Become a leader in the emerging fintech space through NYU Stern’s Master of Science in Fintech program. This one-year part-time program is designed with full-time working professionals in mind. To learn more about the program, submit your resume for a candidacy review at stern.nyu.edu slash msft dash breakingbanks.

Welcome to Breaking Banks, the number one global fintech radio show and podcast. I’m Brett King. And I’m Jason Henricks.

Every week since 2013, we explore the personalities, startups, innovators, and industry players driving disruption in financial services. From incumbents to unicorns and from cutting-edge technology to the people using it to help create a more innovative, inclusive, and healthy financial future. I’m J.P. Nichols, and this is Breaking Banks.

Hey, everyone. Last week was one of the longest weeks ever. That is money 2020 week.

You know what that means. 5 a.m. flight to Vegas. Set a record for myself this time.

I was only there for 14 hours. Managed to catch a flight to go host a hot takes for Glia in San Antonio. Learned the hard way who flies out of Las Vegas on Sunday slash Monday morning at 1 a.m. So in this week’s episode, first, we’re doing a crossover.

My buddy Alex Johnson and I talk about what we saw at money 2020. He was there longer and spent a lot of time on stage, including some wonderful interviews with regulators. In the second half, good friend Mary Winooski, who is also out in San Antonio with me, recorded poolside as we chatted about the future of banking, artificial intelligence, and personalization.

Great episodes talking about some of our favorite topics in new locations. All right. So this is a duo, Breaking Banks, FinTech Takes.

Does it qualify as a bank nerd corner or no? I will give you honorary status. Kia probably would be mad to hear that, but we’ll call it an honorary bank nerd corner podcast as well. I can play the role of Kia here and talk about deposits and esoteric rules, but hey, 20 minutes on money 2020, because I don’t think we can talk for more than 20 minutes without my voice cracking.

I mean, you and I are both, I think, run ragged to the edge in terms of stuff that we’ve been doing. I know you’ve been like just hopping on planes constantly and not sleeping. So yeah, I have about 20 minutes left, and then I’m just going to lose consciousness.

Is that okay? So what was, like walking away, because you were absolutely proliferate between the number of talks that you did, Simon did, that Mikula did. Like you guys were talking everywhere. And it really does feel like there was a lot of interesting content being done in different places in a way that I don’t feel like money 2020 always showed up as the content rich environment versus great connectivity.

But what did you think of this money 2020 versus others? Yeah, I mean, I think that it’s kind of come full circle in a weird way, because back in the old days, it was very payments focused. It was very sort of nerdy payments topics and content and conversations. And then it blew up into this big sales show, right? Where everyone goes, you get a lot of deals done, and it became a lot more transactional.

I do think you’re right, though. Like we’re circling all the way back to it being in some ways more of a content oriented show, but just on a very large scale. I had a bunch of things that I did around the event, where I guess the subtext was it was sort of a sales dinner or a sales meeting or whatever.

But they wanted content to be the core part of it, because everyone wanted to come together to talk about bank fintech partnerships, banking as a service, obviously, open banking and 1033 was very hot this year, AI. And so there were all of these like, major topics, where everyone wanted to hear what all the other people thought. And so it was just like, everyone wanted to make content the core part of what we were doing there in conversation, really.

Yeah, I do like it a number of these events when I’m asked to not just speak, but kind of moderate conversations in smaller groups. It does feel like that. We’ve got a lot of conversations we need to be having.

Right? Where the industry is in flux. And I’m curious of the different topics you just brought up from third party relationships and banking as a service and 1033. And let’s not forget everyone talking about AI too.

Yeah, yeah. Are they all equal weighting in your mind? Or does it feel like some dominate or dominating others? Well, it’s a good question. I mean, the 1033 open banking stuff was tippity top of everyone’s mind, because the Bureau had released the final rule the week before, which we knew was coming.

And then not only that, but they were sued by the Bank Policy Institute. And lots of large banks went out on the record attacking the rule. And so there was a lot of drama swirling around 1033 and open banking.

I actually got the opportunity at the last minute to interview Director Chopra at the CFPB on main stage at the event, which was pretty fun to do. And like, everyone wanted to hear like, what did you think of the lawsuit from BPI? You know, do you think that big banks have a point about risk management, all that kind of stuff. So 1033, I would say was probably the most dramatic and sort of like drama rich vein of content at money 2020.

