Podcast appearances and mentions of christopher woolard

The UK's financial watchdog has lifted restrictions on German payments company Wirecard, allowing it to resume payment activities. The Financial Conduct Authority (FCA) imposed restrictions on the company's UK arm after its collapse last week. Thousands of people could not access their money or make payments through apps as a result. The FCA said its primary objective all along has been to protect the interests and money of consumers. Customers should now, or very shortly, be able to use their cards as usual. the FCA's interim chief executive, Christopher Woolard told the BBC's that the FCA had imposed very strict conditions on Wirecard's UK subsidiary based in Newcastle, which had knock-on effects for about 70 payments firms. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today’s episode of our special series on the future of regulation after the pandemic takes us   across the Atlantic (virtually) to talk with one of my favorite Barefoot Innovation guests. He is Christopher Woolard, the interim CEO of the UK Financial Conduct Authority. In our conversation, Chris talks about the opportunity to come out of this crisis and “build back better.” He discusses how the FCA has converted to the work-from-home environment and what adjustments may last beyond the crisis. He shares the worry that the economic downturn will follow the common crisis pattern of strengthening large incumbent firms at the expense of smaller ones, and how to avoid wiping out a decade of innovation. He talks about impacts on vulnerable consumers and on the UK’s fabled fintech sector, and describes the government’s efforts to build a bridge over the crisis and get as many people across it safely, as possible. 

Regulatory Innovation at the FCA   Christopher Woolard, Financial Conduct Authority  Moderator: Jo Ann Barefoot, Barefoot Innovation Group

Some organizations are so interesting that we come back to them more than once. Among US regulatory agencies, the most fascinating may be the Commodity Futures Trading Commission. Last July we ran a podcast conversation with the Commission’s Chairman, Christopher Giancarlo, which goes into greater depth about the role of the CFTC and it also contains Chairman Giancarlo’s thought-provoking statement that the top priority facing every regulatory body is to convert the rule book from analog to digital design. The CFTC is at the forefront of regulatory innovation in part because its leader is so passionate about the importance of it. In that spirit, they recruited the perfect person to lead the LabCFTC innovation project -- today’s guest, Daniel Gorfine. Luckily for us, the CFTC was able to attract Dan into government from the fintech sector – I first met him when he was at OnDeck – and he’s been bringing an innovator’s mindset and working models to this venerable government agency. This episode has three very meaty topics, each of which could have been a whole show. First, Dan talks about the vision and work of LabCFTC, sharing insights about how it’s organized that I know other regulators will find helpful. He talks about how they track and facilitate innovation in the financial markets, including a “primer” they issued on rules applying to cryptocurrency. He also explains how they explore new technology for use by the agency, itself -- they call that CFTC 2.0 -- as well as “Digital Reg,” an internal think tank for rapid learning and sharing of tech insight. Second, Dan talks with me about an exciting initiative they’ve just launched, issuing the first-ever CFTC Science Prize Competition Act challenge. They discovered this law empowering agencies to run competitions to solve regulatory problems in science and technology, and they decided to crowdsource ideas on both the problems to tackle and the process to use. Public comments are due July 24. In our conversation, Dan throws out some of the ideas he and his colleagues have thought of -- maybe regulatory data visualization tools, or machine-learning for market surveillance, or machine-readable and machine-executable regulation -- but they want to hear from you. Our listeners are among the most thoughtful people anywhere on regulation innovation, so please comment. You could even become CFTC Innovator of the Year! Our third topic is one that rarely surfaces in the innovation dialogue, and solely needs discussion: the legal and procedural obstacles to government agencies that want to embrace innovation. We could call the topic, government modernization. Think about it. If you were a federal agency wanting to keep up with technology innovation, you would want to be able to do a few things. You would want to be able to try out new technologies, hands-on. If the innovation was something you might adopt for your own agency, you would want to test it before you had to commit to a major procurement budget and procedure. You would also want to be able to brainstorm with a wide range of people, learning from them, thinking through ideas with them. All of this is stunted today by well-intentioned rules that were designed long ago -- for good reason -- to prevent inappropriate influence, backroom deals, and the like. Dan talks in particular about the Anti-Deficiency Act, which restricts procurement activities and prevents the CFTC from being able to try out new kinds of tools. Another issue is the procurement process itself. I met a few months ago with people from a different agency, showing them some innovative technology that could make their regulatory work easier, and one of them said, “If we decided today that we should adopt this, we would have it in seven years.” I’ve talked with other agencies that cite the Federal Advisory Committee Act, with its restrictions on meetings, and the Administrative Procedure Act, which structures the rule-making process and, at some stages, limits interactive dialogue. Agencies have raised concerns about various “government in the sunshine” rules, which again make it difficult to talk informally. Some can’t readily attend a breakfast or lunch event. They have to ask about the value of the meal being served and