Podcast S4E4 | RegTech Transformation: Jo Ann Barefoot

Podcast S4E4 | RegTech Transformation: Jo Ann Barefoot

Podcast S4E4 | RegTech Transformation: Jo Ann Barefoot 1400 788 Risky Women

Next in our Transformation series, guest host Lucy Pearman talks with Jo Ann Barefoot about RegTech innovation from how regulators are using technology to how financial services need to urgently expand their experimentation and adoption rates.

Jo Ann Barefoot is CEO & Cofounder of AIR – the Alliance for Innovative Regulation – and host of the global podcast show Barefoot Innovation. A noted advocate of “regulation innovation,” Jo Ann is Senior Fellow Emerita at the Harvard Kennedy School Center for Business & Government. She has been Deputy Comptroller of the Currency, partner at KPMG, Co-Chair of Treliant Risk Advisors, and staff member at the U.S. Senate Banking Committee. She serves on the board of Oportun; on the fintech advisory committee of FINRA; on the Milken Institute U.S. FinTech Advisory Committee; and on the California Blockchain Working Group Advisory Board. Jo Ann previously chaired the boards of directors of the Financial Health Network and FinRegLab and served on the CFPB’s Consumer Advisory Board. She currently serves on the boards of FinRegLab and the National Foundation for Credit Counseling. Jo Ann cofounded Hummingbird Regtech and, in 2020, was named to the Fintech All of Fame by CB Insights. AIR was honored in Fast Company’s 2021 awards on World-Changing Ideas.

Lucy Pearman is the global leader for Protiviti’s TRANSFORM Risk and Compliance practice and focuses on innovating the field of risk management. She has more than 20 years of experience leading complex change initiatives across a variety of organizations to optimize their business performance through operational effectiveness, enhanced governance, process automation and emerging technologies.

Show Notes

01:47 Career journey
01:56 Alliance on Innovative Regulation
15:37 Top priorities for financial services innovation
21:45 Regulators and digital transformation
26:24 What truly smart regulation looks like
31:22 What are leading companies doing to get ready?
35:29 Rants & Revelations
41:32 Rapid Fire Round

Be a silo buster, don’t get in a narrow track!

Successful digital technology adoption is THE ticket to the future, it’s the most important issue facing every organization.

Transformation Series Sponsor
Protiviti is a global consulting firm that uses technology, innovation, data and analytics to create unique solutions that transform the field of risk management and solve industry wide problems.

Kimberley Cole 0:01
This is Risky Women Radio – a show to connect, celebrate and champion women in risk, regulation, and compliance. Sharing insight and perspectives from the most influential members of our global Risky women network on the latest developments, we need to think about, the challenges we should all talk more about and the innovation we are most excited about governance, risk, and compliance. Bringing together the hundreds of senior women professionals already connected with a new emerging group of leading women and men. I’m Kimberley Cole, your chief risky woman.

Lucy Pearman  00:39
Welcome back to our transformation series on Risky Women Radio where we will be talking about change innovation, and taking a look ahead at the views from some amazing Risky Women on what’s next in the world of governance, risk and compliance. I’m Lucy Pearman Global Head of Risk Transformation at Protiviti. And I have the pleasure to introduce today’s risky woman Jo Ann Barefoot. Jo Ann Barefoot is CEO and co-founder of AIR, the Alliance for Innovative Regulation, and the host of the global podcast show Barefoot Innovation A noted advocate of regulation innovation, Jo Ann is Senior Fellow Emeritus at the Harvard Kennedy School Center for Business & Government. She has been Deputy Comptroller of the Currency, partner at KPMG, Co-Chair of Treliant Risk Advisors, and staff member at the US Senate Banking Committee. Welcome Jo Ann.

Jo Ann Barefoot  01:39
Thank you, Lucy. It’s great to be here.

Lucy Pearman  01:41
I know I gave a brief bio, but now in your own words, Jo Ann, can you tell us your story?

