Mar 22, 2016
In 1967, the Beatles sang: "I get by with a little help
from my friends." That sentiment captures something at the heart of
many people's financial lives today, and it embodies the idea
behind the National
Foundation for Credit Counseling (NFCC), the
oldest and largest nonprofit credit counseling organization in the
U.S.
I have known Susan Keating, NFCC's President and CEO, for
about 30 years. I've been wanting to record a Barefoot Innovation
episode with her, because the NFCC is on the front lines of the
topics we're exploring here. They work directly, personally, with
the people who are not thriving in our consumer financial system.
The reasons people don't thrive are complex. We've talked about a
lot of them, and I find it's easy to get excited about new
technologies or regulatory challenges impacting them, and to lose
sight of the real people who are immersed in these struggles.
Helping these people is the driver behind much of the search for
better solutions by industry, government, and the innovation world,
and it's good to pause and think about who they are.
As we discussed with CFSI's CEO Jennifer Tescher LINK TO IT,
the so-called "underserved" market is enormous -- estimated between
70 and 140 million Americans -- and covers a huge percentage of the
middle class. It is also heterogeneous. Data from NFCC, CFSI and
others is breaking the old stereotype of a monolithic "low and
moderate income" category whose problem is just not being able to
afford traditional financial services. Many underserved
consumers, in fact, can afford to pay for high-cost financial
services, and are doing so, but are stuck there due to a wide array
of issues. Some of their problems are caused by their own errors
and difficulties. Some are caused by the difficulties of serving
them through the business models and cost structures that prevail
in the industry today. Some are a mix of both.
Both of these kinds of problems are ripe for improvement
today, thanks to the innovations we discuss here on this show. I
think, though, that we'll still have a big gap between new
financial solutions and the people who need them, unless we build
some bridges -- add in some glue -- in the form of human beings who
can help people learn to use new technology. NFCC is one of the key
organizations able to do this.
Susan talks about all this in our conversation. She describes
the massive scope of the challenge; the "new face of poverty" in
the United States; the NFCC's focus on "breadwinner moms;" and its
key new initiative for helping people manage student debt, with a
insight into the daunting scope of that challenge.
Susan's background:
Susan began her banking career in 1974 at First Bank System
in Milwaukee, where she became Senior Vice President of retail
banking. In 1988 she joined MNC Financial in Maryland and later
became President and senior banking executive for Maryland when
NationsBank (Bank of America) acquired MNC in 1993.
She went on to become the highest-ranking female CEO of a
US-bank holding company, as President and Chief Executive of All
First Financial from 2000-2002. Then in 2002, she was appointed to
the Group Executive Committee of AIB (Allied Irish Banks plc),
which is responsible for developing corporate strategy and
overseeing management of AIB Group.
In 2004 she took on the role of NFCC President. She thought
is was a short term move but, to her own surprise, she's still
there twelve years later, caught up in
the mission. Upon reappointment after her first three-year term,
she said, "The NFCC is uniquely positioned to serve the many
consumers who are struggling to make ends meet and find their way
to a better financial future. I am deeply committed to doing all
that I can in order to lead the efforts in the years
ahead."
Susan also serves on Bank of America's National Consumer
Advisory Council; is a board member of the Council on
Accreditation; and participates in the Financial Regulation Reform
Collaborative, a non-partisan group committed to finding solutions
for reforming financial services regulation.
NFCC:
Last fall I had the honor of joining the NFCC's board on the
occasion of the organization's 50th birthday. Today the NFCC works
with 90 member agencies through more than 750 offices in
communities nationwide. Its certified counselors counsel and
provide financial education to three million clients annually,
focusing on issues that include seniors and the military and
guidance relating to financial literacy, mortgages, and credit
cards. It recently launched a key initiative on helping people with
student debt, and in helping illuminate that magnitude of that
challenge, and plays an invaluable role in consumer financial
research overall.
Here are some links:
Enjoy my conversation with someone on the front lines --
NFCC's CEO Susan Keating.
And please note:
The video series is launched! Please come to my new
site www.RegulationInnovation.com
where we have launched my video briefing show. It's a
practical guide for financial companies trying to figure out how to
thrive on disruption-to thrive through the twin, intertwined
challenges of technology disruption and regulatory disruption.
We're off to a terrific start with the series.
The next video will be called, "The 5 Tech Trends." I made it
because I think financial people often underestimate the disruption
underway, because we tend to think of fintech as a financial topic.
In reality, it's mainly a technology topic. That means the forces
shaping it lie mainly in the tech world, not the financial world.
That in turn means they are mostly over the horizon, outside the
field of vision of busy people focusing on finance.
I've been spending a lot of time in that world, and am
creating this video to explain what these five huge drivers are,
how they are converging, and how they will transform both consumer
financial services and financial regulation. Again, fintech is way
more about "tech" than "fin."
I'll also have a light-hearted short video for your
entertainment, brought to you from my very own kitchen. I'm going
to demonstrate an extremely odd little gadget that contains a big
lesson for innovators.
Coming episodes:
Last but not least, come back next time to Barefoot
Innovation, when my guest will be the visionary CEO of Opportun,
Raul Vazquez. Among other things, he is totally fascinating on the
topic of how he personally keeps up with technology.
Up next in the queue after Raul, we'll have a short update
with Simple CEO Josh Reich, and then an interview with the founder
and CEO of Betterment, Jon Stein.
See you soon!
As always, please donate to my free podcast series (which seems to be trying to take over my life) and please write a review of it on ITunes!
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