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02Nov

Musings from Money 20/20

Pandemic? Recession? Nah. The Money 20/20 conference drew a record crowd of 13,000 to Las Vegas last week and based on the exhibit hall presence and private parties thrown by relative newcomers and established firms alike, we’ve yet to register a decline in fintech enthusiasm or a tightening of purse strings.

Last year’s edition had a crypto tilt- not surprising given that it coincided almost precisely with Bitcoin’s market peak. However I suspect the tone had as much to do with the relative absence of TradFi bankers, many of whom were still facing travel restrictions. I still saw and heard plenty of crypto, digital assets and Web 3.0 this year, but the bankers’ return thankfully rebalanced the volume level.

I’ve shared several Money 20/20 reflections at CUNA.org but in the spirit of Taylor Swift’s new album (yes, several of the industry parties extended past Midnights…) here’s some bonus material.

Regulation a Go Go- CFPB Director Rohit Chopra chose an interesting venue to publicly announce his latest initiative. The idea of the bureau “reactivating its Section 1033 authority” sounds wonky, but it boils down to a step toward open banking. Chopra believes it “should be easier for consumers to fire their FI, for whatever reason,” and therefore aims to create simpler account switching mechanisms. He equates this to the FCC’s “number portability” rule for telcos, which arguably fueled competition in the phone industry.

Another session asked the question, “Did Dodd-Frank Create Modern Fintech?” with the panelist consensus being that it was likely an unintended consequence. Former OCC Chief Counsel Amy Friend, now at fintech consulting firm FS Vector, suggests that newcomers “go to the regulators during peacetime, so they get to know you.” In a similar vein, on a separate panel Plaid co-founder Zach Perret opined, “If regulators don’t understand your business, that’s *your* problem.” Taking the stage just after Chopra, Perret’s firm is well positioned to enable any imminent open banking wave. Perret theorized that consumers “live their financial lives like their medical lives,” with needs evolving over time.

FedNow’s Bright Shiny Object- That steam you saw in the corner of the exhibit hall was probably coming from the ears of The Clearing House. Preparation for the mid-2023 launch of FedNow was a recurring conference theme, including the heightened need for fraud and identity solutions to support these irreversible real-time payments. Federal Reserve Board Governor Christopher Waller lauded FedNow for bringing ubiquity to the real-time space, comparing it to the “public utility model.” I picture The Clearing House seething over the lack of love for its five-year-old RTP alternative- which smaller FIs (non-owners of TCH, not coincidentally) have been slow to embrace.   

What’s a Venture Capitalist to Do?- There was no shortage of opinions on the availability of venture capital, particularly for early stage companies. Several players on both sides of the equation took a contrarian view, suggesting that turbulent conditions are good for starting a business. Noting the large balances currently parked in VC coffers Decisiens Capital founder Dan Kimmerling observed, “Deal pros aren’t paid to *not* do deals.” We’re likely in a temporary period of adjustment as investors and founders find a new valuation equilibrium. 

Who Doesn’t Love a Good Pitch?- Money 20/20 turbocharged its startup pitch competition, making it a centerpiece of the Sunday lineup emphasizing companies addressing financial access challenges. Both the winner and runner-up from ten semi-finalists received $100,000 awards from Commerce Ventures (this isn’t pure philanthropy; the VC firm receives an option to acquire future equity). Congratulations to Zirtue and Remynt- we interviewed the founders of both of these winners on this week’s BIGCast

Finally, after booking Journey and Foreigner the past two years, I wonder if Vegas bookmakers have begun taking bets on who Money 20/20 will announce as 2023’s musical guest. Feel free to add your suggestions below…. 

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