Jo Ann Barefoot  01:47
Yeah, I’d be happy to. I started my career, believe it or not, when sex discrimination in employment was still commonplace, and overt, actually, and I had lots of impact from that. And actually, before credit discrimination against women was even illegal. So I’ve seen a lot of change over the decades. My career really has been marked, usually not intentionally, but looking back on it by finding situations where there was a big thing to do either start something up new or transform something. And that process has involved taking a lot of risks, in addition to ending me up in the field of risk professionals. So I love the name of the show Risky Women. You know, over that course of time, it’s been so striking to me, if you had told me early in my career that we would have ended up with something like the Me Too movement, revealing that institutional tolerance for continuing bias against women, I wouldn’t have believed it long ago. So we have a long way to go. But we have so many awesome women in our realm today.

Lucy Pearman  02:56
Absolutely. We haven’t come that far, even though there’s more and more of us to champion that cause for change.

Jo Ann Barefoot  03:03
I’ll mention one other thing too, that you didn’t touch on in my bio, which is I have started several businesses as an entrepreneur, including co founding a tech startup Hummingbird a few years ago. So I thought there’s another piece of my risk taking approach to life.

Lucy Pearman  03:21
That’s amazing, and an obvious critical part of the whole innovation story. So thank you for sharing that. In terms of your career so far, what do you feel is the biggest risk that you’ve taken?

Jo Ann Barefoot  03:34
I love the questions that you asked me to think about because they’re very thought provoking. As I said a minute ago, I think that my career has been defined by risk taking.  I come from a family of entrepreneurs and people who were the first to do something both women and men in my family.  I’ve also for some reason done a lot of difficult things, sometimes by choice and sometimes being forced into it, but in a lot of different realms.  I’ve had polio and cancer, I’ve run a marathon, I’ve searched for wolves in the Artic, I’ve volunteered to work in India in leprosy communities – I’ve done a lot of different kind of things. I think that the single biggest risk that I took in my career is that I stepped away from my career at one point to work on writing a novel and I was sort of in many ways at the height of my career success, I was very well known in my field, I really knew how to do what I was doing, but a number of events sort of converged to make me think it was a good time to try to do something really different. I also had children that I was wanting to spend more time with at that stage of their lives, and lives. I kept consulting, but I left KPMG and began working on being a novelist. And it’s funny, you know, it didn’t pay off in the sense that I ended up being a best-selling writer, but it really paid off in terms of the benefit to me when I actually came back into my career later. And I attribute that greatly to the left brain, right brain challenge. We do so much work in the financial world and the regulatory world that’s basically left brain analytical. And if you really put yourself into a situation where you’re going to use your right brain, creative side, think differently about things. I felt like when I stepped away, I was at one point and when I came back a few years later, I was at a much higher point than I would have been, in terms of my ability to do my work, just because I had taken that sort of detour that most people probably wouldn’t take. One advice I have all the time is “break the silos” don’t stay inside a narrow pathway, but go try different things.

Lucy Pearman  06:10
That’s great advice Jo Ann. And it’s often the case that if you find the boldness to follow what you believe in it, it doesn’t feel like a risk, even though other people see it as a huge risk that you’re taking, personally. Really diverse career you’ve had there. In terms of your time as a regulator, how did that influence your other career choices? What pushed you into all of those really different diverse backgrounds?

Jo Ann Barefoot  06:34
Yeah, so I was the first woman Deputy Comptroller of the Currency. And I also was the first Deputy Comptroller to lead the Consumer Protection and Community function at the OCC. It was new when I was there. The OCC is an amazing organization. I did a podcast for my podcast show with Joseph Otting, when he was the Comptroller of the Currency, and we talked about the stamp that it puts on people. He said, people call it having the tattoo, you know once you’ve met at the OCC, it never leaves your mind really and your heart that much. Again, I went there at a point when both the consumer protection issues were new as an OCC mandate. And again, I was the first woman, I was remembering a story of the first time that I tried to brief, what was at the time, the 14 Regional Heads of the OCC, all of whom, of course, were men. What I was doing with my, with my consumer protection group, I remember just telling them about the game plan and having them looking at me like, What are you talking about little girl, you know, it was just totally new to them. And I went back to my office, and two minutes later, one of them was knocking on my office door, came in and sat down and said that was the greatest thing I’ve ever heard. How can I help?, you know, and I think that’s how change occurs. But my experience at the OCC has shaped my entire life, my son became a Bank Examiner, I’m a great, great admirer of the regulators.

