Jo Ann Barefoot and David Ehrich, Co-Founders of the Alliance for Innovative Regulation (AIR)

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The regulatory system under which the financial system operates is exceedingly complex. This is understandable given mow important finance is to people’s lives. But the way we have implemented regulations has only changed incrementally over the last few decades while technology has completely transformed the financial system.

Addressing this challenge head on if the focus of our guests on the latest episode of the Lend Academy Podcast. Jo Ann Barefoot and David Ehrich are the co-founders of the Alliance for Innovative Regulation (AIR), whose mission is to make financial regulation more effective and less expensive at the same time. Jo Ann was last on the show back in 2018.

In this podcast you will learn:

  • Why Jo Ann and David decided to start AIR.
  • Why they decided to create the Regtech Manifesto.
  • What a new regulatory system could look like.
  • What digitally-native regulation looks like and how it works in the real world.
  • What machine executable regulation means.
  • The role of AIR in helping the regulators gain confidence in this new system.
  • The feedback they are hearing from regulators.
  • Details of the tech sprint they are doing with the NYDFS and CSBS.
  • The exciting results they had in their recent tech sprint on crypto and CSAM.
  • Their view on decentralized finance and central bank digital currencies.
  • Details of their Regulatory Design Project.
  • What else is coming down the track at AIR.

Read a transcription of our conversation below.


Welcome to the Lend Academy Podcast, Episode No. 272. This is your host, Peter Renton, Founder of Lend Academy and Co-Founder of LendIt Fintech.


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Peter Renton: Today on the show, I am delighted to be talking with Jo Ann Barefoot and David Ehrich, they are the Co-Founders of AIR, the Alliance for Innovative Regulation. I wanted to get them on the show because…….Jo Ann who is obviously, many of you know, she was on the show two and a half years ago, but since then she has co-founded AIR and it’s a really interesting organization, it’s a non-profit.

They ask the question, what if financial regulation could be more effective and less expensive at the same time. We talk about what they mean by that, we get into the Regtech Manifesto they published over the summer, we talk about digitally-native regulation, what that means, what it’s going to look like. Jo Ann actually talks through an example of how it can actually work, we talk about the Tech Sprints they’re doing, how they’re really helping with financial crime, we talk about how they see the relationship with some of the banking regulators and much more. It was a fascinating episode, we hope you enjoy the show.

Welcome to the podcast, Jo Ann and David!

Jo Ann Barefoot: It’s lovely to be back, thank you, Peter.

Dvid Ehrich: Yes, thank you, Peter, it’s great to be here.

Peter: Okay, thank you, it’s great to have you back, Jo Ann. I know it’s been about two and a half years since we last had you on, that time has flown, but maybe….I mean, Jo Ann, you obviously…a lot of people know who you are, but give us a little bit of background what you’ve been working on for the last two and a half years. I know we’re going to get into that in some depth, but just give us a little background.

Jo Ann: Right. So, I am CEO of the Alliance for Innovative Regulation or AIR, which I co-founded with David, and we are working on trying to catalyze and shape conversion of the financial regulatory system for the digital age. How are we going to digitize information in the financial regulatory system so the regulators can keep up with the digitization of the financial industry itself and working on that with David.

Peter: Okay. And, David, I know you’ve been involved in fintech for a little while, tell us a little bit about what you have done recently.

David: Sure. Most recently, I was the Co-Founder of Petal, which is a fintech credit card that’s using casual underwriting to provide safe and affordable credit to folks who don’t have a credit history. But, my background is 20 years in payments, both at American Express and JP Morgan where I was the Head of Credit Card Strategy and I’ve also been involved with a number of policy initiatives. I was the Head of BankOn and the Architect of the National Accounts Standards which provides a product development roadmap for banks to provide bank accounts that that don’t have overdraft fees.

Peter: Okay. So then maybe…I mean you’ve touched on it already, but why don’t you tell us why you decided to start AIR. Obviously, there wasn’t really an organization like yours out there so tell us, what was the impetus behind the starting of AIR.

Jo Ann: Yeah. So, I have worked for decades, more than I should even count, trying to promote consumer financial inclusion, financial health, consumer protection and finance through regulation. I was Deputy Comptroller of the Currency, I worked for the Senate Banking Committee and spent a long time trying to shape a regulatory environment that can do better for consumers. Six years ago, I immersed in technology activities and had the epiphany that technology could solve a lot of problems that regulation is never going to solve because we have a mixed record of success at best in these efforts toward financial inclusion and consumer and financial health.

