house teams and customers alike.