Building Trust Into the Fintech Product with Current's Josh Stephens

Speaker A: Americans, over 100 million Americans who are live paycheck to paycheck. These are people who are often overlooked by traditional institutions. Uh, and I think they're overlooked by traditional institutions for at this point would feel like obvious reasons. They're harder to bank, those folks, they're not profitable customers for them. Um, we have obviously created a business model that makes, uh, that possible, that we can bank them, we can make great services for them. And one of those great services is the ability to build credit. Now, when you're tackling that question of how do you help someone build credit? You're looking at it far more than, um, you know, what's a means to an end. Yeah. Um, so for us, building a build card was, was very much like, what do we do to make this kind of a core part of their life?

Speaker B: Josh, thank you so much for joining me.

Speaker A: Pleasure.

Speaker B: Live in New York City at the Crosby Street Hotel at the Reliance Summit. It's great to have you here.

Speaker A: Yeah, thank you for having me. Yeah.

Speaker B: Well, you have been leading product at Current for the last decade, more than a decade, which is kind of crazy how much our industry has grown and matured. But from your seat, what are some of the major financial infrastructure changes you've seen in the last decade? And where do you think the industry is still needing to modernize today?

Speaker A: Yeah, um, first, it's just, it's, it's wild that it's been that long, you know, and it's also, um, it's interesting to think back to how different things were then. Um, we joke about this, and I'm not even sure if it's totally true, but Fintech, um, as a term was not just casually thrown around then. I think when we first were starting Current, there wasn't this real concept of, oh, you're creating a fintech company. Um, and I think a lot of that does speak to the infrastructure realities at the time versus what you have now. Um, you know, 2015, 2016, you didn't have the types of third parties out there who would allow anyone to be like, how do I move and store money? Right. That, like, fundamental thing was not so easy. Um, it's a big reason why Current early on decided to build our own core, our own ledger. We wanted to create products that we didn't see how else we could do it unless we built it ourselves. Um, had it been five years later, I think it would have been a very different story. Um, and I think that's why five years later, you saw way more entrance into the space because the barrier to entry was much smaller for us. We made this conscious decision early on to say we're going to build something ourselves and make that our core competency. Um, and in doing so, the fact that we do have our own ledger at this point and um, our own core, that proprietary core, allows us to innovate basically. It allows us to do things that we wouldn't be able to do if we were reliant on a, on someone else, on a Gallet or someone like that. Um, and so that part has obviously changed dramatically. I think the other thing that's obviously changed is the market has changed dramatically so much. Um, and so in terms of what types of competitors we have seen come and go, the maturation of folks like Chime, um, the, the way that companies, uh, like Robinhood and um, Sofi and certainly Chime have, have all become uh, sort of household names in some ways. Is, is, is, is, is wild. Uh, the way crypto has exploded during that time, um, these are all things that I think when we first were getting going felt quite far off. And so that's been kind of incredible to see. Uh, along with that there's a tremendous amount of innovation has come and I think we've been um, leading a lot of that. And again a lot of that is possible because of the uh, decisions early on to make the infrastructure our core competency.

Speaker B: Well, and I love that you're saying that the infrastructure as your core competency, how has that I guess enabled you to innovate the product in a way that traditional institutions just haven't been able to?

Speaker C: Yeah, let's start there.

Speaker A: Um, I think a good example would be our credit building card. Our build card, um, when we were first tackling that problem. Right. Um, you know, current is ah, you know, just to kind of back up a little bit here. Right. Current is a, ah, Neobank. We serve um, Americans, over 100 million Americans who are live paycheck to paycheck. These are people who are often overlooked by traditional institutions. Um, and I think they're overlooked by traditional institutions for at this point would feel like obvious reasons. They're harder to bank those folks, they're not profitable customers for them. Um, we have obviously created a business model that makes uh, that possible that we can bank them, we can make great services for them. And one of those great services is the ability to build credit. Now when you're tackling that question of how do you help someone build credit? You're looking at it far more than um, you know, what's a means to an end.