Um, the bank fintech partnerships and third party risk management and bath stuff. I think we were a little further along in the like cycle on that one. And so those ones were more like substantive conversations about like, okay, we know what the drama is.

We know what the problems are. How do we fix it? Where do we go from here? And so that was much more, I would say, like solution oriented. And there was some pretty good conversations around standard setting around you know, new approaches to developing more sort of equal partnerships.

There was a whole conversation around like supply versus demand. And how do we make sure we don’t leave out the smallest fintech companies that need bank partners as well. So a lot of like solution oriented talk around that.

And then AI is like the flip side. Like it’s at the very, very beginning of the hype cycle. And so, um, you know, I was, I was doing a podcast and I, I asked someone from open AI, what is the most overhyped trend going into 2025? And I was like, I promise this isn’t a trap.

And they’re like, no, no, it’s cool. And then they said AI is the most overhyped trend going into 2025. So even the folks who are like selling AI, they were talking about like use cases, separating hype from reality, not pretending that it’s like a silver bullet or magic.

So that one was definitely the most overhyped one at the show. It’s funny. So the reason I was only at money 2020 for 14 hours this year was I was headed to San Antonio to do a talk on AI.

Normally like Madeline on our team is the AI expert, AI identity that that’s her jam, but I was actually going to talk about the business side of it, right? Like that’s the, my jam. And one of my points on, if you look at just the pace of adoption of AI, right over the last two years, like, you know, bumps along generative AI comes on boom, two years, surpasses the previous decade of applications and machine learning in AI. Yeah.

It feels like we’re going to go through the hype cycle faster than ever. Right. We’re kind of kidding.

We’re not in the valley of despair yet. Right. But the fact that even people who sell AI are talking about the like, well, it’s not actually the silver bullet for everything.

Right. Right. Right.

No, I mean, it’s, it’s very true. I mean, everything at the show was AI. I walked to the exhibit hall a few times, just checking out what everyone was talking about.

And like, you had to have AI on your booth. Everyone was talking about AI. But I think you’re right.

Like, there’s sort of this recognition in the industry that we’ve already like way oversaturated the conversations around AI. And so now the way to stand out on AI is to be honest about what it can do and what it can’t do. And like trying to help people find actual applications for this stuff that is valuable.

And, you know, it’s interesting because it does smash into the regulatory side of things as well. And I would say this was probably all the money 2020s I’ve been to. This was by far the one where I heard the most conversation about what do regulators think about this stuff? What are regulators asking about? What might they do next? And so like there was from every corner, AI, open banking, bank, fintech partnerships.

The subtext of every question was, well, yeah, but what are regulators going to do about this? What do they think about this? So there’s just a level of awareness there around that side of things that if you went to money 2020 and 2021, it was crypto, it was AI, it was, you know, disruption. And there was almost no conversation about what regulators thought or what regulators were going to do. And I think it’s a sign of where we are in the industry that the regulatory conversation was hanging on everyone’s mind.

Well, what did the director say? Because, you know, I was actually out by then, didn’t get to hear what you and the director talked about. Any insights that came out of that on the regulatory side of the direction he sees it going? Yeah, I mean, he was very happy to have the rule finalized, as you might imagine. And, you know, it was interesting because I think the biggest change that was made to the rule, probably between the draft rule and the final rule was compliance deadlines, right? And so there is this, I think, recognition that all of this stuff is going to take longer than we might want.

And I think the same thing applies if you talk to the folks at the Federal Reserve about FedNow or anything like a common talking point across all regulators is these things we’re trying to do are good, but they’re going to take longer than we might want them to write. And so that was definitely the vibe from Director Chopra around compliance deadlines, even things like cash flow underwriting. He was kind of like, yeah, it’s going to have a huge impact long term, but we shouldn’t expect it to just like start happening overnight because there’s a lot of operational details that need to get ironed out around this stuff.

The other thing that he talked about was the importance of industry in working certain things out that the Bureau doesn’t want to have a direct hand in, right? And so, obviously, like standard setting is a part of that. You know, he, I think- Money should mention that because I love that the extended interagency on bank FinTech partnerships was right after Money20. There’s nothing quite like hammering out an RFI response.