I had another epiphany which was…I was at Harvard, I was working on a series of papers which are on the Harvard website and our website, papers on these and was studying the fintech and RegTech and it occurred to me, as a former regulator, that we work on a get the benefit of all of these new consumer technology and finance because we were probably going to regulate it wrong.

Not that it is anybody’s fault, our regulators are not designed to be tech-forward and they are designed to be careful and slow and prudent and how they’re going to keep up with both the upside potential and managing the downside at best that’s coming with a lot of these changes also in terms of things like privacy. So, you know, at the risk of sounding grandiose, I kind of appointed myself to solve the problem, I didn’t think anyone else was going to take on. David has a story about how we got together on it.

David: Well, Jo Ann likes to say if it’s a really hard problem then we know we’re in the right place. (laughs) You know, I like to call Jo Ann, especially when I was working at Petal, our fintech fairy godmother. What we did at Petal was take a very regulator-forward strategy so our whole value proposition was transparency to the consumer, but why not then have transparency to the regulator as well and part of what I saw was the inability of the regulatory community to fully embrace and understand casual underwriting.

They had many questions, many concerns about it and so I saw first hand the success of Petal and the success of products like Petal were only going to work if they could fit through this very narrow aperture of the regulatory system and so one of the things that I did at Petal was connect us with the work at FinRegLab which is a non-profit organization that was founded by Melissa Koide to really try to identify the value of cash flow underwriting and prove its use case for the regulatory community.

Jo Ann and I met because she was an advocate for fintechs that are doing this work and she recognized the need for the regulators to really understand, at a much deeper level, the work that was happening in the fintech community. And so, we connected because I saw her give a presentation at a convening that was sponsored by the Ford Foundation for financial inclusion for non-profits.

Her presentation just resonated for me so strongly because I really felt like she had uniquely hit this nail square on the head, nobody else was having this conversation. So, when Jo Ann shared with me that she was interested or thinking about starting a non-profit that would really dedicate itself to this question, I immediately put up my hand and said, Jo Ann, we could really talk about this, this is really exciting.

Peter: Right, right, okay. So, I want to kind of delve right into it because, you know, when we last chatted, Jo Ann, you’ve always been very optimistic about the future of the regulatory system that we have and I, myself, have not been and I kind of felt like we have…I always thought that there was just too many stumbling blocks, it’s too complex in this country.

We have this system that’s just been cobbled together over really centuries, in some cases, but I wanted to let the Regtech Manifesto….because when I read this, and I haven’t read every single word, but I have gone through it and I feel optimistic after reading this (laughs) because I felt like, finally, there’s a bit of a roadmap about what we can actually do to really improve, not just the incremental level, this is really re-thinking of it. So, maybe just talk a little bit about the background, about the Regtech Manifesto, what it is and what you actually write about in the hundred plus pages you’ve got there.

Jo Ann: Right, thanks for asking. Yeah, this is about a hundred pages and by popular demand, I am planning to read it on my podcast show for those who would rather listen than read so that’s coming soon. The Regtech Manifesto was a natural outgrowth of the work and thinking that we’ve been doing, it is a product of about 18 months of work. We issued it in July so most of it was written before the pandemic and yeah, it has been the right thing at the right time as we have been watching the pandemic and the economic downturn and the racial upheaval following the killing of George Floyd, all of these things really galvanizing interest and using better technology in the regulatory and government processes just to speed things.

I mean, we’re seeing every facet of our lives, including in regulation, and the paper makes the argument first for why we need to digitize the regulatory system and find apps and the reasons why the regulation has four missions…systemic stability, consumer protection, financial inclusion and countering financial crime. If we look at those areas, we’re doing better on some and worse on others, but with new technology we could do vastly better on all of them and probably at a sharply reduced cost for both the government and the industry.

And then on top of that, even if we thought we were doing great, if we look at where we used to traditionally, we know that these tools can’t keep up with the change ahead. We’ve got exponential rates in change in technology, they are transforming the financial system, we have all new kinds of things coming up from Libra to DeFi and the regulatory process is going to have to speed up. But, as I said before, it’s not built for speed so we try to lay out why we need to make those changes, why bad things will happen if we don’t and good things will happen if we will and then what a system like this would look like, what would be its attributes and its defining principles that should guide the design of it.

