Barefoot Innovation Podcast

Professor Dog provides inspiration for Greendot Bank's effort to create financial products that serve and safeguard consumers' financial lives. Once known as Streiter the Heater, Steve Streit is now often called the Prepaid Card King. He is the founder and CEO of Pasadena-based Green Dot Corporation and its wholly owned subsidiary bank, Green Dot Bank, described as a "pro-consumer financial technology innovator with a mission to reinvent personal banking for the masses." In this episode of Barefoot Innovation, I spoke with Steve about the former disc jockey's pioneering foray into the re-loadable prepaid debit card industry and how his "highly curious mind" keeps him at the forefront of financial services innovation. As someone who created radio stations with names like Easy 105 and Country 103 (many of which still thrive in today's fragmented broadcast market), Steve is known for bringing simplicity to his platforms, which now include the Green Dot prepaid card and its award-winning GoBank mobile checking account. Speaking of financial products, Steve believes: "If you have to have an owner's manual, you messed up." It is easy to see how he translated his connection with radio listeners into serving bank customers with an affordable product and cutting-edge technology that did not require opening a bank account. Conceived in 1999 as iGEN, a company offering teenagers a pre-loaded debit card so that they could make purchases online, the company was re-branded as Green Dot when Steve realized that his product was primarily used by under-banked adults. Effectively tapping into a 73 million person "niche" market, Green Dot has since built a large-scale "branch-less bank" distribution network of more than 100,000 U.S. locations at retailers, neighborhood financial service center locations, and tax preparation offices,as well as an online presence in leading app stores and through providers of online tax preparation. Its MoneyCard partnership with Walmart was recently renewed for five years. In 2011, under Steve's leadership, Green Dot became a bank-holding company with the purchase of Bonneville Bank in Provo, Utah. The subsequent acquisition of mobile geo-location start-up Loopt led to the development of GoBank, the first bank account designed from scratch to be opened and used on a mobile device. This past Tuesday, Green Dot announced the official opening of Green Dot Shanghai a high-tech facility that will bolster its "follow the sun" strategy to deliver high-scale, high-quality, and efficient technology services around the clock. Steve has won numerous awards, including the Ernst & Young Entrepreneur of the Year 2005 award for Southern California, as well as its National award winner in the Financial Services category in 2011. He has been honored with the Prepaid Industry Leadership Award in 2008 and recognized as the 2011 recipient of the Technology Leadership Award from Los Angeles County Technology Week. The father of seven grown children, Steve also works to improve the lives of children in need. In 2009 he founded Patti's Way, a charitable foundation providing grants to single mothers and their children. Steve also volunteers in mentoring LA County Foster children and supports the LAPD's Hollenbeck Police Athletic League (PAL). Not one to be left out, Steve's schnauzer, Professor Dog, was on hand as I interviewed him by phone at his California home. Listen to this week's episode to find out how Professor Dog became an inspiration for Green Dot Bank in our lively discussion on how innovators and banks can best create products that serve and safeguard financial consumers' lives. Please subscribe to the podcast on iTunes or open your favorite podcast app and search for Jo Ann Barefoot. You can also subscribe via the RSS link below. Barefoot Innovation Podcast RSS

Episode 7: Vouch Founder & CEO Yee Lee Everywhere I go in the fintech world these days, people are mentioning Vouch. It's new, it's still small, but it has a potentially huge idea, and a team that can make it happen. Vouch is a Bay-area startup that calls itself "the first social network for credit". Its concept is simple: a borrower asks his or her social network friends to vouch for repayment of the loan. The friend can choose an amount to vouch for. If the borrower defaults, the friend pays the promised amount. The vouching network - or "trust network" -- can become mutually beneficial, bringing lower rates (5% to 30%) or larger loan amounts ($500 to $15,000, with one- to three-year terms.) As I say in introducing the episode, this idea may look like something just for millennials, but I think it is tapping into something with massive potential - new ways to evaluate people's creditworthiness by understanding them in their social context - understanding how they are viewed by the people who know them best. Vouch says they want to "return lending to its roots," where your reputation carried weight, but to do it using new tools and reach. Yee Lee is a software engineer and serial entrepreneur and investor. In our conversation he says he grew up in the Bay Area and it was just "in the water" there to do an internet startup during the dot-com bubble - he quit his PhD program at Stanford to go after his first idea. Since then he's been involved with everything from PayPal to TaskRabbit, and in 2013, founded Vouch. That same year, he wrote a thoughtful Wall Street Journal blog piece for Fathers In Tech. He lives in the Bay area with his wife and two young sons, and I will personally "vouch" for his dad credentials, as I recently invited him to an event that he declined because of his younger son's birthday. I know you'll enjoy hearing our discussion. And here's is a bit more on some of the other entities mentioned in this episode: PayPal Mission Asset Fund, a much-emulated innovator using Latin American-style lending circles Grameen Bank, microfinance pioneer Core Innovation Capital, a Vouch investor IDG Ventures, a Vouch investor The CFPB's Project Catalyst, fostering pro-consumer innovation Enjoy my conversation with Yee.