As Madeleine pointed out, she goes, I felt like we were doing the assignment last minute. I’m like, it wasn’t the last minute. So much changed between when we wrote the first draft and this draft, like we had to rewrite it.

Right, right, right. No, I mean, the conversation around standard setting is evolving so, so fast, both when it relates to like bank FinTech partnerships. And then even on like the open banking side, you know, we have organizations like FDX that have been working for years to build technical standards and build some consensus around them.

But I can tell you for a fact that the FinTech quorum of FDX members were very taken aback by the lawsuit from the Bank Policy Institute, which is represented by many of the same banks that are on the board of FDX, right? And so, like a question that was burbling at the show was, how do you have a standard setting organization when half the members of that standard setting organization are suing to stop the thing that you are creating standards around, right? And so, there’s a whole sort of question around, you know, are we going to fight over this thing being a thing? Or are we going to agree to work together to set standards on how this needs to work? And so, it’s really hard because I do think, and I’d be curious for your take on this as it relates to like bank FinTech partnerships, regulators, they’re just not going to give us everything we want in terms of clear sets of rules, right? Like, they’re going to be principles based, they’re going to provide guidance, they might hammer out the occasional rule, like the Henrik’s rule on reconciliation, but they’re not going to give us everything we want. And in the case of like open banking, one of the things that I asked Director Schroeper about was, I was like, what about liability? And he’s like, look, the private market’s going to figure out liability, right? Like, that’s something that’s going to get worked out by the private market. And so, there needs to be private network rules and standards around some of this stuff.

And I don’t know that the industry is quite ready to collaborate on that as much as we might want them to be. You know, something that struck me when the BPI dropped their lawsuit so quickly, right? Like, clearly not a Schroeper joke, read the rule, right? You know, they just had taken a stance against it, which I find disappointing because I would have loved to seen a well-reasoned lawsuit with the specifics of what they want changed as opposed to categorical, right? Like, it doesn’t feel like progress. It feels like my children fighting.

It feels a lot like your children like sticking their fingers in their ear and like screaming and you’re like, okay, we can’t have a productive conversation about this. I would have hoped we could have learned a lesson because this reminds me a little bit when Dodd-Frank came out, happened to be at MasterCard’s World Congress, right? Which was an interesting setting when the head of policy is talking about Dodd-Frank. And there was frustrations because the merchants were in the room.

And to your point of like, it’s not constructive when we talk about this industry and we have a greater obligation, you know, it’s like us in medicine around safety and soundness of the practice at the organizational level, the individual level and the entire system and how it functions. Yeah. Kind of draw this line in the sand and just say philosophically, no, like to be a single issue voter of it versus here are the things we want that would make it better.

To your point of like, you’re not going to get everything. So just tell us the things that you actually do care about on both sides. Well, and I think that is a really good point too, because if you don’t do that, then I start to ascribe other motives to you trying to stop this in its tracks, right? And like one of the theories about what the big banks and the Bank Policy Institute are doing here is the big banks already use open banking to their benefit.

I was just going to say that, right? Like they’re already doing it. So that’s why I was shocked when they were the ones suing. It’s like, are you just trying to, well, I have a theory, but finish.

No, no, no. I mean, we’re probably converging on the same theory, which is I think big banks want open banking to themselves, right? And so I think the way to think about it is if you’re Chase, we’ll just pick on Chase since they’re the biggest. And like, you know, that means you get picked on a little bit.

If you’re Chase, you have the size and scale to negotiate everything that you want, right? And so if you want Plaid to do X rather than Y, well, Plaid has to do X rather than Y because you have the leverage. Same thing applies across the board, right? You can do whatever you want. Chase is embracing open banking, right? Chase is participating in pilots around cash flow underwriting.

Chase is very actively working with MasterCard on pay by bank because Chase’s large customers like Verizon, for example, have asked them to enable pay by bank because Verizon likes it and Chase wants to make Verizon happy. So like pay by bank is happening, cash flow underwriting is happening, like these things are happening. The benefit, though, to stopping the rule, I think would be if I’m Chase, I can still get everything I want out of open banking.