if it’s more than, I think it’s $15, they can’t eat it, or they have to go through paperwork to pay for it. And of course, there are complex approval processes for participating in various kinds of forums. More than any show we’ve done, this one puts you in the shoes of the regulatory agency and shows how their hands are tied by procedural prohibitions and requirements. I’d love to see someone do a study, maybe a graduate thesis, on how rules that were written in an older, slower era may now undermine the ability of regulators to keep up with exponential change in technology. We could use suggestions on updating them for the digital age. And remember, it’s an issue much broader than finance. I’ve been in and around Washington for decades and can remember the bad old days before some of these rules were created -- indeed, I remember some of the bad old practices that led to them. Still, we don’t need to straightjacket our regulators. Other countries have a much more fluid discussion between agencies and industry, and also have the ability to try things. One model is the Bank of England’s Fintech Accelerator, which explores new technology for the bank itself. And Dan and I both participated in London last month in the amazing AML Tech Sprint run by the UK Financial Conduct Authority -- which is a stunning model of innovative regulatory process. Its leaders were my guests on the last podcast we posted (which my friend Peter Renton of LendAcademy and LendIt called the “most fascinating discussion he’s ever heard on the future of financial regulation” -- if you missed it, check it out). Meanwhile, here’s some great news. Just a few days ago, Congressman Austin Scott (R-GA) introduced the CFTC Research and Development Modernization Act, H.R. 6121. Dan refers to it in our talk – it’s bipartisan legislation to address some of these hurdles at the CFTC. We’ll link to it in the show notes. The bill would permit the Commission to collaborate on projects with fintech developers. It would also allow it to receive “gifts” for R&D purposes, including software to try out, subject to common sense safeguards. The bill echoes work by Congressman Patrick McHenry (R-NC), who has sought to facilitate innovation by all the financial regulatory agencies. And the US agencies, themselves, are all moving ahead, too. The CFPB’s Acting Director, Mick Mulvaney, plans to launch a regulatory sandbox. The FDIC held a tremendously impressive technology forum. Five US agencies attended the UK tech sprint. Regulation innovation is coming, and no one is more thoughtful about it than Dan Gorfine. More links Our Podcast with Christopher Woolard of the UK Financial Conduct Authority Our Podcast with Nick Cook, the FCA’s head of regtech FinRegLab, which is leading regulatory innovation in the US Link to transcription of this episode (Note that transcripts may sometimes contain errors and that transcript timing notations do not match the posted podcast) More on Dan Gorfine Daniel Gorfine is Chief Innovation Officer and Director, LabCFTC at the U.S. Commodity Futures Trading Commission. LabCFTC is dedicated to facilitating market-enhancing financial technology (FinTech) innovation, fair market competition, and proactive regulatory excellence and understanding of emerging technologies. Daniel is also an Adjunct Professor at the Georgetown University Law Center where he teaches a course on ‘FinTech Law & Policy.’ Daniel was most recently Vice President, External Affairs & Associate General Counsel at OnDeck, and previously served as director of financial markets policy and legal counsel at the Milken Institute think tank where he focused on technology-driven financial innovation, capital access, and financial market policy. Earlier in his career, Gorfine worked at the international law firm Covington & Burling LLP and served a clerkship with U.S. District Court Judge Catherine C. Blake in the District of Maryland. A graduate of Brown University (A.B.), Daniel holds a J.D. from George Washington University Law School and an M.A. from the Paul H. Nitze School for Advanced International Studies (SAIS) at Johns Hopkins University. More for our listeners We have many more great podcasts in the queue. We’ll talk with another community bank CEO, Mike Butler of Radius Bank.  We’ll have two more episodes that we recorded this year at LendIt. One is a discussion of new research by LendUp and Experian, on credit reporting, and the other is with Greg Kidd, Founder of Global ID.  We also recorded two episodes at last month’s Comply 2018 conference in New York, with two regtech firms -- Compliance.ai, which offers machine-readable regulatory compliance, and Alloy, which has high-tech solutions for meeting the Know-Your-Customer rules in AML. Speaking of LendIt, I was a guest last week on Lend Academy podcast, and Peter Renton will be on our show soon as well, so watch for those. I’m also excited we’ll have several leading members of Congress on the show in the coming weeks. So, stay tuned! The summer conference slowdown is nearly upon us, but I hope to see you at upcoming speeches and events including: American Bankers Association Regulatory Compliance Conference, June 26, Nashville, TN Money 2020, October in Las Vegas. Among other things, I’ll be speaking on the Revolution Stage about the regulation revolution Also, watch for upcoming information on my collaboration with Brett King on his new book on the future of finance -- we’ll have a show and events on that as well. If you listen to Barefoot Innovation on iTunes, please leave a five-star rating on the show to help us build it. Also please remember to send in your “buck a show” to keep it going, and come to jsbarefoot.com for today’s show notes and to join our email list, so you’ll get the newest podcast, newsletter, and blog posts. As always, please follow me on Twitter and Facebook. Support our Podcast And tell me what you’re thinking about digitizing regulation. Let’s widen this dialogue to more people and more and more ideas! Subscribe Sign up with your email address to receive news and updates. Email Address Sign Up We respect your privacy. Thank you!