Lucy Pearman  08:17
That’s really inspiring too. Who inspires you? Who do you take inspiration from either generally or women that are very, you know, in embroiled in the risk and compliance industry?

Jo Ann Barefoot  08:31
I’m so inspired by the women in my life, we have a small team at my organization. There are five of us and four of us are women and like my female colleagues, really inspire me as of course does my male colleague and I was thinking about names, I decided not to try to name too many names because I would leave off the awesome women that I work with. There’s so many amazing women in this space. I am going to mention three, one is I’m very inspired by my daughter, who has an amazing career and a husband and two little boys, very young children. And I look at couples who’ve gone through the pandemic with little children, and I just admire them so much. I love millennials. Really, I just think they’re such a great generation. My daughter just puts it all together and has the greatest part. She helps everyone she can. So that’s one. I’m going to mention someone that I’m just getting to know and I’m really inspired by. I’ve just recorded a podcast with the Kenya Central Bank Deputy Governor, Sheila M’Mbijiewe, and I really hope everyone will listen to this podcast because she does talk about women. She was the first woman in Kenya to do many, many things, including what she’s doing now. She has such heartfelt advice for women on taking risks. I really suggest people listen to that podcast when it comes out. And the other one that I’m going to mention that I admire enormously, is the Chairman of the FDIC, Jelena McWilliams. I don’t how well people know her but she is the most bold, visionary leader around. She came into the role at the FIDC, which is a great organization like the OCC, although younger, and she is setting out really to create technology change. Since we’re talking transformation here, she’s setting out to change how we supervise banks, and also how banks, especially community banks, can thrive in the age of digital technology. I really encourage everybody to watch her. She could be a case study in management classes leadership classes, she’s visionary, she’s funny, she’s the type of leader that makes people want to follow her. Which I really admire.

Lucy Pearman  09:59
Thanks Jo Ann. It sounds as if you’ve got a natural affinity towards trailblazers which is close to my heart. I like a disruptive environment in a positive way.

Kimberley Cole  11:23
This episode is brought to you by Protiviti. Protiviti is a global consulting firm with deep expertise in transformation, risk management and compliance. Partner with Protiviti and face the future with confidence.

Lucy Pearman  11:41
Before we dive into our main topic today, can you tell us a bit more about the Alliance for Innovative Regulation, AIR as you call it, and how you are helping to digitize the financial services industry?

Jo Ann Barefoot  12:56
It’s the Alliance for Innovative Regulation and we call it AIR.  Your audience knows this but we still but as humans we tend to underestimate it, technology is transforming everything in our lives, and financial services, financial risk management, and financial regulation are all undergoing complete transformation due to the move from analog to the digital age. These sectors have always used technology, they’ve always been innovative, but what’s happening now is different. It’s like going from film to the iPhone.  It’s not just evolutionary change, it’s completely different technology.  What we do at AIR is we focus on trying to help the financial regulatory and the compliance and risk management sector keep up with technology change. Both to use technology in the financial services industry and for the regulators to oversee that well, and also for themselves.  These technologies are changing at an exponential rate. COVID has given us a harsh lesson in what that means.  Exponentially changing technologies have that traditional hockey stick shape where they look very gradually changing for a long time and then change suddenly accelerates and spikes upward. I worry that financial risk management and regulation, and financial companies for that matter, will find themselves under that curve as that vertical shift starts. If you haven’t kept up, you may never catch up. We try to help people understand the technologies, figure out how to adopt them in terms of cultures, and human beings, and skills sets. We wrote a paper last year called the “RegTech Manifesto” trying to layout this vision. One thing I’ll mention about AIR, is that we were very excited 2 months ago to be honored in the Fast Company magazine World Changing Idea Awards. When you think about the complexity, and you know, frankly arcane nature of financial regulation, we thought it was pretty great, that Fast Company could see that this is a world changing idea. If we can get this right, we can have a financial system that will be more fair, more accessible, more affordable, more efficient, more stable, more green. I mean, you name it, the technologies that are coming can just do massive good if we got them right. And conversely if we got them wrong, they could do a lot of harm. So that’s what we worked on at AIR. We do white papers, we do a lot of convenings we run tech sprints with and for regulators on how to do rapid innovation where you bring the tech people to the table to help problem solve and build prototype solutions.

