Tracie Kosakowski: From Chemist, to Lawyer, to Fintech Leader (Part 1)

Speaker A: Foreign, um, Sarny. And you're listening to what the heck? Fintech, where you'll experience and learn that fintech is fin life. Let's get started. Welcome everybody. We have an unbelievable guest for you today. We have Tracy Kozakowski and she is, I met her via fintech, um, women. She's on the board there. We collaborate, doing events, we bump into each other all the time. She's going to bring a different dimension than what you've heard here too. Uh, uh, if I get this right, you're general counsel. Ah, at places you're big into Your Helping Startups, Web3Blockchain, all on edge type technology. You're really, um, focusing on the business side and the technology side, which is fintech. Right. Which is perfect for this podcast. Right. And how you advance, you know, women in fintech. Right. And how you do that on a daily basis with all the great programs you do and everything. So, Tracy, I really mean this. Thank you so much for coming in today. I'm going to learn so much today. Um, I'm excited for our episode. So how about this? I mean, I didn't do it justice. I didn't do a very, very great, uh, introduction there. So how about you give me a little player profile? How'd you start? How'd you get into fintech? I know, you know, uh, I mean, I'm older than you, but I mean I like we didn't start there was that fintech was even a name back when we were working. Right. So. And I'm older than you, so how'd you start out and how'd you get to the spot that you are? And what's, and what's some of your passions that are keeping you, keeping you cranking that you're doing so many great things.