What if regulation, as we know it, might disappear? Regulation will never stop, of course, but what if some of it will take on a new form, shaped by technology?  What if we’re entering into a new era of what we could call “digitally-native” regulation, that’s as agile and intuitive about regulation as digitally-native consumers are about consumer technology? Of all the shows we’ve ever done, I think this is the most mold-breaking and thought-provoking. My guest comes from the agency that is leading the world in modernizing financial regulation for the digital age, and he leads the team that’s doing it. Nick Cook is the head of Regtech and Advanced Analytics for the United Kingdom’s Financial Conduct Authority. The FCA’s innovation leadership is world-renowned, especially for their Project Innovate and its “regulatory sandbox,” which allows careful testing of new financial technology that could benefit consumers. Less well-known, though, is a newer initiative, launched about 16 months ago, to explore regtech. As we’ve discussed in other shows, the term “regtech” is used in two ways. It refers both to regtech for regulators -- technology to enhance their own activities, and to regtech for the industry, to improve or streamline regulatory compliance. The FCA is working on both halves of this equation, and true to form, they’ve invented an innovative way to explore it. They aren’t using a sandbox for regtech (although the Bank of England has a sandbox-like “Fintech Accelerator”). Instead, Nick’s team has been convening what they call “tech sprints.” They invite a diverse set of participants -- banks, fintechs, tech companies, lawyers, consultancies, academics and others -- to come together for problem-solving exercises designed like hackathons. Sometimes for a day or two, and sometimes longer, they work on how new technology could be applied to a regulatory challenge like “digitizing” the rule book or streamlining regulatory reporting. Nick and I recorded this discussion at the Regtech Enable conference in Washington in December, where he had just shared an update on their work from the stage. At the time, they were in the midst of a two-week sprint that had two objectives. The first is to try to make regulatory reporting requirements “machine-readable,” and therefore much easier to navigate, including for innovative companies that often struggle just to know what rules apply to them. The second -- even more profound -- is to explore whether some regulations can also be made “machine-executable” -- could regulatory guidance, in some cases, be issued in the form of computer code, and therefore be self-implementing? This is an idea that’s been under discussion for about a year, including at a regtech roundtable I hosted last spring as a Senior Fellow in the Harvard Kennedy School Center for Business and Government. The same conversations have included a second concept the FCA is also pursuing, namely that new, high-tech regulation should be introduced gradually and should be optional for the industry. Gradual rollout would enable policymakers to start small and learn, while voluntary adoption opens up a practical road to changing our complex system with minimal disruption.   The FCA’s tech sprint on machine executable reporting ended a few days after we recorded this podcast. They will be sharing its results in the coming months, so be sure to watch for it! Let’s step back and think about what’s underway here. Finance is being transformed from analog to digital design. And, right behind it, so is regulation. Digitization will do for both -- for finance and financial regulation -- what it does for everything else. That is, it will make them faster, better, and cheaper, and will create a new foundation on which people will innovate further, in ways we cannot yet envision. A striking thing about my talk with Nick is how different he sounds from traditional regulators. It’s hard to put your finger on exactly why, but I think it’s mainly the comfort he displays with uncertainty. The same trait was evident in my earlier podcast with Christopher Woolard, who heads the