Podcasts about Radius Bank

Every bank that decides to get into the Banking-as-a-Service (BaaS) space already has an existing legacy business. Most of those legacy businesses have very little crossover with fintech and BaaS, so internally at the bank, there is a completely new skill set that needs to be developed. But then there are those banks that were born digital and for which BaaS is a natural extension of their existing business.My next guest on the Fintech One-on-One podcast is Mike Butler, the CEO of Grasshopper Bank. I first had Mike on the show back in 2019, when he was the CEO of Radius Bank - that was the bank that LendingClub acquired in 2021. So, Mike is back at the helm of another digital bank, bringing his deep experience in BaaS and digital banking. And he has big plans for Grasshopper.In this podcast you will learn:How Mike went from selling Radius Bank to becoming CEO of Grasshopper.The core offerings of Grasshopper.Why Grasshopper has a "work from away" culture.How much they focus on BaaS versus serving customers directly.The core learnings he brought from Radius Bank to Grasshopper.Who Mike thinks of as his main competitors.How the BaaS challenges of 2024 impacted Grasshopper.Why you can't dip your toe in the water when it comes to BaaS.How the expectations of fintechs have changed.The types of fintechs they work with today.Why they decided to acquire Auto Club Trust, an insurance company.Where Mike sees the future growth for Grasshopper.Connect with Fintech One-on-One: Tweet me @PeterRenton Connect with me on LinkedIn Find previous Fintech One-on-One episodes

Julie is joined by Scott Sanborn, CEO of Lending Club (peer-to-peer lending) to discuss:the acquisition of Radius Bank (2:48)Lending Club's market valuation (6:34)the inclusion of crypto (13:05)why Lending Club is a 2021 success story (17:34)New episodes every Monday and Thursday!For daily updates on the fintech space sent right to your email, subscribe to the FTT newsletter HERE.For weekly updates on the cryptocurrency and DeFi space, subscribe to the Crypto Tonight newsletter HERE.For a more in-depth breakdown and analysis of the fintech space, subscribe to the premium newsletter, FTT+, HERE.Follow us on Twitter:FTT - @fintechtoday_Julie - @julieverhage[Theme Song Credit]

Media Mavens sit down with Chris Tremont, Executive Vice President, Digital Banking at Lending Club to talk about the new era of banking and how digital is putting finance at our fingertips. With the Mavens, Tremont discusses the substantial growth of technology and how its making banking more seamless and easier to access. With technology evolving at a rapid pace, the world of finance and banking is gaining speed over at Lending Club, which merged with Radius Bank, one of the first all digital banks in the United States. Despite the seemingly confusing concept, customer service is just as superior with digital banks as it was with traditional banks. In fact, Lending Club is providing even better customer support, and offering up significantly easier ways to do your banking. Tune in this week to learn about “ A New Era of Banking in a Digital World " and how to streamline your finances.

LendingClub (LC) CEO Scott Sanborn discusses the Radius Bank acquisition and skyrocketing loan originations and the end of banking as we know it. Clorox (CLX) battles post-pandemic filth. Why Activision Blizzard's diversity problems could help Take-Two Interactive (TTWO). Marriott International (MAR) sees a rapid return to travel. And SEC chair Gary Gensler wants purview over Bitcoin, Ripple and XRP and the rest of the world of crypto. The Drill Down with Cory Johnson offers a daily look at the business stories behind stocks on the move. Learn more about your ad choices. Visit megaphone.fm/adchoices

In February of this year, LendingClub closed the acquisition of Radius Bank, becoming a full-spectrum fintech marketplace bank and among the first fintech companies to buy a bank. LendingClub's long-term vision is to pursue a platform strategy expanding the use of a variety of financial products and services by their 3 million members, while providing transaction integration and processing capabilities. To understand what makes this combination of digital bank and lending platform unique, we are joined by Scott Sanborn, CEO of LendingClub. Scott shares his perspective on how the LendingClub platform can leverage the loyalty of borrowers for future relationship expansion. This episode of Banking Transformed is sponsored by FIS. The way we move money is changing. We want to send money in real-time—to the other side of the world. We want everything in one place, integrated, seamless and on our devices. Embedded, fast, standardized, frictionless and secure. These are our Financial Futures. The Financial Futures podcast by FIS explores fintech innovation and the trends that are already transforming the way the world pays, banks and invests...across the globe. And the mechanisms we'll need to prosper in this brave new landscape. Is the world's technology up to the challenge? Are we? Find Financial Futures on your favorite podcasting app. FIS. Advancing the way the world pays banks and invests. More at: https://feeds.transistor.fm/financial-futures

Tune in as Brett King hosts Scott Sanborn, CEO of LendingClub, the only full-spectrum fintech marketplace bank at scale, to discuss LendingClub’s decision to buy Radius Bank earlier this year – why it's transformative and how it changes the company. Plus learn why LendingClub went the acquisition route and more.Stay tuned, as JP Nicols hosts Beth Bafford, Vice President of Syndications and Strategy at Calvert Impact Capital and an architect of the new SOAR Fund. That’s S-O-A-R for Southern Opportunity and Resilience, to discuss the fund and learn why a group of nonprofit community lenders in the South have teamed up with national philanthropists, corporations, investors and others to launch a multi-million dollar fund aimed at helping small businesses and nonprofits across the South.

Scott Sanborn, CEO of LendingClub, talks in-depth about why the prominent fintech opted to buy Radius Bank earlier this year and how that move is transforming the company. He also talks about how competition will heat up in the peer-to-peer lending space as the pandemic ends.

For the last several years, Boston-based Radius Bank had been a popular name in banking, due to their transformation from sleepy community bank to an innovative player committed to mobile-centric banking and unique fintech partnerships. They became even more prominent when it was announced in early 2020 that well-known fintech LendingClub was to acquire them, a game-changing transaction that has recently closed. For Chris Tremont, Radius' EVP of Virtual Banking, and his team, a new era has begun. In this episode, Keith and Chris discuss the bank's evolution, transforming the bank into an innovative leader and pioneer in community banking.”

Open banking seems like it’s been just around the corner for years.  Now it’s here…  But most organizations are still a little scared to move into it.  Why? To find out, I caught up with Phil Peters, EVP/Chief Operating Officer & Head of Institutional Banking at Radius Bank, a company who’ve embraced open banking with open arms.  In this episode, Phil explains: - Why Radius moved into open banking - How embedded finance is shaping the future - What makes a winner (and why there will be many)  To ensure that you never miss an episode of Payments Innovation, subscribe on Apple Podcasts, or Spotify, or here.  Until next time!

Open banking seems like it’s been just around the corner for years.  Now it’s here…  But most organizations are still a little scared to move into it.  Why? To find out, I caught up with Phil Peters, EVP/Chief Operating Officer & Head of Institutional Banking at Radius Bank, a company who’ve embraced open banking with open arms.  In this episode, Phil explains: -Why Radius moved into open banking -How embedded finance is shaping the future -What makes a winner (and why there will be many)  To ensure that you never miss an episode of Payments Innovation, subscribe on Apple Podcasts, or Spotify, or here.  Until next time!

Banks may be losing their edge when it comes to CX, at least according to a new report from Sitel Group. “While the retail industry quickly implemented practical online solutions such as click and collect to meet changing customer needs, banking and financial services fell behind,” Sitel Group said in a financial services industry snapshot of the report. U.S. Bank, meanwhile, reported during its second-quarter earnings that 77% of its customers are using digital channels. Bank Innovation also sat down this week with Chris Tremont, executive vice president of virtual banking at Radius Bank, to discuss the bank’s technology roadmap. Find this and more in today’s edition of The Weekly Wrap, featuring JJ Hornblass and Rick Morgan, for the week ending July 24, 2020.

When COVID-19 accelerated customer movement into mobile and online banking solutions — and triggered consumers to push their funds into bank accounts — banks that had made investments in the digital customer experience were positioned to capitalize. On the latest episode of the ABA Banking Journal Podcast, Radius Bank President and CEO Mike Butler discusses the branchless bank’s fintech-forward strategy and how it helped the bank double account openings in the post-pandemic environment, a core part of the bank’s deposit-focused strategy. In the wide-ranging conversation, Butler also discusses: Radius Bank’s “banking as a service” partnerships with fintech firms and how it vets potential partners to “create an Amazon-like experience for our clients.” The bank’s pending acquisition by nonbank fintech firm Lending Club and how the deal may rebundle some core banking functions in the combined organization. How fintech firms have prepared for the economic downturn. The persistent value of the traditional banking bundle of lending, payments and insured deposits.

In our latest episode of the Wharton Fintech podcast, Miguel Armaza is joined by Laura Spiekerman, She’s the Co-Founder and Chief Revenue Officer at Alloy, an operating system for identity in financial services, including KYC, AML and fraud. Laura Spiekerman is a 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. Alloy works with both fintech companies and banks, including Marqeta, Petal, Brex, Radius Bank and others. Alloy was recognized on the recent Forbes' Cloud 100 Rising Stars list and as one to the global Venture Radar Top 10 RegTech Startups. Prior to Alloy, Laura led Business Development & Partnerships at an ACH payments startup and was on the Research & Investment team at Imprint Capital Advisors (acquired by Goldman Sachs). Laura is a proud Barnard College alumna and lives in Oakland, California. Alloy is an operating system for identity in financial services, including KYC, AML and fraud. The Alloy API allows its clients to customize which data sources they access and the rules applied, to validate an identity in real time so that 98% of users will be automatically decisioned upon onboarding, increasing conversion, lowering fraud, and reducing manual reviews. Alloy has been working with both fintech companies and banks since it launched in 2016, and has a client base of ~80, including institutions like Radius Bank, KeyBank, Brex, Marqeta and others. In this interview, Laura shares: - Her background and how she got started in the industry as employee #1 at Kopo Kopo, a Kenyan fintech company. - What inspired Laura and her co-founders to build Alloy and how they crafted a successful strategy to secure their first customers. - The strategic reasons why Alloy's products are attractive for fintech startups, community banks, and large banks alike. - Company Culture. Why it's important to hire people that are different from each other and why Alloy emphasizes celebrating differences and being bold. - Her experience as a female fintech leader and why men should take on more responsibility to recruit and cultivate women in the industry. - COVID-19's impact on Alloy and its clients- as fraud and cybersecurity attacks have increased in the last few months, Alloy has taken steps to help their customers combat these attacks. - Lessons for founders! Why learning how to sell is the most important skill to learn for entrepreneurs.

In this episode, you'll learn:What is the intrinsic value of Berkshire Hathaway?What is the intrinsic value of Markel? What is the competitive advantage of eBay and what is the intrinsic value? Why Spotify might be undervalued at a $30B valuation even though it’s not making any money·Ask The Investors: How are Preston and Stig managing their stock portfolios? BOOKS AND RESOURCES MENTIONED IN THIS EPISODEPreston and Stig’s tool for stock selection and determining the momentum of all US stocks and ETFs, TIP Finance Mastermind Discussion Q1 2020Preston and Stig’s FREE resource, Intrinsic Value IndexSubscribe to Preston and Stig’s FREE Intrinsic Value AssessmentsDatabase of what super investors’ invest in, DataromaTobias Carlisle’s talk at GoogleTobias Carlisle’s podcast, The Acquires PodcastTobias Carlisle’s ETF, ZIGTobias Carlisle’s book, The Acquirer's Multiple - read reviews of this bookTweet directly to Tobias CarlisleHari's Blog: BitsBusiness.comTweet directly to HariDiscover CMC Markets, the ultimate platform for online trading on mobile and desktop.Experience savings in your shipping cost with Pitney Bowes SendPro.Search for The Jordan Harbinger Show on Apple Podcasts, Spotify or wherever you listen to podcasts. Capital One. This is Banking Reimagined.Earn unlimited 1% cash back with Radius Bank. Get a $50 sign on bonus with promo code “TIP”.