Thirdly, putting on my hat as a former regulator at the LCC, really trying to lay out how can we actually get there from here which is the thing that has hang people up, I think, from the beginning of when I begun doing this work. Just the feeling that it’s too complicated. In the Manifesto, we draw on the inspiration of Sir Tim Berners-Lee who invented the world wide web 31 years ago, was not that long ago. What we’re trying to do is complicated, but not as complicated as that so we think there’s an opportunity to break this work down into incremental steps. I am more optimistic than I was last time we talked, by far, because it’s happening everywhere. Maybe, David, you’d like to talk a little bit about that. That would show the examples of what’s going on.

David: Sure. You know , we like to say at AIR, think big, but start small. I think that your comment about the Regtech Manifesto giving you hope is actually I think a really important thread here because what you see, both in the ecosystem and in the regulatory community, really strong signs of change that really do give us hope.

You know, one of the things that AIR was really instrumental in doing was bringing to the US, in collaboration with the Financial Conduct Authority, Tech Sprints. Tech Sprints are really just a hackathon, they are a mechanism for doing an intensive problem solving session to solve a particular problem and create a rapid prototyping, but one of the opportunities that we’ve seen is to really bring this technology to the regulators as an innovation tool and they have really begun to embrace this. When we brought the first Tech Sprint here which was on anti-money laundering and human-trafficking, we had an incredible opportunity to showcase this event for over 16 regulators.

Jo Ann: 16 regulatory agencies.

David: They’re regulatory agencies who sent a number of people and this has now starting to get embedded in the regulatory agency culture. We are now providing technical assistance to six different regulatory agencies that have either launched or planning to launch regulatory Tech Sprint strategies. This has already been launched by the FDIC, the CFPB and just recently announced the Tech Sprint that is going to be happening with the Department of Financial Services so there’s some very significant changes in the regulatory landscape.

Peter: Yeah. I want to actually dig into it though because in the Manifesto you talk about digitally-native regulation machine, machine executable regulation. This is a quantum leap, right, this is not just, you know, not just like an incremental change. You know, normally, a new regulation, you see a big printout of a thousand pages and then everyone has to go and read it and understand how their company fits in. What I would love you to do is paint a picture for us of what digitally-native regulation looks like and how it works in the real world.

Jo Ann: So, it’s developing in pieces right now. I’ll give you a couple of examples and then maybe I’ll offer you sort of a …imagine those future…one of the exciting innovations this year has been the G20 Tech Sprint which they’ve done with the Bank for International Settlements and other partners, Monetary Authority of Singapore and others. They surveyed regulators all over the world, dozens of them offered use cases for regulator problems that maybe technology could help with and they distilled it into three use cases.

One is how regulators can share information in a crisis like a pandemic, one is how to detect financial crime in crypto currency and the third one was digital regulatory reporting and I was a judge in the third one. In the course of reviewing the submissions that came in, I was astonished at the sophistication of the approaches that world class companies are ready to take to try to bring us machine readable regulations so you can tag the regulation and the machine can figure out: does that apply to my startup or my bank or my product and what do I have to do.

And then, even more ambitiously, machine executable regulation in some cases where in the case of reporting, you would have the opportunity potentially in some areas to have the regulator issue some rules in the form of computer code which the regulator can simply plug into its systems and produce a correct report. The FCA pioneered this idea at the end of 2017.

I had convened a meeting at Harvard that June where we had talked about this as a future dream and then next thing I knew, six months later, the FCA ran a Tech Sprint and successfully proved that they could do it, that they could get a correct report back out of a pool of test data in ten seconds instead of what you just said, Peter, like two years issued the paper, have everyone read it, you know, implement all the operational controls, have all the mistakes that come with that and so on, and so on.

So these things are becoming real, those projects are now being incubated and BIS, you know, the Asian Hub in Singapore, that’s the kind of thing we’ll have. But, if I picture myself as a regulator ten years from now, maybe sooner, this won’t all be done by band, but you can imagine an environment in which I’ve got tools available to me that are closer to querying something on Google than to reading a regulatory report in the way that we do today. Now, as soon as I say that, everyone panics over the privacy implications and the data security, massive amount of work that needs to be done there.

The Manifesto does talk about some of the important subsets that need to be addressed, but if I wanted to…..suppose I was looking at something that could be turning into a sub-prime mortgage crisis that would lead to a global recession and I was wondering how vulnerable was the banking system to contagion from sub-prime lending practices that were outside the banking system. In 2006 or 2007, there wasn’t a way to know the answer to that, in the future we should be able to know, the regulator should be able to get more information, faster.

