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hello and welcome to bryant university my name is madan anna virgila i am the dean of the college of business here at bryant university it's indeed my pleasure to welcome you to today's panel fintech and the future of finance and banking this is the third of four panels in our fall series that were titled paths to recovery strategies for getting back to work and to a better future in this series distinguished experts will focus on the road to recovery from the perspectives of healthcare social issues finance economic competitiveness etc each panel will examine how well we all can work together to shape a stronger future for all of us we are grateful for the continued partnership of the rhode island foundation which partnered with us on the successful pandemic economic series this spring we are also grateful for the sponsorship support of citizens bank and fidelity investments you know it's easy to think of fintech as very specialized and something that big bank executives and financial market gurus and silicon valley hot shots think about and profit from and we all don't know or don't have any clue about but the fact is fintech and more generally technology is a big part of the lives of everyone here today technology is not only altering the landscape of banking and finance it is changing the world of business including accounting marketing and management and to be successful in just about any area of business now and in the future workers need to have an understanding of technology and a high degree of data literacy at bryant we are constantly updating our curriculum to meet these emerging trends we integrate data science and data analytics in almost all our programs not only in finance but across the college of business and recently we launched a data science major and it has been very successful and it's one of the fastest growing programs at bryant university today's conversation however will focus on how the fintech industry have has evolved to this moment and where is it headed and the impact that it has on the future of finance banks financial strategies and outcomes for individuals and businesses i certainly hope that you find today's panelists and the information that they share useful and insightful and now i want to introduce you to our moderator for today who will get the program started in a couple of minutes some may recognize margie o'brien from governor raimondo's daily press briefings where she assisted in getting out the news and information on the covet crisis others know her as an award-winning journalist and an anchor who has been reporting the news for more than 25 years margie currently covers the rhode island legislature and political news as the host of rhode island capital tv she earned her bachelor's degree from saint anselm college and her master's degree from emerson college she's a graduate of leadership rhode island and she sits on the board of the organization's women's network thank you margie for being the moderator today and now let's get started let's get started dean thanks so much for that introduction it's a beautiful day this is an amazing topic and we have so much information to share so we really are going to begin but first i wanted to give everyone an outline of how it's going to go today we're going to have a brief introduction of the panelists and i am going to try to be mindful of the time so i'm really butchering their wonderful resumes by highlighting what they're doing now but i encourage you to check out their resumes online and when you registered for this program you got to see everything also we're going to dive right into the conversation but the whole time if you have a question right at the bottom of your screen there's a little box for q a that's where we would like you to put your questions i know typically in zoom calls you're throwing everything in a zoom the chat room but for today please put your question in the q a and then our group will go through it and i'll be able to ask these questions of our panelists at the end of the program so what we wanted to do first was to thank the students that are also jumping on we know that there's so many of you that have chosen this today and we're hoping that you will also ask some questions so we can make this relevant to your age group when i was first asked to moderate this i was really intrigued i love the topic but i have to be honest i don't know much about this so this is the extent of my fintech knowledge i send ten dollars to my teenage son so he can get pizza with his buddies he thinks it's great i think it's easy that's a win in my book but i am so excited that we have this incredible group of panelists who can really elaborate on what fintech is so let's start with more than 20 years in working in financial services kate bond is a leader and innovator in global finance katie's positions at deutsche bank and citigroup and is currently at lloyd's banking group where she serves as incubator and accelerator lead mario hernandez is the founder and ceo of impesa an innovator of electronic payment solutions licensed with both visa and mastercard and a shout out to mr hernandez he has earned his mba from bryant university nirbhay kumar is the global head of fintech and market data sourcing at n y melon he served in various positions at strata alpha point and also also fis global he is an advisor to brian's dean of the college of business and as a connector and mentor to veterans entering the civilian workforce for the first time kumar is also an alum earning his ba from bryant university it's great to have you guys both back here and brian is fortunate to have professor peter nigro as the sarkeesian chair in financial services at bryant university prior to joining brian peter served as a senior financial economist in the policy analysis division at the office of the controller of the currency for over a decade he is also the architect of this wonderful panel so kudos to peter so just a little background fintech is all about innovation disruption and transformation and will undoubtedly impact and shape the way financial institutions all over the world operate in fact a recent pwc survey states that over 80 percent of financial institutions believe that business is at risk to innovators 56 percent have put disruption at the heart of their strategy and 77 percent expect to increase fintech partnerships in the next three to five years so let's begin kate bond i'm going to start with you you are a superstar in tech having spent over 20 years with a variety of stakeholders clients and agencies dozens of startups and incubators so give our audience an idea of what is fintech and who are these innovators who are you looking to to partner for your next startup well thanks margie um great to be a part of this lineup this evening so conscious time so i'll get right into it i think so broadly fintech financial technology is any tech that's been applied to the financial services industry that seeks to either improve or automate or compete with the traditional financial services delivery mechanism which is you know the paper ledger and the branch network now we look at that today and you know it's as you mentioned it's apps that pay for pizza