Financial Services and Technology

This meeting covered a lot of great information about Fintech (finance and technology), business, and earning an MBA degree. It also covered how technology can be integrated within today's society.

Speaker's Background

majored in Japanese and did a lot of business with Japan, but wanted to branch more into the technology
went to MBA school to be qualified for more leadership positions (MIT management school)
first worked at more of a hardcore technology companies called Teradyne, which works with semiconductor tests
very technical, must understand scientific principles to understand the product
semiconductors are the chips in phones, computers
transitioned out of that company to work for Digital Insight (online banking, mobile banking company)
worked between the engineers and the sales people
translated customer needs into a product.
he was qualified for the position and I joined that company even though he did not have much experience in that area
that company got bought by Intuit, which does TurboTax and QuickBooks
Intuit is a big financial software technology company
Then moved to Green Dot to lead a network of taking in cash in retail stores for businesses

What his

company does

If you go to CVS or 711, there'll be Visa, MasterCard, debit cards in the gift card section that you could purchase with cash and spend online.

they can become your bank account

This is Green Dot's property

Working with Apple

they have privatized and put bank products into stores
especially serving lower income people and others that may be wary of financial problems in past banks, want no charge on fees, etc (an alternative)
they also do "banking as a service" because they have a bank holding company like Bank of America or Chase
there's no one regulated institution for finances so to do certain financial transactions you need to have a bank
So they are a technology company and a bank

Working with Apple

Apple has an "Apple Pay wallet" which allows people to send money electronically
Green Dot is inside the iPhone (partners with Apple)
Apple uses them to move money and embed a spending account in the apple pay wallet.
FinTech is powered by the mobile revolution
finances can now be done on a cell phone
Apple doesn't have the expertise to issue a debit card so that's what Green Dot does

PayPal

go to the PayPal app and click "Add cash in the store"
if you are payed 60 in cash but want to spend it online, it becomes a problem
how do you spend cash online?

PayPal uses the Green Dot patented technology to solve this problem
select a store from a list and the app generates a barcode that says "add cash"
then go to the store and scan it to get $60 in your account in a few minutes

it's about bridging cash and technology

there is a lot of cash in distribution (800 billion dollars)
more people use the cards, but there's room for cash
software engineers figure out how the technology works but then he must figure out how to work within the banking system and work with partnerships (ex: CVS)

Fintech Projects

how do you create and manage financial services that makes people's lives easier? or lets them use money the way they want to?
Venmo is one option to send money for the iPhone, and then you want to be able to spend that quickly. that's something that Green Dot helps to solve.
How does one spend cash online?
use a paypal account

these problems are solved with technology, financial capabilities and banking needs
It has to be a business so this gets into entrepreneurship too
everything is starting to talk to business
What's the revenue model
How you can make money

Great ideas are not enough

There's like a lot of great ideas out there but:

how you actually make money at it
how you execute on it
how you make it happen

are big parts of what this career is

Fintech Fundamentals

how do you solve a customer pain point better than the competition?
how do you actually create that and make money at it?

that's the challenge (either business or technology)
It could be more on sales or more technical

User experience is another thing about technology product design

What is it like as a user of the product and going through it?
Ex: the Snapchat update
maybe they should have done more user testing
or had young beta customers

User experience design is a subfield within technology that lends to more artistic stuff but also tracking how well can customers achieve their goal (ex: posting a story)

Solving Customer Pain Points

trying to think about new products and new services
start with thinking about a new business or product idea
there's probably some customer pain points (something's inconvenient, expensive or bad)

One example is Netflix

when Netflix started, the 20th century problem was renting DVDs or video cassettes from dominant video rental companies (ex:blockbuster) would result in these crazy late fees just for a few days
Reed Hastings was so fed up with these late fees he hate these late fees, he started a company that you can get unlimited DVDs for $15 a month
it would come in the mail and you can hold it as long as you want, but you didn't get another one until you send the original one back
that's exactly what business disruption is
it means that the blockbuster people lost jobs and that company went down
Netflix came up and it's better for the overall economy
And then streaming came along and Netflix was one of the first ones to get on top of it

Earning an MBA

Going to MBA school is a great way to get into a management track with businesses such as:

financing banks
Google
Facebook
traditional big business company (Walmart)

There's all kinds of companies that would that hire MBAs

It's a good general qualification for graduate school
Unlike most other graduate programs, they want you to work in between undergrad and your MBA school to get experience
First you get work experience and then go on to see how business or organization relations work

Getting an MBA really helped him

But once you're out of college it's mainly your work experience, what you've done and showing that you can

A good aspect of an MBA is that it teaches you to process a lot of information quickly and figure out what's important and what's not worth spending time on

Or : be able to have the bandwidth to process a lot of things, and everything is important overall in business

Something really important is how to talk at different elevation to different people/knowing your audience

If you're talking to a senior executive, he wants like a high level summary of your activity.