Lucy Pearman  15:07
Thanks, Jo Ann. When we think about innovation, innovation can mean so many different things. And you’ve just covered the huge spectrum of the different things that AIR gets involved in. What do you think innovation really means for financial services? You know, particularly given the different states of maturity and a lot of the organizations? What do you see as the top priorities when it comes to innovating financial services? Where can people really focus their energy?

Jo Ann Barefoot  15:37
There are some areas that are ahead of others globally, at AIR, we do work on a global scale. One of them has been AML. So there have been there’s a tremendous amount of work underway in the US and globally on how to use better technology and innovation for finding financial crime. The UN estimates we catch less than 1% of several trillion dollars worth of annual financial crime. And the only way we’re going to get traction against that is with better technology. So that’s one area, we also see a lot of work going on in credit accessibility, the use of new kinds of data and artificial intelligence to fine tune the risk evaluation of borrowers, applicants who may be screened out under traditional tools, because those tools are using very limited data. Today, there’s an opportunity to do so much more. I’m involved with FinRegLab, Melissa Koide’s group, you should have her on the show as well. I’m on that board and chair that board originally coming up with new ways to underwrite credit. So that’s another area that’s kind of out in front, but everything is going to be changed, all of the information in the system is going to become digital. And once it is, we’ll be able to use tools like AI, whether you’re a risk manager, or a regulator, you’ll be able to use tools like those to really get the information out of data in real time and full sets of data, and massively improve how we do risk management and the efficiency of the process.

Lucy Pearman  17:23
And you mentioned fair lending. Fair lending and credit risk is obviously a huge topic today, particularly with some of the products that you see the top tier banks starting to launch into the market in recognition that there needs to be alternatives to the more traditional ratings. What do you think are the first steps that organizations need to take to create that fair and inclusive lending using tech innovation?

Jo Ann Barefoot  17:50
I think the first steps there are the same as the first steps for all of these innovation and transformation efforts. The secret to it, we work with so many organizations that are sort of paralyzed by the size of this challenge. You know, this is a very complicated, every company in the space is complicated. And then if you look at the whole sector, unbelievably complex, and people look at it and go, I don’t even know where to start. The answer to that is it really doesn’t matter. You just need to start, we like to say think big, but start small, pick a concrete starting point, do a project. We’re big advocates of starting with steps that are going to enable you to do experimentation. You can’t have innovation unless you can try things out and see what works. And we’re not used to doing that easily in our sector because we’re risk averse and we don’t put things out until they’re completely buttoned up, and so on. So we need safe spaces, regulatory labs, sandboxes for the industry, FinTech and regtech, innovation teams that can look at new kinds of technologies. And again, get hands on with them and try them out on a small scale. So in the area of new kinds of credit, innovation, that’s a great place to start, look at the new technologies that are becoming available. Find a way to test them, see how they perform in your environment, and then keep your regulators informed as you’re going about it.

Lucy Pearman  19:29
Your point is spot on the secret to successful innovation is to learn how to fail fast and there’s a serious consequences to that in the financial services. So there is a risk adversity to that. But what do you think the consequences for organizations if they don’t innovate, and don’t transform?

Jo Ann Barefoot  19:49
Yeah, I mean, I hate to be alarmist but I really think that successful digital technology adoption is The ticket to the future, it’s the most important issue facing every organization. I worry, I’ve worked through my career extensively with community banks. And I worry about that sector, because they have a tech disadvantage against both big banks and fintechs. And they know it. And I think we’re going to see that the ones that really are successful in undergoing a digitization of their bank are going to be the ones that will succeed. Don’t forget that we have a demographic transformation, paralleling and converging with the technology transformation. And as the leadership of organizations becomes less baby boomers and more Gen X being in the middle, but then more millennials, everyone and the customers too, everyone is going to be expecting great digital services. And if you don’t have them, I think you’ll struggle to compete. I want to say as simple as that it’s not simple. It’s very difficult. But I think that’s the reality of it. There could be niche strategies that are very high touch. But you’re not going to do be successful in mainstream financial services, unless you’re really great at Digital – both to please the customer and to manage your costs and to comply, to keep your compliance working right.