In this episode, you'll learn:Why did Warren Buffett sell his airline stocks? Whether Warren Buffett recommends that retail investors buy stocks now? Why Berkshire Hathaway hasn’t acted more in the financial markets during the corona crisis so farHow does Warren Buffett allocate capital across Berkshire HathawayAsk The Investors: What does “cash is trash” mean?Books and resources mentioned in this episode:Check out the momentum tool that Preston and Stig created for the TIP Community that predicted the crash in the stock market. TIP Finance also gives you access to our filter tool for the cheapest companies in the US. Preston and Stig’s interview with Jeff Booth about inflation and deflationPeter Diamandis and Steven Kotler’s book, The Future Is Faster Than You ThinkInterview with Ray Dalio where he says that, “cash is trash”Follow Ray Dalio on Linkedin Preston’s tweet about the Cantillon Effect Discover CMC Markets, the ultimate platform for online trading on mobile and desktop.Capital One. This is Banking Reimagined.Get a FREE book on how to systematically identify and follow market trends with Top Traders Unplugged. Solve your long list of must-reads once and for all with Blinkist.Earn unlimited 1% cash back with Radius Bank. Get a $50 sign on bonus with promo code “TIP”.The brand new season of Billions is now streaming only on Stan. Start your 30 day free trial today!

Episode ResourcesSUBSCRIBE to the NEW Real Estate Investing PodcastGet a FREE audiobook from AudibleJohn Bogle’s book The Little Book of Common Sense InvestingRick Ferri’s book The Power of Passive InvestingErin Lowry’s book Broke Millennial Takes On InvestingAll of Robert’s favorite booksDiscover CMC Markets, the ultimate platform for online trading on mobile and desktop.Capital One. This is Banking Reimagined.Earn unlimited 1% cash back with Radius Bank.Get daily content from Robert on Instagram @therobertleonardRead this episode’s transcript and full show notes on TIP: theinvestorspodcast.com/millennial-investing

In this episode, you'll learn:What is happening in the stock market right nowHow Preston and Stig are positioned in the marketWhether the US is falling into the same liquidity trap as Japan.Pros and cons of fiat currenciesStock market similarities and differences to 1929Ask The Investors: How do I avoid catching a falling knifeBOOKS AND RESOURCES MENTIONED IN THIS EPISODECheck out the momentum tool that Preston and Stig created for the TIP Community that predicted the crash in the stock market. TIP Finance also gives you access to our filter tool for the cheapest companies in the US.Subscribe to our newsletters about the current market conditionsLink to Preston’s series of tweets that showed the momentum status on indexesYuval Noah Harari’s book, Sapiens, recommended by Guy Spier and Stig - Read reviews of this book.Preston’s pitch of Biogen and Stig’s pitch of Allstate the Mastermind Meeting 4th quarter 2019.Discover CMC Markets, the ultimate platform for online trading on mobile and desktop.Capital One. This is Banking Reimagined.Get a FREE book on how to systematically identify and follow market trends with Top Traders Unplugged. Solve your long list of must-reads once and for all with Blinkist.Earn unlimited 1% cash back with Radius Bank. Get a $50 sign on bonus with promo code “TIP”.The brand new season of Billions is now streaming only on Stan. Start your 30 day free trial today!

Episode ResourcesSUBSCRIBE to the NEW Real Estate Investing PodcastGet a FREE audiobook from AudibleThomas Stanley and William Danko’s book The Millionaire Next DoorRamit Sethi’s book I Will Teach You To Be RichGeorge Clason’s book The Richest Man in BabylonAll of Robert’s favorite booksDiscover CMC Markets, the ultimate platform for online trading on mobile and desktop.Capital One. This is Banking Reimagined.Earn unlimited 1% cash back with Radius Bank.Get daily content from Robert on Instagram @therobertleonardRead this episode's transcript and full show notes on TIP: theinvestorspodcast.com/millennial-investing

In this episode, you'll learn:How Mohnish Pabrai thinks about biasesWhy and how Mohnish Pabrai uses his checklist in stock investingHow has the shorter tenure of stock in S&P500 made Mohnish think of compoundersWhy Mohnish started Dakshana foundationHow Mohnish Pabrai uses his investor mindset to give to charities with the highest possible returnBOOKS AND RESOURCES MENTIONED IN THIS EPISODEMohnish Pabrai's Reading ListLearn more about Mohnish Pabrai’s Dakshana FoundationMohnish Pabrai’s websiteLarry Cunningham’s book, The Essays of Warren Buffett – Read reviews of this book. Mohnish Pabrai's book: The Dhandho InvestorDiscover CMC Markets, the ultimate platform for online trading on mobile and desktop.Capital One. This is Banking Reimagined.Get a FREE book on how to systematically identify and follow market trends with Top Traders Unplugged. Solve your long list of must-reads once and for all with Blinkist.Earn unlimited 1% cash back with Radius Bank. Get a $50 sign on bonus with promo code “TIP”.The brand new season of Billions is now streaming only on Stan. Start your 30 day free trial today!

Episode ResourcesSUBSCRIBE to the NEW Real Estate Investing PodcastGet a FREE audiobook from AudibleThomas Stanley and William Danko’s book The Millionaire Next DoorRamit Sethi’s book I Will Teach You To Be RichGeorge Clason’s book The Richest Man in BabylonMohnish Pabrai’s book The Dhandho InvestorThree Major Credit Reporting AgenciesCredit score tracking with Credit KarmaLuckin Coffee’s Financials on MorningstarVanguard Real Estate ETF VNQAll of Robert’s favorite booksDiscover CMC Markets, the ultimate platform for online trading on mobile and desktop.Capital One. This is Banking Reimagined.Earn unlimited 1% cash back with Radius Bank.Get daily content from Robert on Instagram @therobertleonardRead the full transcript and show notes of this episode on TIP: theinvestorspodcast.com/millennial-investing

In this episode, you'll learn:Why we have too much debt and not enough growth in the worldWhy we need monetary policies deflation on a global scaleWhy we won’t have a new Bretton WoodsWhy technology is massive deflationaryWhy and how to invest in businesses that have the best networking effectAsk The Investors: What does the low interest rate mean to us as consumers?BOOKS AND RESOURCES MENTIONED IN THIS EPISODEJeff Booth’s book, The Price of Tomorrow – Read reviews of this book Tweet directly to Jeff BoothCapital One. This is Banking Reimagined.Get a FREE book on how to systematically identify and follow market trends with Top Traders Unplugged. Experience savings in your shipping cost with Pitney Bowes SendPro.Solve your long list of must-reads once and for all with Blinkist.Earn unlimited 1% cash back with Radius Bank. Get a $50 sign on bonus with promo code “TIP”.The brand new season of Billions is now streaming only on Stan. Start your 30 day free trial today! Discover CMC Markets, the ultimate platform for online trading on mobile and desktop.

Episode ResourcesGet a FREE audiobook from AudibleGino Wickman’s book Entrepreneurial LeapChris Ducker’s book Virtual FreedomNathan Latka’s book How to Be a Capitalist Without Any CapitalDaymond John’s book The Power of BrokeAll of Robert’s favorite booksEarn unlimited 1% cash back with Radius Bank.Capital One. This is Banking Reimagined.Get daily content from Robert on Instagram @therobertleonardRead the full transcript and show notes of this episode on TIP: theinvestorspodcast.com/millennial-investing

In this episode, you'll learn:How to estimate the intrinsic value of Bank of AmericaHow to understand bank valuations based on tangible book valueHow to read the yield curve and what it means for profitability for banksHow to understand the competitive situation between Wells Fargo, JP Morgan, and Bank of AmericaAsk The Investors: Why should I buy psychical gold over paper gold?BOOKS AND RESOURCES MENTIONED IN THIS EPISODEOakmark Fund’s websiteOakmark Fund’s market commentariesPreston and Stig’s interview with Bill NygrenPreston and Stig’s interview with Sean Stannard-Stockton on First Republic BankCapital One. This is Banking Reimagined.Get a FREE book on how to systematically identify and follow market trends with Top Traders Unplugged. Earn unlimited 1% cash back with Radius Bank.Have everything you need to live your most comfortable life with Brooklinen. Use promo code INVESTORS.

In this episode, you'll learn:How the Chinese central bank operates, and which interests they have in manipulating their interest rateWhat the real drivers behind the trade war areHow to understand the Chinese economy and the impact of the US and the rest of the worldWhy China will soon grow only 1-2% annually Why the Chinese banking system prevents acute crises, but also limits growthHow to invest in China and to capture the premium from uncertaintiesResources mentionedTweet directly to China Beige BookConnect with China Beige Book on LinkedInChina Beige Book websiteCapital One. This is Banking Reimagined.Get a FREE book on how to systematically identify and follow market trends with Top Traders Unplugged. Earn unlimited 1% cash back with Radius Bank.Have everything you need to live your most comfortable life with Brooklinen. Use promo code INVESTORS.

Until recently, M&A bankers were like cooks in the kitchen cooking up hotter and hotter deals. With recent deals like Visa buying Plaid, Intuit buying Credit Karma, and Lending Club buying Radius Bank, many anticipated a banner year of deals that would be a prime force to reshape the industry. But COVID-19 forced the cooks out of the kitchen and cooled down formerly red hot valuations. Now, as we are socially distancing, we are looking at the earlier deals, and project what the kitchen will be like the rest of the year. Guests: Ryan Falvey, Partner, Financial Ventures Studio Tyler Griffin, Partner, Financial Ventures StudioHosts: Sanjib Kalita, Editor-in-Chief, Money 20/20 Rachel Morrissey, Content Producer, Money 20/20 USAProducers: Roland Bodenham, Senior Video Producer, Ascential Rachel Morrissey, Content Producer, Money 20/20 USA

Alex starts the episode with a break down of why the deal between Lending Club and Radius Bank is genius. Also covered in this episode, why Target+ is failing and the inception of Symphony messaging. TIMESTAMPS: 00:09 - Meet Moxie 01:09 - Lending Club Radius Bank Deal 11:26 - Symphony Messaging 14:39 - Target+ Misses

We cover a lot of ground in this episode, starting off with what companies are disclosing about coronavirus risks. Then, we touch on the Wells Fargo fake accounts scandal, how Shark Tank 'Shark' Barbara Corcoran got her $400,000 back from scammers, and explore the LendingClub purchase of Radius Bank for $185 million - the first fintech takeover of a regulated US bank. In other news, there's the Robinhood outage, NetSuite's adaptation of bank feeds, Sage's departure from Latin America, and the closing of legal startup Atrium. What's more, we examine Deloitte's new VR platform, why QuickBooks Connect London is cancelled, and how the IRS expects to audit more wealthy taxpayers. Not last, and definitely not least, we explore the reasons why women leave accounting firms, what we can do about it, and more!

It rocked the fintech world. When LendingClub announced they would be acquiring Radius Bank (pending regulatory approval of course) it was a groundbreaking moment for fintech. It was the first time a fintech company had acquired a bank and suddenly the rules were being rewritten. Now, a lot has to happen before the acquisition is […] The post Podcast 237: Scott Sanborn of LendingClub appeared first on Lend Academy.