Episode 6: The Innovative Bank - Manolo Sanchez, CEO of BBVA Compass Can banks be innovators? If so, how? In Episode 6, we tackle that topic with one of the most innovative bank executives in the world – Manolo Sanchez, the chairman and CEO of BBVA Compass. BBVA is the Spanish bank that bought the U.S. startup Simple, whose founders we featured in our podcast Episode 2 ("The Cheerful Disruptors"). Today's discussion picks up the bank side of that equation. It's our first conversation with the leader of a large bank. BBVA has over $700 billion in assets and a global reach. And what an interesting bank it is. When I first met Manolo several years ago, I had no idea they were heading into one of the most notable innovation strategies in the industry. Since then, they've made huge investments to modernize and integrate their IT, and have stood out for their active experimentation with innovative startups – working with them in various ways, and always, especially, learning from them. A native of Spain, Manolo has worked for BBVA for nearly 25 years, holding positions in the corporate, investment and correspondent banking divisions of the bank. He is a graduate of Yale University and earned his master's degrees in international relations from the London School of Economics and in advanced European studies from the College of Europe. His career has taken him to Paris, Madrid, New York, Mexico City and Texas. As Chairman and CEO of the U.S. bank BBVA Compass, Manolo today lives with his wife and three children in Houston, where he's a leader in a wide range of community-strengthening institutions. The bank also has major facilities in Birmingham, where it has anchored economic development including a newly-opened LEED-certified technology development center. Manolo sets the tone for this "innovative, principled and customer-centric company" — and earned recognition as American Banker's 2014 reputation survey leader — with the principle, "We work for a better future for people." In Episode 6, he explores the fertile landscape of financial innovation from the viewpoint of a major bank with a multi-year strategic vision to make BBVA the "next great bank in the U.S." Please Click HERE to subscribe in iTunes or open your favorite podcast app and search for "Jo Ann Barefoot". Barefoot Innovation Podcast RSS

Lending Club and its founder, Renaud Laplanche, rank high on nearly every list of fintech disruptors. They are the biggest player in "marketplace lending" – online matching of borrowers with people and institutions willing to lend to them. Marketplace lending (which has evolved from "peer-to-peer" or P2P lending as more institutions join in as funders) is one of the fastest growing innovations in consumer finance. In December, Lending Club did the largest U.S. tech IPO of 2014, at nearly $900 million. Their success is attracting interest from every direction. Last year they announced a partnership with Chinese tech giant Alibaba. At the same time, they are partnering with BancAlliance, to connect with its network of 200 community banks in 39 states. Renaud is French-American. He has an MBA from HEC and London Business School and a JD from Montpellier University. He practiced law at Cleary Gottlieb Steen & Hamilton in New York and then founded the enterprise software company TripleHop Technologies, selling it to Oracle Corporation. In 2006, he began work on his disruptive ideas, leveraging his unusual combination of software, entrepreneurial and legal skills to create something truly different. Business Insider named Renaud the "best start-up CEO to work for," and he won the Economist Innovation Award in the consumer products category in 2014. He lectures at Columbia Business School and is a member of the Young Presidents' Organization. On top of all this, Renaud holds two world speed sailing records, including crossing the English Channel in 5 hours and 15 minutes just this spring – Alas, this is a topic we didn't have time to explore, but clearly it's no coincidence. Renaud has been covered in leading publications like The Wall Street Journal, The New York Times, The Washington Post, USA Today, BusinessWeek and Barron's and has been featured on CNBC, Bloomberg, ABC News, CBS News, and Fox Business News. We are delighted he could join us for Barefoot Innovation.

