Matthew Cooper: Easing that burden to keep you compliant is big. There are some new regulations like the California privacy regulations which will make everybody’s lives much more painful.
The intent of the regulation is fantastic. It will just put a burden on smaller companies that are similar to those of big companies. The only other twist that I would give on that same theme is, can you embed regulatory technology solutions in existing products.
Nadim Homsany: There’s bank sponsorship. In order for your customers to be able to move funds across the payment system, you need a money transmission license or a sponsor bank. Sponsor banks are critical to making that happen.
Matthew Cooper: That whole area is probably top of mind. If you look at EarnUp as an example, we believe strongly that you cannot solve the debt crisis in America with more debt. Just giving people different lines of credit is not the solution.
We believe it needs more structural changes. One of those is helping people manage their money in a more simple way and get somebody on their side of the equation. EarnUp helps recommend to them when they can get ahead and make extra payments. That’s a piece of the puzzle.
For us, anything that can become a tool that lets a whole group of companies innovate is exciting. They unlock a whole bunch of other entrepreneurs to move faster and help more people.
Sramana Mitra: Platforms is something that we are hugely behind. We have started launching co-branded accelerators with various platforms. One of them just launched a few weeks ago.
Going back to your point about the structural problem with debt, what I worry about even more is that this segment of 100 million people who are living paycheck to paycheck are the most vulnerable to being completely blindsided by automation.
These 100 million who have at least a paycheck to live off today, what percentage of that are going to have a paycheck if you look 20 years out when automation really hits at a steeper level? There is a much deeper structural problem emerging.
Nadim Homsany: There are fundamental questions around the end game of automation and what that means for income. I don’t think any one company can solve it. That’s a societal and a technology challenge altogether which we’re excited to be part of. At the same time, the reality is that there are 100 million Americans that have these massive amount of stress and financial concerns today.
Sramana Mitra: In the next five years, your solution is acknowledging one level of the problem. We also have a grander scale problem emerging, which is going to be much harder to tackle. Another point that you made earlier about regulation is that FinTech companies are harder to launch because of regulation.
I can’t imagine what would have happened had there not been adequate regulation and we would let Facebook go and launch Libra for example.
Nadim Homsany: We’re 100% aligned. We’re in support of regulation. We are huge advocates of consumer protection. The dynamic is not one of decreasing regulation. Technology should allow us to meet those regulatory standards in a more seamless way. Protecting consumers is vital.
Governments have a huge role to play in that. But there are regulations that are cumbersome that don’t increase consumer protection but do take a huge amount of cost to comply with. That is the dream we have. You provide that protection and oversight but you do it in a way that is more streamlined and less costly.
Sramana Mitra: Very good conversation. Thank you for your time.