Jason Henrichs and Brett King host Steve Allocca of Lending Club & Mike Butler of Radius Bank to talk through the major elements that have been changing the landscape of fintech and the mergers happening today! Then, Dara Tarkowski of Actuate Law and host of Tech on Reg explains the regulatory effects of merger madness!

Welcome to the Tearsheet Podcast. I’m Zack Miller. Last week, LendingClub announced that it would be acquiring Radius Bank. It was exciting news as a large influential fintech player purchased a bank to round out its own balance sheet and provide banking functionality its own customers were asking for. I’m excited because we have Steve Allocca, president of LendingClub and Mike Butler, CEO and president of Radius Bank on the show for an exclusive talk about the reasoning behind the merger and how the combined entity is positioned to scale. We talk about the vision of becoming a marketplace bank at scale, as well as the role of Radius’ banking as a service offering. We talk about what each party brings to the table and the rebundling of financial services. Before we jump into the podcast, I wanted to introduce you to Outlier, Tearsheet’s leading membership program. It’s designed for top fintech and financial service professionals to stay on top daily of the biggest trends, the top companies, and the leaders of this next generation of finance. Get industry briefings by experts like the ones we just hosted on best practices in PR and customer acquisition. Find out more at Tearsheet.co/outlier

Connect with Fintech One-on-One: Tweet me @PeterRenton Connect with me on LinkedIn Find previous Fintech One-on-One episodes

It takes a certain kind of mindset for the leader of a small community bank to go all in on digital. Particularly back in 2012 before digital banking became the all the rage with massive funding rounds and millions of customers flocking to digital bank startups. Our next guest on the Lend Academy Podcast is […] The post Podcast 227: Mike Butler of Radius Bank appeared first on Lend Academy.

A startup fintech Brexlançou a Brex Cash, uma conta bancária digital gratuita para startups, criada em parceria com o Radius Bank.O serviço permite efetuar pagamentos e transações sem pagar taxas e todas as transações efetuadas são remuneradas através de um sistema de pontos que podem ser trocados por milhas para viagens ou cashback.Outra vantagem é o facto de os depósitos oferecerem um rendimento de 1,6% ao ano.Saiba mais sobre inovação e nova economia em SuperToast.pt. 