with your son it's venmo it's paypal that we're using our mobile devices to pay with the things on the go and and that seamless piece nobody goes in and catches a chair called or does that swiping of a credit card with four layers of bits of paper anymore um you know there is there is cryptocurrency there's crowdfunding there's cloud services there's blockchain it's a myriad of different things all the way from robo advisors and budgeting apps to splitting a bill in a restaurant and then you've got different divisions within that you know you've got a short insurtech regtech um tech for tech which is kind of looking at the back end of systems and how we look at the infrastructure and architecture of financial services and then when you come to the innovators um it used to be that it was all the cool young kids and people talk about millennials all the time and i have to point out to them you know i'm i'm i think i'm gen x um but uh the older millennials are all beginning to turn 30 you know 40 now they're not these bright young things that everybody thinks they're all 17 and so they are native digital users but you know millennials are not the be all and end all and oftentimes now what they'll be particularly in financial services is those people who've been in a career already within a incumbent bank or even a even a sort of up and coming neo bank but what they've spotted is a challenge within their company or within their industry that just isn't being sold but materially impacts either the customer or the internal audience on what they're trying to achieve and and how they can simplify that piece and they may have tried to do it as what's called an entrepreneur where you are almost um encouraged by your company the company bears the risk if you like of you experimenting and seeing if there's a different way of doing things but it could also be that actually the appetite of where you're employed just isn't there for trying to solve the problem or the niche area that you've identified so often these times it's people in their 40s 50s 60s they're looking to spin out solve a problem they're leveraging their network they've got access to cash and and really some of the accelerators and incubators they get involved in are much more about sort of commercial modeling or financial modeling and the pieces that overlay the ability to deliver whatever they're thinking about and and move towards that that moon shot and then from a pitching perspective what do we look for um i personally i'm less about the pitch because people are learning learning to sort of create shiny content all the time you know vaporware if you like and i want to really understand what is the problem that they're solving what was their eureka moment you know how did how do they want to solve things the technology is almost secondary and and i like to say that that's why it comes second in the fintech phrasing the financial piece is first and foremost you know don't be sitting there with an interesting idea trying to punt it round to find a problem to attach it to make sure you know what your problem is it could be that either you know it it actually when you come down to the bones of it what you're actually punting is a um an add-on a feature if you like that maybe would be surfaced through bloomberg for example and it's not actually a whole business and i also like to know exactly what the strategy of those fintechs are whether they are scale-ups or startups are they looking to sell are they looking to retain their privacy their private status you know those those kind of things and sort of more thematic pieces that align to the specific bank strategy in my day-to-day space great thank you so much kate um i do think it's interesting what you said about splitting the bill at the end of a meal this has been a wonderful solution to not having that awkward moment exactly peter i wanted to ask you in the mid 1990s bill gates predicted this he said that traditional banks are going to go the way of the dinosaurs and will be bypassed by these tech firms do you think his predictions are coming true do we lose peter he doesn't meal no i'm like my students now well i think uh sorry about that margie thanks so i mean the threat of bank extinction goes back a long way uh yet they've managed to continue to adapt and transform themselves i mean just think in the 1970s banks survived the emergence of money market mutual funds which threatened a deposit franchise in the 1980s it was commercial paper was going to disrupt banking in the 1990s uh walmart applied for a bank unsuccessfully applied for a bank charter congress denied on that charter in fact uh the grammys buy act was post-dated to keep them out of banking because we want this separation between banking and commerce in more recent years technology securitization automated underwriting credit scoring combined with regulation have led to a smaller banking sector at least in measure in terms of assets so let me just elaborate on that for a second we talk about credit scoring we can quantify risk and if we can quantify risk we can take those previously illiquid assets loans and transform them into trade of securities and that really has shifted bank's role in the financial markets from originating whole to originate to distribute and this change has been enabled by technology securitization as well as credit scoring but it really has been driven in part by regulation uh basel iii basel one two and three have made it more costly for banks to hold those loans on a balance sheet so that the twin forces of regulation and technology have opened the door for the competitors that kate was talking about to capture those traditional profit pools that banks have long controlled although banks have met these challenges in the past i think this time is slightly different the speed of change the lack of borders the size and scale of big tech and uh fintech they're very unique challenges and when i think of you know banks advantages in the past i always tell my students the bread and butter of traditional banking is they take deposits and make loans well their informational advantage in the data which they've historically controlled they don't anymore it's the tech firms the tech firms have more data and to put this in perspective when you look at the largest originators of loans out there in the consumer loan market fintechs control the majority of the market or the biggest share of the market and even in the mortgage market quicken mortgage the largest mortgage originates we have these fintechs taking over the traditional bread and butter bank so i think at a minimum the emergence of technology in these fintechs will accelerate that consolidation in the banking industry which we've seen over the last 30 years when i came into the industry started at the occ i don't date myself but let's say the 1990s there was roughly less than 15 000 banks today there's less than five thousand i think this trend will continue as some of the things that kate mentioned big data ai blockchain become even more important and i expect these banks the banks that survive anyway will morph to become more like tech firms better able to manage and use their data as well as making the banking experience more convenient and