Speaker B: Yeah.

Speaker A: Um, so for us, building a build card was very much like, what do we do to make this kind of a core part of their life? And so we wanted to build a credit building card that didn't have the friction of having to move money from one wallet to another wallet or check in every month to say, wait, how much am I securing on this side? It needed to be something that just worked. M. From a customer standpoint, it needed to feel like this just works. And so the ability to create something from an infrastructural, uh, standpoint would not have been possible if we had not done that ourselves. So again, the idea of being able to sweep money and to store that money, um, in a way where the customer doesn't have to see it, that was a really, really important innovation that we were able to lean into in large part because we had that flexibility. And then I think there's just um, some more obvious examples like um, because we have the full ledger, we have a lot more information on what's going on. We're able to surface that information to a customer in a way that's more interesting. So um, just the type of uh, information we provide on a receipt, you know, someone's like, hey, where did I spend? They look at their transaction history and they're able to see a lot more rich information there. Um, these are all kind of easy examples. Um, there's more, I'm happy to give.

Speaker B: Yeah, no, but I think these are great. And you know, it's, it's incredible to think about that evolution and kind of the simple places where product can be tweaked so that more consumers. Right. Have the access for you to, for, for the NEO bank and for you know, companies like Current to essentially say, hey, no, there is a profitable business model here and we're going to show you how to do it and largely do it through product innovation is, it's been huge and we've seen the change happen over time at, we're at a place though now where obviously, you know, agents are coming into the equation where uh, you know, fraud is heightened, compliance is becoming more of this, uh, we're talked about actually even as like a growth lever as you know, and the compliance and product side, um, working together. Right. Having to work together rather closely on this. I imagine this event is talking a lot about just reusable KYC KYB standards and just this customer data sharing. How do you think about this shared infrastructure and how does that change the product experience for consumers over time or I guess the idea is that they just don't even feel it.

Speaker A: Yeah, it's really important. I think, um, we're talking about what has happened in the last 10 years and what's shifted. Uh, KYC standards have not right what is required to KYC someone is still what is required to KYC somebody. Um, there's a lot more tools in place to make that easier. But ultimately when current KYCs or brings on a new customer, we are treating that customer as a net brand new customer, that customer, regardless of where else they have gone to KYC or create an account or regardless of what else they have done. We are effectively starting from scratch. And so getting to um, kind of more portability when it comes to kyc I think is a really important thing and it's slowly happening, but it's definitely an area that I think has not um, moved forward at quite the pace that I would have otherwise. Like said differently, I don't think kycing someone needs to be a core competency of current. I m think that we should be able to say if you are a good customer, we are able to trust in the signals we see that you're a good customer. That comes both from who you are, your identity and then I think the second really important part here is the fraud signals that potentially come with you. Um, we are working with a overlooked audience. They are people who are often penalized by other banks. They are people who are um, not given the same fair shot by many other places. I want current to be able to make the decision about what we believe is risky or not risky. But at the same time I want us to be able to ingest data from other folks, to be able to come to the right conclusions there. So right now I think uh, KYC portability in general is still far behind where I think it should be. Just as an aside, this is a bigger problem than I think just the banking world. The fact that we still use Social Security numbers for many things is a very flawed thing. Um, uh, there's many other examples as you go through your life where you realize you're using documentation that is not really the best standard for our you actually who you say you are. And again, it's catching up. I think you're seeing a lot of improvements here. I think, um, we're starting to see a world where that gets a bit better. But from a product standpoint, I want an experience to be smooth. I want it to be clear. I um, want it to be frictionless as much as possible. Um, and there is Much better ways to do that than asking someone to give us the same set of identification, um, uh, details that they're getting every single time they go anywhere else.

Speaker B: All right, hit me with some of the ways that we can do it better then that you're thinking of at current.

