September 3, 2024 • 27 mins
Can financial compliance be the key to a safer global economy, or is it a labyrinthine obstacle for startups? In this episode, we unravel the intricate world of KYC (Know Your Customer), KYB (Know Your Business), and AML (Anti-Money Laundering), using the recent developments with the digital banking startup Mercury as a springboard. We dissect the complexities behind sensational headlines, exploring the foundational importance of KYC in thwarting fraud and money laundering. Discover the historical journey of the term "money laundering," from its emergence during Watergate to its critical role in Reagan's war on drugs and post-9/11 global security efforts. This segment will give you a comprehensive understanding of the global initiatives aimed at preventing financial crimes and ensuring institutions don't inadvertently assist terrorists.
Our conversation then shifts to the persistent challenges of identity verification and the inefficiencies plaguing current systems. We delve into the struggles faced by under-documented individuals and propose innovative solutions, including a startup idea leveraging gig economy workers for identity verification. Finally, we explore the KYB process and its implications for startups like Mercury, particularly the challenges of regulating international business dealings. Listen in as we share actionable insights on balancing compliance with business opportunities, emphasizing the crucial role of thorough verification processes in maintaining a robust and secure financial ecosystem.
Hosts: Sam Maule & Maia Bittner
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Maia Bittner (00:05):
Hello, hello.
Welcome back to yet anotherepisode of Artificially
Intelligent.
I am your FinTech intern, eagerto learn early to show up.
I have coffee.
I'm Maa Bittner.
I am here with my co-internco-host, Sam Maule.
Same Maule (00:23):
Hey Maa, how are you doing?
Welcome, welcome, I'm good thisis one of those.
I'm like already rubbing myhands, I'm like dying to get
into this.
Maya and I were talking earliertoday and we're like what
should we talk about?
We're both geeks, we're nerds.
This is horrible, but it's agood thing.
And uh, I know we both saw thestory in TechCrunch about
(00:45):
Mercury.
This came out around July 23rd.
The headline is Digital BankingStartup Mercury Abruptly Shut
Service for Startups in Ukraine,Nigeria or Other Countries.
Maia Bittner (00:58):
Mercury so mean.
Same Maule (01:01):
I think that's a slightly misleading headline,
don't you?
Maia Bittner (01:04):
think I agree, totally, totally.
Let's clear it up for peopleyeah, it's.
Same Maule (01:11):
Yeah, that was one of those headlines that it looks
really good, but I don't knowhow accurate I would call that.
Essentially what Mercury saidwas they no longer service US
domiciled customers withbusinesses and residential
addresses from certain countries, which would include the
Ukraine.
That's a little bit differentthan the headline there by the
(01:33):
way, quite a bit more nuanced.
Yeah, just a little bit, butthis does open up a conversation
around KYC, kyb and AML.
So I just threw out three greatterms that get tossed around in
banking and in payments andfintech all the time, but I
don't know that we ever doveinto this topic, Maia.
Maia Bittner (01:55):
No, and as soon as you suggested it, I was like,
yes, let's talk about KYC, I'min.
Same Maule (02:03):
So basically, everybody, we're going to talk
about fraud, we're going to talkabout money laundering.
We're going to talk aboutmaking sure that, as a financial
institution or a paymentscompany, or take your pick that
you actually know who yourcustomers are.
But before we go there, we gotto do trivia.
We're talking about moneylaundering.
I love that term and I swear,Maia, you're going to get this
(02:25):
right and I'm going to getannoyed, but where did the term
money laundering come from?
Officially, by the way, Maia.
Officially.
Maia Bittner (02:33):
Ooh, I don't know.
I would guess officially itcomes from like a movie, like
it's not even a term frombankers or finance or regulators
.
Same Maule (02:46):
I got this wrong.
I got this from Finra, by theway, but I always thought it
went back to Al Capone and themoney laundering he did in
Chicago, and again he had toomuch cash.
He had to basically take hiscrooked cash and make it
legitimate, and he did buy abunch of laundromats, so I
assumed that's where the termcame from.
(03:11):
It's not it actually came out ofWatergate the first time the
actual term money laundering wasused.
I know it was back in 1973 whenthe term first was used.
And Maia, to prove how old I am, I remember Nixon retiring.
I was driving back with myfather from working on our
fishing boat in Detroit, stoppedto get ice cream and my dad
said you need to listen to this,this is very important.
And Nixon resigning on theradio.
(03:34):
So there you go everybody.
I just dated myself, but that'swhere the first time the money
laundering term was used.