Speaker B: Uh, so first, I'm only a smidge. You're only a smidge older than me also, thank you for asking me. I'm, um, really happy and proud to be part of your podcast and all the great people that have come before me and that I'm sure will come after. I actually, um, kind of started out and have a very strange and winding road in my career and how I got to fintech. Um, I actually, in undergrad was chemistry pre med. So I came out of Holy Cross as uh, a chemist and then went to work for an environmental firm. And kind of the thread that really weaves throughout my whole career is regulatory oversight. So, um, started environmental chemistry, highly regulated, um, you know, industry where you're required certain forms, um, certain standards to Me. And then I went into industrial chemistry and hazardous waste. And that is very, very highly regulated. Uh, the transportation, the, uh, intake and the treatment of hazardous waste. Um, from there really kind of started to look at what makes up our society or ecosystem. How do we do things, what happens to the stuff we don't want anymore. And then through all that, looked at different companies and what they were doing. And there was this company up in Lowell, Massachusetts that was making, uh, water filtration equipment. And so I had been tangentially involved in that kind of through the environmental chemistry work and through the hazardous waste and industrial work, and really jumped on the opportunity actually to get to work with, um, an individual who was the creator of the substrate that went into both, um, industrial water filtration equipment. So think power plants. Um, and then also the substrate was used for lab water purification treatment and the substrate was used for dialysis units. So kind of across a wide variety of industries and uses. Got to work with him as the inventor. Um, then really kind of grew the company and actually became, um, an engineer and working on different systems there and was able to work with people both in sales and then technicians in the field. Um, as you can imagine, again, highly regulated, right? So if you have some. Somebody on a piece of dialysis equipment and alarms are going off, you know, what do you do? How do you manage this equipment? I was the person they called to figure out, you know, how to make sure everybody was safe and what was happening. So, um, very interesting time, um, in my life, in my career and dealing with regulatory bodies. Had a shift in my, uh, situation and moved out to Nevada and then decided that, you know, this regulatory aspect I'm involved in was quite interesting. And I went to paralegal school at, ah, unlv. Um, got to meet some great people there, uh, in the paralegal program, including some judges who were very instrumental in really fostering my idea of the law, continuing regulatory work. And then at that time in uh, Rhode Island, Roger Williams was, um, starting a very fledgling law school and, you know, kind of decided that I wanted to go to law school, move back east, ended, um, up doing that and worked, you know, temporarily in some law firms still. I like to try things before I buy to figure out, am I going to like this? Is this my passion? Is this something I want to go, you know, head on into? Um, and ended up at Fleet bank, um, in a wealth management group working on trusted estates. Fabulous, fabulous work, fabulous training ground, fabulous mentors there. Um, great, uh, business unit I worked with. Literally, it Was amazing to be going to law school at night and then putting the information that you were learning into practical use the next day at work. Um, so I did that and really, uh, loved kind of the whole aspect of financial services and how to deliver product to people and what it meant actually during different stages of their life too. At Fleet then I had the opportunity to see many different areas within financial services and you know, kind of with the advent of various mergers, acquisitions that happened over that time period in banking, um, found myself then at a group, um, at bank of America on ET Money laundering. And it was a brand new group, uh, startup, kind of learned everything from scratch, uh, really, really heavy into regulatory bodies and the regulations and kind of what it meant for banking and what it meant for customers and was fortunate enough to be able to do some work not only domestically but in Latin America, and then also able to work with Merrill Lynch Financial Advisors when that merger happened. So over the years, became exposed and more interested in all the regulatory aspects of banking and financial services and what that meant and what the delivery chann. Um, you know, at one point in my career I didn't want to move to Charlotte with Bank of America, so started looking around and opportunity knocked. I had the chance to go to Citizens bank and work there and start, uh, a risk management group around AML and sanctions. Um, started off as a small group, grew to, uh, many people over the years. And that's really where I had an opportunity to see many aspects of the operational side, the customer service side, the legal treasury, commercial banking. Um, ran an operations group, ran an international operations group and you know, kind of saw everything really, you know, how the bank works for customers, how the bank works for itself, um, different roles that people have and kind of what was going on. And then this was right when kind of Fintech was fledgling and starting and kind of the idea of the entrepreneurial spirit was out there and I wanted to make my next move and I wasn't really sure what I wanted to do. So had again, um, the opportunity to go talk to this bank in Boston, uh, Radius bank, and went there, met with, uh, Mike Butler, the CEO, met with the Chief Risk Officer, Chef Rainey, um, met with the cfo, met with very many people and talked to them. And Mike promised me from day one that this wasn't a bank like any other bank. Because I wasn't sure if I wanted to stay in banking or try something else. And um, so I, I signed on with Radius. And Mike, true to his word, uh, no day was ever the same At Radius, we were very transitional, going from kind of a traditional bank that was very steeped in commercial union business to be very entrepreneurial, very first forward, foot forward type of situation and dealing with fintechs and figuring out uh, how to kind of digitize the bank and what that meant and how that delivery system worked both on the operational side and the technology side and the compliance side on the legal side. And you know we had a wonderful team. Um, we learned a lot, we did a lot, we worked with a lot of fintechs, uh, fintechs now that are multi million billion dollar companies. So it's kind of amazing to be part of their origin story too. Uh, so really just a super training ground, a super situation, uh, growth opportunity for everybody that we met and that we dealt with and really got to help regulators and also see from the regulatory side how we deal with innovation and banking and what that means and how you can do it in a compliant manner that takes into account risk and regulation. I worked with various regulators and was part of um, some meet and greets with them and different activities that they did to talk to other banks about how to do banking as a service and how to be involved in financing fintechs and how m to do that in the right way. Um, got involved in you know, kind of all different niche areas of banking, cannabis banking, uh, yacht portfolios. Kind of like it was such a good grab bag and such a good experience of opportunities. Um, I'm one of those people that if I did the same thing every day I just wouldn't be happy. Right. So to be able to have such a diversity of things to be available to me and to join in and experience was really wonderful. Um, then Lending Club came and we had the situation where they bought Radius bank and I then had another opportunity and, and approached me about you know, kind of why, you know, fintechs wanted me to join them but I also felt like I didn't kind of want to marry one fintech and how can I do this and kind of have that same experience of dealing with a lot of different banks and fintechs at the same time and, and that was consulting. So uh, I started my own consulting firm, got to work with, and I still do work with Maze m many amazing clients, both fintech side and the bank side.

Speaker A: Wow, you've done, wow, you've done so much. There was so many things I did not know so I, I, I'm gonna, I'm gonna piggyback on a couple of those stories that I loved. So I mean one, one, one connection that popped in my mind. Have you ever heard of the company Ionics? So it's water purification I guess and they sound plants all over, all over the world. I worked there for six years. That was my second job back in the ninet. Um, I worked in their corporate ah, accounting group for three years. I literally jumped over where I started doing some even more and more fintech. I jumped over the aisle to be in the IT side cause I was one of those systemy type accountants and I ended up doing activity based costing for manufacturing and I got to really understand the business by understanding the finance. But then I did a ton of coding and that's when client server started getting big too. Right. And obviously I got to do some travel and that's awesome because so yeah, you never know where your career go. And then obviously, I mean the company

Speaker B: was called US Filter and it got bought by a French company. Um, but you know I'm dating myself right. So I can remember you know we didn't have cell phones back then. We had those big chunky things and I remember my first cell phone, $9.99 a month Fee to have the phone. But you never wanted to talk on it because it was some like crazy per minute uh, charge for it. But you know kind of the thread of regulated industries has kind of flowed throughout my career.