Speaker A: Uh, well, I just think that if we can begin to adapt a little bit better standards across the industry so

Speaker B: that we can communicate more effectively to each other.

Speaker A: Exactly. Um, ultimately we're still at the whims of what is the accepted regulatory way of collecting information. And I think that's always going to take a little bit of time. Time. Um, there are many ways at this point to collect information about a customer that I think from a more logical standpoint you would say that should be good enough. Um, that doesn't necessarily mean that partner banks are going to be good with that. And I totally get that. You know, they'll have to kind of come to their own comfort levels here. But again, we're moving forward in the right direction certainly. Yeah. And I think the long term goal here would just be from a customer standpoint. Uh, you don't feel you're putting in information that you don't actually need to be putting in. Um, and that from us we can be more sharing with other uh, fis and we can be working with other folks to ensure that there's a little bit of a stronger network to ensure that we know who someone is.

Speaker B: Right. And that the data is properly talking to each other. Right. Because it's like AI is a fun conversation to have, but if the data connectivity isn't there and your AI can't think and connect properly, then um, it doesn't necessarily totally work per se.

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Speaker B: All right, let's get back to the show. And I like what you're mentioning too about like the customer kind of trusting that the data that they are sharing is going to help provide a proper picture of who they really are and a better experience.

Speaker C: Yes.

Speaker B: Overall. So which is, that is a side, I think, of the trust equation that we don't always talk about. It always kind of comes in this like what is the outcome? Not necessarily what is the experiencing leading up to the outcome. How are you thinking about just kind of trust in overall? Because it has become just this huge part of the product experience for you over the last 10 years. It's probably always been at the center, but now, you know, we're talking about it. Right. The industry is talking about it more, whereas you're probably like, guys, I've been doing this this whole time. Um, how do you think about building trust into the financial products just from day one.

Speaker A: So it's interesting, you know, for, for current, we are banking folks who have lowered trust in the banking system because the banking system hasn't put trust in them. Right, right. And so uh, that has sort of been the premise for us from the beginning and, and frankly, uh, just a reality of, of the nature of our business. We have to work very, very hard to both develop and keep the trust of our customers. And so therefore, uh, thinking about that from, you know, the way we approach everything we do is kind of paramount, um, to sort of break it down a little bit. Like we are creating um, value for our customers. Right. Value that we believe is really important for them. You know, value that we think helps improve the way their life kind of unfolds. Um, so that's fee free, overdraft, that's um, you know, higher savings rates, that's uh, paycheck advance, that's you know, credit building. These are all things that we believe are solving a lot of their, their core daily problems. Um, so we can acquire a customer with that promise. But trust is built on delivering. It, uh, said in a different way. Trust is built in moments. So if we are promising something and we deliver on that something, that is building trust. If we do not deliver on that, that is going to reduce that trust. And so the stakes are actually very high for us.

Speaker B: Yeah, they are.

Speaker A: Because if we don't deliver for the customer, the customer will not deliver for us. So there's a really nice kind of, um, symbiotic relationship that we have there. Um, that puts more pressure on us as a business, which I don't think larger institutions have that same type of pressure, because the way that their customers think about a bank is a little bit different than how current customers think about their bank, which, frankly, also opens up a lot of opportunity for us. It allows us to rethink a bit of what does a bank mean for the customer. Right. It means that for our customers in particular, where we can really redefine what that relationship can and should be.

Speaker B: Yeah. Is there any piece of this journey or puzzle from product compliance that you wish the industry would maybe solve more collaboratively, um, instead of this, instead of solving it independently?

Speaker A: Um, I think what we just mentioned with regard to kyc, that, to me, KYC portability is a really, um, is a good one.

Speaker B: Yeah.

Speaker A: Um, I think another one is, is. Is risk. I mean, I think that the way I sort of think about this is that criminals, uh, talk to each other. Banks don't.

Speaker B: They sure do. You know, the criminals are doing it. Yeah, they're organized.