But then all of the smaller banks that don’t do open banking right now, maybe they won’t ever enable these use cases. And so if I’m Chase, I have a competitive advantage because I’ve figured out pay by bank. I figured out cash flow underwriting.

I figured out identity and fraud management stuff built on top of open banking. And none of my smaller competitors, who I continue on to take market share away from, have made any advancements there. And so the whole notion of freezing the market or sending a signal to the market that, hey, the rest of you don’t need to worry about it.

We’ll stop the evil CFPB from doing this. And then quietly, we’ll continue to advance the ball on all of these open banking initiatives. We’re very aligned.

And let me just extend the line for you. It feels like we are really approaching a digital divide between banks that are forward leaning and those back. And I think AI is also part of this.

And regulators are exacerbating that when a certain regulator at the Philly Fed FinTech conference said, no small bank should ever use AI. They’re just not equipped for it. And you’re like, ah, but how do they survive if they don’t use AI? How do they survive if they don’t use open banking? It would be like saying to small banks, you don’t need a mobile app, because it’s dangerous.

And it might do things like, if you don’t have that, you can’t be a bank. They’re not relevant. Right.

And so my concern, actually, in this digital divide is, I actually think the staggered timelines hurt. Because you’re going to see a lot of banks optimized to being compliant versus optimizing to being competitive. And so it’s going to take you four years to do open banking.

The war has been fought and won. You just don’t know that you lost yet. That’s right.

That’s exactly. Yeah, I think that’s exactly right. And I also asked Director Chopra about excluding banks under $850 million in assets from the final rule.

And that was something that ICBA and the trade associations representing small community banks asked for. And they got it. But I think it’s one of those things where it’s like, I don’t know that you know what you’re asking for.

Because I know it’s a hard lift. I know for very, very small community banks, some of them don’t even have a website. So like, they’re not even getting screen scripts.

So I get it. And I understand the sort of practical realities. But if you want to survive long term, if you want to continue to thrive, if you want to continue to get bigger and sort of increase your reach and your asset size, these tools are non-negotiable.

You have to have them. And so we need to have a regulatory framework that encourages and enables small banks to keep pace, not going, oh, it’s okay if you don’t do this. This is really just for big banks.

We actually saw the CEO of PNC, Bill Demchek, say on the record, we’re going to use open banking to pull deposits out of smaller banks that don’t have the technology to keep up. Like he gave the game away, right? That’s what they’re going to do. And so if you’re a small bank, you need to figure out a strategy to stop that from happening.

That can’t be to just stick your fingers in your ear and sing law. Well, and say, but we’re vital to the community. I forget who said this on Breaking Banks before.

It’s like that teller who works at Chase, they don’t bust them in from, you know, New York and then take them home every night. Like they’re also playing t-ball with your kids and also care about you as a person. It’s a great point, right? And like, you know, the thing about Chase that you have to remember, and this applies to all big banks is they have the resources to play all the different versions of the game simultaneously, right? And so we saw Chase announced that they were going to open 100 plus branches in low income communities across the country.

Like they’re doing that too. And they’re hiring community-based employees who yet play t-ball with your kids and, you know, all those things like they are doing those same things and investing hundreds of millions or billions of dollars in AI and are embracing open banking and pay-by-banking cashflow or underwriting and are expanding internationally into other markets. Like they’re going to play every game simultaneously.

And so you can’t say, oh, we’re differentiated because we do branches and community-based banking. They do that too. Yeah, I like that.

They well-resourced, they can play all the games simultaneously. Like that is my concern. Is banks are playing one-dimensional chess or they’re playing checkers and there’s 3D chess going on around them if they don’t start to motivate.

Now, some have already done it, right? Like we had John Pitts on a couple of weeks ago to talk about the rule before it had finally come down. And that was one of the things he’s like, there’s nothing stopping a bunch of these small banks, not even small, even medium-sized, to start doing the strategy work now, to start getting the data pieces and then partner with a plat. He’s like, we’re equipped to come help them do this.

