Weekly Briefing No. 121 | A GPS for Consumer Fintech Opportunities


Welcome to our 121st edition. We took last week off for some R&R and to make some small changes to our format. Please let us know what you think here.

  • Core’s Arjan Schütte gets creative with the CFPB’s complaint database
  • Wall Street’s disappointing response to Parkland
  • Cyber breach market takes a step forward; Mike Cagney’s return
  • Apple and Uber join the health care trend; Cryptowarnings are everywhere
  • Rebank’s 1-on-1 with Antony Jenkins; Richard Turrin on chatbots


Complaints = opportunities.

“We strive to invest in the most consumer-friendly financial services companies in America. This is hard to do without knowing what consumers consider unfriendly.” That’s the rationale that motivated Arjan Schütte and Will Thomsen of Core Innovation Capital to search for “nuggets of wisdom” within the CFPB’s customer complaints database. Schütte readily admits that Core isn’t the only firm scrutinizing the complaint data, but his firm went an extra step by running 150,000 complaints through IBM Watson’s Tone Analyzer to analyze the emotional content behind the grievances. In doing so, Core was able to access the most prevalent sentiments felt by aggrieved consumers (i.e., sadness, anger, fear) involving products and services including prepaid cards, credit reporting, debt collection and virtual currencies.  In a new opinion piece for The FR, the takeaways of this clever approach reveal useful insights for aspiring entrepreneurs. They also serve as a reminder that despite the efforts made by some incumbent firms to build more customer-friendly offerings, they still have a long way to go. Core’s analysis makes that point perfectly clear.

You can do better, Wall Street.

This week, Marjory Stoneman Douglas students returned to school and began the healing process. For major financial firms with ties to assault weapons companies, though, the response hasn’t been as impressive. We’ve seen several retailers make clear, full breaks with assault weapons. And behind the scenes, we’re hearing that some large fund managers and banks are seeking to extricate themselves too. But publicly, they seem to be listening to advisors who have told them to pass the buck to index providers, write “tough” letters to firearms board directors and express an interest in having dialogues about the responsible use of military-grade rifles.

We understand that publicly talking down the value of one’s debt and equity assets makes asset disposal harder and legal risks higher. We also know that index providers include weapons makers in their indices, which are tethered to popular passive fund products. But guess what? If the world’s largest fund managers exert enough pressure on index providers, changes to those indices could happen. Moreover, Wall Street could show greater moral clarity by ceasing fictitious talk that weapons that liquify the insides of human beings can somehow be made safe. Tech can do a lot, but it can’t transform community-destroying weapons into water pistols. Finally, Wall Street should remember that several courts have ruled that assault weapons are not covered by the Second Amendment, and recall that they used to be illegal, thanks in part to NRA member Ronald Reagan. Because a few years from now, people will look back and marvel over the hypocrisy that financial services giants once did business with AR-15 weapons makers while avoiding other ”sin” industries. And those who deflect accountability and try to spin their position today could pay a price tomorrow.

Want to cause a splash within the greater financial innovation universe? If so, contact us about marketing opportunities with The FR.

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Tradeable cyber risk is coming.

Nasdaq was in the news this week for filing a lawsuit against upstart exchange IEX for allegedly infringing on several electronic trading patents that cost a lot of money to develop. On a friendlier note, it also agreed to partner with Extraordinary Re, a former Company of Note, to launch a partnership that will allow institutions to trade liquid cyber insurance contracts. Given the ongoing prevalence of cyber breaches, a developed market to allocate risk makes a ton of sense in our view.

Cagney’s comeback.

Mike Cagney, who we interviewed prior to his resignation from SoFi last year, is fast at work on building his new start-up. Some of the details on the new company that have been published recently are incorrect. What we do know is that Cagney is launching the company with his wife, June Ou, and it will involve the HELOC sector. It will also leverage blockchain technology in a bid to reimagine the securitization process. For those interested in getting a headache, check out the mortgage securitization flowchart below.

Gucci to launch a health care initiative.

Okay, that’s false, but according to Sultan Meghji, “Health care is the new black” for formidable companies seeking to extend their brawn and brand into the massive and messed-up world that defines US health care. Joining the ranks of Amazon, JP Morgan and Berkshire this week were Apple and Uber. “The approaches taken by Apple and Uber make sense given their respective genes,” says Meghji. “Perhaps in the future, patients will take Ubers to Apple clinics. The insurance provided by Berkshire will be run on Amazon’s health version of AWS, and payments will be taken via your Chase Sapphire card.” Now that’s comparative advantage in action. For more on health care trends, see Flare Capital’s Michael Greeley’s post.

Recent deals run the gamut.

Last week, USAA revealed it made a strategic investment in Socotra, which is seeking to reinvent core technology platforms for insurers. Also, Circle has bought mysterious alt exchange Poloniex for $400 million, alternative investment strategy provider Payaga raised $75 million through a debt financing from Citigroup and Industrious, a Brooklyn co-working start-up, has raised $80 million, because WeWork can’t be the only major player in the co-working space. Finally, regtech start-up Ascent raised a $6-million Series A, and cyber insurance solution provider Coalition announced a $10-million round backed by Vy Capital, Ribbit Capital, Valor Equity Partners, Sam Altman and Deep Nishar.

Cryptocurrency warnings two ways.

This week, Bill Gates used his latest Reddit AMA appearance to assert that Bitcoin causes death in a “fairly direct way. " His logic is that cryptoassets are anonymous, although in the case of Bitcoin that’s becoming less true. What’s becoming more true is that major Wall Street firms are adding the threat of digital currencies and blockchain to the risk factor section of their 10-Ks.

BofA’s Erica set to launch.

For whatever reason, the name Erica has never been featured in a popular song (unlike Michele, Roseanna, Prudence, Maria, Cleopatra, etc.…). Perhaps, though, BofA can make Erica into a smash hit later this month with the upcoming release of its much anticipated, AI-powered, mobile-first digital assistant.


Our recent hiatus gave us an opportunity to catch up on all sorts of content that we sometimes miss in the midst of headlines. For a reflective read, we recommend FinTech Innovation Lab’s recently published white paper discussing the stubborn challenges bedeviling financial institutions and fintechs that want to collaborate. We’d also suggest Richard Turrin’s meditation on the tentative love affair we have with chatbots, using René Magritte’s painting “The Lovers” as his inspiration. And speaking of tentative love, we remain fascinated and confused by quantum computing, which is a computing model designed to store information as both a zero and a one simultaneously. Here’s Goldman’s Toshiya Hari’s explanation. Finally, we enjoyed Rebank’s Will Beeson’s interview of Antony Jenkins, who in his new role is overseeing the development of a digital bank for Virgin Money in the UK.


“The intelligent man who is proud of his intelligence is like the condemned man who is proud of his large cell.”

~ Simone Weil