In the pandemic, the FDIC, for example, has undertaken this year a rapid prototyping project to modernize the call report because they’re sitting there in the pandemic in an economic downturn and they are trying to rely on reports that come in quarterly. (Peter laughs) You know, it’s late, they’re there blind, they have huge blind spots so we want to give them digitized information, I’d say give it to them, we’re not giving it to them, but we want to help them build the structures that are needed, the architectures that are needed for regulators themselves to begin to create that access they need to real-time data, full sets of data.\

Bank regulators today still got sample files of loans, they rely on these summary reports like call reports or reports sometimes that come in annually, instead of being able to take a look at where trends may be occurring, slice it vertically, look at it horizontally across all the financial institutions and see where the emerging risks might be. That’s what the future regulation should be like and I should say, bringing AI into that data. Get the data, extract it from the silos where it’s all locked up and imprisoned today and into forms where we can run machine learning and natural language processing over it and find the financial crime or find the patterns of unfairness or find the patterns of emerging risk.

David: Peter, at its core, we have the technology.

Peter: Right.

David: This is the technology to be pioneered today by fintechs and RegTech, right. You know, what we want to do is help the regulatory community embrace that same technology and it requires some structural changes and that’s we outlined in the Regtech Manifesto. If you want the regulators to have access to the benefits of AI then you need to build a system that is inter-operable and it requires that that system sit on a data layer that is standardized. None of these exist today and so this is what we are off to build, this is where we’re off to try to help the regulators put in place.

Peter: When you say that, David, you do mean….what exactly is AIR’s role here? Are you acting as an advisor….you like help them build, I mean, are you helping them build this, I mean, what’s the role exactly of AIR?

David: We are not, you know, a giant (laughs) consulting firm that built, you know, regulatory systems, but we see our role as a thought leadership and  also as exercising the test and learn use cases that can help the regulators gain confidence in some of the early steps they need to take. So, our Tech Sprint strategy is very much a part of that in terms of helping the regulators see that there’s not only a different innovation tool that they can use, but then you can actually produce a digitized prototype that can help solve that individual problem and help the regulators embrace the digital solutioning that’s possible.

Jo Ann: The other thing we’re doing is a tremendous amount of convening across these silos. The regulators increasingly want to come to the table. As you mentioned, in the United States we have a lot of regulatory agencies, you know, they have interest in sitting down talking with technology people, talking with industry people and innovators and I want to emphasize, none of us though was issued like Tim Berner-Lee’s original paper on with world wide web as a request for comments and we’re getting comments from all over the world.

You can come on our website and comment, we have also like notes on our Google document, if you want to, but outside of that channel, we are just finding that people are reading it, reaching out. We’re meeting new kinds of people, we’re building a community of people who have the will and the ability to really make this happen. Many of them are regulators and former regulators, as well as lots of people in the industry. So, our role is to be a catalyst and a helper.

David: At the end of the day, the regulators have to do this work internally, but as a catalyst, we’re helping them build their readiness for this.

Peter: And on that, you know….I mean, in some ways this is a very good timing because Jo Ann has spoken to both Chairman McWilliams from the FDIC and Brian Brooks, the Acting Head of the OCC, and, you know, both of those people are, from my perspective, seem to be the most forward-looking leaders we may have ever had in those two agencies. So, it seems to me that there is an acknowledgment that, yes, you are right, we need to change. Is that what you’re hearing from those two agencies?

Jo Ann: Definitely so and from the other agencies as well. We had recent podcasts with those two leaders and also with the Chairman of the National Credit Union Administration, Rodney Hood, he’s very, very committed to innovation as well and the same is true with the CFPB, the Fed, CSBS. You know, part of the reason we know we’re in a good place, Peter, is that we are bonding acronyms (Peter laughs) because a lot of tech people have no idea what CSBS is, for example, so CSBS is Conference of State Bank Supervisors.

We actually made an exciting announcement two weeks ago with the New York Department of Financial Services and CSBS that we’re putting on a Sprint with them on a COVID-driven problem they have as we talked about before, how do they get information faster, especially from non-banks in a time of crisis. So, we’re going to do a Tech Sprint with them focusing on a starter use case in crypto currency, we’ll be doing that early next year, Yes, those current group of leaders are very, very focused on innovation and some of them are not shy about moving quickly.