The purchase process for first-time e-commerce buyers is rarely stress-free. Today's guest is here to take us through his acquisition from inception to completion. He openly talks about the vetting, the financing, the due diligence process, and the seller/buyer relationship. We also discuss the wins and losses, and how they played off on each other in the six to eight months after the purchase. Finding himself near the end of his career, Rocky Cleborne was looking for something else. As an almost-retiree from the automobile industry, he decided to purchase his first business. Rocky reviewed numerous businesses and performed extensive vettings of fourteen of them before finally deciding on an e-commerce jewelry business. As we've mentioned before, surrounding yourself with smart, experienced people and being the right type of person yourself are often the keys to successful acquisitions. The highest offer is not always necessarily the one that wins the bid for the business. Episode Highlights: The vetting process Rocky went through before deciding on Novadab. How many offers he made out of the 14 businesses he considered buying. How using Centurica services helped Rocky through the process. The SBA lending process and how much Rocky had to come up with in his deal. Rocky's business model and where his e-commerce products are being sold (hint, it's not all Amazon). Mistakes he made in the early days of the transition to e-commerce and sourcing. The customer experience Novadab provides for their 12,000 orders each month. Rocky's email marketing strategy. The business's growth percentage since the purchase. How he's formed a partnership with a surprising partner and how that partnership is fueling growth both in Novadab and beyond. The losses and wins Rocky experienced during the transition process. Transcription: Mark: Joe over the past several years I have sat down and had coffee with people who are looking to buy their 1st online business and we talk a lot about what does that process like. How do you go about finding that right opportunity? How do you vet that opportunity? And then even afterwards what does it look like after you do the acquisition and are spending the 1st several months in there what you would be expecting as far as wins and losses. I love it when we have the opportunity to bring somebody on who has gone through this process and they're totally an open book willing to share what they did. You had Rocky on who you sold a business to to talk just about that. Joe: Yeah and actually I wasn't the broker. I had Rocky make offers on several of my listings and he wasn't the winning bid or the chosen one and eventually he bought one from Amanda and he openly talks about that process of buying the business, the successes that he's had, the financing that he did, some of his big wins and some of his big losses, and how they sort of played off on each other in the six to eight months after he bought the business. Mark: Well, it's great. Now we also have a really exciting announcement here. We had somebody guess one of the movie quotes from the intro Mike K. right? It was Mike K. Joe: Come on now. Mark: I can't pronounce his last name. I'm sorry Mike. Chris, our producer is in here with me; what's his name, Chris? Chris: Koregnept. Mark: Koregnept. Alright, so Mike Koregnept Big Short from the very first intro that we ran. Thank you, Mike, for doing that and hey guys if you're listening and you know the quote send us an e-mail. C'mon send it over. Let us know where it's from and if you use Google tell us; be honest because that's the only way I can ever guess any of these movie intros. I'm not going to at game at all. Joe: Let's do one more thing though Mike I want you to call me, leave me a voicemail message with the proper pronunciation of your last name and we'll air in on one of the upcoming episodes. Mark: That's a really good idea. So let's get back over to the actual topic let's talk about Rocky and the process that he used to acquire his business. Joe: I'm recording; you can see that in the corner. Hey folks, it's Joe from Quiet Light Brokerage and this is another episode of the Quiet Light Podcast and yes you heard me say I'm recording right at the beginning because I have Rocky on the line with me. Rocky pronounce your last name for me; go ahead. Rocky: It's Cleborne. Joe: Cleborne; so easy, spelled funny but so easy. Rocky and I have talked twice in the last week because yes I recorded the best podcast ever last Tuesday with Rocky but I didn't actually do what Rocky? Rocky: Hit the record button. Joe: Exactly! So we're back at it. In the podcast world, everybody has a story of at least one time forgetting to hit record and it happened to us last week. So I'm glad you're back; glad you had time but I think it's appropriate that we didn't do it two minutes after I realized when we were wrapping up that I forgot to hit record. Okay, enough babbling. Rocky Cleborne tell us about yourself; who are you what's your background? Rocky: Well, my name is Rocky Cleborne and after I graduated from college I ended up starting some businesses that I turned around and then sold. I got into the automobile business in the late '90s and became a general manager of a number of large automobile dealerships; some of which were selling over 600 cars a month. I've been doing that for over 20 years and then decided that I wanted to retire but knew that I didn't want to just sit around and do nothing because that's not who I am and so I decided that I would buy a business. At first, I looked at brick and mortar businesses and then I said I wanted to be more cutting edge than that and decided that I would look at e-commerce businesses. I did some vetting and some research. I came across Quiet Light Brokerage and the rest is history as they say. Joe: So you are an almost retiree that is in the automobile industry which is about as old school as it gets and you do what? You buy an e-commerce business and it's not only that but it's a jewelry e-commerce business. Rocky: Yes indeed and the company is called Novadab and I wanted to end up getting a business that had higher margins and that the jewelry business definitely has and I wanted to be able to end up operating the business with my daughter and so she has joined me in this venture and we really, really enjoy it very, very much. Joe: Well, good. So I want to take your life experience in terms of being in business and talk a little bit about the search process that you went through, the vetting process because I know you looked at a lot of deals; we looked at a few together, and then your financing; how you decided to pay for this business and talk a little bit about some of the wins and losses you've had along the way. But before I do that folks I want to say that you've heard me say it, you've heard Mark say it in the past that who you are as a buyer and how you behave as a buyer makes a huge difference in terms of getting the deal done not just with the broker. Well we're here to help both sides of the transaction no matter what and sometimes it does matter in terms of the likability of you the buyer because if we're in a multiple offer situation our client; the seller is going to say who do you like, what do you think, who are we going to get through due diligence with and all the way to closing, and they're going to say who do you think would be better to work with after closing in transition and training? And Rocky is that type of guy. You struck me … well, what you bought this last fall, in fall of 2018 and we've talked a few times before that and then lo and behold I hear you're under LOI and under contract with a deal that Amanda had and excited about it. I even got an e-mail from her and from the lender Stephen Speer about what a great guy you were; so good for you and folks this is what it takes some time. So again, alright Rocky tell us about your vetting process. How long did it take you to find Novadab and how many deals did you look at, and how many deals did you make an offer on? And I know you're going to come up with ballpark numbers because you probably looked at more than you can remember. Rocky: Well, that's true I did look at quite a number of them actually. I started the process February of last year and I looked at quite a few businesses. As a matter of fact, I did do some research and found out that I had actually in-depth researched over 14 businesses that I was trying to end up purchasing. I utilized a company called Centurica with Chris Yates. I actually did quite a bit of study for me because I learned early in life that you want to surround yourself with people that are knowledgeable of the businesses that you're looking to try to purchase and also know what you don't know and I certainly … and I was very, very glad to end up having Chris being part of this search process as well as helping me do the analysis because two heads are better than one and he provided me some great insight and as a matter of fact prevented me from … or didn't prevent me but certainly lend some insight as to why I wouldn't want to purchase certain businesses out there. So we did some due diligence together. I ultimately landed on Novadab and then through that same process and through a podcast I was introduced to Stephen Speer and Stephen really again if you want to surround yourself with really, really smart people that are hardworking and I give it back to you all at Quiet Light and also Stephen Speer and Chris Yates in guiding me to a purchase that ultimately I've been very, very happy with and have enjoyed as I say operating with my daughter. Joe: So you started in February 2018, when did you close on Novadab? Rocky: August 23rd. Joe: August 23rd, so just about eight months … no six months. Rocky: Six months. Joe: I always … I actually did this today, I talked to a buyer today and I said look man trying to find that perfect business is like looking for a needle in a haystack inside of a giant big ass haystack and he said absolutely. He's looked over 53 cases; he looked at 53 of our listings in the last I think probably 12 months, so a lot more than you've probably looked at. How many of the businesses that you looked at did you … you said you looked at 14 in depth; how many of those did you make offers on? Rocky: I actually only made offers on five of them and one of them actually was one of your offers where I was reaching for that brass rain if you will but because I hadn't been in the e-commerce business previously we felt that it wasn't something that we could end up doing and securing the financing ultimately with Stephen. So while I reached for it and wanted to try to do it I'm certainly glad that we ended up where we did in purchasing Novadab. Joe: Good. Alright so quickly and I don't mean to plug Centurica, we don't get any referral fees. They're not an advertiser but what I've talked about historically with Centurica is that once you're under a Letter Of Intent they will help you with due diligence. We give a great deal of information on our listings but no matter what you're going to want to dig deep. You're going to want to look at bank statements, vendor invoices, Amazon statements, credit card statements, all of that in due diligence and when you do an SBA deal like you did Rocky with Stephen at First Home Bank and they've got a 3rd party valuation team, they've got an underwriting team, and they're going to dig in and vet the business as well. So you've got lots of people that are helping but one of the things that Centurica did for you just to make sure if I understand it is that they didn't just help you with due diligence once under LOI, they helped you with the search process as well and it made sense in advance of making the offer and going under a Letter Of Intent; correct? Rocky: Yes, indeed they did. In fact, Chris and I took a look at a number of different businesses together and looked at the attributes, the positive things about the different businesses and how they might indeed tie into my skill set or not necessarily tie into my skill set. And by doing that he really helped guide me to purchasing a business that fit my skill set that I could then expand upon and ultimately grow the way that we actually have grown the business over the last six months. So he was involved from day one with the search for a business and really provided me that hand holding that when you're investing the kind of money that you invest in these businesses really gives you somebody to lean on and obtain incurred information. Joe: Cool. I want to get into the growth but let's hold off on that just for a moment because I do want to learn there. Stephen Speer of Bank United another great one that they're working with is Bruce Marks at Radius Bank for those listening. And if anyone listening has an amazing SBA lender please shoot me an e-mail at Joe@QuietLightBrokerage and make an introduction; the more the merrier. Bruce and Stephen though are top notch. I don't think you'd go wrong with them at all. Okay in regards to the SBA lending process we're not going to talk about the purchase price of the business here but generally, depending on the deal size the lenders are looking for something from 10 to 25% equity infusion and that can come from the buyer and the seller or from just the buyer. Rocky in purchasing this business how much percentage of the overall deal did you have to come up with? Rocky: I ended up coming out with approximately 20% of the overall deal including the inventory and there were some reasons behind that that I did not want to end up pledging my home is a security with the SBA which they looked to try to do and so in exchange for that I put up some additional equity in order to not have my home secure. And it was really quite interesting, the sellers also took back a note for 15% of the total deal and it was interesting in that when we did the interview as you mentioned previously on this podcast how important it really is to end up building a relationship with the seller. Everybody thinks that when they're a buyer that they're in the driver's seat and when you have as much demand for e-commerce businesses particularly the good e-commerce businesses that you really want to buy; you're the one that's being interviewed as a buyer to end up buying that business and you really should treat it as an interview because you are being interviewed by the seller. They've taken a lot of their hard work and really it's their baby if you will and they've owned it and brought it to where it is and now they're turning around and trusting you with it so you want to end up making a good impression and certainly during that interview process you want to make sure that you put your best foot forward. What ultimately happened for me is that I … like many others faced a situation where there were multiple offers on the business; mine was not the highest of offers, in fact, mine was about $50,000 less than the next offer. Joe: Wow. Rocky: He took my offer and it's great because the two of us are still talking with each other on a regular basis and in fact, we've formed another business that we could talk about later. Joe: Good for you, you found another business together in your retirement years. Rocky: Yes indeed. Joe: Crazy Rocky that's what I'm going to call you from now on. It's interesting being likable on those calls gets you … obviously, you got the deal $50,000 less than the highest bidder but also a 15% seller note. That's not standard. I think the highest I've seen and I've done a fair amount of SBA deals is 10% so good for you. This total 35% equity infusion is interesting; 20% from you, 15% seller note for the seller and it's news to me that the equity infusion that you brought to the table scratched the requirement by the lender to have your house as collateral on the business so that's fantastic, good news there. Let's talk about— Rocky: That was thanks to Stephen as well. He did the negotiation for me with that as well. Joe: That's terrific. Let's talk about the transition and training period here. You've got a physical product business, the business model itself is not your standard typical e-commerce business where you're selling on let's say a Shopify store and Amazon you're also selling on I don't want to call them daily deal sites, how would you classify Zoot Wulily; hold on let's just talk about my mispronunciation. I said Zoot and Wulily, I meant Woot and Zulily and Groupon, things of that nature. Okay enough, we can make fun of me all day long; it'll be a long podcast. Tell us about the model where your products are being sold so that everybody understands the business model itself. Rocky: Sure our biggest partner happens to be Groupon, and Zulily is our 2nd biggest partner. We only do at this point about 10% of our business on Amazon, the rest are on deal sites as you mentioned. We have a company called MobStub that we do business with, OpenSky and some of Walmart of course and some of the other platforms that really are great opportunities for growth for us but our … what's called a preferred vendor on both Zulily and on Groupon and it works out very, very well for all of us. Joe: We don't have enough conversation about deal sites like Groupon, Zulily, Woot; all of them and I think the key … tell me if I'm wrong and expand on if I'm right but the key to success on deal sites like that is SKU counts and new SKUs and being able to present new products on a regular basis. Is that right; is that what sets you apart and allows you to do business with them on a regular basis? Rocky: Very much so; they are looking for new products to list on their sites and what we do is we try to do three new products a week on each on the Groupon site as an example. And by doing that we can end up growing along with them and they can present fresh products to their customers on a regular basis. So we vet the products out, we put them on their site, and ultimately we get orders from their customers of course and it helps us grow our business on our home site because they'll order their initial product from say Groupon or Zulily but because we send our product out branded with branded boxes or bags they then could come to our website and we really have done quite a bit of growth through our website and our e-mails because of those different vending platforms. Joe: That's fantastic. So in this situation are you using a 3PL or are you fulfilling orders yourself? Rocky: We fulfill our orders ourselves. I've got a wonderful team of people here in New Hampshire. In fact, we moved the business from Texas to New Hampshire over the Labor Day weekend and did not miss any orders that were placed with those portals that were wired to ship within a certain period of time. And the women that fulfill our orders here do an awesome, awesome job and we're very, very glad to end up being able to provide not only jobs for them but also we take real care in presenting our product to our customers. And because we have control of it we really feel as though it gets into the hands of our customers in a timely fashion and also with it having looking its best. Joe: Did the company come with any outsourced VA's that transferred with the business or did you take it over with your daughter? Rocky: Well, my daughter and I took it over and she does the day to day operations but we ended up having a wonderful team in India. As a matter of fact, we're going through some of the mistakes that I made in why that team ended up being so very important to our ultimate success. When I bought the business we had just about 510 SKUs, during the last quarter of the year I increased those number of SKUs from 510 to over 800. Joe: Wow. Rocky: And it was … I thought pretty easy; you just go out, you source the product, you bring it in, you just get some pictures, put it online, put some marketing behind it and you're all good to go. Joe: Simple; I mean its e-commerce, that's all it takes right? Rocky: That's all it takes. Joe: So I'm sensing we're going to have a valuable lesson come out of this. Rocky: Yes very much a valuable lesson but out of a few mistakes comes your biggest opportunities as well and what happened was I would go out and I would source all of this product and be bringing it in and bringing in and it was a little bit overwhelming to our people at the warehouse as far as stocking it in; having the SKUs. You have to create those SKUs, you have to end up picturing them, get them on the website, and so our team in India provided us with all of that necessary grunt work I'll call it to be able to assign SKUs, to be able to get our pictures taken, to be able to help us with the marketing of the product, and ultimately our customer satisfaction as well because with this size of business that we have we ship about 12,000 orders on average a month. Joe: 12,000 orders a month; that's amazing. Rocky: Yeah and in doing that we certainly have customers that we want to make sure that are taken care of and so we have four customer service people in India, we have a graphics designer, we have a website developer, and a number of other people that help us really execute the plan. We couldn't be where we are today and have experienced the growth we've experienced without their help. Joe: Rocky, you're in 12,000 I mean that's 400 orders a day are you capturing e-mail addresses for every single one of those customers? Rocky: Almost all of them. Joe: Are you're doing any e-mail marketing? Rocky: Absolutely we have about 125,000 e-mail addresses at this time and we e-mail market every single day; Monday thru Sunday. Joe: What software are you using? Rocky: We're using Mailchimp. Joe: Mailchimp; you need to go to EcomCrew.com and listen to Mike Jackness talk about his e-mail campaigns that he does on one of his businesses. I actually just sold up listings of business of Mike's and it's that business that he talks about. He goes all around the world speaking about it. He doesn't use Mailchimp, he uses Klaviyo and the getting 400 new email addresses a day 12,000 a month is gold to somebody with the skill set to be able to send additional e-mails. And with the volume of SKUs you have I would think that that's a growth opportunity; a huge one for you. Not that I know anything about it, Mike knows everything about it. So EcomCrew.com for anybody listening that wants to do e-mail marketing and Klaviyo as well I think you should check it out. So I know you love listening to the Quiet Light Podcast but I'm going to point you over to EcomCrew too. Let's talk briefly about your growth, I mean 12,000 orders a month is great; how many orders a month was it doing when you bought the business eight months ago? Rocky: We've actually experienced about 60% growth overall. Joe: 60% growth and you used to run automobile dealerships; you had no … other than e-commerce websites for the auto dealerships, did you have any e-commerce business experience? Rocky: No, actually I do not. Joe: What is fueling that growth other than your wisdom and your brilliance Rocky? What is happening here; how are you doing this? Let's just say it's your daughter man because she's going to listen to this. Rocky: Yes; absolutely. It goes back to realistically I was able to purchase a business where the gentleman who sold me the business is still actively helping me run the business. And so that really helps quite a bit. It goes back to the relationship that he and I built when he was selling the business to me. Joe: Is he being paid for that beyond the sale of the business and the transition and training period? Is it a consulting deal or he's just a really nice guy? Rocky: No, he is a nice guy; I will say that he's not being paid to end up doing the consulting work. What happened was we ended up forming because of my mistakes of adding these 300 SKUs at the end of the year we formed some businesses; two businesses together and so he wants to end up helping me continue to run Novadab and the growth of Novadab and in turn the two of us are helping each other grow these two new businesses. Joe: I think this is a 1st where we sold a business and then the buyer of the business starts another business with the guy who sold it. I think that's fantastic. And it goes to the relationships and being likable and connecting. I guess it's not always going to happen for sure and sometimes people just want an exit. They want an exit; they want to be done. They go through that initial transition and training period which the standard folks is up to 40 hours over the 1st 90 days. And if you don't have a seller note like Rocky did there's something called a hold back; a certain percentage of the funds just reside in Escrow and then are released in 90 days after that transition and training period is over. Alright well, let's … you've grown it 60% is that what you said? Rocky: In the last quarter of the year, we grew at 60%; the 1st quarter of this year, year over year growth was 40%. Joe: Wow, unbelievable. Alright so … but those 300 and something SKUs that you added; the big win big loss, what was the loss and what was the win? Rocky: The loss was definitely that I overwhelmed the team. Again it's just to add that many SKUs in such a short period of time during the peak quarter if you will; a mistake on my part and it definitely was too much too fast. And while they were very, very helpful in trying to get them launched we actually didn't get them up quickly as what we would want to. At the same time three of the SKUs that we didn't end up launching I know it's not a great percentage but three of the SKUs ended up selling over 20,000 pieces during the month of December. So it really provided some real good growth to us and the other SKUs some of them are working some of them are not but you have to try. And ultimately we're going to end up having most of those SKUs work and retire some of the older SKUs. You have to refresh your product up on a regular basis. I just try to do it all too quickly that's all. Joe: Oh that's alright, that's just part of the learning process at least you know it's a product line that doesn't go bad and you can sell through them, discount them, and maybe retire a few but that's pretty awesome. The big win; let's talk about what you're doing with the guy who sold you the business. You have started two new businesses together, what are they? Rocky: We started two new businesses; the 1st one is called Profinac and it stands for Professional Financial Accountants. Joe: Okay, I just have to say that sounds like prophylactic; how did you pick that name? Rocky: You and my wife said the same thing actually. Joe: She's a brilliant woman let me tell you that right now. Rocky: I will have to say that's part of why we're partners. I did not pick that name, Ashish picked that name for me or for us but the reason it stands for as I say Professional Financial Accountants and so we ran with that and see we're having an impression on everybody just as this [inaudible 00:30:44.2]. Joe: It's now unforgettable to the thousands that are listening. So Professional Financial Accountants, you are doing online bookkeeping for e-commerce businesses? Rocky: Yes, we do online bookkeeping for e-commerce businesses. We also do sales tax management. We end up doing payroll services for people as well, income statements. We'll do anything that they need to in order to offload what I feel that many e-commerce and really small businesses don't want to end up doing. They get so bogged down in being a business operator they don't end up being a business owner and so by taking off the real necessary, you have to keep score somehow and if this way somebody else can do it it ends up being or allowing you to end up focusing on the growth of the business. Joe: And there's … in my experience I mean growth is important if and when … you know what it's really when; when you decide to sell the business and it may be 15 years from now, it may be passing it on to a family member but they're still going to want financials when you decide the business you've got to have good clean financials. You can't co-mingle it with other brands and things that you want to keep. You're just going to get less value for the business and the time to start planning that exit even if it's in 10 years is now by getting good clean financials. So I think the prophylactic company, the Profinac is a great business. I'm sorry I won't do that again. What's the other … is it Profinac.com I assume? Rocky: Yes, it is. Joe: Alright. We'll put that in the show notes. Rocky: Okay. I appreciate that. The other thing is that's what you and Stephen taught me as far as the businesses were concerned in the sense of being able to provide a clean settled financial so that when you end up wanting to sell your business you have those financials that can end up getting that SBA approval ultimately. Joe: Let me ask the question because I think it's probably on some folks mind in the event they need these types of services and are doing it a little bit themselves right now are you using Xero or QuickBooks? Rocky: We will use both. Joe: Really? Rocky: Yes. We'll do either one for them. The team is well versed in both. We feel though that Xero will end up providing them with much more in depth information. Joe: I agree; I hear that a lot. The one thing that I wish the developers of Xero would do is allow a Profit & Loss statement to be run with a longer date range than just 12 months. When someone sends us the Xero reports we have to merge all of the years together in order to get to a running P&L which we always want to present with Quick Books; it's easy. And also the Xero folks they're not US based, I don't think because all of the dates are reversed of what we do here in the States which is the reverse of everybody else in the world I'm sure. Rocky: Yeah very, very true. They're an e-commerce based platform and they were founded on the e-commerce platform or in the cloud if you will, that's one reason why we feel that it provides us with a lot of [inaudible 00:34:10.3] that way. Joe: Good, what's the 2nd business that you're starting with your new business partner? Rocky: It's called Supportab and that is S-U-P-P-O-R-T-A-B.com. Joe: Only one T? Rocky: Only one T. We don't know how to spell either. Joe: It's giving you support to your abs; that's what this one does. Okay, what does Supportab do? Rocky: Supportab basically provides again a lot of the necessary support that an e-commerce business needs. This is going back to my big mistake of introducing those 300 SKUs. I needed to end up having a team; a website developer, for example, customer satisfaction people, graphics designer, marketing person. That's what we provide to people that are in the e-commerce world. And what we do that's a little bit different than some of the other businesses out there is that we have it all and we call it omni channel instead of multichannel. And omni channel basically is the integration of all of those different facets under one roof where your customer satisfaction team or your customer service team, your website developing team, your graphics team are all working together and that way they communicate with each other and interact with each other as far as what the overall goal of the company is. Whereas if you do it multi-channel you might go out and hire a bookkeeper, you might go out and hire customer service people but they never talk to each other so they don't get that common feel of the business going forward. We have it all under one roof and we also provide the supervision and management of that team. So we interview the companies and we ask them what their goals are and then we then convey that and manage the team towards those goals, talk with the owner of the company on a regular basis, and then we make sure that we're doing what it is they want to end up doing and more to achieve their goals. Joe: Based upon my experience in doing thousands of valuations I would say it's a very needed service because a lot of people that sell their business sell because they're just pulled in too many different directions, feel like they're going nowhere, and just need to cash out and get some emotional satisfaction because they're not getting any. Because they're working in the business instead of on the business, so Supportab; support one T ab.com sounds great. But Rocky you don't have any e-commerce experience, you're an experienced business person who's been managing a very difficult niche in the automotive world for 20 plus years now you've got Novadab so I guess that brings that life experience to starting these two new companies which are essentially service agencies which are definitely needed. What about your business partner before Novadab, what kind of e-commerce world experience does he have? Rocky: Well, he founded Novadab and certainly brought it to fruition and then before that he works for AT&T for a period of time in website development and was doing a lot of computer work himself. So that's one of my partner's— Joe: So he's mature, he's not in his early 20's that started his 1st business sold and is doing more business with you? He's got some real world experience behind him as well. Rocky: Very much so and the other partner that we have is actually his brother who is located in India and is heads of the operation over in India for us so that we have someone who has experienced … he worked for Pfizer for a period of time and did marketing for them and spends the time building our team in India and sourcing all of our employees that we end up hiring in that area. Joe: Wow. Is he and his brother originally from the States or born in India and relocated to the States? Rocky: They were born in India and Ashish came over here. He came over here to go to college, graduated from college and wanted to stay for a period of time and has now located in Austin is where he is. Joe: Oh, that's great. That's great to have a direct contact there that is an owner of the business, a relative of one of the owners of the business as well so it's fantastic. Well, Rocky, this is a great story; we're running out of time here. I appreciate you coming back on and actually allowing the team to record this one. Thank you very much for your humor in that regard and your time. I'm very impressed that you've taken this and grown it to the level you have in such a short period of time just for your daughter's sake. He's given you all of the credit in case you're listening; Rocky is just showing up every day. I'm kidding of course. The next time we have you on I want another update maybe in another 12 months we can get you back on, maybe have a daughter on as well what do you think? Rocky: That would be awesome. I couldn't do it without her that's for sure. She takes care of the day to day operations and allows me to end up working these other businesses and really without the team that I have I wouldn't be where I am so I really appreciate all of their hard work without a doubt. Joe: And we appreciate the type of person you are, the type of buyer you are, and the fact that everything has gone so smoothly. I'm so glad to hear for your success. Thank you for coming on the podcast and I look forward to doing an update with you sometime in the future. Rocky: Thanks very much for having me, Joe. It's been a real, real lot of fun. Joe: Take care, you too. Links and Resources: Novadab Profinac SupporTab Centurica StephenSpears BruceMarks Austin Meetup

