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.

Welcome back to Breaking Banks. I’m your host, Brett King. Well, you know, we love to profile fintechs and get a bit more information about what is happening out there, particularly for those that, you know, have sort of a bigger mission than just disrupting the traditional financial services industry.

So with that in mind, I saw some news pass by on LinkedIn the other day about Cashable with their most recent funding round. And I thought, would it be great to have the founder of Cashable on to discuss their round and what they’re doing? And this is Inet Steklov. Inet, welcome to Breaking Banks.

Thank you. And thanks for having me and giving Cashable an opportunity. No problem.

To be part of your show. And yeah. Well, tell us tell us about the funding round.

You know, you’ve just announced it’s exciting news. I always, you know, I can remember with Move and, you know, every time we did a funding announcement, it was it was such a win, you know, because it means we had graduated to the next level. You know, we got to play a bit longer with our team on the business.

So it was always exciting. It was always like a milestone. Yes, it’s definitely a sign of maturity.

This was our B round. And and at this point, we we have Revolution that co-led the round together with Moneta Ventures. These two VCs specialize in in high tech companies, Moneta more on the FinTech side, Revolution is on the high tech and the growth.

And we feel that this is a big milestone for us, not only for the round itself, that is always a milestone for a startup. But 2023 was especially tough year for startups and FinTech especially. And that vote of confidence coming from funds like Revolution is is an important milestone for us.

It’s it’s also a sign of maturity of cashable. We went through the proof of concept. We went through that actually a couple of times in the past five years.

The COVID was a big one for cashable and the philosophy that is the basis for cashable is that we could underwrite consumers for unsecured loans based to a large extent, based on employment information and not just credit scores. Yeah, this is I think this is a trend we’re seeing all over right now. You know, if we look at NewBank, NewBank’s done something similar with their data profiles for credit card offerings.

We bank, you know, in China the same. We’re seeing a lot of these alternative credit scoring mechanisms come up based on things like cash flow and behavior and so forth. What’s the specific data that you look at from an employee profile to under underwrite a payroll loan as you do? So what actually makes us unique is the fact that we are using employment information.

We’re using it in different layers. The first layer that we underwrite is the employer itself. And we’re looking at the employer and all the employees in that employer is one group where we do that underwriting first on the employer level.

And we categorize that employer. And only then, when the individual employees are coming to cashable and applying for a loan, at that point, we have the group profile and we benchmark the information of that individual into the group, into the industry of the employer in order to to retrieve the data that gives us a sense, a better better analysis of what’s the likelihood of that person, the individual, to default on an unsecured loan beyond their credit score. So we are creating a new risk profile of the individual and letting that individual enhance their credit profile with employment information.

And if you think about it, so so let’s let’s just stick with that thought for a moment in respect to the credit score. I mean, I’ve I’ve been a critic of the credit scores in the US, although, you know, because I think they now sort of used as a punishment tool rather than financial access, you know, like more if you default, then that’s when the really bad things happen. You can’t get access to credit and so forth and you’ve got to rebuild your credit and it takes a long time instead of, you know, just helping you manage your credit, as an example.

But what what what are the shortcomings in respect to credit score operationally for a business like yours? So so that this behavioral scoring model has an advantage. So if you think about credit scores in the United States, about half of the adult population is prime, the other half is not prime. But when you look at the labor market, two third of the people that bring home a steady paycheck and not prime credit, that means that they cannot access the financial services that the prime credit score borrowers could use.

They cannot borrow on a credit card. Many of them don’t even have access to credit cards, but they also cannot buy their iPhone on a payment plan. They cannot rent an apartment with one month security deposit.

There’s so many things that two third of the labor market doesn’t have access to. So for us at Cashable, for me and for my co-founder Rishi Kumar, that seemed wrong and we felt there must be a better way. There must be other factors that we could use in order to extend credit to people that do have steady employment.

And for us, that was employment data, employment data, employment overall is much more steady than credit defaults. Yes, look at that over time. So we’re utilizing employment information and we’re incorporating it into our underwriting.

It’s not that we’re just using. The payroll is a mechanism for repayment, right? You’re using a blended, a blended data approach, you know, you use the scoring and other things. But but at least it gives you a way to say, all right, this person may not have a great credit score, but based on cash flow, based on their current income, they’re actually less of a credit risk than the credit score would suggest.

You got it. That’s a fair assessment. It’s exactly how we do it.

The question that we ask ourselves, will this person maintain their job during the term of our loan? And if the answer is yes, then now we’re looking at the credit score in order to get a better offering for that person. OK, sounds great. So how, you know, when did when did you get started with Cashable? Tell us your foundation story.

I mean, we know why, because you’ve told us the mission. But how did Cashable, you know, with you, you and your co-founder, how did you get started? When was that? Both of us are immigrants. We came over to the United States many years ago.

And as immigrants, we did not have any credit history. So first. I know that feeling.

Yeah, I’ve had that. Yes, we actually went through the credit bureau’s process in order to build our credit files, in order to be able to access financial services. You guys took that really seriously then.