Now, Chris Nichols from South State, the day the final rule dropped, I loved a LinkedIn post he did, which is, hey, community banks, how are you going to go play offense with this? And I think that’s the stance they need to say is this is an opportunity. No, I mean, building on that point, right? Like I think with open banking, the question you have to ask as a bank is, what are all the products and experiences you offer that could be improved if you had consumer-permissioned access to their data? Okay, and it’s pretty much going to be every product and every experience you offer. Okay, next question.

How do you build hooks into those products and experiences to motivate consumers to want to share their data and permission that data to you? And so if you are not thinking about how you re-architect every product and every experience you offer to build consumer-permissioned data into that product or experience, you’re behind the curve, right? And not to say you have to do every single one of those right away. You’re going to make a list, and then you’re going to prioritize that list. But you need to think about that.

And it extends beyond the applications that we’re talking about today, right? It extends beyond pay-by-bank. It extends beyond cash flow underwriting. Like just to give one example, I think cash flow servicing is going to be a huge deal, a huge, huge deal, right? Because if you have access to someone’s cash flow as you’re servicing an account or servicing a loan, you can see when a financial hardship is about to hit your customers, and you can proactively work with them to avoid it.

Like we’ve never had that ability before, right? We’ve never had that capability before. If I was a mid-size or community bank, I would be thinking about that huge list, and then which of those do we want to pick off first? And then to your point, working with Plaid or working with MX or working with Akoya or working with Finicity to enable those experiences. Yes.

Well, I promised we were only going to do for 20, but I have one last question. Yes, sir. Is there any topic building on what you just said that you think should have been higher on the list of conversation at Money2020 this year, and it wasn’t? Ooh, that’s a good, good, good question.

I would say probably the sort of lurking topic behind everything was that we still have a lot of rationalizing down to do in terms of how fintech fits into the industry, right? And so to give you one example, this came up with people I was talking to as well. I was wandering the show floor, and you remember this. Back in the day, there used to be like three ID verification vendors that you could work with, right? It was like Jumio, MyTech, Authentics.

If you wanted to scan someone’s ID for digital account opening, you worked with one of those three, and that was pretty much it. Now there’s 65 ID verification vendors that all have varying stacks of somewhat similar, somewhat different solutions. That’s just too many, right? It’s the same thing with AI for compliance.

We just have way too many AI for compliance vendors. Not all of them have differentiated capabilities. A lot of them are very thin layers over top of ChatGPT or Claude or whomever.

So we’re going to need to rationalize down the fintech infrastructure and the fintech companies to a more reasonable stack. And so I think one of the things that wasn’t really talked about too much at the show, because no one wants to talk about being acquired until they’ve been acquired. But I think there’s going to be a huge wave of acquisition and consolidation in this space.

And actually, we’ve already seen some really interesting examples of even like on the B2C side, I was talking to some folks at Lending Club, and they were very excited about acquiring some of the IP from Tally, right? The credit card optimization, one that went bankrupt. There’s a lot of great IP and people that’s going to be available relatively inexpensively. And if I’m a traditional bank technology vendor, or I’m a bank, I am making a shopping list and trying to think about what might I want to bring in house, or what might I want to encourage one of my vendors to bring in house because there’s a lot of great stuff and not all of it can be standalone anymore.

Yep, absolutely. So that is a great wrap. And I think we share the exact same concern.

And I know what our next show is going to be on is the great rationalization. I love it. I can’t wait to do it.

And I can’t wait to see you in person next month. All right. Look forward to seeing you in DC.

All right. Thank you, sir. Become a leader in the emerging fintech space through NYU Stern’s Master of Science in fintech program.

This is a one-year part-time program divided into one online and six on-site modules that take place in New York and in rotating global locations. The MSFT, Master of Science fintech program is designed for experienced working professionals who want to strengthen their fintech skills or transition into fintech leadership positions. The final application deadline for the MSFT class of 2026, beginning May in 2025, is March the 1st.

GMAT and GRE scores are generally not required. To learn more about the program, submit your resume for a candidacy review at stern.nyu.edu slash MSFT dash breaking banks. So Mary.

Yeah. I think I need a therapist. You do.

Okay. I do need a therapist. I think I need a financial therapist.

Jason, I’m not sure you know what that is. I don’t, but you’ve been talking about it and I’m so curious. Educate me.