Welcome to the Tearsheet Podcast. I'm Zack Miller. On the show, we've explored a lot of ways large banks, with lots of assets and resources, have found ways to innovate. But smaller banks are innovating too — they're just doing it differently. Without in-house development teams, smaller financial institutions have to be scrappier to punch above their weight. One way they're doing that is by partnering with fintech firms. Over the past few years, Radius Bank has embarked on a process to upgrade the billion dollar+ bank's digital consumer offering by working with top tech players. Chris Tremont, Radius' head of its virual bank, joins me on the podcast to talk about how Radius leverages not just fintech offerings but how it found it could influence product development cycles by participating closely with earlier stage fintech firms. Chris Tremont is my guest today on the Tearsheet Podcast.

Today’s guest is Michael Butler, CEO of Radius Bank in Boston. As with our recent show with Bob Rivers of Eastern Bank (which is also based in Boston), Mike belongs to a small, but growing, group of CEOs who are truly transforming their community banks through technology. When conversation turns to the tech future for community institutions, these two banks’ names always come up. We’ll link in the show notes to the Eastern episode and you’ll notice many common themes -- especially that both CEOs focus first and foremost on full embrace of a tech culture. Not a mixed culture, not one that’s hampered by pockets of resistance, but full embrace. We all know it’s hard for smaller banks to keep up with cutting edge technology. I know some community bankers who say they have given up. I know many others -- maybe most -- who hope they are keeping up enough to please their customers, but can’t tell for sure how well they’re doing. And I think many worry that they have no clear idea of what the road ahead looks like. For Radius Bank, Mike explains how they analyzed this challenge. Their conclusion was that in today’s market, in which customers expect Amazon-type technology, their small bank was not going to be able to offer fully competitive full-service retail banking products. As a result, they shifted quite radically to a new strategy. In this show, Mike tells the story of that journey, beginning in 2008 at the height of the Great Recession. He shares their reasoning that a full-service, branch-based, locally-confined strategy would actually be more risky than offering a narrow product set to a wide market, with a very low cost structure. He argues that a small bank like Radius has powerful advantages over larger ones that have more complex and rigid systems that slow them down. And he talks about how they tackled the task of building, as he puts it, a great tech platform, including for attracting deposits from a very specific niche of customers -- those who don’t want a branch, and actually prefer to bank through their phone, if the experience is wonderful. You’ll enjoy listening to Mike describe the internal debates they undertook, including the fears around offering something like, for example, a free ATM. He says they concluded that the whole banking industry’s platform is wrong, if you want to offer a virtual product. They also realized that a key to their future is fintech companies, both as customers and as partners. He says they now think of their “branches” as being located at the “corner of Radius” and the partner company, not on a physical street intersection where they would be competing with other banks’ street. Mike says it’s “a beautiful place to be.” He also talks in depth about making the tech great. For example, he describes getting the deposit account opening process streamlined from fifteen or twenty minutes down to three or four. He says that, behind the scenes, Radius Bank does things like Amazon, and delivers an Amazon-like experience. He also has tips on how to attract tech talent (hint -- it includes empowering young employees). Mike has thoughts on how to modernize the Community Reinvestment Act for the digital age. More broadly, he shares insights on overall regulatory challenges which, as he says, are “not easy.” He describes tasking the bank’s risk people to figure out how to work with new-generation vendors, because, as he puts it, “we can’t just go with the big guys that look good and look safe,” if they have old and inferior technology. He describes the checklist they’ve developed to handle this modernized third-party risk management for partnering with fintechs and regtechs. He says one secret is to have a “rock star compliance person.” Another is to interact constantly with the regulators. Listen especially closely to how he thinks about the risk in these partnerships, and specifically his thought process on how these newer tech partners are able to make any needed course corrections quickly and nimbly, and at low cost, so that even if things don’t work perfectly the first time, the bank is still ahead for having experimented or for trying a new approach. I’m hearing this thinking more and more from innovative banks, including the point that while older technology may look safe, it’s actually high-risk because much of it is too rigid, and changes too slowly, to keep up with the market. I’ve long believed that the two top challenges facing banks, and especially community institutions, are, first, keeping up with technology and second, regulatory burden. The good news, which is sometimes hard to see, is that new technology can be the answer to both. Radius bank is pioneering a new pathway to reaching those solutions. I know you’ll enjoy my conversation with Mike Butler. More Links Link to Full Transcription Radius Bank Website Podcast with Citi Fintech - Citi Fintech Global Head of Policy, Andres Wolberg Stock Podcast with Eastern Bank CEO Bob Rivers More on Michael Butler Michael Butler is the President and Chief Executive Officer of Radius Bank. Since joining Radius Bank in March 2008, he has transformed Radius into an innovative leader in the financial services industry, focused on delivering superior customer service and leading-edge technology to its clients. He is an experienced banking executive with an extensive background in all facets of commercial and consumer banking. Prior to joining the Bank, Mike served as President for National Consumer Finance at KeyCorp in Cleveland, Ohio. He is a graduate of Providence College and the ABA's Stonier Graduate School of Banking. Mike serves as a member of the Financial Services Committee for the Greater Boston Chamber of Commerce, on the Board of Trustees for Thompson Island Outward Bound, on the Advisory Board for FinXTech, and has been active with the Habitat for Humanity program. More for our listeners We have many more great podcasts in the queue. They include a number of leading government officials, including Congressman Gregory Meeks and Jan Owen, the banking commissioner of California, as well as World Bank official Harish Natarajan. We’ll have an amazing show with Greg Kidd, Founder of Global ID; a show with the co-founders of EarnUp, and two regtech firms -- Alloy and Compliance.AI. The fall events schedule is filling up. Some of the places I’ll be speaking are: Get Smart On Blockchain, US Chamber of Commerce, August 1 in Washington Finovate Fall, September 26, 2018, New York, NY NFCC Connect, October 2, 2018, Dallas, TX Money 2020, October 21-24. Among other things, I’ll be speaking on the Revolution Stage about the regulation revolution LendIt Europe, November 19-20, 2018 in London. Regtech Rising, December 3-5, London 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 do 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. We want to widen this dialogue. Until next time, keep innovating! Subscribe Sign up with your email address to receive news and updates. Email Address Sign Up We respect your privacy. Thank you!