accessible to their customers in fact if you look at jp morgan chase or most of the larger banks today they don't refer to themselves as banks they refer to themselves as tech firms and i guess i'm being too u.s centric here i i just want to mention that fintech's the importance of fintechs in the developing world is much more important and transformative in nature than in the us fintech firms have made banking services available for the first time and it really had increased access dramatically and just over the past two weeks if you read the paper about and financial amp financial will be the biggest bank in the world in the next 10 years and they really started out as you know as a subsidiary of alibaba and their initial goal was just to bring consumers and small businesses together so small businesses could sell their goods directly to consumers and they solved this trust they created an escrow account and basically they kept the money in escrow until there was a little bit of the product and the customer is satisfied with the product from these rather humble beginnings ant has grown to be one of the large at one point the largest money market mutual fund in the world they've created a bank they've created a credit scoring system and they've created a wealth management arm they have transformed the financial system in china i think that's true in a lot of developing countries where fintech has had a much greater impact than the united states so to sum up i think marty i think this time is different banks are becoming more like tech firms and i think we're going to see ongoing consolidation in the u.s we're going to see an increase in the concentration of assets amongst the big banks and i think as kate mentioned i think we're going to
ee more banks either to partner with more of these fintechs as um the fintech world continues to grow and peter you mentioned regulation and that's something i'm going to say for the next half of the program because i think people are really interested in whether we're going to need more or less regulation for this but i wanted to jump over to nurbae so you're hearing all about this competition and as head of fintech for bny what types of fintechs are you most interested in to ensure that bank of new york remains at the forefront of banking and finance you have all this how do you remain number one sure so i think you know i agree with uh the point that kate made where i i almost sort of shy away from this fintech moniker because it really is technology as a tool now some of those technologies can be applied to multiple industries and you know when i talk to students i tell them to kind of don't think of this as like a monolithic standalone industry uh it has to be use case based so at bny so we are different from other banks like a jp morgan or a city because we are not actually a bank it says the bank in our name we are the oldest bank in the united states founded by alexander hamilton and we are regulated like a bank but we don't function as a bank we have no retail banking meaning you and i can't go and open an account there we have no investment banking we have very little commercial banking the way people think of commercial banking so we are a custodian of assets we are the largest custodian in the world so a lot of our services processes are quote-unquote heavy so historically they've been um very people-intensive very process intensive at a very very large scale we we custody 37 trillion dollars of assets which is more than the gdp of a lot of com of a lot of countries so the idea is that what we look for is similar to the point that kate made what problem are we trying to solve are we trying to make a process faster more accurate uh more efficient or do away with the process that's not needed and can be done away with technology so if you think of technology as a disintermediator right so coming back margie to your ten dollar pizza payment um as opposed to going to an atm taking the money out giving it to your son your son going to the pizza person and paying it those are like four steps and you've gotten rid of all of them so the point is technology is a disintermediator and it it it should be used to create efficiency so you know peter mentioned 670s 80s it used to cost you know hundreds of dollars to do a stock trade right so metal lynch was the name then right i don't know if anybody calls them that anymore but uh it used to cost hundreds of dollars to do a stock trade there was a small minority of people in the country who could afford to buy and sell stocks everybody does it now it's free practically to do a stock and you can do it on your phone with the fidelity app or schwab app or whatever so we look for technologies that can improve the client experience the end client experience that's one that's like a baseline thing so it's a use case we can we go look for the companies that can help us solve for that the second piece is uh technologies that can help us launch new services and products so which are would have been impossible to do because they might be too people intensive too expensive take too much time to launch so time to market is another thing that technology helps us with and then the third piece is that in terms of looking at companies that we can partner with we are heavily heavily heavily regulated so for us to go and get a vendor startup company to work with us there is a process which most startups are going to like shy away from because all banks are very heavily regulated so that is we need to find partners who are who have the capability bandwidth to come work with us we can help them along their process but again it keeps coming back to can they scale can they do they understand our underlying business problem so we are not actually the technology piece is great but if they don't understand our underlying business problem uh they're not going to be able to solve for it so the same point that that some of the folks have made a lot of people are not these seven the people we are dealing with in these fintechs are not young kids out of stanford and mit they are seasoned professionals who've had 15 20 30 like 25 years in capital markets banking asset management who have basically said okay we want to start our own company be part of a smaller more faster growing company they understand the business problem so when they pitch to us it's like talking to somebody you work with because they're like oh yeah completely get it you know yours and here's how our technology can solve for that so i think it's it's very important to understand the business process and then figure out where technology can be a disintermediator and i use the word disintermediator very broadly but essentially something that takes away friction okay well i think that one of the things that we can all agree on is that one of the areas that fintech has really taken hold of is the payment side of things and as a former banker mario hernandez you are at the forefront of this now as the founder and ceo of impesa so i'm wondering if you could tell us a little bit about your company and if as nerve said your timing was right to start this where is your company what's your goal what's your growth been like oh mario you're you did sorry about that uh thank you