February 18, 2021
Everyone is going to love today’s show, but if you are a fintech or regtech startup trying to sell services to a big bank -- this is absolutely a must listen. And the same is true if you’re a bank wanting to work with tech startups.
My guest is Maria Gotsch, CEO of the Partnership Fund for New York City. The fund’s goal is to make New York City a technology innovation hub like Silicon Valley but focused on finance, leveraging New York’s role as global financial capital. Maria assembled a group of ten big banks to work with her on how to tap into the innovation wellsprings of tech startups and make them, in effect, the banks’ R&D arm, in ways that make the relationship worthwhile for both sides.
Our conversation covers a wide range of issues. Maria shares insights about how COVID has impacted the economy, especially for small businesses. She shares the fintech trends she is seeing, from quantum computing to how to serve low-income customers. She describes big shifts in how tech is evolving to deal with data security and fraud. She talks about how the financial sector has lagged others on adopting predictive analytics, and why it’s harder for financial companies than, say, Netflix, to put these tools to use. She describes the rising asset class focused on environmental sustainability.
I found every word fascinating, but what really struck me in our conversation is Maria’s deep insight about how banks and fintechs should help each other -- how they should evolve toward working together symbiotically. What are the potential models for that? How should we envision the future state? What might we learn from the innovation models in the medical space? Maria describes this in ways I’d never thought about, on how pharmaceutical companies have evolved to work with biotech companies as essentially their labs for R&D, and the possible parallels we might consider for the financial sector.
Maria also has such rich insights about the key challenges in these relationships. She talks about mistakes that lead to startups “banging their heads against the wall” in frustration with regulation. She describes how the regulatory journey transforms as companies scale. She explains how tech people need to grasp the cultures of big banks -- where decisions are a “long game,” where the customer will spend months “poking holes” in a startup to see if working with it would blow the bank up. And she brings color to the reality that we all know, but don’t fully appreciate -- that at these banks, no one is ever going to move fast and break things. Maria has so much concrete, practical advice, learned first hand, ranging from how to find champions at banks, how banks network with each other about fintechs, what critical factors makes them decide to buy or not buy, and even how fintechs should manage their own lawyers.
This episode is nothing less than a look behind the curtain for every fintech and regtech firm that dreams of scaling by working with banks.
More on Maria
Maria G. Gotsch is President and Chief Executive Officer of the Partnership Fund for New York City (https://partnershipfundnyc.org/), which is the investment arm of the Partnership for New York City. The Fund, which has invested over $150 million, has built a network of top experts from the investment and corporate communities who help identify and support New York City’s most promising entrepreneurs in both the for-profit and not-for-profit sectors. In addition to leading the Fund’s operations, Maria has spearheaded the creation and operation of a number of the Fund’s strategic initiatives, including its FinTech Innovation Lab.
Prior to joining the Fund, Maria was a Managing Director at BT Wolfensohn (now part of Deutsche Bank), providing strategic and financial advice related to mergers, acquisitions, dispositions, joint ventures and the development of business strategies. Before starting with Wolfensohn, Maria worked at LaSalle Partners in the New York area and for Merrill Lynch Capital Markets in New York and London. Maria has an MBA from Harvard Business School and a B.A. from Wellesley College. She was also the recipient of a Fulbright Fellowship to study international relations at the Institut Universitaire de Hautes Etudes Internationales in Geneva, Switzerland.
Maria is a member of the boards of the New York Venture Capital Association and the Lang Fund and serves on the business advisory board of ProPublica (investigative journalism non-profit).
Next up on the Barefoot Innovation Podcast will be Mike de Vere and Teddy Flo of Zest, followed by Pindar Wong of VeriFi, Rob Nichols of the American Bankers Association, and Sharmista Appaya and Ivo Jenik of the World Bank and CGAP.
I would love for you to join me at upcoming speaking engagements, including at virtual South by Southwest with Cleve Mesidor in March — we will be talking about diversifying the tech world. For those of you in Asia — or who do well with time zone challenges — I’ll also be speaking in March at the Australian Regtech Association’s #ACCERATERegTech2021. Also coming up is a fintech talk at Harvard University — exciting for me because I so enjoyed being a Senior Fellow there a few years back. I’m looking forward to speaking at the UK’s Department for International Trade’s Regtech Roadshow conference. I’ll be at an event hosted by Women of Color Blockchain in April. I’ll be at the ACAMS International Conference on financial crime. And of course, I’ll be back at LendIt this year.
Some of these events are invitation only, but I know many of you are on those invitation lists and will be there. For the open conferences, like LendIt and ACAMS, I hope everyone will register and join!
I was also recently a guest on two podcast shows — on Breaking Banks talking about likely policy priorities in the new administration and Congress, and on the 11:FS Fintech Insider Podcast. Be sure to check out both.
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