And we’re disciplined people, highly skilled. I have I’m an attorney in my training, an MBA from Columbia University, Rishi Kumar. He has a master’s from MIT in software engineering, spent his whole career in financial services.

So as you can imagine, we were able to build it. But the process was long and very unpleasant. And for us, it just stuck in our head that there is something that is not right.

There must be a better way to underwrite consumers and open the door for so many. And it’s tens of millions of employees that have this steady paycheck, that bring it home every other week, every week and still do not access financial services. And the concept of cashable, the idea was, let’s bring them in.

Let’s not only give them the loan from cashable. Let’s help them build up their credit. Let’s encourage them to monitor the credit, because except for cashable, the rest of the world in America is still looking at their credit scores.

So let’s help them build up this path for financial wellness. And well, you know, there’s a there’s a great look. I think the financial wellness angle is absolutely critical.

You guys should check out the Financial Health Network as well. We can talk about that offline, but they may be able to help you with this as well because it’s aligned. But, you know, I think if you look around the world now, we have some fairly strong evidence that these alternative credit models are reducing NPL ratios as well.

So if you look at Nubank in Latin America that use more broad cash flow data and so forth, even absent a credit score, their credit card delinquency rate is 30 percent lower than the industry in Latin. We bank in Shenzhen or Alipay with their SME loan business, which they do through the wallet with with my bank, 53 million businesses that have used Alipay loan. And they call it 3-1-0, three minutes to apply, one second approval, zero humans involved.

And their NPL ratio is half that of the traditional lending industry. So it seems very clear now that better data models is what is going to not only reduce credit risk, but also open up credit access to to people. And we know that access to credit is a huge element of helping people, you know, like start their own businesses, make, you know, have economic financial mobility and so forth.

It’s it’s really critical part of financial inclusion. And we say and we say all of that is correct. And we actually see very similar results where we’re using employment information and repayments through payroll.

We see subprime borrowers that any other lenders will categorize them as subprime to deep subprime. We see them performing very close to prime borrowers. So just as all the other examples that you gave, we see the same thing.

And for us, we also say to employers, when your employees are less financially stressed because they do have access to credit, they are better employees. They’re more engaged with you. The likelihood of them changing jobs is less.

So you, employer, get to retain your best employees. They’re borrowing less from 401Ks. They keep something for their retirement.

They are building that retirement package for them so they can retire with the same lifestyle that they expected. So there’s so many other goods that are coming from the fact that people do have access to low cost credit that we feel that this is the way to go. Look at alternative models.

All right. But at the same, I mean, this is sort of a bigger discussion, I guess. But, you know, I would like your thoughts on it.

I mean, we are seeing a, you know, a real struggle right now for various large scale employers to, you know, like in the fast food, grocery sector and so forth, attracting employees at minimum wage. There seems to be a reluctance to really move the minimum wage. And the cost of living is going up.

So people are becoming more reliant on credit. So you talk about socially responsible credit, but the fact is today people have to rely on credit for all sorts of daily occurrences, you know, to get an advance on their salary and so forth, because these cash emergencies or whatever come up and they don’t have, you know, the sort of money set aside for a rainy day anymore because, you know, we’ve had a few tough years with the pandemic and so forth. So in that environment, aren’t loans risky, given that, you know, it’s clearly with the cost of living increase and the pressure on real wage growth that people are having to rely more on credit? And that could be a bad habit, right? It could, but it also could open up a way to improve your overall financial wellness.

And what we see in cashable is about 50 percent of the people that borrow from us are paying down other debt. So they’re using cashable with its low cost loans in order to pay down expensive debt. So if you give it, and that’s my belief, if you give people the opportunity to do something right, they will do that.

If you do that, if you do give them the tool to take a low cost loan and pay down expensive debt, they will do that. The other thing that they’re using cashable, if they use cashable for those daily expenses, we replace tires in the car so they can drive to work. They actually avoid borrowing from their retirement because otherwise they use their retirement as their checking account.

And that’s wrong. That’s where they actually create damage that will carry over for many, many years. And you cannot recover from that.

If you borrow from your 401k when the market is at the bottom, like people did in the during the pandemic, and you don’t put the money back while the stock market is running up, you will never recover that money. Yeah. So cashable is an alternative to those borrowing from retirement plans.

Just don’t put it into Bitcoin. Not right now. And wait for the price to come down.

Well, I don’t know. You’ve got you’ve got a pretty, you’ve got a pretty diverse team. I like your leadership team.

You’ve got a Korean chief technology officer, it looks like. So and I’m trying to figure out, but Rishi is probably from the subcontinent, but I don’t know. But, you know, you’ve got a… Rishi is from India, I’m from Israel.

Right. So it’s quite a, it’s quite a, it’s an immigrant rich team, which I’m a fan of, obviously, being an immigrant. But what sort of culture has that created, given you all come from very different backgrounds? I think we all bring ourselves to the table.

We bring the different cultures and how we grew up. We bring different opinions. There is, people come to work at cashable because they believe in the mission.