FCA’s innovation strategy. Somehow this agency manages to be simultaneously bold and humble. They know they don’t have this all figured out. They even know they can’t figure it out by themselves. But they also know they can move forward, and that the way to do so is by engaging a community of diverse experts to work together. As Nick says, that can be scary, but the risks come way down, for regulators and everyone else, when solutions are developed collaboratively by people who believe in its potential to make regulation better. I hope this episode finds its way to many regulators, including those in the US where our agencies are actively exploring innovation agendas. Nick says regtech should be easier for regulators than fintech change is. For one thing, the companies leading it are generally not regulated entities, which makes them easier to work with. In addition, no consumers are affected by regtech experimentation. It’s about how the regulators can do their own jobs better, and/or can enable financial companies to do the same. As he puts it, regulators can, therefore, put “a toe in the water,” in regtech, and then move forward. My friend Andrew Burt of Imuta and Yale Law School helped design the FCA’s December sprint and has put out a white paper on it. And here is the FCA’s great video on how tech sprints work. So, I’m not naive. I’ve been a bank regulator, a U.S. Senate staffer, and I’ve worked in regulatory compliance for decades. Technology won’t magically make regulation easy. These solutions won’t fit some types of regulation, and where they do fit, they will inevitably create new problems. We all know all that. Still...Digitally-native regulation. Think about it. More on Nick Cook Nick leads the FCA’s RegTech activities, including the FCA’s TechSprint events - the first events of their kind convened by a financial regulator. He is responsible for creating the FCA’s Analytics Centre of Excellence to drive the organization’s use of data science, machine learning and artificial intelligence.  Nick is the FCA’s representative on the European Securities and Markets Authority’s (ESMA) Financial Innovation Standing Committee and an advisor to the RegTech for Regulators Accelerator Programme. Nick joined the Financial Services Authority (the FCA’s predecessor) in 2009, initially in its Enforcement and Market Oversight Division. Prior to joining the regulator, Nick qualified as a chartered accountant at KPMG Forensic. Other links Podcast with Sanjay Jain on the “India stack” technology Podcast with Miles Reidy on regtech More for our listeners Just before Christmas, I finished my 7 week, three-continent “World Tour.” I think 2017 was the pivotal year for moving both fintech regulation and regtech toward becoming priority issues at regulatory agencies throughout the world. 2018 will take it all to the next level. We’re starting the year with amazing shows in the queue. We’ll have a fascinating London conversation with the charismatic CEO of Starling Bank, Anne Boden; another with Innovate Finance CEO Charlotte Crosswell; and another with a group of amazing innovators working in Europe and Africa, including Ecobank. In the U.S. we’ll have one with Cross River Bank CEO Gilles Gade; with Michael Wiegand, who heads the Gates Foundation’s work on financial services for the poor; with Financial Services Roundtable CEO Tim Pawlenty; and with Nerd Wallet CEO Tim Chen...and many more! I hope to see you at upcoming events including: OCC Bank Information Technology Conference, January 9-12, Washington, DC Innovate Finance Global Summit, March 19-20, London, UK Bank Director, The Reality of Regtech, April 18, New York Texas Bankers Association Annual Conference, May 3, Houston, Texas Comply 2018, May 16, New York As always, 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. Again, follow me on twitter and facebook.  And please send in your “buck a show” to keep Barefoot Innovation going. And keep innovating! Support our Podcast Jo Ann Subscribe Sign up with your email address to receive news and updates. Email Address Sign Up We respect your privacy. Thank you!