Today’s show brings us two fascinating guests.  Alex Lintner is President of Consumer Information Services for Experian, and Sasha Orloff -- who is a previous guest on Barefoot Innovation -- is founder and CEO of LendUp. They recently joined forces to explore using new kinds of data to widen financial inclusion. We all sat down to discuss it at the LendIt conference this spring in San Francisco. Credit scores are a great tool for evaluating the creditworthiness of many consumers, but as Alex explains, not for all of them. He and Sasha think -- as do I -- that we need a fuller view into what Alex calls the consumer’s financial “reputation.” Experian estimates that 100 million people in America need this kind of broadened evaluation. We know that many consumers with low or no credit scores are actually creditworthy, and in fact could prove it if we had systems that could look closely at their financial behaviors and situations beyond reported credit history. Traditionally, though, we didn’t have efficient ways to get that information because, in the analog age, when the current systems were designed, data was scarce and costly. Today, in contrast, we have massive volumes of digital information we can access and analyze, instantly and efficiently. This creates the ability to do what used to be impossible -- make financial services more inclusive, without sacrificing lending soundness. Toward that goal, LendUp and Experian undertook a joint research project to look at the benefits of capturing data on customers’ performance on single-payment loans. The study produced really striking results -- the overwhelming majority of consumers in the study came out with positive impacts on their credit scores. And as Alex explains, single-payment loans are just one kind of nontraditional data. In today’s digitized world, there are many other factors that we can begin to capture methodically and build into routine credit scores. Experian is now routinely doing this, offering a new score called Clear Early Risk. In our conversation, Alex and Sasha share insights drawn from their own lives and talk about the many situations in which people have trouble accessing credit when they need it. Some of these consumers are young people or new immigrants with thin or no credit file. Some are facing life changes like a family death or divorce. Some are contending with emergencies like loss of a job or medical bills. Our discussion also tied these kinds of individual challenges into big shifts underway overall in lifestyle and in technology -- the advent of mobile financial services, the rise of the gig economy, and expanding use of artificial intelligence.  In addition, we touched on the future of the Community Reinvestment Act, which is due for much-needed, tech-driven modernization. Using alternative credit risk data has complex implications for fair lending regulation, especially in the US and especially regarding “disparate impact.”  US policy bars use of credit practices that have a disproportionate adverse effect on “protected classes” like women and minorities, unless the lender can demonstrate a business need and show that less-discriminatory alternatives are not available. The criteria for proving this are not clear today, and I’m among the many people who think that clarifying them is essential to expanding financial inclusion by fostering use of new data. Despite having the best of intentions, policymakers have inadvertently made hard-to-score consumers the riskiest market to serve, due to the regulatory risk arising from uncertainty. That chills efforts to address these customers’ needs by many mainstream and high-quality lenders. The CFPB is exploring this issue through its evaluation of alternative data and issuance of a “no action letter” for Upstart. A similar effort is underway, also, at the new nonprofit FinRegLab, which is run by Melissa Koide and funded by the Omidyar Network. I chair FinRegLab’s board, and we’re conducting empirical testing of alternative data -- specifically cash flow underwriting -- including how these new methods relate to disparate impact. Today’s show is a glimpse of a promising future, harnessing innovative technology to produce lending that is more inclusive, and also more sound. More Links Episode Transcription Podcast with Al Ko - Episode recorded last year with Al Ko of Intuit LendUp Infograph Alternative Credit Data trends and reports Op-Ed by Sasha on innovation in credit scoring More on Sasha and Alex Sasha Orloff is CEO and co-founder of LendUp. LendUp’s mission is to provide anyone with a path to better financial health. The company builds technology, credit products, and educational experiences that haven’t existed before for the emerging middle class -- the 56% of Americans shut out of mainstream banking due to poor credit or income volatility. It has originated more than $1 billion in loans. With offices in San Francisco, CA and Richmond, VA, LendUp is backed by debt and equity financing from venture and social impact investors including Y-Combinator, Kleiner Perkins, Andreessen Horowitz, Google Ventures, Victory Park Capital and Yuri Milner’s Startfund. In June, both Nigel Morris and Frank Rotman of QED Investors joined the LendUp board of directors. Prior to founding LendUp, Sasha held roles in risk management, finance, online acquisitions and customer insights on Citi’s consumer credit team, and most recently served as Senior Vice President on Citigroup's Venture Capital team. He previously worked for the Grameen Foundation Technology Center and The World Bank. He has a B.S. in applied math and economics from the University of California, San Diego and an MBA from Georgetown University. Alex Lintner is President of Experian’s Consumer Information Services, overseeing the company’s US consumer credit bureau and the National Consumer Assistance Centre (NCAC). He’s responsible for all aspects of Experian’s consumer credit activities within the business-to-business marketplace, including delivery and management of value-added credit risk, marketing, and collection products to help clients manage and optimize their customer relationships. Alex was previously CEO and President of Vertafore, a $450+ million revenue insurance industry technology provider. Prior to that he was President of Intuit’s Global Business Division and also Senior Vice President of Strategy, Government Affairs and Corporate Development. He’s also spent 15 years as a consultant, starting as a Business Analyst at Dr. Hoefner & Partners in Munich, Germany and later serving as Vice President of The Boston Consulting Group in their London and San Francisco offices. More for our listeners Our next guest on the show will be another community bank CEO, Mike Butler of Radius Bank in Boston.  Upcoming episodes include a fascinating conversation with Congressman Gregory Meeks on financial innovation and policy; a talk I recorded this year at LendIt with my friend Greg Kidd of Global ID; and three discussions with regtech firms -- JWG in London, Compliance.ai, and Alloy. Speaking of LendIt, I was a guest this month on Peter Renton’s Lend Academy podcast, and he’ll be on our show soon as well. I was also a guest in June on the Commodity Futures Trading Corporation podcast, CFTC Talks, with Andy Busch. And here are my two podcasts with the CFTC, one with Chairman Giancarlo and a recent one with innovation head Dan Gorfine. It’s not too early to register for the fall’s premier fintech event, Money 2020, in October in Las Vegas. I’ll again be MC for the regulatory track, which, remember, is on Sunday -- be sure to plan accordingly!  I’ll also be speaking on the Revolution Stage, which is new this year, about regulation innovation. Also watch for Regtech Rising in December, which I’m helping to plan. We’ll also be posting 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, and I’ll be a guest on Brett’s great radio show Breaking Banks this week, on July 5. Please remember to give Barefoot Innovation a five-star rating on iTunes to help us expand the show. I hope you’ll sign up to get emails that bring you the newest podcast, newsletter, and blog posts, at www.jsbarefoot.com.  Follow me on Twitter and our Facebook fan page. And please send in your “buck a show” to keep Barefoot Innovation going! SUPPORT OUR PODCAST Until next time, keep innovating! Subscribe Sign up with your email address to receive news and updates. Email Address Sign Up We respect your privacy. Thank you!

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!

This is the most unique, and the most consequential, show we’ve ever done. If our thousands of listeners all think about it and especially if you share it widely, it has the most potential to actually change the financial regulatory world for the better and also in turn, therefore, to improve the financial world, too. It goes right into the heart of the most important work, being done by the most innovative people, on redesigning regulation for the digital age. My guests are Chris Woolard and Nick Cook of the UK’s Financial Conduct Authority. We sat down to record it on the last night of their enormous, ambitious, mold-breaking tech sprint held in London a few weeks ago. This regtech sprint, the fifth one they’ve done, focused on how to use new technology to combat financial crime. The sprints -- which are hackathons -- play a dual role, both sparking new ideas on specific regulatory challenges and also innovating in regulatory process, itself. I’ll set the scene for you. It was a Thursday night, dinner time, in the London offices of EY, in the Canary Wharf section of the city on the Thames, just a few blocks from the FCA’s building. EY generously offered their beautiful training facility for the sprint, because the FCA’s building is too small to hold the 400 people who were there by the end, or even the 260 who had been there for three days, working feverishly, day and night, to invent new solutions for money laundering. Those people had arrived on Tuesday morning and had self-formed into sixteen small teams, usually with total strangers, in a format mixing organizations and most importantly, mixing knowledge and skill types. Regulatory experts and AML experts and lawyers had worked elbow-to-elbow with tech experts, brainstorming ideas together and then translating these, live, into computer code, using test data provided by the participating tech companies. We sat down for this recording in a quiet conference room, just as the main gathering began to shift into post-conference socializing and bonding and celebrating over food and drink. It was one of those special moments where everyone feels elated and excited, and at the same time, completely drained. For me, as I think I say two or three times in this show, the sprint was the most fascinating and inspiring thing I’ve ever experienced. I hope that listening to it will inspire you to take up the FCA’s challenge to build on it in your own country and with your counterparts in other countries, and perhaps to take up their offer to help. People came to the sprint from all over the world, including, I’m especially happy to say, a substantial contingent of both regulators and financial companies from the United States (and also a new nonprofit, FinRegLab, with which I’m affiliated and which is building an empirical testing environment for regtech concepts in Washington). The FCA is at the forefront of a global regulatory awakening about the need to innovate regulatory models as technology increasingly outpaces the speed at which government can change. Its most famous innovation is its Regulatory Sandbox, which enables fintech innovation to be tested in a controlled experiment under the regulator’s close scrutiny and is being emulated throughout the world. Less well-known is their equally important innovation on the regtech side, for which they invented this creative new format, the regulator’s TechSprint.   Both the sandbox and the sprints have three key elements essential for regulatory innovation. First, they make collaboration happen, especially between the regulatory and tech worlds. Second, they enable very fast learning by the regulator, through direct, hands-on experience. And third, and most crucially, they use experimentation. They provide a safe space for trying things out, testing, learning, shaping -- quickly and cheaply. They apply the techniques that technology innovators figured out years ago, about the need to start small, try something, adjust as you learn, and if some ideas are going to fail, let them “fail fast” in a controlled setting where critical lessons can be learned early, and no harm can be done. These ideas are hard for people to grasp in the abstract, especially the notion that regulators need to get comfortable with learning through trial and error because there’s no other way to learn fast enough. I’m a former bank regulator and I know this idea is completely alien to regulatory culture and tradition, which have been designed, for good reason, to be careful and thorough and deliberate. A couple of years ago, a senior U.S. bank regulator told me that her agency had figured this out by spending time on the FCA’s website, reaching this epiphany that, the regulator doesn’t need to have all the answers -- even can’t have all the answers on tech change, before moving forward. It’s really the other way around. You have to move forward, to get to the answers. Chris and Nick describe the very same process -- as Chris calls it, the light bulb turning on, suddenly realizing it was riskier NOT to move, even though you’re not sure exactly what to do and what will happen. To me, the most interesting thing you’ll hear in this show is their voice as they describe this journey, the struggle toward creating a new way to work. Again, this was the fifth tech sprint. Be sure listen to my two earlier FCA shows, one with Chris that explains the FCA’s regulatory sandbox and one with Nick on regtech. The regtech one featured the breakthrough, two-week sprint held last November, successfully proving that regulatory reporting requirements could be updated directly, computer-to-computer, by issuing a rule change in the form of code, rather than words. That one was like a regulatory moonshot -- it could eventually change regulation, itself. This new sprint last month, by contrast, focused on the specific use case that’s most ripe for regtech transformation -- anti-money laundering. The UN estimates that there’s $1.6 - $2 trillion in annual global financial crime, and that we catch less than 1 percent -- despite spending tens of billions of dollars each year. And it’s getting worse. The criminals and terrorists today use sophisticated technology and operate as networks, while banks and governments use old technologies, with data trapped in silos. As Chris and Nick said, it will take a network, to beat a network. Chris also said that a million children are trafficked, each year. There’s a moment, in our conversation, where Nick says the sprint brings people to realizing that collectively, we can actually DO something about money laundering -- and you can hear the tone of excitement in his voice. For decades, we couldn’t really do much better, because we’ve had analog-era technology. Today we can use digitally-native tools. We can use them to fight crime and also to tackle nearly every other aspect of financial regulation -- all the areas where problems are so hard to solve. Financial inclusion. Consumer education. Preventing discrimination and predatory finance. Identity verification. Risk assessment. Financial reporting. New technology can make it all work better, and cost less, at the same time -- something that in the past was completely impossible. Believe it or not, I’m actually curbing my enthusiasm for this. This is the tamped down version. I think this is a regulatory revolution, beginning to move. Please listen to this episode, share it with everyone you know, and join in the dialogue. More on Chris 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. More on Nick Cook Nick Cook 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. More for our listeners Full interview transcript. 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 recorded this year at LendIt. One is a discussion of new research by LendUp and Experian, on credit reporting, and the other is with my friend Greg Kidd 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’ll also be a guest on Peter Renton’s Lend Academy podcast, and he’ll 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! I hope to see you at upcoming speeches and events including: CFSI’s Emerge, this week in Los Angeles, CA North Dakota Bankers Convention, June 10-12, Fargo, ND 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. And tell me what you’re thinking about digitizing regulation. Let’s widen this dialogue to more people, and more and more ideas! 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!