That’s the most important thing for us. And the diversity is in the management team. It’s also across the line in all the employees.

We’re coming from many different countries, different backgrounds and men, women. It’s important for us to have those conversations. It’s important to us to be as similar as our customers, right? Our customers are extremely diverse and we’re able to service them well because we’re listening.

We want to be able to answer their problems and yet we’re building a profitable company, a sustainable business. Now, you guys, are you based in New York? Is that where you’re based? Okay. I thought so, with the 646 area code.

And you’re working with Cross River. We work with Cross River in the bank partnership. And also Blue Ridge Bank as well.

So tell me about, you know, we’ve seen recently some pressure on banking as a service platforms. Do you expect any of that to affect you from a regulatory perspective? Do you expect any of that to impact your current relationships or? So we actually also have state licenses and we’ve done that because we believe we’re so different from any other lender that those state regulators are familiar with, that we felt it was important for us to introduce cashable, to introduce the philosophy to the different states where we operate. So we have excellent relationship with almost every state in the United States.

So these are credit licenses? Lending licenses, consumer lending licenses. And so we go through multiple state audits every year on top of our bank partnerships. For the bank partnership themselves, this is a young industry overall, right? We’re all growing, we’re all trying to understand what is right, how to do that.

And the bank regulators, whether it’s the FDIC or the OCC, are trying to figure it out themselves. No, I understand that. Yeah.

And that’s the process that we all see now, right? You know, in fact, I’ve often said that that’s one of the differentiations we see with fintechs is generally fintechs, you know, there are some exceptions to this rule. I’m not going to mention names because it’ll be fairly obvious. But, you know, I’ve said that generally from a fintech perspective, I’ve seen so many fintechs have positive outreach to regulators to engage them, to talk about this is what we’re doing.

Would you like invisibility into our program? You know, what data can we give you to make you feel comfortable about these changes we’re making in terms of the way the business works? And that actually works very well. Whereas within banks, I’m used to having worked in the banking industry for many years as well. I’m used to the compliance in the legal team saying, no, no, you can’t do that because we haven’t been explicitly given permission to do that by the regulator.

Right. So I think the way to help the industry evolve is not to wait for the regulator to evolve it, but for leading edge companies to engage with the regulator and make that process as safe and as risk free as possible. Because we know it’s going to happen.

And the reason we know it’s going to happen is it’s happening everywhere in the world right now. And in fact, it’s happening in other countries faster than it is in the United States. We’re a little bit slow.

In terms of the evolution of our industry, we’re trying to protect the incumbents a lot. You know, I don’t think that’s controversial to say that, you know, whereas you’ve got some of the biggest banks in the world now are fintechs. In fact, all of the fastest growing financial institutions in the world are fintechs or tech.

You’re absolutely right. Right. You cannot stop technology, especially in the United States.

You cannot stop technology where the rest of the world is competing on technology. And I think this is the process. The regulator is always a little bit behind, but they’re catching up.

And I feel that this is what our bank partners are doing right now. They are engaging with their regulators where they are opening up and having that conversation on what’s right and what’s wrong, but really trying to improve the process and the open conversation between the banks and their regulators. It is happening and it will continue to happen.

And a bank without a technology will just not survive. Yeah, no, I think that’s pretty clear, you know, but it’s funny that people will argue, argue that point. Right.

You know, even today, people will be arguing that Chase is still relying on branches. They’re still opening branches, you know, and it’s like, just just step back, step back from it and look at the data. And it’s not hard to see that, again, all of the fastest growing financial institutions in the world are these digital acquirers, you know, and it’s if you want to grow a business in the 21st century, you’re going to do it with digital, not with face to face signatures on application forms.

Absolutely. People want to engage on their phones. People want to engage digitally from their home computers or their laptop or their phones.

And yes, they do want to have a branch somewhere, but it’s not as as it used to be. I can remember the last time I’ve been in a bank. Yeah.

So you do you do work with federal organizations as well. I noticed that you have specifically low cost loans available for federal employees. You treat them differently in your process.

Can you give any specific insights into that? Sure. So overall, about two and a half to three million people, employees have access to cashable, among them many federal government employees and the federal government, while they’re not contracting directly with vendors like cashable, they do provide employment information through third parties and then allow their employees, the federal government, government employees to set up repayments directly from their payroll. So the way we interact with the federal government employees is by communicating and advertising and marketing to the federal government employees.

But the process for us for underwriting is very similar. It’s still based on employment. It’s still benchmarking the federal government employees in the departments where they are to to the rest of the federal government employees.

And then repayment comes directly from payroll in the form of allotments. So, yes, we interact directly with the consumer. But the process for underwriting or repayment is the same.

Yeah, I understand that. Tell me about and we’ve talked about your scoring methodology, you know, and the being able to bring in employment information and so forth. But tell me a bit about the technology you’ve got and how you’re built, you know, difficult differently from a typical lender.