An example:

Tony Knight (high level position) might want to hear a general summary, but a teacher might want more of the details

In like lots of career paths you gotta be able to know how to go up and down at elevation to give relevant general things or cover the details

A lot of people can only cover the details, they can't synthesize and bring it to a higher level meaning and talk to people that have a different perspective

Advice

you have to make your own business to go into business
there's a whole set of careers in business, but almost all companies are technology companies
you want to adjust because working in technology doesn't mean you need an engineering degree or computer scientist
It's great if you do, but it is not necessary
the speaker doesn't have a computer science engineering degree but works in technology business

Product Management

Product management is really important to a career in technology

you can be in Google, Facebook, lots of companies
product management sits in between the customers and the engineers that create the technology
Product managers translate:
what people want to use
What's the market
tell the engineers what to do
engineers translate that into code, databases and everything else to make it work.

Product management is a really big role that combines business, technology, and design

a great overall field
some people go into product management when they were engineering or computer science undergrad and they go more business
others are more business people but have technology affinity

It varies. Product Managers are probably closer to the entrepreneurial side.

Day-to-day Activity

His company is currently working with Uber on Uber cash, which is prepaying for your car rides

right now you can only fund your Uber balance from your debit, credit card or gift card
They want to use their patent on e cash (a mobile barcode) and embed it into the Uber app
You can go to the store with cash to, add it to your account, and use it for Uber rides
Uber issues Green Dot debit cards to drivers, so they already have a partnership with Uber
Uber partnered with them since Uber knew they do several instant funds disbursements (funds delivery to a Second Canto regard account) with retailers like Walmart, CVS and 711
they're trying to go live by Thanksgiving

he does calls for this and does some project statement meetings/partner project planning

monitoring how the business is going (meeting budget in terms of revenue)
thinking about customer research

data analytics (seeing all these data transactions and analyzing what they mean:
marketing
growing the business
what's going up what's going down
and more
managing his team that was given the challenge to launch this mobile cache to two of their new cards
it's a variety of projects to come up with new ideas, how to execute it, how they are doing and data analytics.

Dealing with Partnerships and Competition

working with big partners it lets you reach a bigger audience more quickly
So they partnered with Apple with the Apple Pay cash thing instead of making their own Green Dot branded card and going direct to consumers
In doing things with partners, you can take advantage of their reach and their customer base. So, you can get sales/revenue more quickly and do something just once for it to work everywhere
Uber has about 50 million Uber apps downloaded
So, their product will be in 50 million apps to do cash deposit
CVS will be their first partner to expand their technology
This is great for Uber because it can become your "operating system for life"
they want you to do a lot of stuff through Uber (ex: order food) since that's good for them to get cash into that ecosystem

Uber restricted them from working with Lyft and other companies in their contract
companies want to protect their advantage in the marketplace so they will often create exclusivity contracts.
also known as non compete clauses (but in California non compete clauses are illegal in employment contracts)
that's part of what makes Silicon Valley good
people will jump from Google or Facebook to other companies
companies/organizations can be jealous of their technology/products and don't want others to have it
That's why the Coca Cola recipe is locked up in a bank vault in a trust in Atlanta

How Transactions Work

Uber does not charge the rider a transaction fee

Uber pays an X percent of $100 load to his company
businesses split up the revenue between partners

We also do these for cash deposits with PayPal

if you put cash in your PayPal account, you'll get charged $3.95 as an extra fee
that's their revenue (charging a fee)
if you buy something on Amazon with a credit card that says $100, Amazon doesn't get $100
They get like $97 and 50 cents for that transaction
the remaining $2.50 gets split up between Visa, the bank that issued it and the company that processes the debit card etc

This is called interchange revenue

This is where such a big business around card based payments is because whoever selling that product or service doesn't get the whole value
between anywhere from 1 to 3% goes to pay for those payment companies
Green Dot make most of their money when consumers buy things with their Apply Pay Wallet
They generally get paid by the company