Speaker A: They're very organized. And, you know, risk is a. Needs to be a product competency in this case. And so the. The more awareness we have from other banks, the more we are partnering with other folks to understand, like, what exactly is happening. And that could be as basic as this person we believe to be a fraudster. But it could be much more. Here are rings we are seeing. Here are dynamics that are happening. These things are happening a little bit informally between institutions. But I certainly don't think we have any true, codified, um, type of technology layer on that.

Speaker B: Yes. And I think that I'm hopeful because we're. The more interviews I have and the more discussions I have with leaders like you, the more this is coming up. And so, you know, you identify the problem and then we create solutions. And I think it's what is valuable about being in rooms like this. Right. Having conversations like this, um, putting it out there so that we can have more of that connectivity. We can have more of that collaborativeness and talking to each other so that we can start to outpace the fraudsters, since they're not going away anytime soon. In fact, they're just getting bigger and stronger. But that means we do too. Final question for you, Josh. Um, what are some of the product shifts that you think will define the next 10 years of financial infrastructure since you've seen the first 10 years? Give us, give us your crystal ball moment.

Speaker A: I think one thing that hasn't to start with, looking back, one thing that hasn't moved as quickly as I think we would like and something we have tried to really push as much as we can, is just this simple concept of how your money moves and how quickly that can move. Um, money movement in the United States lags other countries dramatically. Um, and you know, the ACH system is a really amazing thing in some ways, but it's a, it's a legacy piece of infrastructure at this point. Uh, real time gross settlement is here. It is not widely distributed. It is not something that I think the incentives have been built into widely enough yet. But for current customers, faster access to money is the most important thing that can impact how they go through their lives. Um, so I'd really like to see that happening more and more. Um, I think the other sort of elephant in the room in all this is how AI is impacting what we do. Um, you know, there six months ago, we were in a very different world than we are right now. I'm sure in another six months that will be even changed even more. Uh, but I will say that when it comes to providing better products and services for the customers that Current serves, um, agentic AI opens up a lot of really interesting opportunities. Um, we believe that finance should be automated and should be personal. Yes, that automation needs to come with checks and balances. But we have customers who have never been treated personally before. And it's been very hard even for folks like Current to do that to a very precise degree. Um, but being able to get to a point where we're able to really treat everyone as they kind of deserve to be treated. Um, AI agents open up a real opportunity for that. Um, and so I'm interested to see where that goes when it comes to things like, um, just better insights into your money, like m movement of where your money's going, being able to provide better recommendations, being able to provide personalized deals, being able to really intersect into these questions that are stressful questions. Right. Where do I go to get a car loan? Or what is the right um, rental insurance for me or when and how do I pay my rent? Um, this is combined uh, with the reality that our folks work, um, you know again they work shift jobs often they work service industries, they work for the government. Um, their paychecks are not always guaranteed in the way that I think we often think about the white collar uh, world to be white collar worker to be. And so for those folks being able to provide certainty it then, it provides confidence which provides trust. Right. And so I think that these are all areas that I'm excited to go to. But um, yeah, faster access to money and I think more personalized experiences powered by agentic AI.

Speaker B: Well Josh, that was so well said. Um, and we are lucky to have leaders like you in uh, the product suite to be able to push this all forward, especially for the customer that, that you serve. So thank you um, for, for, for the work in the fintech world. I know it hasn't been easy over the last 10 years and the next 10 years is going to be crazy as well. Um, but we'll be here and ready to, ready to make it happen for, for those end users, uh, and make a, at FinTech SFEM. Um, you know, for us the goal has always been to build a better financial future for everyone. So we're definitely aligned there. So thank you for, thank you so

Speaker C: much for tuning in to this episode of Humans of Fintech. If you loved this and want to hear more from leaders across the fintech industry, be sure to subscribe to our YouTube channel. That is FinTech is FEM. Um, and be sure to sign up for the Fintech is Fem newsletter which you can do at Fintech ism. Co. See you next time.