so much for uh for having me here um uh i'm really happy about what nearby and uh kate mentioned uh because i'm one of those uh former bankers i was a ceo of a regional bank here in costa rica i retired well not retired i started my fintech company when i was uh uh about six years ago uh and uh basically the reason why i decided to start my company and back then back in 2013 when i started knocking on doors uh to raise funds for uh for my company you know people didn't even know what fintech was uh i didn't even know that i was founding a fintech company it was until 2017 that we decided to raise our series a that our investor said okay you have a fintech company so i think that uh from from my experience one of the uh one of the reasons why payments have grown so much is because it's it's part of the day-to-day uh thing that keeps you attached to to a bank so uh banks are much more than just payments banks like the bank i was uh running we had commercial banking we had mortgage car loans uh we had a whole bunch of fx wire transfers you know there's a whole lot of products that uh banks are or products that banks have and but but payments not only i think it's most profitable but it's also the one that allows you to grow faster and the one where people have the most needs you don't have a lot of needs for your mortgage you just go to the bank and pay once once a month but if someone provides you the as nearby said uh says to you now you only have to press this button and you will be able to send your son uh ten dollars for this pizza instead of having to go to the atm and you know doing all that then there is a and there there uh there is a a a be a big need um i would say customer experience is one of the most important things there are and that's one of the biggest reasons why uh why fintech companies are growing so fast and being started so uh uh with with such a uh a success i think that uh you know my my business model when i started my company was b2b meaning i provided technology to the banks and i completely relay what uh with what nearby said because there there are a couple banks we work with over 30 banks in about six countries now and there's bands that it's taken me three years to implement uh one year ago i did an alliance with paypal and uh from the first meeting that we had until the go to market we went through the signing process signing process of the contract due diligence of my company uh developing the coding the solution it took us eight months and it's our fastest growing product and it's our number one revenue generator in my company whereas you know we've had products for four or five years and uh you know their their growth is just uh much slower because uh the banks uh you know it takes them so much because they're so heavily regulated and it takes them so much to even make a decision let me ask you before you go though i know that banks are trying to make it easier for the consumer you don't have to go in anymore and see the teller you go to a drive up atm pretty simple but because everything else this technology is that much more simpler the venmo the apple pay will banks be able to compete with this that's a great question so be uh behind this button that you just showed us there is a lot going on uh that not necessarily uh uh bankers know this button that you press to send ten dollars to your son behind it is there's telecommunications there there's payments there's working with mobile companies there's a lot of things going behind all that that bankers maybe they don't know most of them i mean i've talked to lots of bankers that are not familiar with blockchain they don't know what blockchain is and how it can help them let alone cryptocurrencies uh just how can block their blockchain help them so uh i my my personal opinion is that banks will probably uh have a much harder time because they are not experts in customer experience so you have apple pay for example last time i saw they had i think about 300 billion dollars in cash and they decided not to put their cash into their apple pay they could have started at their own bank instead they decided i believe it was goldman sachs who was underwriting their their uh lows for the apple card and goldman sachs bears the risk bears does the uh credit analysis they put their those loans on on their books but apple pay provides what's most important and it is the customer experience uh so venmo i would say it's about the same i mean what they provide and what's very very important and that's that's the reason why my company has been so success successful working with banks is because we go to them and we tell them listen this is your uh this is your credit card and there's no features on your credit card we can provide this to you uh with our mobile app we can provide you with technology that will make you more competitive so you know we help smaller banks i would say that probably the uh jpmorgans and the bank of america and all the bigger banks uh they already have their they they have lots of money to put into creating these uh tools but there's seven thousand banks i think more than 7000 banks in the us so the smaller banks are really struggling because they need to find that technology uh and that's that's where we come in all right what a great first half hour lots of information shared we're going to go into another round of questions the answers are a little bit shorter this time because we do want to save time for questions at the end of the program and already we are getting some really great ones especially from the students so if you do have something that you want to ask you can just put it in the q a box and we're going to get to that at the end um kate let me go back to you for a second we've heard a lot about the importance of fintech and disruption but right now we are still in this middle of this pandemic and even despite the great news from pfizer yesterday morning that they have a 90 effective rate for a vaccine there's really no end in sight so how are you counseling your clients on this and helping them not to just survive but thrive during this time um so there are a number of things that the bank specifically is doing from and it's from a uk perspective so i apologize if i'm using references and terms that aren't quite so familiar to people but but on a broader basis from a from a retail bank perspective so that sort of b2c business the customer model of the man in the street the lady in the street um you know we're doing payment holidays on mortgages on credit cards on loans on motor finances because again back to um mario's point it it's not just um the retail bank and also with nerve bay with all these different umbrella pieces that lloyd's banking group makes up um you know we've got emergency access to fixed terms loans we've got base rate reductions we've got um contactless payment limits have changed from a from a 30 pound original maximum up to 45 and i know that an apple pay it's like a thousand pounds and i'm sure it's something different again in the us but um you know interest-free overdrafts there's any number of things and then sort of on a more sort of business to business perspective we've got big conversation big conversations cattle letters um happening in the northeast