Peter: Exactly. It’s been quite amazing there to see the speed that they’re willing to move. I want to talk about last week because last week, and we’re recording this on October 26th, so last week, you had a Tech Sprint on a specific topic and at the end of it you had these open sessions. I caught Chris Larson, the Head of the New York Department of Financial Services, since we’re not using acronyms and also Ashton Kutcher, the sort of entrepreneur/actor, so why don’t you tell us a little bit about that. It was obviously about a specific topic, explain the topic and what you got out of the Tech Sprint.

David:  You know, this was our second Tech Sprint on financial crime. Our first one, I imagined earlier, we really focused on AML and human trafficking. This is one where we focused on crypto currency and very specifically its traceability in the block chain to identify and apprehend perpetrators of CSAM, which is Child Sexual Abuse Material, so a very heavy topic, very painful, at times, to engage, but very powerful in the sense that many people think that crypto is a currency that is often used for nefarious purposes.

In some cases, that is true, but what we have with crypto that doesn’t exist, say with cash, is the traceability on the block chain and we are learning through a new enhances that are being made in crypto analytics. We’re learning how to analyze the flow of funds and identify the wallets, the nodes that are particularly active in the purchasing of CSAM and we’re able to do that by connecting those wallets when they actually exchange for fiat currency. That’s the moment when you can actually link an identity with a particular crypto wallet even if it is anonymous. And so, this is the work that our teams did.

We had three teams from very diverse backgrounds, from crypto, crypto analytics, from children’s advocates, we had policy folks, regulators, financial institutions, both large and small, all coming together to try to solve this particular problem and so we had three teams. Each team  had about eight or nine people on it with very diverse backgrounds and we’re able to collaborate, over the course of a week, to produce a solution. The solutions were really focused on how to help law enforcement access, leverage and easily interpret the data that can be made available to them.

Jo Ann: We had five regulatory agencies or six participating in the Sprint. We had the Royal Canadian Mountain Police, we had a judge from the Financial Conduct Authority, FinCEN spoke and was a judge, we had Senator Rob Portman, Congressman Anthony Gonzalez, you mentioned Ashton Kutcher who was a Founder of a group called Thorn along with Demi Moore which protects children from these crimes. This crime is particularly heinous because the children are abused when they are going through the experience that they’re put through and then they’re re-victimized as their images are shown potentially forever online and it’s very difficult to find the crime itself.

So, we have law enforcement involved, people from DOJ, the FBI, the IRS brought down a big case and we added the dimension of trying to find these crimes by finding their patterns and the money in addition to the online photographs and videos themselves. We actually did have one of our teams find some live leads, this wasn’t beyond our expectations when we started, but developing these technology approaches, they found what appears to be some live CSAM crime underway and we were able to have that analyzed by Chainalysis which was a partner as was Ripple.

The whole idea came from Ripple and referred to law enforcement so it’s possible that these efforts may have saved some children already and then the winners are going into presentation to FinCEN to drill down further how the tools they developed might be used in law enforcement.

Peter: Right, I remember I was listening to your remarks on Friday morning, Jo Ann, and you were……what was striking to me was that you’ve got people, like you’ve got people who are focused on CSAM and that’s their area of expertise and you’ve got people who are focused on crypto and that’s their area of expertise and then you’ve got other people who are focused on catching these criminals. Their siloed, they don’t really have the knowledge of the others so it seemed like what you were going to do there that was most striking to bring together all these expertise, but have them cross-pollinate. So, the crypto person now understands about CSAM crimes and vice versa.

Jo Ann: Exactly, that’s the key to the Tech Sprint, it’s crushing the silos and bringing….and it’s especially bringing the tech people to the table. In the Regtech Manifesto, we have a section where we said, the technology people need to be in the room where it happens when we’re doing financial regulatory policy and they aren’t usually.

Peter: Right.

Jo Ann: But, when you put them in that room, they’ll have a different idea than the rest of us who may be lawyers or policy people are going to have and how you might be able to get out a complicated problem.

Peter: Right, right.

David: And part of this, Peter, is that you building lasting relationships. You know, at these Tech Sprints, you’re not only building relationships between regulators and market participants, between market participants and subject matter experts, but also between the regulators themselves.

Peter: Right.

Jo Ann: Even virtually, this one was virtual, the one we did with last year was live. Even without being able to grab a beer with each other, whatever, people made friends and they’re going to keep working on these problems.

Peter: Right, right. You know, in the virtual world we’re all used to it now so it is something that we find that….people are, I think, pretty open, for the most part, to creating new connections virtually. We found that here at LendIt with our events, we’ve been really pleased that people are willing to do that. So, we’re running out of time, but there’s so many other things we could talk about.

