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 and The Block crypto joined us for Happy Hour. For our first Moov Global Community conversation we spoke with Simon Taylor of 11fs.

Both conversations were wide ranging with a lot of great questions from the community. Before our conversation Simon published a blog post detailing his thoughts on the recent FinCEN file leaks and so naturally that topic took up the majority of our conversation. Though Cokie has a long background in Fintech she’s recently found herself at the nexus of Fintech and media. For her conversation she started off talking about where she see’s BaaS going and then tied in a lot of her thoughts around the creator economy and the unique financial opportunities it’s creating.

Simon Taylor on the FinCEN Leaks

With the recent revelations coming out in the FinCEN leaks our conversation with Simon Taylor couldn’t have been timed better. A few days before he spoke with the Moov Community Simon wrote an excellent post detailing his thoughts on the leaks. This sparked a debate in the #industry channel of our slack group. One of the point that was brought up by one of our members 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 knowledge if 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 singlular problems banks face and do a much better job than the bundled solutions that are available through existing core providers. What remains to be seen is if this constellation of providers can be stitched together in a way that is more effective that a centralized solution.

The most telling fact from our discussion with Simon was in regards to our current track record of prosecuting financial crime. Of all the criminal activity that happens on the worlds payment rails it’s estimated that we identify roughly 1-2%, and of that only prosecute 1%. If you’re an entrepreneurial kind of person it’s hard not to see that as an opportunity for growth. There are also two new reporting initiatives that 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 that is happening 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.

In addition to the being the leader of Fintech music thought leadership Cokie has written about almost every sector of the industry. During her talk with the Moov community she focused on trends in BaaS and the emerging banking needs of creators.

These two fields actually overlap more than you may expect at first glance. During our call Cokie talked about what she calls “customized banking”. BaaS is opening up a field where founders can create banking products that tailor to what Cokie calls “communities of affinity”. Where once community banks thought that by having a personal relationship with clients they were differentiating themselves. Challenger banking products can create deep connections with their customers by targeting groups with similar interests and lifestyles.

This targeting customer 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 are expecting their clients to follow a “traditional” life pattern College/Marriage/House/529/401 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 up front. If a bank catered to that group they could help their customer set savings goals that reflect them and the challenges they are going to face.

The customizable banking conversation dove tails well into services for the creator economy. From Youtube to TikTok the way people are making money is changing and banking products need to offer solution 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 a lot of opportunities to help this growing sector of the economy take a hold of their financial future.

There is a lot to be said for the way that most banks are hampered in 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 the experience of customers by leveraging behavior and affinity data. We’re looking forward to see what this customizable banking trend means for the space and are thankful for people like Cokie keeping an eye on it.

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