When we recorded this short episode with Susan Ehrlich, she was head of global credit for Amazon. She oversaw the Amazon Rewards Visa and Amazon Store Card in the U.S., as well as Amazon credit programs in Canada, United Kingdom, Germany, and Japan. Most of our conversation focused on this very unique perspective. Susan has since left Amazon to take on a diverse set of roles as a financial services director and investor. One is as Vice-Chairman of the Board of Directors for the Center for Financial Services Innovation (where I too serve on the board). She is also a director of BECU, the fourth largest credit union in the United States and largest in Washington State ($12B in assets and over 850,000 members). Susan has a long and remarkable track record as an executive scaling growth and leading turnarounds across a range of businesses in payments, retail, banking, and financial technology. She was President of Financial Services for both H&R Block Inc. and for Sears Holdings Corporation. At H&R Block, she built the Emerald Card program into Consumer Reports' #2-rated prepaid card in the industry in 2013. At Sears, she re-launched Kmart layaway—turning it into a $1 billion-plus business--and expanded the company's credit partnerships, generating $9B+ in annual retail sales on the Sears Card. Her earlier career included developing and delivering payment and credit solutions for JP Morgan Chase, WaMu Card Services (Providian Financial), and Citibank. American Banker magazine recognized Susan as one of the 25 Most Powerful Women in Finance three years in a row (2009-2011), and the Federal Reserve appointed her to its Consumer Advisory Council in Washington, DC. She holds a B.A. with honors in organizational behavior and management from Brown University and an M.B.A. from the Harvard Business School. Our photo of Susan duly reflects all this gravitas, but she's also an avid golfer, traveler, and wine enthusiast -- she founded the Bruce Cass Wine Lab and Ehrlich Vineyards LLC in the San Francisco Bay area. When we sat down to talk it was Superbowl Sunday (long story on why this is posted so late), and she joined me fully bedecked in Seattle Seahawks attire, hat included. We had to cut our conversation short for the kickoff. The episode is only about fifteen minutes, and I think you'll find it fascinating. One tidbit that intrigues me: Amazon's borrowers rate its credit services, publically, on the Amazon site – just like for a pair of shoes or a flat screen TV. Amazon actively learns from that feedback. Such high transparency must be a big motivator to fix issues that cause complaints. Enjoy my quick discussion with Susan Ehrlich! You can find her at sehrlich23@gmail.com. And please also watch for Episode 5 next week, when our Barefoot Innovation guest will be Renaud LaPlanche, Founder and CEO of Lending Club. Please subscribe to my podcast by opening iTunes or your favorite podcast player and searching for "Jo Ann Barefoot". You can also subscribe to my mailing list on my front page at www.jsbarefoot.com

Arjan Schutte (pronounced Ar-yon Shoot-eh) is Founder and Managing Partner at Core Innovation Capital in Los Angeles. Core is a double-bottom line venture capital company seeding innovation that both helps consumers and wins in the marketplace, with the ability to reach huge scale. Listeners will discover several kinds of value in his insights. One is an overview of the fintech innovation landscape – what are the exciting things happening? VC firms enjoy a unique vantage point, since their funding makes nearly every innovator seek them out. They see it all. Another insight to glean from our talk is that many of these startups are taking aim at perceived vulnerabilities of traditional financial companies – the industry's Achilles' heels. Some innovators think many customers are not happy today, or at least can be lured away with a vastly better customer experience. Some believe millions of potentially high-profit customers are being neglected by the mainstream system, or are accessing it only through high-cost products that can be replaced. These startups are working on cutting delivery costs, reimagining the customer experience, using big data to invent powerful new risk analytics, using behavioral science to engage customers in new ways, empowering consumers with new tools, leveraging mobile to reach massive new markets, and much more. Many are making impressive headway. For those wanting to understand the fintech innovation realm, this is a quick primer. Core's companies include: In addition, L2C has exited. Notice the broad range of business types. Core tries to have at least one company in each arena that's important to consumers, from affordable lending and personal financial management to digital currency. In our conversation, Arjan talks about the unlikely journey that brought him to this work, Core's launch as a bold initiative of the Center for Financial Services Innovation, and the firm's strategy. He zeros in on the incredible opportunity around mobile services closing the "digital divide." And he laments the minuscule impact of 40 years of well-meaning but small-scale community development lending, laying out a big vision for how to measure Core's impact as it seeks to change the lives of millions of people. The key is to make it very profitable to do right by them. Enjoy the show! Please subscribe to the podcast by opening your favorite podcast app and searching for "Jo Ann Barefoot".

