Barefoot Innovation Podcast

Leonard has been involved in the crafting of pretty much all the consumer financial regulations since 1985. And for years he led the legal teams – first at the Fed and then at the CFPB – that wrote them. I consider him the single most expert person in the world on how to write consumer protection regulation in finance. His deep knowledge of the field and his great sense of humor led to a really fun and animated discussion about the challenges of financial regulation.

As understanding of Bitcoin has spread, a new conventional wisdom has emerged - the notion that the crucial innovation here is not digital currency, but rather the blockchain, including closed chains inside companies and closed networks. In our conversation, Jeremy challenges that idea head-on. He argues passionately that the big power in this technology is its openness.

Digit has set out to solve one of the core problems in consumers' financial lives - how to save. Their solution is to make savings effortless, using an intelligent algorithm that analyzes your spending and income patterns and automatically moves funds into savings.

The title "CIO" used to mean Chief Information Officer. It still does, of course, but today that "I" increasingly stands for another word too: innovation. Dominic Venturo, the Chief Innovation Officer of U.S. Bank, reflects a growing trend of banks assigning specialized leaders to spearhead their work in innovative technology.

Most of our listeners know Michael as the former Assistant Treasury Secretary for Financial Institutions who shepherded the Obama administration's efforts on the Dodd-Frank financial reform law. Fewer people may know that he also led the initial organizing of the Consumer Financial Protection Bureau, prior to the President's appointment of now-Senator Elizabeth Warren to take on that task - that was when I got to know him. He is now back at the University of Michigan (my own alma mater) as a law professor, and continues to be very active across a wide spectrum of consumer finance and financial regulation activities, and also on lending to small businesses.

Nitish and I started discussing the sandbox concept last summer (before the U.K.’s proposal). I’d convened a roundtable on disruption of consumer finance and how to (and not to) regulate it. Nitish, whom I’ve known for years, came to the meeting armed with the most specific blueprint I had seen on these ideas. In the months since then, he’s refined it and shared it publically several times. The goal of a sandbox approach is to allow testing of pro-consumer innovation, while assuring that customers are still well-protected. The issue has endless subtopics. For instance, is a sandbox really needed? How do current rules impede innovation -- if they do – and which ones are most problematic? Is it appropriate to use the concept of “risk tolerance” in consumer protection? If so, can risks be defined? Can they be quantified and measured?

Our episode covers many of the major themes that have cropped up this year: prepaid cards, financial inclusiveness, mobile platforms, mission-oriented companies, partnerships, regulatory challenges, the underserved and underestimated consumers, the rise of fintech, uncertainty, but most of all excitement.

As you will hear, Tom Curry has many preliminary thoughts on those questions. He cautions against getting swept up in innovation fads, some of which end badly, as recent history has shown. He also talks candidly about the fact that regulators are not wired to look at the upside opportunity of change – they are culturally primed to see the risk in things, to say “no.” Shifting that mindset will be a challenge.

My guests are Jesse McWaters of the World Economic Forum and Rob Galasky of Monitor Deloitte, who co-led the WEF's landmark research project on financial technology. Switzerland-based WEF focuses on public/private collaboration and is best known for hosting the annual global forum in Davos.

My guest is Courtney Kelso, who leads the Amex product and marketing team in Enterprise Growth. I talked with Courtney about two things. First, their strategic move into creating an inclusive set of services, through Bluebird and Serve. And second, what it takes to innovate inside a big company. Interestingly, the two are linked. Their work on building an inclusive strategy is the engine of innovation at American Express.

ennifer Tescher is CEO of the Center for Financial Services Innovation. Our regular listeners will recognize CFSI as a continuous presence in these conversations – I think we’ve only done a few episodes where we didn’t mention them. Why is that? It’s not because I serve on the CFSI board, although I’m very proud to do so. Rather, it’s the reverse – I serve on its board because I think CFSI is the single most foresighted and impactful organization involved in the quest to do better for financial consumers.

The community bank is a unique feature of the U.S. financial system, and Brian Graham, CEO of Alliance Partners, is both one of its most eloquent advocates and an innovator with new ideas on how small banks can compete in the digital age. In 2011, he and his colleagues founded BancAlliance as a collaborative solution that enables community banks to access attractive lending markets typically dominated by larger banks, through use of a shared lending platform. The mission is to empower member banks to diversify prudently into high-quality loans that meet all commercial and regulatory standards – without changing the nature of the community bank

In my conversation with Richard, he wove together all these themes of business, innovation, and ethics. More than any of our guests thus far, he voices a full-throated faith in the future of retail bank banking -- including branches in lower-income communities. At the same time, he speaks thoughtfully about the need for innovation in the branch and beyond (while warning against falling in love with every new idea).

Currently, almost half of the Hispanic community in the U.S. is underserved. Luz decided years ago to help the 25 million individuals who represent the un- and under-banked in her community by offering responsible credit-building and affordable loans. Before moving to California to broaden her mission, Luz co-founded and served as President and Chief Operating Office for El Banco de Nuestra Comunidad in Atlanta. Since then, her career has been characterized by a relentless drive to use technology and creative techniques to “score the unscorable” and serve those overlooked by traditional financial institutions.

Stoyan Kenderov and I had a truly rich and candid conversation about the evolution of banking innovation and regulation, and though he appears ten episodes into Barefoot Innovation, it was Stoyan who first suggested I record our thought-provoking discussions and offer them as a series of podcasts. Thank you, Stoyan, for your encouragement! In this interview, we travel everywhere from communist Bulgaria to the emerging coding culture of mid-1990s Germany to today’s nucleus of innovation, Silicon Valley. In his current capacity, Stoyan leads Business Development and inorganic growth partnerships at Intuit’s Consumer Ecosystem Group and its product brands Mint, Mint Bills, and Quicken.