Okay. So I’m like fascinated by this because it’s a newer profession that’s popped up. That’s like, you know, instead of like a CPA running the numbers, it’s like the financial therapist is using therapy principles to like investigate the why.

Why are you spending on this? So it’s unpacking a lot more meaty stuff, I would say. So like, are we talking about this idea of retail therapy? Like people shop for like the hormonal rush? Yeah. Or addictions, right? Gambling, drinks, drugs, you know, it could be that too.

Interesting. I wonder how prevalent, because I’m trying to remember where and when I read this study. There’s something about Starbucks and compulsive Starbucks buying as a treat behavior.

Okay. I deserve something that you don’t even… Oh, that’s the bad language. Yeah.

People use this language. I deserve this. I deserve this.

I don’t think it’s good language. So how’d you start like pulling on the thread? Like who’s doing this kind of thing? Well, Cash App hired a financial therapist that they’re working with through the year. Okay.

And then you’re seeing Ally Bank, they did a partnership with Calm on money meditations. And there also did drop in like, I don’t know if it’s on Zoom or something like Zoom, where people like explore their emotions behind the purchasing decisions. And I think you can sort of see a nod to this and like the new banks that are offering like, hey, I let you block like gambling, for example.

Okay. That’s Monzo. Okay.

So that’s addiction therapy. I’m more curious on this, like my personal drivers. Yeah.

Of things I would love, is anyone doing analysis of spend data? You know, I can’t remember this startup, but they were like, they have a thing where they’re like, it was like a mindfulness check in where you’re like, do you value this purchase? Sort of like, how does that make you feel? Because I think it’s like you have to, you know, sometimes you just, you spend, spend, spend, and then you’re not realizing, oh, I actually like this thing. Or that was, that was silly. That’s not what I want to put dollars toward.

I find I get this immense satisfaction out of spending on two things. What? Activities for my children. Yeah.

Things that I like. You’re a family man. That I had wanted and couldn’t have done.

So like taking kids skiing and getting gymnastics and things that be like, they get something. Yeah. And the other is saving.

I love, I love saving money, like investing and saying, we’re gonna take X and put it over here. So little other spend like is gratifying to me. Am I just weird? I think you’re thoughtful.

And I don’t know if like you represent the average human. I’m going to say no. For a lot of different reasons.

As I spray you with like water, water dust from my cup. I’m also the person who like takes weird joy in eating baby carrots, even though. I thought you were going to say baby food.

And I’m glad we went in this direction. No, baby carrots, baby carrots. No, but like eating baby carrots, right? And maybe it’s a level of conditioning that like I’ve been conditioned by myself in an environment to take pleasure in the things that are good for you versus bad for you.

And I wonder if that isn’t the next avenue in both open banking, more access to data and AI. Can we condition, you know, like behavior response to do things that are actually good for us? I think that’s always the hope. And, you know, the setup should point us toward at least more experiments around this area and be so cool if it could.

I mean, you know, it’s also sort of like the idea of a pause button just to be like, don’t do this too quickly. Take a pause. You mean necessary friction? Yes, necessary friction, which I actually quite appreciate.

Yeah, I need some necessary friction on the house fridge. Like the whole fridge? Like a time lock. Like maybe I can open the vegetable drawer whenever I want, but I can’t access the cheese drawer.

You know, I will always access the cheese drawer because I’m like, this is good. This is yummy. But my mom, I don’t know if she still does this, but she would hide like chips on the top like cabinet because she couldn’t really reach it.

And so she’d have to hit it with a broom. But then she’d end up hitting it with a broom. So, you know, not enough.

I’m not going to say on the podcast what my mom does to keep my dad from finding the chips and the off chance he listens to this. But I think behavior modification is entering the next level. And I’m really glad you introduced me to the idea of behavioral therapists or financial therapists.

You’re welcome, Jason. Cheers. Cheers.

Hey, nice handkerchief. Thank you. I got it online.

And we both got boots for the occasion. We did. So we are in the hill country of San Antonio in Texas for Galea.

It’s gorgeous, clearly. Absolutely gorgeous. Perfect location for this.

And one of the things that I actually thought was also perfect and different, it’s the right size. And you would ask the question, who does a vendor conference well? Yeah. I’m going to put this up there.