Lucy Pearman  21:28
Absolutely. And I think we are seeing more and more regulators put digital and innovation to the top of their agendas. What other priorities are you seeing the regulators focus on in addition to that kind of digital transformation agenda?

Jo Ann Barefoot  21:45
Yeah, you know, if you look at the regulators across the world as sort of learning laboratories, which many of them are, they’re doing lots of interesting things. One thing we’re seeing is much more adoption of artificial intelligence tools by regulators themselves. The SEC and FINRA, for example, and securities regulators in other countries are using AI to analyze both reported data but also big data, and try to spot risk trends in markets, signs of potential market misconduct, aberrations and behavior that may be indicators of insider trading, etc. Not to prove anything, but to target the the human experts to look more closely at something instead of having just this vast array of data. Something people don’t realize enough about regulators, and it’s true for risk managers too, is that we mostly have blind spots in trying to look at the system that we’re supposed to be managing the risk in. We have data and information and access. But it’s really limited. Regulators are looking at quarterly call reports for example. So the data is stale. And what’s in the call report, you know, it’s it’s rolled up data, it’s averages, you don’t get into the granular information that’s below it, you don’t get access to it in real time. This has always been true. And it’s becoming more and more true as the change in the system is accelerating. COVID really brought this home all the regulator’s accelerated their technology efforts during COVID, because they realized they didn’t have a good look into really what was going on in the system. So we’re seeing a lot of that type of effort. There’s a lot of interesting work going on in digital regulatory reporting DRR, we did a project at AIR with the state of New York on this and the New York DFS. The UK regulators have done work on this, Singapore ones have as well. The FDIC has an initiative on the call report that has a version of this. And basically, it’s let’s get the information that the regulator and risk manager need into digital form and enable it not to be sort of transferred into an old fashioned report, but make it accessible digitally with the appropriate controls. And again, let’s use AI type tools, machine learning tools to look for patterns in it. The UK has done cost estimates on this and found that a system of digital reporting in the UK would save the industry billions of pounds per year just in generating reports and give better data to the regulators as well. Another even more far reaching set of initiatives coming from the regulators that people should be watching for is first machine readable regulations, we already are seeing a lot of this coming out. Many regulators are developing taxonomies of their rules that will enable a machine to be able to understand what the regulation recovers and requires and how it’s changing. And then even more ambitious is a move toward, in some areas, using machine executable regulation, where potentially the regulator would issue a regulatory change in the form of computer code that the digitally ready industry would be able to plug in and produce instant compliance. This has been tested in the UK, the G20 did a tech sprint on it last year in which I was a judge. These tools are coming, they’re not going to be used for everything. But they will be in our daily lives as risk managers in the next few years in some form.

Lucy Pearman  26:00
That’s really interesting. And a nice segue way into the art of the possible. What does truly smart regulation look like? You’ve touched on components of the kind of the immediate near term to get digital reporting, you know, real time insights into data. I love the concepts and machine executable regulations. Where do you think utopia lies for this?