of england where we're bringing people who would be our small to medium enterprise customers um so that would be you know private entities of either news agents or smaller businesses um and having really big conversations about what the difference is around the sort of digital divide between that sort of northeast of the country or around the cities compared to the more rural um areas and really trying to understand what some of those challenges are for them but then we also have a lloyds bank academy where we're trying to look at how we digitally upskill the general populace because as as mario nebe and peter of all reference you know the the roles and the and the way in which we integrate with the world is is changing so rapidly we need to make sure that people can even begin to have a conversation in that space you know if we apply for a job these days we don't generally do it by snail mail we don't send our resume in the post we'll do it electronically we'll apply online but actually if you're not familiar with how that works you know it's not quite you know did you plug it in did you turn it on but there's certainly an element of are you comfortable with how to fill in on an online application and those kind of processes so there's lots of things from a very practical perspective all the way through to sort of the more sort of policy driving um discussions that are happening so one of the points i wanted to make uh is that kovit has been fantastic for fintech just so you know uh because it's forced previously unwilling entities who were either too slow didn't want to take on the effort or the cost to do certain kinds of digitizations it forced them to do it there's no choice now because and i'll give you an example so everybody has a brokerage account and from time to time you will get once a year you'll get a mailing like an actual thing in your mail which is like proxy voting right so you own stock in blackstone you'll say okay this is your form fill it out send it back most custodians are doing that through snail mail and it costs millions and millions of dollars a year across the globe to do that and there's no rational reason to do it anymore because people have email and there are other ways to guarantee to have guaranteed delivery so our clients used to be like oh we don't want to sort of you know go down the path it's when we have to make some investment and technology now there's no option because the mail is not that reliable or there are delays and people are not checking because peop so it's forced the digitization of certain processes that were antiquated across the board not just you know bny any but across the board so it's actually there's a funny chart and it was a little tongue-in-cheek as to you know what are the four reasons for the explosion the expansion of digitization and like it was covered it was new technology it was like four things and it was like covered check check check check because you know that's what's forced because we have no choice people aren't comfortable giving bank notes it's forcing digitization forcing electronic payments it's people aren't going out so what do you do so let me just throw this out and really anyone can jump on who's pushing back is it a generational thing older people are like look i like my little checkbook dottie the teller at the bank is my friend i'm not gonna change are you just trying to appeal to a younger audience because you know you're going to
have them someday i would i would go with the answer absolutely not so one of the biggest things is very much around accessibility so how do we make sure that we retain customers across the board how do we ensure that they are financially illiterate how do we make sure that they feel that they're in control of what they need to be in control of and really understand and and have them participate in the conversation and not just sit there sort of nodding when some specialist tells them how they should manage their affairs and and maybe isn't really understanding what their personal needs are so absolutely not just appealing to the younger demographic and also you know there are older people who are incredibly digi savvy and then there are younger people who you know my brother my brother works in tech the last thing he's going to do is have any kind of tech profile about anything because he's completely paranoid about what you might see so there's this huge discrepancies around how people envision different demographics which i think again a bit like millennials people hang on to it a little too much um so you know we do have mobile branches literally like fans that go around enabling those people who do want to speak to the same teller on a daily basis and are creating those those sort of senses of community but at the same time making sure that we are enabling people to engage with us in whatever channel whichever method is their preference whether it's telephony whether it's online whether it's in person and then there's also the accessibility pieces around people with either learning disabilities or you know hard of hearing deaf blind etc etc there are all of those things that we are trying to bring to it and then you sort of take on the hyper personalization around you know what's your personality style you know do you have a large risk appetite are you gregarious are you an introvert all of those those kind of things are being beginning to take it into consideration all right this next question has come up in three different topics uh all about regulation and one of our audience members jordan hoey asks do we need more eyes do we need greater greater regulation on this business no peter let me all right good good mario so let let me give it a shot i was uh i'm the uh the chairman of the central american fintech association and i was recently invited to uh deliver a speech in front of all the uh regulators and there's a like central america south america uh group that meet once a year and i thought that i was invited because they were going to throw tomatoes or something to me um it was very interesting conversation they wanted to know if fintech was to be regulated and uh so my i guess i'm being a banker uh i'm pro regulation uh provided uh three things uh first you have to regulate compliance which is very important that banks have invested tons and tons of millions of money making sure that uh those people that we don't want uh stay out of the banking system uh second uh financial intermediation that's why banks uh that's what regulators do if you're a fintech and you're doing financial intermediation taking loans and uh taking deposit and lending money you're not a fintech company you're a bank and you should be regulated and uh third uh and probably most important thing that should be regulated is security because uh again banks have invested millions of money in security today more than ever i agree with nearby uh kobet has come to it's the biggest uh uh promoter of digitalization but also there's lots of fraud that are occurring right now uh so think to companies if they will if something wants to be regulated are those three things and the last thing that i mentioned is that uh you have to put in a balanced regulation and innovation you cannot limit uh innovation