FinCEN leaks and customizable banking with Simon Taylor and Cokie Hasiotis

Last week we hosted two conversations for the Moov community. The famous Cokie Hasiotis from Fintech Today joined us for happy hour. For our first Moov Global Community conversation, we spoke with Simon Taylor of 11:FS.

Both conversations were wide-ranging, with a lot of great questions from the community. Before our conversation, Simon published a blog post detailing the recent FinCEN file leaks, and naturally, that topic took up the majority of our conversation. Though Cokie has a lengthy background in fintech, she’s recently found herself at the nexus of fintech and media. For her discussion, she started off talking about where she sees banking-as-a-service (BaaS) going and then tied in many of her thoughts around the creator economy and the unique financial opportunities it’s creating.

Simon Taylor on the FinCEN Leaks

We could not have timed our conversation with Simon Taylor more perfectly, given the recent revelations coming out in the FinCEN leaks. A few days before he spoke with the Moov Community, Simon wrote an excellent post detailing the leak. The post sparked a debate in the #industry channel of our Slack group. One of our members' points was the idea that financial policing is hard, and we should be careful not to point fingers when leaks like this come out. Simon, for his part, is more optimistic than you might expect for someone with his amount of knowledge of the space.

What makes him so optimistic? The “unbundling of the core,” as he puts it. In tech, we like to say there are only two ways to make money, bundling and unbundling. In fintech, we’re currently at the beginning of a great unbundling. On the compliance side, there are great companies like Alloy. Startups like this are hyper-focused on particular problems banks face and do a much better job than the bundled solutions available through existing core providers. Will this constellation of providers be stitched together in a more effective way than a centralized solution? Time will tell.

The most telling fact from the discussion with Simon was our current track record of prosecuting financial crime. Of all the criminal activity on the world’s payment rails, 1-2% gets identified, and only 1% gets prosecuted. If you’re an entrepreneurial kind of person, it’s hard not to see that as an opportunity for growth. Two new reporting initiatives are gaining traction and showing a lot of promise. So while the FinCEN leaks were very concerning, it was an opportunity to shine a light on all the good in financial crimes reporting.

Cokie Hasiotis is “Customized Banking”

If you’ve spent more than ten minutes in the fintech community you’ve rocked out to one of Cokie’s playlists, if not you’re missing out and you should Listen to her latest masterpiece.

Besides being the leader of fintech music thought leadership, Cokie has written about every industry sector. During her talk with the Moov Community, she focused on trends in BaaS and the emerging banking needs of creators.

These two fields overlap more than you may expect. During our call, Cokie talked about what she calls “customized banking.” BaaS opens up an area where founders can create banking products tailored to what Cokie calls “communities of affinity.” Once community banks thought that by having a personal relationship with clients differentiated themselves, challenger banking products could create deep connections with their customers by targeting groups with similar interests and lifestyles.

Targeting customers by lifestyle can be things like targeting savers a la HMBradley. Cokie pointed out that companies can get even more personal with this. A recent survey cited that 10% of millennials answered “yes” when asked if they identify as LGBTQ+, while over 40% of GenZ gave the same answer. Banks expect their clients to follow a “traditional” life pattern College/Marriage/House/529/401k etc. But for many LGBTQ+ people, this doesn’t hold up. For example, the cost for an LGBTQ+ couple to have a child averages $50k upfront. If a bank catered to that group, they could help their customers set savings goals that reflect them and the challenges they will face.

The customizable banking conversation dovetails nicely into services for the creator economy. From Youtube to TikTok, the way people are making money is changing, and banking products need to offer solutions that reflect that. A solution for influencers and creators can help their customers even out the income from lumpy ad dollars and plan for the future. There are ultimately many opportunities to support this growing sector of the economy to take hold of their financial future.

There is a lot to be said about how most banks hamper their data utilization efforts by old technology. Beyond the tech side, it’s hard for any legacy provider to switch how they interact with customers when they’re not under enormous pressure to do so. What’s apparent is that challenger banks and other fintechs are changing customers' experience by leveraging behavior and affinity data.

We’re looking forward to seeing what this customizable banking trend means for the space and are thankful for people like Cokie keeping an eye on it.

Upcoming conversations

Join the Moov Community for more conversations with industry leaders and to connect with fellow fintech builders. Every day Moovers are helping each other solve technical and business challenges. Our next talk is a Moov global fintech conversation with Chirag Gandhi and Sujay Choubey.