I’ve been looking forward to today’s show since my very first visit to the UK’s Financial Conduct Authority, over two years ago. It was clear even then that they were doing something completely new for a regulatory agency. They were innovating. Not just creating new regulations, but actually rethinking how to create them. Reinventing the regulatory process itself. Specifically, they were responding to the novelty and especially the rapid pace of technology change in finance by creating an innovation initiative and soon thereafter, the world’s most famous regulatory sandbox. Today’s guest is Christopher Woolard, the FCA’s head of Strategy and Competition. In this episode, he tells the story of how they first realized they had to change, how they did it, and, importantly, what they’ve been learning so far. We sat down together last month during the Money 20/20 conference in Las Vegas, where we also did a fireside chat on the regulatory stage and where, for the first time, Chris shared their new report on lessons drawn from their first several cohorts of sandbox companies. Most of our listeners know what these sandboxes are -- they’re also sometimes called reglabs, greenhouses, or a new generation of pilot projects. They’re being adopted by a leading cadre of regulators, including a few in the United States, who have realized that the speed of innovation today is outstripping traditional regulatory processes, which means policymakers are going to have to invent something new to keep up. Part of what they’re inventing are these small, safe “testbeds” where they can get hands-on with new ideas, understand them, shape them if appropriate, and generate insights to feed back into mainstream regulatory activities. The original version, really, was in the United States in the CFPB’s Project Catalyst, which inspired the FCA to build something similar. But it was the UK’s much bigger and bolder effort that then caught the world’s attention and has now inspired several dozen imitators around the world, according to Aspen Institute research. Here is an article I wrote with more on how the program is designed. The FCA itself grew out of the financial crisis, as the UK decided to separate prudential banking oversight from a new entity focused on “conduct.” In some ways the restructure mirrors the U.S. decision to create the CFPB after the crisis, except that the FCA’s remit is not limited to consumer protection. The UK Prudential Regulation Authority is now housed in the Bank of England in the old City, while the FCA inhabits contemporary offices out in Canary Wharf, in an area burgeoning with startups and financial companies converting old warehouses to cool new space. In our talk, Chris describes what the FCA is doing in both the sandbox and the agency’s wider set of innovation initiatives -- and again, what they’re learning so far. He cites the FCA’s advantage over many regulators in having a mandate that includes fostering competition. He debunks some misconceptions about the UK sandbox, including that it waives or dilutes consumer protections. He touches on their work in regtech (a topic we’ll soon return to with the FCA’s regtech head, Nick Cook, in an upcoming show). He talks about the sandbox’s global imitators and also how the UK cooperates directly with other countries to ease the path for their respective innovators. And he shares his concern that if even one of these global sandbox experiments “catches a cold,” we could see a contagious loss of confidence that could undermine regulatory innovation, worldwide. I admire the FCA’s deft mixing of a very high-profile, exciting initiative with, simultaneously, a strong note of humility. They always emphasize that they don’t have all the answers, that they’re just learning as they go. But this, you see, is actually the key. The thing they figured out -- and believe me, it doesn’t come easily to regulators (or to anyone, for that matter) -- is that it’s not going to be possible, anymore, to figure things out before acting, in the way policymakers used to do. Instead, regulatory institutions are going to have to learn to navigate permanent and daunting, technology-driven uncertainty. They won’t have the option to hold still and wait for clarity to materialize...because it won’t. They need to find ways to move ahead iteratively and collaboratively. Testing -- sandboxes and reglabs -- will be essential to that. It’s a huge change, in both process and culture, for both regulators and industry. The sooner everyone starts making this shift, the better. The FCA’s humble tone is right and wise, but my view is that this regulator has shown not only vision, but also courage. They decided to take the risk to strike out in uncharted territory, to begin to blaze a new kind of policy pathway, and they’re inspiring many others to follow them. More on Christopher Woolard: Christopher Woolard is Executive Director of Strategy and Competition, and an Executive Board Member of the Financial Conduct Authority. He’s responsible for policy, strategy, competition, market intelligence, consumer issues, the Chief Economist's department, communications and the Innovate initiative. He is chair of the FCA's Policy Steering Committee and a non-executive board member of the Payment Systems Regulator. Christopher joined the FCA in January 2013. Previously he was Group Director and Content Board member at Ofcom. He has spent most of his career in regulation or policy development including working at the BBC and in government as a senior civil servant. He is a Sloan Fellow of London Business School.   Here are resources and links to items mentioned in the episode: Financial Conduct Authority Website FCA Project Innovate FCA Innovation Hub FCA Regulatory Sandbox FCA Report on Sandbox Results My podcast with Wai-Lum Kwok on Abu Dhabi’s Reglab More for our listeners I’m in the midst of a busy set of travels that will produce some fascinating podcasts. Between November 1 and December 20, I’m traveling to seven countries -- three in Asia, three in Europe, and one in Africa -- to speak on fintech and regtech for both industry and regulators. As I mentioned, we’ll have a podcast with the Nick Cook, who leads the FCA’s innovation work on regtech, recorded at Regtech Enable in Washington. We have one coming up with Wells Fargo’s Braden More on payments innovation. We’ll have Nerd Wallet CEO Tim Chen, and Cross River Bank CEO Gilles Gade. We’ll have one in London with the charismatic CEO of Starling Bank, Anne Boden and with the trade association Innovate Finance, and also a lively discussion with a group of amazing innovators working in Europe and Africa. We’ll have one with Michael Wiegand, who heads the Gates Foundation’s work on financial services for the poor. And back in the U.S., we’ll have a show with Financial Services Roundtable CEO Tim Pawlenty...to name a few! Plus, I’ll be recording a special series straight from the floor of the American Bankers Association conference on financial crimes, in December. I hope to see many of you there and at other upcoming events, including these: S&P’s Fintech Intel, December 13, New York The African Fintech Forum, December 18-19 in Abidjan, Ivory Coast www.africafintechforum.net Dutch Central Bank, December 20, Amsterdam 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. See you soon! Support our Podcast Subscribe Sign up with your email address to receive news and updates. Email Address Sign Up We respect your privacy. Thank you!