because of uh excess of regulation so you know i think that there should be a balance between regulation and uh and uh innovation but yeah i think that there are some things uh that should be uh uh definitely regulated and mario i'll add two things to that from a consumer's perspective i think at least in the united states i mean i know this is not true in the u.s we data privacy is a big thing and that's something we're woefully behind the world and as i tell my students if the product is free you're you're you are the product they're using and selling your data customers have to have the right to determine who can access their data and decide how and where can be used and the last other area of regulation i think is really important that is financial stability i mean uh if if one of these large tech firms get in gets into banking i mean if that large tech firm fell they could possibly bring down the whole financial system and just think about amp financial so people have to remember that fintech firms because of that business model are much more vulnerable to adverse economic shocks because they don't hold as much capital so although bankers complain about uh holding being forced to hold so much capital if they didn't this this coveted crisis could have turned into a banking crisis so i think that's really important and the other you the u.s regulatory system is so screwed up and that a lot of these fintechs to operate in the states we don't have a a national fintech charter so they have to go to each of the individual states and get approved which makes it incredibly costly and time consuming so from both the the consumer level the fintech level and more the the macro prudential perspective you know i do think we need more regulation but to mario's point we have to balance that with uh innovation and acceptance of these disruptive technologies and margie can i add to that a little do we have time yeah couple minutes cool so i was equally going to say i mean yes you're right covet has definitely accelerated it but then mario and peter are also correct in as much that you know we do have risk and regulation and on one hand you know you you've got the 2008 crisis where somebody says oh but you didn't say i couldn't um and we're getting a lot more about simplification of rules and thematic kind of guidelines coming in that ask you to act on the sort of the spirit of the commentary rather than just the absolute letter of the law if you like um so i think we we're probably getting slightly um less draconian type direction coming down to us on the understanding that actually we don't want to trans sort of prescript what the answer is or is not because it's a bit like you know you didn't tell me i couldn't wear the gold line my hot pants to work um in the big list of what you know 75 pages of what i could and could not do but now it's become like general motors dress for your day or dress appropriately you know it's become much more interpretive but that means that actually we are made to think and be more constrained about what we're doing and then on the other side in terms of again risk for the bank risk for the customer you know we are beginning to work in a very different way when we engage with these fintechs and the startups and scale ups the activities that we're doing them are no longer those big tech strategic five ten-year partnerships and our onboarding kyb kyc is not necessarily fit for purpose for those different interactions you know we don't have a common lexicon in terms of what is a proof of concept what is a proof of value what is a pilot i could be talking about a pilot but and you're talking about proof of concept but we're talking about the same thing so there's risk appetite from risk models for what are we doing what does it involve how long is it going to take what sort of data do i need these are all really amorphous things that haven't yet quite been tied down and i think coming to that point of being regulated we do move much more slowly as as the incumbent banks and and deeply aware of that risk whereas neo banks they've got less they usually only have customers who are using them as a secondary bank account not a primary bank account they have a greater appetite for risk because they've got less infrastructure that's sort of creaking around the edges um and although they're getting there um and and that whole whole piece of sort of moving the tanker and and trying to get people to get their heads around different ways of interacting and how we do more partnering and less kind of that that conservative you know they're coming to disrupt our market actually we're all working on the same side we're all just trying to make it a safe and seamless experience for the customer where we have all these sort of joined up bits in the background that does have infrastructure and architecture that allows real-time notifications and all those things that everyone's beginning to come to expect now oh kate i think that you raise a lot of points and peter this could be the framework for another whole virtual event and i'm happy to moderate um but i did want to break into another whole topic and that is where are the jobs in the future i mean obviously technology is transforming financial services do colleges have to change their curriculum do people now looking for jobs have to find an extra skill just to put their resume out there yeah so i i don't think it's a question of an extra skill i think it is a recalibration of skills so peter and i and magan and others from bryant have spent the summer several times talking about you know this concept of core curriculum right so most colleges in the us have this year year and a half core curriculum where everybody's doing a baseline a similar baseline set of courses and that is the piece that i think needs to be recalibrated because it's probably not been revisited since the 70s maybe even before that so you know it's it's it's the exposure to things like data science which impact all industries and data science is a fancy new name for you know combination of statistics and sort of analysis and things like that but the idea is that it's applicable to every field it's applicable to every industry so at least exposing students as part of the core curriculum something like that and say okay here are case studies in television you know the case study in health care you have the case study in financial tech at least give them a flavor of what it means in reality as a case study way and then for those who want to build on it you know can build on it and you know major in it like brian has as a data science major i i work with students freshmen through senior year students at bryant at nyu and the one thing i tell them is i say if you're a freshman doesn't matter what you major in go learn a coding language over the next four years and then like coding coding coding i'm like think about it it's easier than learning a natural language because you don't have to speak it right so it's that it's only half that effort because you don't have to learn uh so the idea is that if you get exposure understanding you don't have to become an expert programmer but at least if you can understand sort of what's going on behind the scenes for everything your