One of my goals for Barefoot Innovation is to amplify the voice of America’s community banks about the future of financial innovation and regulation. Today’s guest is perfect for this. He is Bob Rivers, CEO of Eastern Bank in Boston. At age 200, Eastern is the oldest and largest mutually-owned bank in the United States. At the same time, it is one of the most “young” and nimble community banks in adopting new technology. Mutual savings banks were once common, especially in New England. Most have converted to stock ownership, but Bob points to Eastern’s mutual structure as a key advantage in its strategy, which includes a strong focus on social mission. He explains the bank’s roots in Salem, Massachusetts, serving people who had no bank, and describes how it evolved to emphasize empowering marginalized customers, including women. He also tells the story of his own rise to leading Eastern, from a start 36 years ago that included cleaning bank branches at night. It’s a classic community banking story, for both Eastern and its leader. What mainly drew me to Eastern’s offices, though, on a cold day in Boston last February, was its reputation for innovation. When people talk about community banks and the technology change that’s transforming banking, Eastern’s name always comes up. In this episode, Bob describes how their innovation strategy began six years ago, when he invited Eastern’s Chief Technology Officer, Don Westermann, out for “walkabouts” in Kendall Square, a Boston neighborhood noted for innovation. Bob and Don just introduced themselves, cold, to tech firms, hoping “to understand the mindset of the disruptive innovator” -- their goals and approaches, and also how to reach their networks. Two years into that process, they met PerkStreet Financial, which Bob describes as similar to Simple (we’ve done two shows with Simple CEO Josh Reich, who just stepped down this month -- they are here and here, still great listening.)  In Boston, PerkStreet was giving up (actually as a result of regulatory changes), when Bob met its CEO Dan O’Malley, and they went into business together. The resulting Eastern Labs set out to digitize the lending application process for small businesses, including on SBA loans. Three years later, Eastern spun off that enterprise as Numerated Growth Technologies -- whose website describes it as “Built For Banks, Incubated Inside A Bank.” Now Eastern has opened a new Lab 2.0 with plans for additional tech solutions. In our conversation, Bob gives a road map for how a community bank can undertake this kind of innovation -- how to position it, structure it, staff it, fund it, and run it; how much capital it needs; how to price the services; how much to integrate the innovation team with the bank versus leave it independent; and how to use tech-world concepts like agile design and minimum viable products, or MVP’s. He also explains how an initiative like this can radically transform a small bank’s ability to attract tech talent, and how it can remake the bank’s culture, itself. Bob also has views on how regulation factors into innovation. Notably, Eastern recruited Steve Antonakes, former Deputy Director of the Consumer Financial Protection Bureau and former Massachusetts Commissioner of Banks, to lead its enterprise risk function. Bob has a range of insights into what regulators are doing right, along with suggestions. This bank has cracked the code on one of the most critical challenges facing community institutions, namely how to partner with innovators to leverage the respective strengths and weaknesses of each. As he says, fintech startups used to see themselves as replacing lumbering old banks, but most now hope instead to work with them, because these two groups need each other. Few banks of any size can innovate the way startups can. Yes, banks have always innovated, but today’s changes, coming so fast, driven by trends erupting in the wider tech world, are simply not in basic banking DNA. Few banks can build a world-class, digitally-native user experience. Few can afford and attract the data scientists for new-generation risk analytics.  Conversely, though, very few fintechs can readily get the building blocks needed to scale up, like rapid, affordable customer acquisition, or accessing stable, low-cost funding, or deeply understanding financial products, markets and regulations -- all of which are strengths every bank can bring to the table. And the good news for community banks, specifically, is that they also have natural advantages over large banks, despite having less sophisticated technology, precisely because they’re small. They can be nimble. They don’t have to turn the proverbial battleship. They can chart and follow a new course, as Eastern is doing. Smaller banks see this logic, but most struggle to know where to start. Bob Rivers has the answer. It’s simply, start where you are and just move forward. You don’t need to figure it all out first. Really, you can’t. Instead, start small. Try things. Immerse in rapid learning. Talk to people. I’ll add, go to tech conferences and read tech publications. Do the walkabout! I recently spoke at a state bankers association conference. On the hotel elevator, coming down to the event before my talk, I chatted with a former bank CEO, now a director. When he learned my speech was on technology, he laughed and said, “I’m too old to learn it!” I told him I was going to try to change his mind about that, because, here’s the reality: banks’ CEO’s must lead this. They don’t have to be techies -- Bob Rivers isn’t. He says he still balances his checkbook with a calculator. But he’s leading his bank into a new digitized financial world, by knowing it needs to change and embracing innovation with boldness and imagination. More about today’s show Link to Full Transcript of This Episode Our podcast episode with John Ryan, CEO of the Conference of State Bank Supervisors, on banks and communities. My cover story in Texas Banker, with tips for community banks on digital transformation. More about Bob Rivers Bob Rivers is Chairman and CEO of Eastern Bank, America’s oldest and largest mutual bank with two centuries of service to the communities it serves. During Bob’s tenure, Eastern has built on its long legacy of community service and philanthropy by developing a robust advocacy platform in support of various social justice and sustainability issues. In 2014, Bob co-founded Eastern’s innovation venture, Eastern Labs, which earlier this year spun out Numerated Growth Technologies, a new fintech company offering a state-of-the-art small business lending platform. Bob has also been personally recognized for his work in championing social justice and sustainability issues by organizations and outlets like The Boston Globe, Boston Business Journal, The Partnership, Get Konnected!, Color Magazine, the Massachusetts Immigration & Refugee Advocacy (MIRA), Asian American Civic Association (AACA), Association for Latino Professionals For America (ALPFA), El Planeta, the Massachusetts Transgender Political Coalition, The Theater Offensive and The Ad Club. Since the podcast was recorded, Eastern Bank has opened a new branch in Roxbury Crossing, the first bank in that community to open in 20 years, reflecting the bank’s work in underserved communities. More for our listeners We have many more great shows in the queue. We’ll talk with the CEO of another community institution, Mike Butler of Radius Bank, which is much smaller than Eastern and is pursuing a fascinating innovation strategy.  We’ll have two more episodes recorded this year at LendIt. One is a discussion of new research undertaken jointly by LendUp and Experian, on credit reporting, and the other is with my friend Greg Kidd of Global ID.  We also recorded two episodes at this 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’m also going to be a guest on Peter Renton’s Lend Academy podcast, and he’ll be on our show as well, so watch for those. I’m also pleased to say we’ll have several leading members of Congress on the show in the coming weeks. In addition, we’ll record a very special show at the upcoming, global AML tech sprint being run by the UK Financial Conduct Authority in London this week -- which will be, in my view, the most important regtech development in memory...for reasons we’ll talk about. So, stay tuned! I hope to see you at upcoming events including: Financial Conduct Authority AML TechSprint this week -- May 22-25, London, UK (By invitation only) American Bankers Association Payments Forum, June 1, Washington, DC CFSI’s Emerge, June 6, Los Angeles, CA North Dakota Bankers Convention, June 11-12, Fargo. ND 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 revolution in...what else?  Regulation! 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. 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.   Support the Podcast And please send in your “buck a show” to keep Barefoot Innovation going! Subscribe Sign up with your email address to receive news and updates. Email Address Sign Up We respect your privacy. Thank you!