So we’re thinking employment and from the beginning, all of our systems technology is geared to talk with payroll systems, with HRIS. And that’s the difference. If you think about how payroll systems work, you have weekly payrolls, you have bi-weekly, we have bi-weekly this Friday, bi-weekly next Friday.

So while every other lender that we can think of is collecting repayment once a month for cashable, our system can collect the repayment, whether it’s on a weekly basis or every payroll and it’s within the same employer, you can have multiple payroll systems. So do employers now talk about this as a benefit to their employees? Absolutely. It’s a financial wellness benefits.

Over 250 employers, including the largest in the country, already set up cashable for their employees. A billion dollars of loans already done and millions of employees do have access to cashables. So we truly believe that this is where the industry is going to go.

Embedded financing. And here, it is embedded into your business. Well, this is great.

Embedded into your workplace. Yeah, no, that that makes sense. I like that.

I like that positioning. I like it, too. Have you, of course, have you thought about, you know, taking cashable offshore? So eventually, yes, but the United States, it’s a big market.

There are 150 million employees. Yes. So and we just started to scratch the surface.

Right. So with 250 employers. So let’s talk in a couple of years.

Yeah, absolutely. Well, Ina, thank you for joining us today. Congratulations on your Series B with a twenty five point six million raise.

Doesn’t doesn’t hurt. Gives you at least a couple of years of runway, I would think. Absolutely.

But certainly will help you expand your your platform. How do if you’re an employee listening to this show or an employer or a federal employee, how would we find out more information about your business and your lending? Cashable.com has a lot of information with a K, right? Correct. Cashable.com. And otherwise, we’re pretty we’re all over the social media.

People see our ads. We’re very accessible. And and how can people follow your.

You personally. And that’s the close on LinkedIn. I don’t I don’t think there is a second one.

OK, cool. So fantastic. Well, thank you very much for joining us.

So you check it out, guys. It’s cashable.com with a K. And we look forward to hearing more of your success. And, you know, if you have some more announcements, feel free to join us again on the show and give us an update.

Absolutely. Thanks so much for having me. It was really a pleasure.

No problem. That’s it. Let’s take a quick break.

You’re listening to Breaking Banks. I’m your host, Brit King. We’ll be right back after these words from our sponsors.

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Learn more at AlloyLabs.com. Alloy Labs, banking unbound. Welcome back to Breaking Banks. This week, we are privileged to introduce a new podcast to the Provoke family.

It’s called The Social Currency Podcast. It’s hosted by Tyler Sedell and Eric Schorr. You know, we think it’s great content for you guys to have a look at.

The role of social currency specifically in society, particularly with how AI and bias and so forth is creeping in. We want to look at the innovative change makers in finance, in tech, in ESG, looking at diversity, those sorts of issues. How these leaders are dismantling barriers and reshaping industries for a more inclusive, equitable and sustainable future.

Now, this is an important conversation to have, because the more we automate society, the more that those existing biases become a problem and become ingrained. And we need a process to talk about that, continue to think about social entrepreneurship and to think about a world that we can create, where everyone has equitable access to opportunities. So check out The Social Currency Podcast.

Good morning, good morning, good morning, folks, and welcome to The Social Currency Podcast, powered by Sunrise Banks. I’m your host, Tyler Sedell, and I’m excited to bring you the first episode of Social Currency. Our first guest is my co-worker, co-host, friend, pal, confidant and subject matter expert in all things foresight, Mr. Eric Schorr.

And I can’t wait to dive on in. But as I maybe mentioned, we kind of preluded a little bit of his background. Let’s walk through a little bit of his bio right now.

He is the chief strategy officer here at Sunrise Banks. So he has certainly a lot of great depth in stories that he can share, but some great insights as well. He’s a certified foresight practitioner and applied futurist, which means he’s adept at trend spotting, horizon scanning and pattern making.

If you’re not sure what those are, that’s all right. We’re going to dive into those here briefly. Eric, we’re getting our social currency rearing gear, for lack of a better turn of phrase.

Thanks for joining me on our first inaugural episode. Hi, Hillary, this is so exciting. I’m thrilled to join you this morning, and I just I can’t wait to kick this off.

We have talked, you and I in the past, about meeting people that have different approaches, the way they think about the future of payments, the future of financial services, the future of financial wellness, the future of ESG. Can’t wait to dive in. And I’m so happy that you asked me to join you this morning.

So thank you. Absolutely. And of course, you know, for those that may not know, Eric and I have a lot of interaction here within the four walls of Sunrise Banks.

And it’s exciting to take some of our closed door conversations and maybe broaden that audience a little bit. And we’re going to look to do that here live and in color, for lack of a better turn of phrase. Eric, to kick things off, I’m sure everybody wants to know the science, perhaps even the art behind foresight.

What is it and how have you become so immersed in it? Well, thanks for that. You and I have talked in the past. I don’t know if you know how I got into this in the beginning.

It was a it was a it was an invitation to a conference. I had just taken over the chief strategy officer role at a prior employer and really didn’t know what to do with the role. And I had a business coach at the time who asked me, said, why don’t you come join me at a conference? It’s going on in Orlando over the weekend.