Speaker A: Yeah. And here's another thing that really, that got uh, me thinking too. So you, you were a chemie, right? Chemical engineer. Right. Coming up. My brother was too. Right. So my brother, my older brother. Right. He was a chem. He went to you all. I'm um, dating myself just by saying you all um, so um, but, and he got into the whole um, uh well he, he, he was similar. He, he was at ah, uh, Occidental and, and in Down Louisiana and, and he got into the wrist side and the regulation side and the insurance side which dovetails because everything's risk versus reward. Right. Which is fintech. Right. That's what finance is all about. Risk first reward. That's what risk management's all about too. So it's interesting, you're, you're the only, the second person I know came from a chemie, you know and because he's deep into the insurance side because any end up being a risk manager uh, similar to what you were talking about. So I was getting flashbacks on that too and how my brother grew up so starting out as a chemie and now he's, he's, he's more on the um, uh, on the, on the OSHA side now, um, he's got even further on that risk side for the OSHA side. But it's got me thinking how like, wow, those backgrounds are so similar because it's all about, you know, looking at, with an engineering mindset, understanding the business relating to that and then obviously the risk versus reward and what's, you know, what's your return on investment, why invest in that? And that's what you did your whole career over and over and over again. So. Wow. I saw connections that I have not seen, um, that. It makes total sense.

Speaker B: Yeah. And I think those disciplines teach you about process. Right. So how to take something that, uh, at first blush you don't understand and how to break it down into smaller pieces so that you understand. And then you're able to step back and look at the whole and understand how it works. Right. And be able to improve the process too. So, you know, it's not so much what you learn, it's how you learn it. And are you able to kind of take that to the next level and apply that down the road?

Speaker A: Right, right. Yeah. So you can really own it too, and understand it and bring it into the whole operation side of it too. That's the stuff that people forget to do over and over now. Uh, also with your legal background. Wow. I mean, that's a great connection. So I'd like to talk a little. What's your view on the regtech side, the compliance side? I mean, obviously the risk management goes hand in glove with everything like that too. From a fintech perspective. How do you, how do you look at that? Because you obviously, you grew up, you know, and then coming to the fintech side, um, not near the end, but say, you know, in the middle or so how does that.

Speaker B: Yeah.

Speaker A: Impact you?

Speaker B: Well, you know, I think it's not, it's not just to know why you should do something, it's to know why and how you should do it. Because, you know, lawyers are trained in a certain way to read a regulation, read a law, and then interpret it. Right. And that's one thing, but then what is the application? So that's the important part, Right. Because I can tell you what this means, but you're like, well, then how do I apply that? And that's the most important thing, really, because you think of laws and regulations. I think of them as guardrails, like a left guardrail and a right guardrail and things. There's a lot of gray area in between that, uh, fit within those guardrails. Depending upon the law or regulation. So if you understand the guardrails and you understand the intent behind a law or regulation and why it was put in place, you understand what you can do and what maybe you can't do as you go through. And so the idea of regtech taking the technology and kind of building in those algorithms and those rules and those understandings to be able to then really take the how do we do it? How do we comply with the regulation and allow people to be the creative part of that. Right. Because I think technology is so important to be able to take care of that. Low hanging fruit are things that technology does and AI does that, you know, we don't need, you know, people brain power to do that. They're very um, methodical. You know, things happen in a very standard way and if you can utilize that and then utilize the people with the brain power to do the more creative and the more strategic things, then you're really, you know, saving time, money and you know you're investing in people doing the interesting things.