iphone your video games your anything your hulu tv or apple tv anything you use if you start understanding what's going on behind the scenes and appreciating that i think when you get into any job any kind of job you might have one it helps you get into the job because you can talk with some intelligence about it and then secondly when you do get into a job and i mentor veterans and students who are and and folks were actually in their careers and i say think about the problems you're having day to day what's taking your time to do what's taking too many people to do what's causing a lot of mistakes what's not efficient those are the things where you can if you have a little bit of this other background on data science on programming you can say okay you know what there is a way to solve these problems once and for all or solve them for everybody in my organization as opposed to just you know me trying to do the same same process again and again and take me five hours a week more than sure so those are the kind of skill sets so it's a flexible mind and the ability to understand sort of these moving pieces nothing is in isolation like everything is connected um and the sooner you start seeing those connections the better off you're going to be peter did you want to add to that i hope all the students are listening and i think we're we are headed in that direction we we've made a lot of changes at brian but i think there's a lot more work to be done and uh one of the things that's great things about brian is we really do prepare our students for the real world so i know all our students online are taking it to heart so i agree 100 with their babe all right as i said we have some great questions and i'd love to get into them um here's one from ben koplovsky what is stopping the united states from starting a cryptocurrency should a government entity produce an e-currency so can i speak to the second piece because i don't want to get into whether the u.s should or should not but i think there's been a lot of discussion in europe and the uk about cryptocurrencies and you know who owns what and we talk about the cloud and it's it's open to everybody but actually it's owned by about three big corporate private entities um so it's not public at all and therefore i think cryptocurrencies are in danger of heading down the same line so it's almost kind of if you could have an eu currency that was or a government-based backed currency cryptocurrency then we ensure that it doesn't end up being owned by single institutions with potentially some not nefarious kind of um bias to it but certainly a personal agenda rather than a public agenda so i have a view on this i worked at a crypto startup for 14 months mid-career which was an interesting experience so i it's not so currency especially if you look at fiat right if you're talking about government issued currency it's fiat so it can't exist in isolation and be digital because economic policy financial policy the levers of those policies interest rates is all driven off that so there has to be a semblance of control uh not just ease of use or ease of transfer like those can't be the underlying logic so there has to be a framework that has to be well thought out of you know looking at data for the last 100 200 years or since the bank of england created fiat or whenever uh and sort of really kind of understand what that framework is what the corner cases are you have to account for all kinds of scenarios that's that that needs to be thought out first before um actually issuing it or moving to a digital currency like technically is not that hard i personally think that smaller countries in third world fourth world markets are probably much more likely to get to a national cryptocurrency first as opposed to an established um you know global currency like the pound or the dollar or something like that i think it's much easier for some of you know congo republic of congo or even the african union may be coming up with the unified currency but i don't see uh the us dollar or the pound or the yen you know going that way without this underlying framework being built which is going to take some time because it's going to read regulation and legal and you know buying from global central banks and so on so forth all right i think that there's a majority of women who have been sharing a meme since saturday night when vice president-elect harris gave that amazing speech of a shattered glass ceiling it gives us hope that things are going to change for women but we can't rely on hope so how do we get more women into this field and kate i definitely want your opinion seeing that you're a finalist for the 2020 women in tech leadership award but gentlemen weigh in how do we get more women who major in the business in college and also want to go into this field and feel heard so yeah please do chaps weigh in um i think we all recognize that it's not necessarily a female thing it's definitely a human thing you know most of the senior positions that hold sway in how people get promoted seen sponsored are gentlemen and so we are absolutely reliant on those people at the top of the tree to
want to see change and reflect boards and senior executive committees that look like the rest of the environment does margie you made a point at the beginning where you said that those companies that have mixed or female um boards do better and and are more successful and you know i came into banking after 10 years in the art world so probably beginner's luck kind of had a massive part to play in it i had no expectation of how things should be done or what you know how things had always been done or any of that so i just kind of looked at things that went that doesn't really work um i think sponsorship is hugely important you know those those structural things the fact that we're even asking the question means that we're definitely moving forward you know when i i came into banking when i was 29 and it was still you know there were no ladies bathrooms on the top two floors because that's where the management meetings were so why would you have ladies bathrooms on those floors you know at best they were coming in bringing the tea and and scuttling out very rapidly um so i think that's that's definitely hopeful um and from a you know a personal perspective you know i've i've conscious that you know the primary care of of all things from you know i joke about from from grandparents to dependents to goldfish seem to come down to the to the the tenant of the female or um taking on that sort of primary carer role and i think it it behooves all of us ladies to sort of make sure that we shine a spotlight and we create opportunities for other women and other talent around us to sort of really shine in that spotlight and and there's a hashtag that goes around you hashtag lift as you rise um you know if as as we've seen with the the speeches over the weekend you know you may be the first but it behooves you to make sure that you're absolutely not the last we don't want we don't really want token women or you know diverse ethnicity backgrounds or heritages sort of helicoptered in just to tick that box you know we need to make sure that the pipeline is growing and if there's a gap for how we move people