It’s a Saturday, Sunday conference. Come join me. So I went down there and it was put on by the World Future Society, which, as I learned later, was a an organization developed in the 1960s by folks like Alvin Toffler and other science fiction writers and at the time futurists that were thinking about the future and trying to get people of like mind together.

And I was told, hey, dive into some sessions. Don’t stick around to one session very long. Just kind of dive in, get a taste and move on.

So as I went around for the two days, listening to spiritualists and housewives and and restaurateurs, and they’re talking about their industries and they’re talking about the trends. But what the the the the the light bulb moment for me was there are things that transcend industries. There are what they call trends that that truly moves society forward.

And that’s what got me hooked. That was 10 years ago. I stepped back, talked to talked to my business coach about a week later when she asked me, said, hey, what do you think of the conference? I said it was the most stimulating conference I’d ever been to.

She said, that’s great. You’re presenting there next year. So so part of my so part of my work over the course of the year was was to put together a paper and and submit it.

And I was accepted and presented on the future of personal financial management at the 2014 World Future Society conference. It was interesting after the conference, I got picked up by the the government accountability office and the GAO invited me out there to to give the presentation there as well. The exercise gave me the ideas that fuel my thinking today and gave me the tools, actually practice that I hope to instill in others.

That is, you know, Eric, we didn’t ever have the time to unpack some of that background, but I appreciate you shining a light on that. And one thing that really resonated with me that you were talking about is as you were attending these varying classes, you started to notice a trend between what feel like tangential, if not disparate topics altogether in terms of what you were sitting in on when you’re looking at the future of space and you’re and I imagine that’s what you would call scanning, where you’re scanning the horizon and you’re finding some of those common denominators. Is that really the purpose? And is that start? Is that what starts to really inform your thinking as to where this is going? And could you color that in a little bit for the audience? It’s very intriguing.

Yeah, you know, there’s the art of foresight really has a number of benefits, because as we’re you know, when you think about the past, the past is everything we know. The present is what we’re experiencing today and what’s being revealed to us collectively. And the future is that which is unknown.

And that whole sense of unknown brings a lot of fear. It brings, of course, it because it’s unknown, it brings uncertainty. It brings trepidation to us as humans.

And so what foresight tries to do is foresight actually has a number of tools that allow us to dive into various aspects. One might be from an individual perspective. We we gather so much information.

We’re bombarded not only with social information, but just with environmental information. And we filter most of that out on a day to day basis when you think about the actions we take. Most of our actions are our routines.

We have developed routines and we make very few true decisions on a day to day basis. Think about from the time you woke up this morning to the time that we’re sitting here today. How many real decisions did you make other than maybe what clothes you were going to put on today? So a lot of this is routine.

And so what we do is we we talk about foresight first about unpacking, at least creating awareness and unpacking biases and assumptions. And we try to do that in light of an issue that we’re facing or a problem we’re trying to solve. Secondly, then we we we are we operate in systems that are so deeply embedded within our psyche that sometimes we don’t even realize we’re operating within them.

It’s the old joke. Two guppies are swimming along in a pond and a big old fish comes by and says, more employees, how’s the water? And as the two fish swim away, one turns the other says, what’s water? You know, when when we think about our, for example, our economic system that is driven by by GDP, that is the the measure of economic activity. And economists will tell us that GDP has to grow up into the right forever.

Never. And really, really bad things will happen if that’s not if that doesn’t continue. As a matter of fact, they’re so bad, we won’t even describe them to you.

Well, if you’re dealing with issues, you may sometimes have to think about the system you’re in. And so to do that, Foresight helps unpack some of those some of those perceptions, some of those myths and metaphors that we operate under to at least create awareness and potentially think about how we challenge them. And then you brought up this notion of scanning.

So so that’s observing the environment around us. And we’re looking for we’re looking for evidence that things are occurring. So those are trends.

We’re looking for, more importantly, values, people’s values that drive the acceptance of some of these other things that are coming out to think technology. Right. A lot of futurists will talk about, well, the future is all about technology.

I got to be honest, I differ there. The future is all about humans. It’s all about people.

Now, we can choose to adopt technology or not, and we choose to adopt technology for certain things. You know, chat GPT, for example, a lot of curiosity around it. But where is a commercial adaptation? So I went out, I was curious.

I’m thinking about how I’m going to use it. I haven’t adopted it, but maybe one day I will. And maybe I’m adopting it in certain tools that are being embedded into some of the software I’m using, and I don’t even know it.

And so it’s through that discovery process. I’ll adapt that technology. So that’s a third way that foresight is used.

And then once you scan and we have this qualitative data, how do we make sense out of it? And that’s probably one of the key impacts of foresight is organizations are looking at the environment they’re operating in. There’s this looming question. How do I make sense of all of this that is coming toward me and the challenges that I don’t even know about yet that might impact my business? Foresight allows us to begin to make sense around those by producing implications and impacts on some of the observations that we’ve made about the world around us.