Speaker A: Yeah. And another thing I like to hear because you're legal but also your technical and in your business background. So we, so we were talking a little bit before about the, the medical. Right. So like I'm gonna give a little quick story. So I mean I, I was down in Florida, I'm a Disney guy, I love going to Disney. I slipped and I got a concussion down in Florida in Orlando. So, so and I was out, I was out. I was literally so I was, I was concussed badly and I ended up not hitting Disney that week. I had to fly back home because of it. But the learning there I got was the medical area needs help. Right. They need technical help. So like the health tech, the, the biosciences and fintech need to come tighter together and because I was seeing how portals weren't talking, I, I'm talking to my insurance, I'm talking to my doctors. They can't see what I can see. That makes no sense. Right. It's my data. I should just say a approve go ahead. Do you know, go, go look at it. Right. But no, I knew costs and my wife knew cost before our doctors up here in Massachusetts knew. So things don't talk, they don't communicate. The technology and little great legal reasons because a hipaa, uh, but with the technology we have especially in and I know things are near and dear to your heart with Blockchain and Web3 and I'd love to hear your thoughts. How do we merge those two from an Operational standpoint, because there's collaboration that has to happen here, that something's going wrong. Bring down the cost, bring up the efficiency. Because I just, in my one little example, um, I'm sure people get that all the time. So what are your thoughts? Because, you know, the regulate, you know, so much about all the pieces, I just, I just mentioned.

Speaker B: Yeah. You know, the thing is bringing all those pieces together, right? And so having the people that want those synergies and can see beyond the box that they're in and, you know, have those experiences, good or bad, right. And then be able to learn from them and take for them to say, you know, why. Why is healthcare delivered the way we deliver it? How can we build efficiencies in, how can we improve the process? How can we improve the experience? What things do we know about regulation and technology that can be beneficial? You know, there are many companies out there looking to combine aspects of financial services with the delivery healthcare and, um, obtaining health care and making it more affordable and making it more available. And the idea of, uh, you know, just as you said that, the sharing of data, right, so, so you own your data. I ought to be able to provide that data to other people to assist in my care in an easy and efficient way. You know, there, there are hospitals that are still dealing with paper forms that look like they were made in the 1980s. You know, why, what are we doing that everything should be digitized, everything should be, you know, available at a moment's notice. And that also prevents errors, right? Errors in delivery, errors in timing. Um, and we just have to break through those silos in those barriers and have people who are the idea makers, right, who can understand that they've seen things in other industries and other aspects and then apply them in a different situation. Um, you know, we, we talk about a lot of things going back to, you know, kind of one of the, the things that you talked about about Web3 and, um, crypto and things of that nature. So, you know, people are very fearful. Like, you know, you're fearful of that, that you don't understand, right. But when you start to explain things and, and how things work and, you know, some of the transactional problems with things around crypto, you know, the idea of, uh, you know, it's this anonymous situation, which it's not. So you can still kyc the user. You can screen people's wallets, you know, you can move crypto to fiat. It's really an attribution and a context problem. So you're kind of there Inheriting risk from, you know, kind of these systems that um, where behaviors matter more than identity. And you know, that's where we're going really the idea of how do people behave, how do systems behave, how do entities behave rather than, you know, kind of some static identity, um, qualifier that can be potentially easily masked or um, easily spoofed essentially. So you really need to build some type of, of bridge between kind of these, um, basic financial building blocks and the traditional expectations and then what kind of things like crypto and on chain activity mean. So you know, just take the concept of source of funds, right? Which is a very traditional AML expectations. And when you, you take a look at, you know, crypto and you say source of funds, what does that mean? Right. So because when you, you look at that, it's not really something that translates into the traditional system of source of funds. But that doesn't mean it's wrong or it doesn't mean that it introduces more risk if it's understood. You know, um, we think of, you know, behavior analysis and that's where some of the technology is going here. Because what you do and how you show up is far more uh, telling more than what you say essentially. Right, so, or what you present as. So the idea of behavior analytics, um, really kind of across the chain, right? Because you could see that in healthcare how behavior analytics are important. What do you do, um, how do you act versus what I tell you, you know how that happens. So um, I think there's just so much synergy and so, so much good work that can come out of all these technologies and you know, with Fintech being very innovative and translating that across uh, so many industries.

Speaker A: Right. Please come Back to part two with Tracy Kazakowski as Traci goes deeper into Web3 Edge technology and regulation and why and how Tracy is on the board of Fintech. Women, Thank you for listening to what the heck fintech. Make sure you tune into our next episode as we continue to interview fintech leaders and share real world stories from across the fintech ecosystem. Um, so you can fully understand that finish. Fintech is fin life.