Jo Ann Barefoot  26:24
So the utopia is going to be one in which first of all the machines are doing all the routine work. It’s unbelievable how much time a compliance person or a bank examiner today spends just gathering the information and getting it into the form that you can work with it in. Our information in this field is all locked up in vertical tech stacks, right? It’s in a database here and the report over there and so on, getting easy access to it is very difficult. So we’re going to get to the point where the machines are pulling all the information together, they’re also scanning for the big patterns of problems. Money Laundering is a particularly ripe area for this where we won’t catch the global laundering until we can anonymize and protect information really, truly protect its confidentiality, which technology can do, and then enable it to be analyzed on big scales to find the huge patterns and things like human trafficking and so on. And then smart regulation is going to be that the smart human beings who so deeply understand these risks, will be able to use all of that improved data, and improved set of tools to find and catch the patterns. One of the big changes we’re going to see and it takes people time to get their head into this is as this system matures., and we do talk about this in our RegTech Manifesto paper, as this system matures the industry, the risk manager in a bank is going to catch a problem as soon as it crops up, they will see it and we won’t have these long accumulating terrible compliance scenarios where something has been building and building and building and going undetected at a bank for years, and when it becomes a regulatory issue. It’s a huge, huge reputation damage, expense, you know, from top to bottom. You’ll be able to see the new FDIC Head of Innovation, Sultan Meghji, is talking about the examiner getting up in the morning, you know, getting a cup of coffee and pulling up a screen and seeing where was risk spiking overnight in the portfolio that she or he is looking at? And what might it mean, and how can you dig down into the data? Or how can you figure out more broadly if more people are affected? I’ll say one other thing on this, where we’re headed, and it’s going to take time. Is that much of the reason the system has traveled today sharing information and getting it accessible, is that it’s locked up in closed technology systems. Vendors or protected communities using different data that can’t easily interact with others. We’re still going to have vendors and we’re still going to have lots of company specific information. We’re going to take those vertical technology stacks and basically turn them 90 degrees into horizontal platforms where it’s going to be possible to plug in new tools and unplug old ones easily and have the data and the systems interoperate. And we’re well along in beginning that journey with more API’s wth more opportunities to plug things in, but we’ll never be able to keep up with the change underway in the system or even in regulation, unless we can quickly implement new technology. And to do that, we’re going to have to have modular tools that don’t require millions of dollars and two years of system overhaul to implement, it’s going to be like getting a iOS update on your iPhone, with changes being available to be continuously brought out to patch problems to upgrade to the next level.

Lucy Pearman  30:53
And as some people might be very overwhelmed listening to this podcast, Jo Ann, you know, particularly those organizations that we know are running their regulatory inventories on a spreadsheet today. This feels like a gargantuan task to get to that type of environment. What are you seeing those leading companies do to actually start to get onto this journey and transform the way that they’re operating and adopt and embrace innovation successfully?

Jo Ann Barefoot  31:22
Well, the first thing I’ll say on that is, if we do this, right, and we may not because it’s a big challenge, this will be a leveling force for the industry. And the small companies that are still working on a spreadsheet should find that they’re going to have great tools available to them, the industry is going to create them and the regulators are going to encourage them in the coming years. And it’s going to be possible not to be carrying a big heavy disproportionate compliance or operating cost burden. If say you are a small bank, if you’re a small FinTech, you’re going to be regulated digitally. And you’re going to find that your regulator can see what you’re doing more easily than they can today. But that will be a process in which problems are getting caught early. And it’ll work better. In terms of what the leading companies are doing, you know, it sounds sort of trite to say it, but it’s really true, they are realizing that their business is technology. I’m among many who predicted the word FinTech is going to go away, because fin is going to be tech mainstream, just you won’t need the hyphen anymore. And the same for reg tech, regulation is going to be technology, better technology tools. So the companies that are in the lead are hiring data people, data scientists, and I realized that everybody worries about being able to compete to hire Google engineers, and so on. And the big companies are doing that. The small companies are going to find that Google engineers are going to design the tools that they’re going to need, and they’ll be able to buy them affordably. They also, the big companies, the leading companies are also doing what we talked about before, they all have experimentation programs, I went to one of the top four banks and looked at their innovation lab. And it was really fun, they had a drone that they can send out to look for insurance questions. And they had a 3d printer. Some of that is maybe for show and playfulness. But they’re really pushing themselves out into that lab environment to say, not disconnected from the needs of the company, I mean, they’re the good ones are listening to what do we need to solve for, but then they’re putting people on to solving those problems and not putting a box around them. These companies are all adopting agile workflow, for example, which is not how we traditionally have worked in these spaces where you put a big, you know, multi disciplinary team on a problem and get the problem solved together. You know, knee to knee, elbow to elbow, we tend to have in finance the water flow, you know, the sequence that makes it take a long time to change things. And they’re adopting Human Centered Design. We have one US regulatory agency, and I I’m not gonna say which because they’re not public yet, that hired a designer to redesign their one entire unit, a small unit, from top to bottom, from their workspace to the information they’re getting and how they get it and how they use that, and the tools that they have in their hands. So the leading companies are thinking that way. Their way, way, way outside the box.

Lucy Pearman  35:02
Fascinating. Thank you for sharing what you’re seeing Jo Ann. I’m gonna move us into part three of our podcast, Rants and Revelations.