Now you can put that into scenarios and create a background and stories about what a future might look like. And then you can also, as an organization, start to define your preferred future. And then finally, you can actually put that into action and bump it up against a strategic plan.

And that’s where you see a lot of foresight work being done is when they marry the strategic planning process with foresight. So basically, you can build a plan that is resilient and you have scenarios out there that as you observe what is going on around you, you can bump those up against your scenarios that you’ve developed and then look back at your strategic plan and say, well, if A happens, that’s a signpost. This means that this is probably bigger than we first realized.

What does our plan say if we indeed saw an uptake in this type of adoption, for example? Eric, I appreciate that. And one thing that I was looking to draw distinction on and you captured it just organically in your dialogue was really there’s an intersection or perhaps how a strategic plan works with really a foresight product artifact. And how I’m understanding it is that your strategic plan is kind of standalone.

And that’s kind of what you’re looking to do. Your foresight analysis, your scanning is going to make a determination or that artifact that comes out of that foresight process is going to inform a strategic plan that says, hey, this is what we’re seeing on the horizon. It looks like perhaps maybe there’s tougher times.

Maybe it’s open skies. And this is how we’re going to reflect or how we’re going to amend our strategic plan. Is that accurate? And could you give perhaps some examples for our user base as to what that would look like in terms of amendments, pivoting or otherwise? Yeah, I know that.

Thanks for that. That’s that’s absolutely true. The way I think about it is putting a cartoon character such as Mickey Mouse drawing the cartoon character on a blank piece of paper.

Well, the cartoon character is us. We are we are going to move forward. And yet we don’t really know what we’re going to do with that cartoon character until we paint the background.

Is Mickey sitting on the river? Is Mickey sitting in space? Where is Mickey and what are the situations around him? So that foresight tends to paint in the background. And then our actions start to become a little clearer and we start to at least eliminate the the chaff and start start harvesting some of the wheat. Let me give you an example of a situation that I think we’re running into.

For for me, I think the the impacts of the environment, the ability for organizations to adapt. Control and change in reaction to environmental impacts is the biggest business opportunity in the next 70 years. And the reason I say that is because there is so much that needs to happen.

And and it is so localized. So let me give an example. There are coastal areas on the East Coast, particularly that are sinking in the ocean.

So The New York Times tells us in an article that they say is science based. And we’ve had municipalities along the East Coast conduct studies. City of Boston conducted a study in 2030 called Boston 2030.

And one of the headlines is by 2070, they think 80 billion dollars of property value is going to be at risk for coastal flooding consistently. Now, their strategy is to take and defend that. So they’re actually they’re thinking about building seawalls.

So when you think about that type of infrastructure build, what opportunities does that present to us as an organization? Down the coast in Norfolk, Virginia, Norfolk wrote a plan called Vision 2100, where they actually looked at they have sunny days flooding today. And when they took a look at their map and released it in 2015, they had four broad areas of impact. They’ve since updated it.

And the most severely impacted areas, they’re actually thinking about seeding to the ocean. Now, that’s really interesting, because that has very different, for example, infrastructure questions. So how do you seal off the water supply and the electric supply and the gas supply from the ocean so that it doesn’t encroach and and affect those properties that are still they’re still above ground? You know, and and then there’s the whole human impact of that.

So does a FEMA check still cut it? Should we be talking to our to our policymakers and thinking through how do we relocate folks? This whole notion of immigration from a human perspective is going to be massive. And then you have cities on the northern climes such as Buffalo, New York and Duluth, Minnesota, who are declaring themselves climate havens. So they’re looking at climate change, but they’re looking at it strictly as an opportunity.

How do we build more housing? How do we reimagine living? How do we accept people into this area that are coming here? And how do we preserve the quality of life that we want to have for ourselves? So we see we you know, we we see that we see we see new new construction with embedded carbon being a being a big factor now. So just building materials themselves take up a lot. You know, they use a lot of carbon just to create two by fours and concrete.

There’s a whole movement around that as well. And that’s going to become increasingly important because in about 20 years, embedded carbon, the carbon that’s used to create materials is going to account for 50 percent of the lifetime carbon footprint of an existing structure. So when so if if I’m a bank and I lay this out to you.

And we gather some information, now we can sit down, we start talking about some of the implications, what’s the implication? And don’t forget, you know, heat and wildfire as well. So on the West Coast, you’ve got you and and and you’ve got Phoenix in the Sun Valley, you know, what are they going to do? They have a whole host of problems. So it’s local.

But at the same time, there’s such opportunity out here. So if we’re sitting here as an organization in the upper Midwest, we have to ask ourselves, what are the opportunities that we want to take to help nudge some of these things along through the use of finance? Again, how do we make finance a force for good? Eric, when you say that the future is unknown and paraphrasing here, perhaps worrisome and even trepidous. And I think that you and I both are firm believers that where some see trepidation, social entrepreneurship, they see opportunity.

And really what you’re describing here is you’re starting to paint that picture one to three years into the future, perhaps even more into the future, perhaps than that. And in terms of some of these manifesting in reality, it gives the organizations those that are looking to position opportunity. It gives you a long enough runway to intersect that trend, to capture and provide our position some form of value.