If you spend a lot of time in Washington, as I do, you see a lot of issues framed around statistics about people, especially medians, and averages. For instance, policies aimed at helping lower-income people typically stratify Americans into categories, in bands above and below median income, or median incomes in their census tracts. I’ve worked with programs like this for decades -- HUD housing and mortgage programs, the Community Reinvestment Act, and many others. And then one day, someone comes along and goes inside those data categories, and finds out what’s really happening in the lives of the people covered by them. And it turns out to be surprising. That is exactly what today’s guest did. She is Rachel Schneider, Senior Vice President of the Center For Financial Services Innovation and co-author of the new book, The Financial Diaries: How American Families Cope in a World of Uncertainty.  Some years ago, Rachel joined a CFSI study trip to South Africa where she learned about financial diaries methodology -- intimate research that tracks the daily financial lives of individual consumer households. With funding from several organizations including the Omidyar Network, she and NYU Professor Jonathan Morduch undertook a diaries project in the United States. They identified a cross-section of America -- 235 families in a wide variety of circumstances, in communities ranging from Mississippi to Ohio to California to New York City, and had a team spend over a year with each one, mapping every bit of money that flowed into and out of each household. Not surprisingly, they found some alarming trends, which other research has revealed as well. A full fifty-seven percent of households today are considered financially unhealthy -- including a third of those with incomes over $100,000 a year. But by looking closely, they found much more. In particular, they spotlighted a huge issue that had been traditionally masked by the statistical averages -- namely that for many people, the most pressing problem is not actually lack of money, but rather volatility. It turns out that millions of Americans live within their means, in that they spend less than they earn, but struggle nevertheless because they have volatile and unpredictable earnings and expenses. Since they also lack savings, they can’t cushion or smooth out their expense spikes and income troughs without relying on high-cost services like payday loans and checking account overdrafts. It’s worth pondering the irony that these consumers can afford financial services, as evidenced by the fact that they do -- they actually pay more in interest and fees than other people do. But they are not well-matched to our current models of products, pricing, money management, and risk assessment. CFSI’s research has also revealed something else: families that appear identical in the statistical averages may actually be in completely different situations. Some are rising while others are sinking. And some are overwhelmed and confused by financial management, while others are the best money managers in the population, because they have to be -- have to know exactly how much money they will earn, and when it will be in their account, and exactly how much they must pay, and precisely when, and which bills have timing leeway and grace periods and which don’t, and then must strategically plan and execute the daily, weekly, and monthly financial plan. As we’ve discussed in other shows, innovators are working on all these problems -- more affordable smoothing solutions, easier saving, better saving psychology, effortless financial management, ladders toward good credit scores, new data that more accurately evaluate credit risk, and more. We’ve talked about those in past shows and will cover many more going forward. Most of these innovators begin by trying to understand customers’ real-life ways of using money, including by bringing in behavioral science -- recognizing that finance is not just a cerebral process but also an emotional, and social, one. The financial industry will do even better as it aligns the products offered with the ways people think and feel about them. For this deeper understanding, nothing is more illuminating than Rachel’s book. In today’s show, she helps us get to know some of the people the Diaries tracked, see a little bit into their lives, and learn the strategies they use to make ends meet. In the process, she gives us a lot to think about, beyond the statistics. So...buy the book! It’s in the show notes at jsbarefoot.com. And meanwhile, enjoy my conversation with Financial Diaries author Rachel Schneider. More about Rachel and her work Rachel Schneider is a Senior Vice President at CFSI, and co-author of The Financial Diaries: How American Families Cope in a World of Uncertainty. The Financial Diaries connects the findings of the ground-breaking U.S. Financial Diaries research project, which collected highly detailed data about how 235 households save, spend, borrow and plan over the course of a year, with the broad trends