Kimberley Cole  35:12
Connecting, celebrating and championing women in risk regulation and compliance, Risky Women Radio takes an intimate look at the rants and revelations of the top women shaping the debate and the industry.

Lucy Pearman  35:29
So revelation – what was your lightbulb moment, something that shaped the choices that you’ve made during your career?

Jo Ann Barefoot  35:38
My biggest lightbulb moment of my career didn’t happen early. It happened later. And that was I did spend two years at Harvard. I had become immersed in financial technology as an exciting field years before that, it was looking at FinTech. Actually, when I was at Harvard, we didn’t even have the word reg tech yet. That was 2015 to 17, I think. I had spent my whole career decades trying to solve the problems of financial consumer protection, and inclusion and financial health, through regulation and compliance. I started my career, as I say where I worked for the US Senate, at a time when it seemed like regulation was going to solve lots of things. And you know, if you raise your head up out of it, and look at where we are, certainly we’ve accomplished a lot with regulation. But we’re nowhere near having a financial system that everyone thrives in, then a lot of people still can’t even get into it. Globally, and even here in the US. And they they’re in a lot of people are harmed by it. Because they don’t make the right choices. They don’t understand products, and so on. So I had a lightbulb moment while I was at Harvard, where I had taken another big career leap and just went to Harvard, moved to Boston to do two years of this work. And it dawned on me one day, that technology could solve more of the problems that financial consumers have, then regulation can, at this stage. We still need regulation, don’t get me wrong, I’m a regulatory person. But most of what’s left so we could solve it with technology. We don’t have enough time in this podcast to really talk about that. But I realized that that was too. So that was my lightbulb moment. Immediately followed by we’re probably going to regulate this wrong. Not anyone’s fault. Again, I’m a former regulator. I’m, you know, I love regulation, love regulatory people. But these institutions are just not designed to deal with change that’s happening this fast. And that is as mold breaking as this. Look at how we’re thinking about cryptocurrency today. And central bank digital currencies. CBDC. I mean, these are profound changes, and our regulatory apparatus, the laws that regulatory protocols are far behind it. So I decided that if we didn’t regulate it right, a lot of harm would be done. And a lot of good would be never realized. To put it in kind of a cheeky way I sort of appointed myself to try to solve that problem. And that’s what we’re doing. And we’re one of many, many people all over the world, our AIR team is, but I think we have to get the regulation, right. If we want a better financial system.

Lucy Pearman  38:50
Totally agree with that. And it probably leads nicely into your rant. What is your rant? And what is it that you really want to change?

Jo Ann Barefoot  38:58
So I love this question. If I was the ruler of the world and had a power that rulers don’t have to change people’s hearts, I would wish that our world would have a lot less anger and hatred in it right now. But in thinking about the work that we do, I think my biggest rant is just that I would like everyone to speed up, speed up, speed up, speed up! We have to go faster, and we still can’t get it wrong. I understand we can’t get it wrong as risk managers, but we have to speed up. I think the other thing I’d say to an audience of women that maybe is more on the professional and personal side of ranting is that I really advise people to avoid working in and living in environments that are infused with toxic anger. And I think we see more of that today than we used to, but it’s often there in workplaces and in relationships. And something that I’ve learned in my life is that it makes sense to fill our lives with positive stress, you know, have the stress of working hard or, you know, taking care of family, whatever you’re doing that is important than fulfilling, but environments that have angry people in charge or disrupting an environment. I’ve just been amazed at how much I see in the world of people who are it’s stealing their energy to just cope with being in those environments and my advice, sometimes, if it’s a relationship you can’t walk away with, you have to work on it. But in a lot of situations, my advice is leave, get out of those environments and go to a place where people are working constructively or relationships that are that are not angry.

Lucy Pearman  41:00
That sounds like good, good advice, Jo Ann. I agree with you. There’s a lot of a lot of anger around in today’s environment. And that leads us into our rapid fire round.

Kimberley Cole  41:13
Risky Women is a vibrant network at the center of a global community in a rapidly growing, evolving and influential industry. Given the continued pace of change, our rapid fire round revisits the most pressing topics to share ideas and offer listeners new perspectives.

Lucy Pearman  41:32
So in one word, what do you see as the top priority for the year ahead?

Jo Ann Barefoot  41:37
It won’t suprise you that my one word is tech, tech tech tech!