And that is what I perceive in our conversation to be the highest and best use of foresight just from an entrepreneurship or a going business consideration. What are your thoughts around that? And is that truly the highest and best use of foresight in your mind? Well, it can be. The you know, the six benefits I laid out earlier can be utilized to solve either market opportunity problems or organizational design problems into the future, how we’re going to organize our work into the future and reimagine our organization in service of that.

So so we can separate those and use those for specific purposes. But if taken together, those six interlocking pieces, if adopted by an organization, truly makes an organization future looking. The the language of foresight begins to infiltrate the language of projects and the language of everyday work.

And it’s as much a mindset as it is the use of the tools. Now, some people. Some people, they they they live to work, to keep the trains running on time, to keep the operation efficient.

And for some people, foresight is is a foreign language. It’s not for everyone. But if organizations can take.

And adapt some of the tools of foresight to their particular need and expand as needed, they will find benefits that go beyond the initial one. So in this case, market opportunity, inevitably, they will turn to organizational design. You know, we’ve talked about the three horizons model, which is a tool that’s being that that’s used out there.

And we talk about horizon one being that which is currently occurring today. Horizon two in the intermediate and horizon three long term. But you can also turn that tool around and use it and say from a point in time today, there’s evidence of all three horizons out there.

Horizon one is the way business is being done today. Our business as usual processes. Horizon two are the are the adoptions of new technologies, for example, into business processes.

So artificial artificial intelligence in the customer service, for example, in the banking background. Horizon three is subtle. She’s a subtle lady.

She’s she’s in the background. And those are the values that we see people considering and adopting today. And you see it in in areas that aren’t necessarily directly associated with the way people consume and think about financial services today.

It might be in the way that people are desiring to live out their passions consistent with their values. And so you see evidence of all three. So you can take these these tools and use them for multiple purposes or turn them on their sides and ask some really interesting questions.

And that’s really the purpose of foresight. Purpose of foresight is to is to ask the provocative question and have us think about that seriously. And if we think about them in new and different ways, what are the opportunities, what are the possibilities out there? You know, when you say values and belief systems and how that starts to really frame the future and really motivate people, that is profound.

And that is a takeaway that I captured from that dialogue there, that we were having is that that is, as you stated early on, it’s not technology that’s moving things forward. It’s the people, it’s the social aspect. And I think that gets reinforced in that comment.

What are some of the most interesting, perhaps, revelations that you found in the foresight process or perhaps to frame that differently? What does Eric Scherz crystal ball hold for financial technology in the coming years? Oh, man, I don’t forecast. My crystal ball is as cloudy as yours. Got to be honest, you know.

You know, we I would say we will tend to see, you know, the great question you can ask any business leader in any industry, you can ask him two questions. Know the answer. Number one, is your industry being disrupted? Absolutely.

Absolutely. Is that industry being disruption, being disrupted from inside or outside your industry? It’s always from outside forces. It’s the things we didn’t know that kind of caught us off guard.

So I would say for us, we continue to see finance, finance being embedded in in experiences. And this is a continuation of a trend we saw for a long time when people, when financial institutions would build new branches and they put out these extravagant, you know, architectural great. They’re wonderful to walk into and they’re serving coffee and doughnuts.

And that’s wonderful. But folks, a branch visit isn’t a destination. It’s an errand.

It’s something to check off the list. The same thing with payments, payments. People don’t desire to reach in their wallet or pocketbook and pull out a card, swipe it or dip it or tap it and wait for the receipt to come out.

They’d rather not do that. So I think we’re going to continue to see that. The question is going to be, though, for I believe is back to my comment around people acting consistent with their values.

Technology has gotten to a place now where I think and consumer attitudes, I think, have gotten there. It’s beyond convenience. It’s being whole.

It’s acting. It’s feeling good about the actions I’m taking with the money I’m earning. And I think that’s going to be that’s that’s going to play a large role in financial services in the future.

I’d agree, I think certainly our generation, subsequent generations, they very much are of the belief system of voting with your dollar, putting your money perhaps where your belief systems are. For lack of a better turn of phrase. One thing that you said that I was really going to stick with me is going to be the swipe, dip and tap it, Eric.

So we might have to we might have to turn that into a little bit of a remix. What are some of the actions that you’re taking just in your personal life? If we want to maybe shift it a little bit from the work setting to the personal setting? What are some actions that you take in your personal life, knowing that you sit on kind of foresight academia, knowing that you have this adaptability to pattern scan, to see things in the future? How does that affect your personal life and what you look to do and how you serve your local community? Yeah, thanks for that. We we talked about this before.

I’m a firm believer, first off, that people are at the center of the future. It is not about technology. It is not about nature, although our actions are being driven by nature.

It is about humans because we have the we have the ability to choose that which we use and we have a responsibility to steward the resources we have. There is a gentleman by the name of Herman Daly, who was an IMF, International Monetary Fund economist in the 80s and 90s. And he he he came up with this concept of consumption economics.