I’m curious. What do you think was well? Well, the design was well. First of all, well organized.

You know exactly what you’re in for as a speaker in terms of like, these are the seats. This is the mic. This is the warm up room.

But visually pleasing as well. Like the centerpiece is boots with flowers. I want one of those neon cactuses.

I want. Cacti. Yeah.

Did you see those? I did see those. And I would like one or two. So Angela, if you’re watching this, we did not steal those.

Yet. Yet. And we won’t.

We also won’t. We may ask. Yes.

One of the other things I love, they gave us artistic freedom. So we did one of our hot takes and hot wings. Everyone loves it.

Surprising number of people in the crowd knew about hot ones online. So I like that. Although you said you couldn’t.

I had the hat so I could see the crowd. I could see no one in the audience. I knew they were there.

Yes. Lots of laughter. We were, this was the hottest sauce I think we’ve all had yet.

That was, and you were a good sport. Yeah. My tongue was burning and my lips were burning, but I didn’t throw up.

You know, one of these days on stage. I want to drill into one of the things we talked about on stage around platform versus point solution. I know Cornerstone has some serious research around this and some good points of view.

How do you as a firm think about platform versus point solution when it comes to AI? Well, you know, it’s going to depend on like the bank, right? Like what, what they need or what they think they can do. So you brought up this point where it’s like, this is nice because you can use either through Glia. And so I think that’s like, it’s always the best when you have all the options.

Yeah. One of my favorite conversations after our talk was with the head of growth, Ben, with the credit union that went from 400 to 900 million and talked about how they actually kept a call center of 20 people. And the CEO did not care about AI because that actually probably would have worked against us.

But he cared about the call center, not going, you know, above the 20 and could see the cost savings. And I think Samantha on our panel really made a good point of that, which is no one cares about AI for like at a board level, they might say, Oh, we need some of that. Give me that AI.

But you need the business outcome. You need the business outcome. And definitely like, you know, I got in last night and there was a few bankers, credit unions chatting just about like, um, it’s not even the staffing is certainly one thing, but the other thing is like, you can really like power up your, like, I don’t want to like the, the person who would take longest to answer a question, they can get those answers quicker.

So it’s sort of like your strongest and your lowest performers are probably hitting the similar. And you can optimize around who you send it to. Yeah.

Yeah. I mean, back to this platform, we’re thinking about this a lot right now on the venture side, Alice alchemist fund, which is, we’re looking at a ton of compliance. We have a couple of investments out there already that are compliance related, like DMS and Cass app and risk out like all touch.

They’re not necessarily AI, but they use AI and what they do. And what we’re finding is the more specialized, the more narrow you want, and you really do want a product and a point solution, but I find it and you integrate, but what I think is interesting about Glia’s ecosystem, what the mess, again, disclosure, we’re investors, they’re building a chassis that says, Hey, we do a generalized layer, but you can plug in whoever you want underneath because we can’t go deep in absolutely everything. Okay.

And yeah. And I definitely hear that’s the appeal, like, Oh, wow. They have a lot of integrations with a lot of different providers and that’s, yeah.

Yeah. It’s kind of like when you think about T shaped people, you know that? No, I don’t. Oh, so it talks about, it’s like, you know, what you want in an executive is someone who has a breadth of skills and goes more than an inch deep, but they have an area that they’re like a T. Okay.

Right. They go, they go super deep and they know this. Okay.

I would say Jason can talk banking, regulation, compliance, you know, deposits, lending. You want to talk banking as a service. Jason can go deep with you.

Okay. Right. Like Jason is a T. He needs a little rebrand for that one, but.

Oh man. Even our Baz banks are like, you can shut up about banking as a service already. Well, I’m glad you, but, but you know, it goes the flip side.

It’s just like, Hey, I, I just want to be, has seen as an expert in everything. So I’ll just pretend that I want this, but I won’t really know what it is. I think that happens too.

That happens too. So one of the things coming out of this that I’m super excited about is even midsize financial institutions are really leaning into more technology and automation. Yeah, that’s true.

Here’s my favorite topic. Jason, you were wrong about open banking. I was in fact wrong about open banking.