Lucy Pearman  41:43
What did you want to be when you grew up?

Jo Ann Barefoot  41:47
I wanted to be a writer. And I definitely do a lot of writing and my work.

Lucy Pearman  41:52
Whom do you most admire?

Jo Ann Barefoot  41:54
I admire so many people. But I probably would say my parents. My father was an entrepreneur and an inventor, very significant inventor in his field. My mother was an amazing woman who, in many ways was before her time, but taught me things that helped me every day. They’ve both passed away now, but they definitely are with me.

Lucy Pearman  42:22
What podcast or book would you recommend to any up and coming risk, compliance or transformation leader?

Jo Ann Barefoot  42:30
So I cannot resist recommending my podcast show Barefoot Innovation. We talk about all these issues. We have amazing guests on it. Just amazing guests. And for a book, the most significant book that I have read recently, and I find I use it nearly every day, as The Future Is Faster Than You Think, by Peter Diamandis, and Steven Kotler. And it really is, it’s a short read or a short lesson pretty short. And really, really wakes you up to how the convergence of technologies is suddenly making things possible that were not possible before. We have exponential technologies connecting and suddenly bursting through with amazing new kinds of changes in our sector. And in every sector.

Lucy Pearman  43:23
What advice would you give to women pursuing careers in financial services and innovation?

Jo Ann Barefoot  43:30
The first thing I touched on earlier, which is stay out of the silos be a silo buster, don’t get in a narrow track. It’s because it’s also the case that the tech world because of the speed of innovation is driving fast change that you really have to have a collaborative environment. You need to be drawing from other places to be sure that what you’re doing is on track. So I really recommend again, that left brain or that right brain creative side, you know, if you’re a lawyer, work in technology and the arts or, you know, just mix it together. My other biggest piece of advice kind of goes back to what we talked about at the beginning, which is I was once asked what was the best advice I ever got. And I ended up saying, it wasn’t really a piece of advice. It’s song lyric from Ford Atlantic, and it’s “never fear.” I really believe that we should try to be fearless. We’re not going to be fearless about everything. But I think women today should approach their lives and their work not in fear of who’s going to disapprove. Might you fail? If you fail, so what. Look at the world around us. It’s full of Steve Jobs failed at Apple and got fired, and then came back and built what he built, both before and after he was fired. So women just I had several young women recently asked me for advice on how to be taken seriously. And especially in an environment where there’s a bunch of people there and you’re not sure what to do. And I found myself, I actually wrote a little, a little paper for them which I might try publishing someplace kind of on how to command a room, you know, how do you just not be afraid to speak up. And if anybody in the audience is interested and wants to connect with me on LinkedIn, I’d be happy to share that. But I think it goes back to courage and confidence. And I think this is true for women and their careers, especially. But it’s really true for all of us in everything we’re doing. I think we live in times that call for courage. And I think courage rewards us. Again, maybe sometimes we’ll be harmed when we take a risk. But usually, we’re going to end up vastly better off because we’ll be better off but we also will have had an impact that is making everything better. That’s kind of my creed that I try to live by and encourage others to embrace.

Lucy Pearman  46:23
That’s really good advice Jo Ann. It reminds me of something my mother said to me when I was just starting out and still does today, you know, you can achieve whatever you want to achieve. You just need to believe.

Jo Ann Barefoot  46:34

Lucy Pearman  46:37
Really, really good advice. Jo Ann I wanted to thank you very much for joining us at our podcast today. We could talk for hours, you’ve got such an amazing and diverse background and set of experiences. And I’m sure this podcast will be really enjoyed by all of those Risky Women out there that are going to tune in. So thank you very much, Jo Ann.

Jo Ann Barefoot  47:00
Thank you for having me, Lucy. It’s been a real pleasure and privilege.

Kimberley Cole  47:04
Thank you for listening to this exciting episode of Risky Women Radio, to connect, champion and celebrate women in risk, regulation and compliance. I’m Kimberley Cole, based in Hong Kong. For more information on the Risky Women global network, head to our website, and the episode notes and please be part of the ongoing conversation by subscribing to this podcast, connecting with us @RiskyWomen on Twitter, or even reaching out to me directly by email.

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