into those those different roles those different areas whether it's spot training spot trading or exco positions you know are we making sure that if you if that person wasn't the best person for the role today have we then supported them to make sure that the next time they're in that opportunity they are the best person for that space and they're being supported to bridge that so gap yeah there's some specific things you know also we can do i think if we sort of take it back to let's say middle school grammar school elementary school i think demystifying technology or introducing kids just kids overall to technology that early on and uh i think the next generation uh is it has i think a lot less of these ingrained whether biases baggage whatever you might want to call it then you know we do and a lot less than maybe generations older to us do but i think introducing these concepts early on so there are lots of these women who code uh you know lots of big companies have these but i i almost think that it should be done in high school or middle school where there is a trajectory you can show a career path you can show uh you know area of interest so you know making it sort of easy to access technology and and technical knowledge uh or knowledge about technology i think that will kind of perpetuate itself you know bny is the little pro it's probably a little unusual our cfo our cto and our ceo are all women um and they've come to us mostly through within banking but you know through various paths but so we are ahead of hr as a woman or it's it's like aside from probably our ceo and a couple of other people i think uh most of our executives and very very senior roles are are women but we're doing a lot i think one of one of the things i saw and i don't know if this would work or not but is we removed uh or whether it was us for some other bank i was on some discussion where they've gotten rid of when somebody applies for a job uh they've gotten rid of um this concept of like your gender so they're it wasn't us it was somebody else i was hearing but there's sort of some of that happening and it addresses not just you know the to sort of manage the imbalance but also with a lot of other things happening in society right diversity inclusion equality uh to balance those kind of things out where they're actually uh suppressing the name of the person in the application so you read you look at their qualifications you look at the experience you don't try to sort of identify sort of what what like like ethnicity they are or gender they are or you know whatever it is so you you call the applicant in for an interview based on purely on their qualifications and experience as opposed to saying oh this person might be from this area or you know might be latino or african-american and you know trying to do that kind of although the slightly scary thing now bae you mentioned when you're reading the surveys you the the cvs the resumes you don't have their names and therefore you can't tell where what their gender is or their ethnicity their really scary thing is when we've got those sort of ai systems that do that pre-scanning for us you know the bias is built in the buyers can tell you know given that they did this course at this university we can tell that that's a female given that they speak urdu given that they speak you know whatever the different languages are that are then reflected as mother tongue we know where they come from what their ethnicity is and so those biases can still pre-filter before you even get to see it and you don't know what their name is you end up and unknowingly you've already got 15 white men or you know 25 uh white females who all went to a red brick university and studied economics you know and so i think there are those pieces that we can get really clever about how we try to filter it down but at the same time we have to be really aware of being a little too clever for our own good sometimes i wanted to ask a couple quick questions right now and this could be rapid fire around uh julie shaw says will cash payments be a thing of the past in the future and you can tie your answer in with andrew mckenzie's question is what's the greatest risk of this fintech is it the hacking so at the at the risk of monopolizing i think the biggest risk um so i'll skip the first one but the the biggest risk is is actually uh operational resilience the more that we continue to partner and rightly so there's an opposite operational resilience perspective you know if a company goes bang a small entity that we've been relying on to deliver something to our customers and for whatever reason they they go back you know it's all well and good having that code in escrow but if we don't have the skill set of how we how we leverage it how we use it how we implement it with scuppered and we may all be using microservices but let's hope you've got your backup plan to to quickly slot somebody in and and keep going so i think that piece is huge and also the security aspect yes of course you don't want to have everyone's private data in the public space and that's almost mario um i would default more important than the customer experience the customer would rather have a slightly clumpy experience and know that they are 150 safe then they would have a seamless experience and be slightly nervous about their data ending up in the public forum and there's been a huge shift in the payments over the last 30 years i mean checks used to be the most important i do think cash will eventually be phased out once we deal with those cyber risks and hacking but there's no like like uh margie said earlier i venmo now it's just so much easier than giving my kids 20 bucks to go to chick-fil-a every week just been mowing 10 bucks and i'm done so cash is definitely on its way out it might be interesting we actually had a piece of legislation come before the house that wanted companies small businesses to still honor cash because people felt that they were being discriminated against because they only had the charge card um i have to say this was amazing and i really think that we have so much more information that we could really do another one but i wanted to thank our incredible panels starting from dean anabola also our panelists cape on mario hernandez nurve kumar and peter nagro thank you so much we also really wanted to give a shout out to our sponsors citizens bank and of course brian's nearby neighbor fidelity just down the street this was the third of the four series we do have one more to go and that is titled the challenges ahead after historic election which you know is going to be a great discussion so pull out your phones now mark it down on your calendars it's december 9th starting at 10 o'clock i am going to be thrilled to moderate one more time and i'll be joined by brian president and also uh philip thompson who is the deputy mayor for strategic policy initiatives in new york city as well as mark zandy the chief economist at moody's analytics so you can check out all the information and you can register for this next one the challenges ahead after a historic election by going on to news.bryant.edu to everyone that has joined us thank you so much for this incredible afternoon we wish you well and be safe