Episode 2 is my lively conversation with the irreverent co-founders of Simple – CEO, Josh Reich, and Shamir Karkal, the company's CFO. Simple is a Portland, Oregon start-up offering a simplified, consumer-friendly account for saving and making payments. Last year it was acquired by the global Spanish bank, BBVA, which has been making bold moves in tech innovation. Our discussion captures the clear voice of the disruptors who are challenging traditional banking. Josh and Shamir describe the famous email that led to their venture, including why Josh's friends thought he'd gone crazy (hint: it has to do with regulation). They explain their own very unbankerly backgrounds, and talk with passion about what they think is wrong with mainstream banking, including why it's so hard for banks to change. They made me laugh throughout -- there's a moment where Josh is explaining the company's funny style and says, "she had this wicked, wicked sense of humor." I think my favorite thing in our talk is how they tell their customers' stories about Simple making their lives better. The key is helping people save, including by highlighting a number labeled "Safe to Spend," rather than the account balance. Simple idea, isn't it? And powerful. I feel like Simple might be on track to crack the code on the core problem that bedevils financial consumers: how to get regular people actively engaged. Most people are very interested in what they use their money for, but bored by the money itself -- a fact that leads them into mistakes. Simple is trying to change that. After we turned off the microphone, Josh said one more thing that has stayed in my mind ever since. I'll share it in my postscript at the end of the podcast. You can subscribe to the podcast in iTunes HERE Show Notes The companies: You can find full information on Simple here, and on BBVA here. My guests: Josh Reich, CEO & Co-Founder — Josh's career has spanned marketing analytics and quantitative finance, including running a data mining consulting firm, a quantitative strategy group at a $10 billion fund, and core components at the mortgage lead market, Root Exchange. Four years ago, Josh founded Simple, formerly BankSimple, a company that is working to radically redesign banking by using modern technology to help people worry less about money. Josh has a BSc. in mathematics and statistics from the University of Melbourne, most of a medical degree, and an MBA from Carnegie Mellon University. Follow him on Twitter at @i2pi Shamir Karkal, CFO & Co-Founder — Shamir is a software engineer turned finance and banking expert. Prior to Simple, Shamir was a consultant with McKinsey & Co. specializing in strategy consulting for financial institutions in Europe, the Middle East, and the US. Prior to McKinsey, Shamir was a software engineer. He has a bachelor's in computer science, a master's in information technology, and an MBA from Carnegie Mellon University. Follow him on Twitter at @shamir_k FAQ's about Simple: https://www.simple.com/faq Here are the two firm's announcements about BBVA acquiring Simple: Here and Here Please note that the views expressed by guests on Barefoot Innovation are their own and do not reflect the opinions of Jo Ann Barefoot or Jo Ann Barefoot Group LLC, nor do we endorse any product, service, or company discussed.

Launching Our Podcasts: Barefoot Innovation I'm thrilled today to announce two innovations for my blog – first in what we're sharing here, and second, in how we share it with you. Welcome to our brand-new podcast program, Barefoot Innovation, and to our first episode -- a conversation with Raj Date, former Acting Director of the CFPB and now Managing Partner at Fenway Summer LLC. Raj has given us the ideal launch into our series, because these podcasts are designed to be a search -- for ideas on how to do better for financial consumers. We're seeking out better products and practices, smarter regulation, new kinds of business models and cultures, new ways to empower consumers, and above all, new technology, which is suddenly making it both possible, and necessary, to rethink today's system. We're conducting our search through conversations. We're finding the most fascinating people in the field. That includes, importantly, lots of people who don't know each other – who barely even know about each other – but who are actually working on the very same challenges from different angles, amidst rapid change. We listen to them, mix their insights, and through the mixing, germinate new ideas. Finding new ideas is urgent, because consumer financial services is the first industry to face technology-driven disruption while being both essential to everyone, and massively regulated. The changes coming will be both good and bad – which means they will, inevitably, disrupt the regulatory system, too – with all its enormous complexity. Everyone involved in serving and protecting financial consumers needs new strategies, now, to navigate the years of upheaval ahead. To do that, people must look beyond their niches, at the whole landscape that's changing around them. Barefoot Innovation makes that more easy, and more fun. We've built it for: Industry and regulatory people who want to understand the fintech world Fintech innovators who want to understand the regulatory world Tech companies – ditto, and All the people working toward financial inclusion and fairness We will talk about it all. Mobile payments, big data, artificial intelligence, machine learning, the internet of things, voice technology, behavioral science and manipulation, personal financial management (PFM), online companies and channels, marketplace lending and investment, Bitcoin and crypto-currency, and emerging new business models and cultures. We'll explore all the related regulatory trends in fairness, fair lending, inclusiveness, transparency, suitability, privacy, data security, risk-assessment, compliance innovation, banking system access, principles-based regulation, enforcement, and regulatory complexity and cost. We'll talk with start-ups, venture capital people, bank executives, non-banks, global tech firms, compliance leaders, lawyers, regulators, ex-regulators (like me), policymakers, advocates, academics -- the whole spectrum. Every podcast will provide some practical advice, some long-term insight, and some fun. (And some will bring you surprises.) So, for today, please listen in on my conversation with Raj Date as he shares his thinking on technology, competition, regulatory risks, advice for banks and non-banks, and some suggestions for regulators. Join me for Barefoot Innovation, Episode One. Here is the URL to subscribe: http://www.jsbarefoot.com/podcasts/?format=rss You can also find the podcast by opening your favorite podcast provider (iTunes, Overcast, etc.) and searching for Jo Ann Barefoot or by clicking HERE. Listen and enjoy! Please note that the views expressed by guests on Barefoot Innovation are their own and do not reflect the opinions of Jo Ann Barefoot or Jo Ann Barefoot Group LLC, nor do we endorse any product, service, or company discussed.