Maybe I just want to hit on….I’d love to get your sense on Decentralized Finance and that’s something that I’m starting to take more of an interest in. I don’t know if it’s anything that you’ve really thought about at AIR, but it feels like to me….you know, it’s becoming the next hot thing. The biggest concern for me about DeFi the way it’s kind of structured is a regulatory concern. The technology is great and it’s efficient, but it’s because we’re sort of combining, you know, crypto currency that is cross border by definition and I feel like the regulatory piece is still unsolved. Is there any work you’re doing in that area?

Jo Ann: Broadly so, yes. I mean, we haven’t had a project on DeFi, but we think it really reinforces the case that we’re making, that we can’t sit around waiting for bad things to happen, there might be some ahead. We really need to be gearing the regulatory capacity to move quickly without moving too fast and choking off good things. DeFi, crypto itself, Libra, the Chinese….I know you’ve spent time in China, they’ve already got their e-Yuan out there, we’ve got proposals for a digital dollar in the United States and grammable money, the Central Bank digital currency is under discussion in many parts of the world, how are we going to regulate these things (Peter laughs).

There’s a lot of smart work going on at both the SEC and the CFTC, sorry for the acronyms, but on using Artificial Intelligence to begin again to understand patterns, but to do that, we have to get the information in accessible form. So, we are really interested and, well, the upside opportunity of these things and also….which, you know, some of these just can be such a democratizing force if we do regulate it right, driving down the cost of intermediating financial transactions, taking friction out of it.

Again, think of the world wide web analogy, but the fact with possible problems to the regulators. We talk about this in the Manifesto, the regulators are going to need new skills, new training, new ways of collaborating with each other, with the industry, it’s going to be a big shift, but necessary and exciting. Frankly, I think, the field is attracting tech people because tech people like interesting worthwhile problems.

Peter: Right.

Jo Ann: We’ve got a lot of them.

Peter: Yeah, it’s a challenging problem on many levels. So, maybe, David, last word and we’d love to kind of get a sense….I mean, you talked about the CSBS and NYDFS Tech Sprint, but what else can we see coming out of AIR down the track?

David: Well, I think what we’re working on right now is identifying a series of projects that can really put in place the ideas and the resources that we outlined in the Regtech Manifesto. So really, we’re working on a couple of ideas to make them very concrete, make it into a particular project, the demonstration project that can help people really better understand what we’re talking about and help regulators understand the first baby steps that they can take to actually begin to achieve digitally-native regulations.

Peter: Right.

Jo Ann: And I think we might have forgotten to say, Peter, that we are launching the space, that’s what we’re calling the Regulatory Design Project. So, let’s take this idea and then figure out what is the work that should be done first concretely, as David said, what are the places where there’s the biggest nesting link that’s holding back progress and AIR is going to try to take that on with partners, including launching a series of webinars called the Regulatory Design Series will jog down on all these topics.

Peter: Interesting, interesting, okay. Well, we’ll have to leave it there and I am actually more optimistic than I was last time we chatted, Jo Ann, so I really appreciate you coming on the show sharing all these fascinating work you guys are doing at AIR. Thanks, Jo Ann, thanks, David, appreciate your time.

Jo Ann: Thank you for having us, thank you.

David: The art of the possible, Peter.

Peter: Indeed, okay (laughs). See you.

David: Thank you.

Peter: It really struck me after I hung up with Jo Ann and David that really, what’s amazing in what they’re trying to do is that the cost of compliance is what you….you read about this all the time. You know, banks, fintechs all have to deal with huge compliance costs and there’s really no way around it, there has been no way around it.

But, what AIR provides and what Jo Ann and David just pointed to there is there is a potential future  where that can be changed and changed quite dramatically is we’re starting to have this be, I imagine, like a digitally-native regulation where there’s API’s involved and really you can know with certainty how your operation is going to be impacted by a new regulation, you know, how you can produce reporting that the existing regulations requires and it can be all done electronically. The cost that can be taken out of the system is quite dramatic and I think it’s an exciting place.

We also talked when we stopped recording that, you know, this is a really complex problem that they’re trying to solve here and so, you know, they’re attracting some of the brightest and best minds in the world to attack these problems. So, one thing I’m really quite confident of is that in ten years time, the way regulation is innovated in the financial system, I think, will be very, very different and it’s going to be exciting to see how that transpires.

Anyway on that note, I will sign off. I very much appreciate you listening and I’ll catch you next time. Bye.

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