We’re moving into a new era of regulation and compliance that will be driven by new technology. Most of our listeners know I’ve co-founded a regtech firm, Hummingbird, to help bring this new model, first, to anti-money laundering, which is widely seen as the arena where the old compliance model is most broken, and where new technology could go the farthest, fastest, to solve everyone’s problems -- by both improving outcomes and cutting costs. There is a growing global “regtech” community, in both the public and private sectors, aiming to transform financial regulation and compliance, and specifically to make them both digitally-native, with all the power of digitization to make everything better, faster, and cheaper, all at once. Executing this transformation will take imagination, vision, wisdom and even courage, which is why I invited today’s guest to join us.  He is Jim Richards, founder of the new firm, RegTech Consulting, and I think he used the word “courage” six times, in our talk.  We sat down together at this year’s LendIt conference in San Francisco, just a few days after Jim had retired from his position as the Bank Secrecy Act Officer and Global Head of Financial Crimes Risk management at Wells Fargo, a job he held for more than twelve years. He’s also an attorney and a deep expert in financial crime. Jim is famously outspoken. He’s also funny (he says the book he wrote on transnational financial crime sold more copies in Russian than in English. Most of all, though, he’s frustrated. He thinks we can do better in fighting financial crime. I do too. According to the United Nations, there’s about $2 trillion in global financial crime each year, and we’re catching less than 1 percent of it. To achieve these paltry results, the financial industry spends around $50 billion a year. In other words, launderers can fund terrorism and amass wealth by trafficking in drugs, weapons, and human beings, with very little risk of getting caught. No wonder financial crime is a growing global business. Jim says that the heart of this problem is that incentives are misaligned, which means resources are too. He thinks we’ve built a regulatory system that does not reward effectiveness but instead prizes compliance “hygiene.” The theory of the system, of course, is that banks’ careful compliance with the AML regulations should lead to high levels of effectiveness in helping law enforcement stop financial crime. Possibly, in an earlier era, it did. Today, though, there is a massive mismatch between the compliance activities required by our regulations and the desired outcomes -- partly because the technology of both money laundering, and anti-money laundering, has shifted under our feet. And today’s methods can’t scale up. Like many people in the AML world -- including me -- Jim envisions a better system in which, mostly through newer technology, we could take some of the thousands of people and billions of dollars devoted to this effort and redirect them to drive better results, and cut the costs, too. He has lots of ideas. They include updating the rules on Currency Transaction Reports; fixing the Know Your Customer process through more information standardization, prescreening, and data sharing; addressing the new beneficial ownership requirements (which he calls a tsunami hitting banks and their small business customers; and resolving what he calls “The Clash of the Titles” -- the four titles of the US Code that govern financial crime. He suggests getting law enforcement input into financial regulators’ enforcement efforts. He has thoughts on how AML and fraud detection overlap and differ. He says there’s a lot to learn from how fintech companies do AML since they generally have good data and new systems. Like our previous Barefoot Innovation guest, Ripple’s Chris Larsen, Jim sees a useful model in how global trade was transformed by the advent of standardized shipping containers, as explained in Marc Levinson’s book, The Box. A key issue is transaction monitoring (although Jim vigorously argues that term is obsolete). The law requires banks to monitor their customers’ activity and report suspicious patterns.  Today, this process, systemwide, produces huge over-reporting of meaningless alerts that drown both bank personnel and law enforcement in low-value information they don’t have the tools to analyze. It’s a perfect use case for AI, which Jim says Wells Fargo began using in AML as early as 2008 and is now building further under his successor, Graham Bailey (whom Jim calls a genius, the best AML technologist in the industry). Jim says that banks like Wells Fargo devote less than ten percent of their AML compliance people to working on sophisticated, complex crime, while the other 90+ percent do regulatory compliance, just “crunching through the volumes.”  This is at a time when the crime itself is getting more and more sophisticated because the worst criminals are adopting new tech and are building global networks, most of which we can’t find with current methods. He makes the case that it would be good to flip that and deck the 90 percent against the big problems. We already have the technology to do that, both in process and analytics. We just need to enable the system to adopt it, for both government and industry. The original AML law in the United States, the Bank Secrecy Act, is approaching the half-century mark. It’s been modernized and automated along the way -- FinCEN has brought in a lot of automation -- but the system doesn’t yet leverage the newest technology. It needs to shift to digitally-native design, probably with open source technology that can enable new, efficient, effective approaches, system-wide. A few weeks after we recorded this episode, I hosted a roundtable in Washington where experts from across the AML ecosystem -- large and small banks, fintechs, regtechs, bank regulators, trade groups, Congressional staff, academics and, crucially, law enforcement -- spent a day together thinking through next-generation AML. The new Comptroller of the Currency, Joseph Otting, has made AML modernization a top priority. Change is coming. And it’s attracting great people, including great tech people, into solving these problems, including many who, a year ago, would surely have laughed to hear Jim Richards say, as he did to me, that BSA Officer is “the most fascinating job you can have in banking.”  People think compliance is boring. They’re wrong. It’s fascinating, and it’s important. Jim has founded his new firm, RegTech Advisors, to, as he puts it, “develop the next generation of professionals, technologies, programs, and regimes and really make a difference.” He thinks doing that will take courage... including the courage to make some mistakes. That’s a type of courage that doesn’t come easily to the regulatory sector, but we’re going to have to develop it. More on Jim Richards James R. Richards, B.Comm., JD, CAMS Principal and Founder, RegTech Consulting, LLC www.regtechconsulting.net Richards@ThinkRTC.net (925) 818-6612 Author, “Transnational Criminal Organizations, Cybercrime, and Money Laundering” (CRC Press, New York, London, Boca Raton, ISBN 0-8493-2806-3) Jim Richards is Principal and Founder of RegTech Consulting, LLC, a private consultancy aimed at developing the next generation of BSA/AML and financial crimes professionals, technologies, and programs. Services include BSA Officer coaching, program reviews, crisis management, director support, non-financial institution development and awareness, and FinTech due diligence. From 2005 to April 2018 Jim was BSA Officer, Global Head of Financial Crimes Risk Management, Wells Fargo & Co., where he was responsible for governance and program oversight of Bank Secrecy Act and AML for Wells Fargo’s global operations, including quarterly reporting to the Board of Directors. As Director of the Global Financial Crimes Risk Management group, Jim oversaw governance and program execution of BSA, AML, External Fraud, Global Sanctions, Financial Crimes Analytics, and High-Risk Customer Due Diligence. He was a member of the Wells Fargo Management Committee and Enterprise Risk Management Committee, and he represented Wells Fargo with the Bank Secrecy Act Advisory Group (BSAAG) of the US Department of the Treasury. Jim previously held AML and financial intelligence positions at Bank of America and FleetBoston. He was also an Assistant District Attorney, Special Investigations Unit, Middlesex County District Attorney’s Office, in Cambridge, MA, investigating and prosecuting cases involving narcotics, organized crime, white-collar crime, and economic crime in the largest county in Massachusetts.  Investigations and prosecutions included felony embezzlement, attorney fraud, public corruption, computer-based larceny, gambling, money laundering, and organized gambling cases. He was Supervisor of the SIU’s Narcotics Forfeiture Group, with carriage of and supervision over the Group’s civil and criminal forfeiture caseload. Jim has prior experience in private legal practice at Choate, Hall & Stewart in Boston, as a Barrister in Ontario, Canada, and as Special Constable, Royal Canadian Mounted Police, E Division (British Columbia). More for our listeners Article I co-authored with Hummingbird Cofounder Matt Van Buskirk on how to fight human trafficking My podcast on the India Stack with Sanjay Jain The Box, by Marc Levinson Thank You For Being Late, by Thomas Friedman We have great shows in the queue. We’ll talk with the CEO’s of two community banks -- Bob Rivers of Eastern Bank and Mike Butler of Radius Bank, both of which are leading the way in innovation by smaller institutions. We’ll also have two more I recorded at LendIt. One is a discussion of new research undertaken jointly by LendUp and Experian, on how to improve financial access through credit reporting. The other is with my friend Greg Kidd of Global ID.  I’m pleased to say we also will have several members of Congress in the coming weeks, and also several guests I’ll record at the upcoming, global AML tech sprint being run by the UK Financial Conduct Authority. I hope to see you at upcoming events including: Comply 2018, May 16, New York, NY FCA TechSprint, May 22-25, London, UK (By invitation only) American Bankers Association Payments Forum, June 1, Washington, DC CFSI’s Emerge, June 6, Los Angeles, CA North Dakota Bankers Convention, June 11-12, Fargo. ND American Bankers Association Regulatory Compliance Conference, June 26, Nashville, TN Money 2020, October in Las Vegas where, among other things, I’ll be speaking on the Revolution Stage about the revolution in...what else?  Regulation. 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.   Support the Podcast And please send in your “buck a show” to keep Barefoot Innovation going! Subscribe Sign up with your email address to receive news and updates. Email Address Sign Up We respect your privacy. Thank you!

My guest today is pioneering a crucial innovation within the innovation landscape in finance -- by providing banking services to fintechs through a platform-based financial services model known as the sponsor bank, or partner bank. In today’s episode, Gilles Gade tells the story of founding and building one of the leading sponsor banks, Cross River. Most fintech companies are licensed by their states, but are not banks. That means that every one of them has to find a bank through which to clear payments and connect to the payments system (which only banks can do). That’s not easy -- many fintechs struggle with this because banks are required by their regulators to set up complex systems for due diligence and risk management in dealing with any kind of third party that could affect the bank’s soundness or its customers’ wellbeing. Over the last decade or so, this challenge, combined with the enormous potential of the fintech market, prompted a number of banks to focus on meeting this need -- Gilles points to Webbank as leading the way. These banks have to meet a range of specialized needs including, crucially, taking responsibility for the partner fintechs’ compliance with regulatory requirements. Gilles describes founding Cross River in 2008, when the financial crisis had curtailed many kinds of consumer and small business credit, and talks about how new companies emerged to fill the gap, with either new kinds of products, or new ways of creating access to old products. He points to fintech lenders -- like Affirm, Lending Club, and Sofi -- and also to payments-focused companies like Coinbase, Transferwise and ActiveHours, as innovators that are opening up more inclusive finance. Gilles is especially thoughtful on regulatory issues, which he calls “by far” the biggest challenge for the fintech world. He emphasizes that the single biggest difficulty is sheer uncertainty, as technology change outstrips traditional regulatory change mechanisms. Gilles cites the Madden v. Midland litigation, with its controversy over national versus state interest rates, and the “valid when made” doctrine, as issues that need clarity so that lenders can build stable business models. Gilles also has thoughts on the Comptroller of the Currency’s proposal for creating a special fintech charter (note that we recorded this discussion during the tenure of Keith Noreika as Acting Comptroller of the Currency). Gilles laments that we have no fewer than 12 federal regulators involved in these issues (I myself have actually counted twice that many, directly and indirectly involved). Like me, he’s optimistic about the innovation efforts of the regulatory agencies -- he mentions the OCC in particular -- and of congressional leaders like Congressmen Patrick McHenry (R-NC) and Gregory Meeks (D-NY) -- both of whom, I’m delighted to say, are going to be guests on our show. Cross River’s emphasis on policy issues has led it to a number of leadership initiatives, including creating the Online Lending Policy Institute, which sponsors an outstanding Online Lending Policy Summit in Washington each fall, and also sponsoring the policy programming at the LendIt conference, which is coming up next month -- I’ll be there, by the way, and I hope you will too! More on Cross River and Gilles Gade Video about the bank Gille Gade: Gilles Gade is a founder of Cross River Bank (CRB) and has served as its Chairman, President and CEO since its inception in 2008 as an innovation-driven state-chartered bank and a provider of fully compliant financial solutions to the marketplace lending and payments sectors. Gilles has over 20 years of experience in investment banking and venture capital including as Co-Founder and Managing Director of Chela Technology Partners and Chela Internet Ventures, a boutique investment bank and venture fund focusing on emerging technologies and telecommunications; technology investment banker at Barclays Capital; and FIG investment banker at Bear Stearns. He started his career in 1990 at Citicorp Venture Capital, after graduating from the MBA Institute IMIP (Groupe IPESUP) in Paris with an MS in International Management. More for our listeners Our upcoming shows will include Nerd Wallet CEO Tim Chen; Michael Wiegand, who heads the Gates Foundation’s work on financial services for the poor; and the CEO’s of both Eastern Bank and Radius Bank. As I mentioned we’ll also have shows soon with two members of Congress, one a Republican and one a Democrat, and some other very special guests. I hope to see you at upcoming events including: Lendit Fintech USA, April 9-11, San Francisco, CA Bank Director, The Reality of Regtech, April 18, New York, NY Texas Bankers Association Annual Conference, May 3, Houston, TX Women Corporate Directors Global Institute, May 10, New York, NY Comply 2018, May 16, New York CFSI’s EMERGE, June 6-8, Los Angeles, CA American Bankers Association Regulatory Compliance Conference, June 26, Nashville -- I’ll be moderating a general session panel on regulation and AI, and also teaming up again with the ABA for some special podcasts. Support our Podcast 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! Subscribe Sign up with your email address to receive news and updates. Email Address Sign Up We respect your privacy. Thank you!