Here’s my mea culpa, probably one of many. So open banking hit Europe first. And I’d like to say it was the capital O, the capital V open banking.

I’m like, but it’s never really going to take place here. Even though it’s included in Dodd-Frank, but I said the market was going to bring it because the banks that were doing it would. I might have even quoted you in a story about that.

And I’m like, but it’s never going to become like the final rule of 1033 is never going to come down except the final rule just came down. Jason is wrong. Pages and pages.

Yeah. Five hundred and ninety. Wasn’t it like smaller than that? And then there was a lot of footnoting or something like that.

It was a lot. Yeah. Alex Johnson does a great breakdown of it on FinTech Takes, as always good analysis.

But here’s the part I want to get into. So one, some lobbyist groups have gone after and said there should be exceptions for institutions below eight hundred and fifty million in assets. Yeah.

OK, let’s just assume they were never actually going to be able to adopt this, except through their core anyway. But it’s in the middle zone. So the biggest banks have relatively short time period, which is fine because they’ve already been doing it.

John Pitts makes a good point of this. This is a story that’s been going on for a really long time. Really long.

But they also saw the advantage. Yeah. The banks I’m worried about are in the middle.

Yeah. Right. They have two to four years, depending on asset size.

If you’re optimizing for like the back end, when do I have to have it done by? Yeah. I think you’re going to be a loser. I think you’re going to be a loser.

I think you’ll even be a loser if you’re on the smaller side thinking you can opt out of this because you’ll still want your customers or your members to be able to plug into different FinTech apps. Because I don’t think you can do anything. If anything, so we’re at the GLEA conference, Interact.

And one of the key lessons that I think we both took away from the showroom floor is the ecosystem, the things that plug into them, because not everything can be done by GLEA. Yeah. Not everything can be done by Fiserv, by FIS, by Jack Henry.

No one is everyone’s answer. Except me. No, actually Ron Shevlin.

Ron Shevlin’s the answer. Yeah. I’m curious as you’re thinking about where 1033 takes the industry, what do you think happens next? Oh, gosh.

What happens next is just a bunch of bickering. And lawsuits. We’ve already seen that.

And lawsuits. And then, gosh, hopefully at a basic level, more safe sharing of data. Yeah.

And I will be really fascinated if this can be pulled off as a more openness to capturing the data, like the interest rate data, et cetera. If that is really realized, that changes the game on things like bank rate, nerd wallet, those kind of things. Yeah.

So Chris Nichols at South State, right after the final rule came out, I think summed it up perfectly, which is, hey, community banks, how are you going to play offense with this? Yeah. And I think that has to be the posture across the industry is like, play to win. How are you going to play to win? Not just comply.

Yeah. Not just comply. And it’s opportunity, too.

I mean, every bank, every credit union, in theory, should be trying to reinvent itself to remain relevant. I struggle with that, though. I mean, I do, too.

Identity crisis has been ongoing for myself as well. Yes. The Ken and Barbie identity crisis.

I should say Barbie and Ken, to be more accurate. Yes. Identity crisis.

From FedEx, the part that I worry about where it’s getting hung up is bank boards. I don’t think bank boards fully grasp this is an opportunity, not an expense. What do you think? Oh, I absolutely agree.

And I think it’s viewed as an expense and believed to be a really tight turnaround time, to your point. But also, it’s longer than the first pitch, right? This is more time than. And so, yeah, I would say the bank board level definitely needs to rethink the way they’re thinking about this.

I’m curious. Not to steal the thunder, but what are Steve and Rod and Sam talking about? They’re in the bank boardrooms. I will speak on their behalf.

Tune into their podcast. Tune into their podcast to hear more. But I do think 1033 is going to be a watershed.

And for the laggards, it’s going to accelerate the demise. And I think for those banks that are pushing and are going to go on the Chris Nichols, how do we use this offensively to create new products and services? It’s going to be a massive booge. Yeah, I think it’s a pretty cool opportunity.

And again, it’s all about, well, hopefully, creating more value. All right. Cheers.

Cheers. That’s it for another week of the world’s number one fintech podcast and radio show, Breaking Banks. This episode was produced by our US-based production team, including producer Lisbeth Severance, audio engineer Kevin Hirsham, with social media support from Sylvie Johnson.

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