But it really didn't kick inbig time until reagan's war on
drugs, the 80s really kicked itoff.
That's when we really saw kindof mass adoption by the banks,
(03:54):
um, and then it cost massivesteam.
So war on drugs, that wentreally well, everybody, yep,
just say that.
But then caught big time.
Uh, steam basically, um, comingout of 9-11 and that's what I
was gonna say I was like.
Maia Bittner (04:14):
I think this is the story about 9-11 this is 100
.
The thing with KYC.
I mean there's a lot of thingsabout KYC apparently it comes
out of the war on drugs orwhatever, I didn't know because
I feel like the main vibe withKYC is just like you cannot bank
(04:37):
terrorists, like dear god, donot provide banking services,
and that is the number one thing.
And we gotta do all this otherstuff and sideways and upside
down and backwards.
But that's the thing is, it'slike you can't be banking a
terrorist.
You got to be really damn smartand that's basically 9-11.
Same Maule (04:54):
Yeah, I mean, that's when this really I was going to
use the wrong word.
This is when it I was going tosay exploded.
This is when it took off.
It blew up, it was coming out.
Maia Bittner (05:04):
It's when KYC really blew up.
Same Maule (05:06):
But this is, I mean, this is when, basically trying
to follow the money trail, andthis is when governments across
the globe really started workingtogether.
I mean, you could say somepeople would point back to the
banking acts that took place inthe 70s and 80s.
I, I would say it really didn'tcatch steam steam until after 9
(05:28):
, 11, and then it really wastaken seriously.
So, basically, you know,countries, businesses out of
specific countries were blocked,and then a list of individuals
you know was developed andshared.
So you know, and that's whereyou get into this anti-money
laundering.
It is amazing when you look atthe actual stats around this,
(05:50):
though, how much money isfloating around illegally.
Maia Bittner (05:55):
So, Sam, I have built a KYC program.
And just as you said right solike.
One of the important things youdo with KYC is you like, you
got to have evidence that youknow the identity of the person
who's signing up Right, so like.
Often people use examples oflike if they know the social
security number, that is proofthat somebody is the identity
(06:18):
that they're claiming.
Or if they upload a driver'slicense or things like that, so
there's different ways thatpeople can prove it.
Or if they upload a driver'slicense or things like that, so
there's different ways thatpeople can prove it.
Then this is so I built this.
This is the most insane thingto me.
What you do is you take thisperson who signed up right and
you check that their identity isvalid.
Now there's a bunch of ways todo that.
None of the ways are even thatgood.
Mostly we trust the creditbureaus as arbiters of identity,
(06:44):
but that doesn't even like.
They're not officially, likethey just sort of collect data
from probably trusted sourceslike lenders and it's all kind
of.
It's almost like I don't knowif you know how DNS works right,
where there's no centralizedauthority, but it's distributed
and things get updated slowly.
That's almost how identityverification works in the
country is.
It's this whole distributedsystem.
You check it.
(07:05):
The credit bureaus have a realproblem with you know, like John
Smith Sr, John Smith Jr, JohnSmith III.
They can't disambiguate thesepeople.
They have the same addresses.
They don't know.
They also have a big problemwith you know people who have
different first names and thesame last name, stuff like that.
(07:26):
Okay, so you check with them.
Then, once you've figured outtheir identity, you got to make
sure that they're not on theOFAC list.
Now what's the OFAC list?
That's the list of terroristsyou mentioned earlier.
That is provided by the Officeof Foreign Assets Control.
So they have a list and they'relike by the way, these are all
the terrorists, and the way thatyou know someone's a terrorist
(07:48):
is if they're on the list, andif they're not on the list,
they're definitely not aterrorist.
So that's all you have to do is, when somebody signs up for an
account is, make sure they'renot on the list of terrorists.
Same Maule (07:55):
Now the OFAC list it's a list.
Maia Bittner (07:57):
It's a list.
It's a nightmare because again,we we don't have like a real
centralized idea of identity.
So the OFAC list is this listof names.
Now, sometimes it's like firstname, last name, sometimes it's
like last name, comma, firstname.
Sometimes the middle name isthrown in there, sometimes it's
(08:21):
not.
A lot of terrorists that arefrom countries that we're really
worried about they tend to usethere's only like a couple first
names that are really reallyreally common.
Okay, so all of those, and thenthey don't have that many last
names either, right?
So all of those names are onthe OFAC list.
So there's some people, there'slike thousands of people who
are kind of blocked out of thebanking system.
They also have a hell of a timeflying.