upending the economic lives of American families. It uncovers the emergence of a hidden inequality, in addition to disparities in income and wealth – an inequality in access to steady finances. It provides a framework for how to develop products and policies that can help. Rachel is highly sought-after as a consultant and speaker, Her research has been featured in the nation’s top publications, including the New York Times, Wall Street Journal and many others, and she speaks frequently at a broad spectrum of events. Though she began her career as an investment banker at Merrill Lynch & Co., Rachel credits her commitment to the potential for innovative finance to solve major social problems from her days as a VISTA Volunteer (now AmeriCorps). She holds a J.D./M.B.A. from the University of Chicago, and a B.A. from UC Berkeley. She lives in New York City with her husband and their two children. She occasionally “competes” in triathlons, which are getting easier to “win” as the number of competitors in her age group shrinks. She says the same cannot be said for improvement in her piano skills. Here are other resources, including items mentioned in the episode: My 2015  blog post on the Diaries project:  http://www.jsbarefoot.com/blog/2015/1/5/diary-of-a-mad-financial-system My podcast with CFSI CEO Jennifer Tescher My podcast with Colleen Briggs, JP Morgan Chase My podcast on CFSI Innovation Lab Even:  https://even.com/ Omidyar Network Todd Baker’s Research at the Harvard Kennedy School Center for Business & Government More for our listeners The next two months will bring a podcast bonanza to Barefoot Innovation, with amazing shows coming up. I just recorded a fascinating one with Christopher Woolard of the UK Financial Conduct Authority on the FCA’s innovation initiative, including lessons learned so far from their famous regulatory sandbox. We’ll also have one with the Nick Cook, who leads the FCA’s innovation work on regtech. We have one coming up with Wells Fargo’s Braden More on payments innovation. We’ll have Nerd Wallet CEO Tim Chen, and Cross River Bank CEO Gilles Gade. We’ll record one in London with the trade association Innovate Finance, and on this side of the pond, we’ll have a show with Financial Services Roundtable CEO Tim Pawlenty...to name a few! And, I’ll be recording a special series straight from the floor of the American Bankers Association conference on financial crimes, in December. I hope to see many of you there and at other upcoming events. My speech schedule is packed solid from now to the end of the year, which is an indicator of the fast-growing interest in fintech regulation and in regtech. I recently spoke at five events in four cities in four days, and here is some of what’s coming up. Central Bank Summit on blockchain and digital currency, October 30 in New York Regtech Rising, November 2, London Asia Finance Forum, Fintech and Sustainable Development, November 8-10, Manilla 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 American Bankers Association Financial Crimes Enforcement Conference, December 3-5, National Harbor Maryland S&P’s Fintech Intel, December 13, New York The African Fintech Forum, December 18-19 in Abidjan, Ivory Coast www.africafintechforum.net Dutch Central Bank, December 20, Amsterdam 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 Meanwhile, don’t stop innovating! 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!

Hear how criminals pretending to be from Talk Talk aim to con customers out of their savings. Money Box listener Graham recorded a call from a thief who said he worked for the firm's customer services team, took control of his computer and almost managed to get access to Graham's bank account details. You will hear the various stages of the con. Talk Talk has said that 'only' 157,000 people and not 4 million had their personal details hacked in last month's attack. As credit card debt rises by more than £2 billion a year to £63 billion, the regulator, the FCA, has published thoughts towards how it might control the market. It found that nearly one in five credit card holders, nearly six million people, are in difficulty with their debts. Most of them - the ones who have big borrowings or pay the minimum each month - are profitable for the card companies. So there is no incentive to try to help them. Will the FCA change that? The regulator's director of strategy and competition, Christopher Woolard, speaks to the programme. Older people have cashed in £4.7bn from their pensions since the new freedoms came into force more than six months ago. It's prompted a debate about how best to ensure that people do not run out of retirement money by spending it too quickly and facing poverty in old age. Should there be a warning system to 'nudge' people if they are in danger of blowing their savings? Do we need new financial products to help provide people with an adequate lifetime income from their pension pot? Katie Evans from the Social Market Foundation and Henry Tapper from First Actuarial debate the issues.