And he talked about this about this idea of earth. You know, we sit on earth and it’s only so big. And as an economy, we take resources, we take energy and resources off the earth.

And then we do things with it. We manufacture and then whatever is wasted or we don’t use anymore gets dumped back on the rock on earth. And that has given rise to most recently donut economics, that whole concept.

And so it keeps me the the notion of foresight helps keep me grounded in the fact that this is about people. This is not about technology. The second thing is it really helps me stay flexible in my mindset.

I’m wildly optimistic about the future. So you need to know that about me. I’m not a dystopian guy.

We can go there, but I don’t stay there very long. But I believe people have agency in the future because it’s all about people. People have agency, meaning that we create our future every day by the actions we take.

I’m a firm believer in that. And so and because the future is every moment from now until the time we’re put in the earth, what are we going to do with it? And how do we think about it? And to that end, then it really feeds my curiosity as a lifelong learner. I love reading history.

I love reading biology. I love reading foreign affairs. I love getting a wide perspective because I find that things are connected and it gives me greater understanding of potentially the issue I’m looking at.

And then finally, it’s this notion of being a little bit humble about my thinking. Alvin Toffler, I mentioned him earlier. He came up in the 60s with this notion of learn, unlearn and relearn.

So while I’m learning all the time, I have to have the the temperament to be able to understand the other side or understand alternative points of view. And when I think they make sense to unlearn what I’ve what I’ve helped to be true and then take a move into a new space so that learn, unlearn, relearn really helps me fuel my sense of self-awareness. I’d say that’s you know, that’s it.

And then and then finally, we spend so much time, you and I do in the business. We’re like 50 feet above the ground. And we and sometimes we’re in the weeds.

And a lot of times we like to pull out because because it’s our job. But sometimes we got to get out there at 50,000 feet. The view up there is just very different.

And that’s what foresight does. I don’t spend a lot of time up there. But boy, the time I spend up there is really valuable because I can come back down to 10,000 or 5000 feet and attack an issue or a situation with maybe a new mental model or a new frame, a new frame or a new mindset or a new piece of information that will inform a clarity around an issue that we just didn’t have before.

I think when you’re able to, as you were mentioning, step up, take yourself to a higher vantage point, look at the issue from perhaps a different optic. It kind of takes some of the fear and uncertainty out of it. And then you’re able to come back down, put yourself in kind of that tactical transactional space and then take the next steps that you need to in an effort to keep going.

I kind of liken it to the parallel of if you’re digging a ditch, you don’t necessarily know where you’re going unless you pick your head up. Take a look every once in a while and then get back down and start digging. So, Eric, phenomenal dialogue.

Great conversation. I want to provide you with the opportunity in case we haven’t just to leave the audience with something that we have not expressly covered, whether by way of questions or conversationally. Is there anything that you’d like to leave the audience with in terms of thoughts? And I’ll give you the floor.

If there’s one thing I can leave folks with is the more I think about the challenges that are out there today that we’re facing, they’re different than challenges we faced in the past because. We as humans have now have the power to alter our environment, and so what we do collectively matters, and it really hadn’t mattered up until very recently. And that creates an issue that for the first time in our life is a long term issue, meaning that it will span beyond our lifetimes.

So as we’re looking for solutions to what we consider climate change today and how to lower the temperature, first off, we have to get it. We have to get comfortable with the fact that we’re not going to see the end game. We just aren’t.

These issues are well beyond us. And that leaves us with a responsibility. You know, the good book says we’re supposed to be nice to everyone we meet and be caring and be useful to them, and sometimes that’s really hard.

The problems we’re facing today are are they’re they’re asking us to be considerate of generations who will never know us as people, as individuals, and to be considerate of them and to value their life as well. That’s hard. That’s hard for humans to do.

But that’s where foresight can help stretch our minds to begin to think about the possibility and create that altruistic action of things that actions that we will take today, that we will never the beneficiary of which will never be able to greet us and say, thank you for that. That’s that to me is really powerful. And that is something that that that I work on every day.

I’ll stop there. There’s nothing for me to improve upon there. I appreciate that philosophy and that viewpoint.

And it resonates very deeply with me. Folks, you’ve heard it here from Eric Scherr himself. Learn, unlearn and relearn.

Almost parallels progression, not perfection. And we really support that philosophy. What we do matters.

You matter. And as Eric pointed out, as we’re moving forward, a lot of these problems, opportunities that we’re going to encounter are going to take a community to solve and the community to support. Eric, thanks for your time today.

I’m excited for the future of social currency. I’m excited for our continued partnership and working together. And I want to thank our listeners for joining our first inaugural social currency podcast.

That’s it for another week of the world’s number one fintech podcast and radio show Breaking Banks. This episode was produced by a U.S.-based production team, including producer Lisbeth Severance, audio engineer Kevin Hirsham with social media support from Carlo Navarro and Sylvie Johnson. If you like this episode, don’t forget to tweet it out or post it on your favorite social media.

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