I will tell you that TSA isbecause we don't have a good
(08:51):
sense of identity and they havethis one of very common names
from these countries that we'reworried about.
So the system is very clunkyand is not working very well and
I was stunned when I firstunderstood how it worked.
Same Maule (08:57):
It is yeah Again.
Sometimes, when you look underthe hood for our friends in the
UK Bonnet, it is terrifying.
Oh my God, that's it, that's it.
Maia Bittner (09:12):
If you Google KYC, it's like you have to verify
that somebody owns the identitythey're claiming to do and that
it's not a terrorist.
It's like, yeah, that soundsgood.
Right, like makes sense.
Verify ownership of identity,make sure they're not a
terrorist.
Then you're like, when thedevil's in the details turns out
, we have no way of verifyingthat somebody is the identity
(09:32):
they're claiming.
Like really, like we don't.
You know, I don't know.
Stripe has this new thing whereyou like take a picture of your
passport and then it takesselfies of you and it's always
complaining I think I, you know,know, I look like hell.
Like look, I have two kidsunder two.
Same Maule (09:45):
Like I don't know I don't look like my passport
photo.
Yeah, I remember.
Maia Bittner (09:53):
We have no way of knowing if you're a terrorist.
Same Maule (09:54):
Yeah, a couple of years ago, it's probably like
it's been a while now, almost 10years ago.
I remember N26, so the neobankout of Germany, part of their
KYC, part of the onboarding theyhad built in the video chat, so
on your phone and on yourlaptop, to where you would
(10:15):
actually speak with a live agentof the bank and you would hold
up your government issued andyou had to be there and do that.
Yeah, but it's funny.
That's like 10 years ago.
I remember showing that to somefolks and they were like, oh
wow, that's a little bit overthe top.
And I'm like, really no, youconsider that over the top,
(10:38):
that's kind of what we need todo.
Maia Bittner (10:40):
One of the things an idea I have or I'm not sure
if this exists, probably Asia,I'm sure Asia does this, but
let's pretend it's an originalidea of mine, not something I'm
copying from Asia again is toturn ATMs into identity
verification centers, because ifsomebody is at an ATM and you
(11:00):
know they're at that locationfirst of all, that's worth a lot
, right, and we would talk aboutthe trouble that Mercury is
getting into.
That's a data point.
Same Maule (11:05):
That's a data point.
Maia Bittner (11:06):
If they have access to the continental United
States, that's a data point.
And then if they have their IDwith them and they show it on
the camera.
Right, it's harder to like muckwith the system and to fake
things if it's not your cameraand not your system.
Same Maule (11:25):
I think it could be a cool new future for ATMs.
Yeah, it is funny, everythingcomes back to the ATM.
But you know what?
The ATM, the branch you takeyour pick.
That's the challenge that weface.
Right, we live in an onlineworld, we live in a mobile world
with our phones and everythingRight, but how do you ensure the
security, how do you ensure thecompliance?
Components of that are allincluded but still provide that
(11:49):
ease of use, and so all of theseare friction points at
onboarding, which, I'm going tobe honest, you need friction
points at onboarding.
That's kind of a good thing.
Maia Bittner (12:00):
Friction is a feature, not a bug.
I see people they're like oh,it's too hard to sign up for the
whatever account, we're goingto make it easier.
I'm like that's the opposite ofwhat you want to do.
The people who can make itthrough that friction are low
risk and high intent.
Those are the customers youwant.
All the other ones you don'twant.
Same Maule (12:19):
Oh, I love it Low risk, high intent.
That's how you know Maia builtsomething.
I love that Low risk, highintent.
Maia Bittner (12:25):
All right, good little phrase, sam.
I was thinking about starting acompany in this space.
Let me pitch it to you.
Let's see what you think herewe go.
So there are some people andmaybe kind of a lot of people,
right.
So we're talking, it's like ohyeah, it's so important, it's so
required, your ID, stuff, likethat.
Okay, so a lot of people,including in the United States,
who do not have a good way toprove their identity, they might
(12:48):
not have a photo ID.
This is a whole thing with thelike voter inclusion laws.
They might not have a driver'slicense, they might not have a
birth certificate, right, it'sall kind of clunky.
And so if these people can'tprove their identity, are they
locked out of the modern bankingsystem?
If these people can't provetheir identity, are they locked
out of the modern banking system?
(13:15):
So here's my startup ideaIdentity verification for the
long tail.
And so for these likeunder-documented people, here's
what it would look like.
Somebody fails your KYC, right,because they don't have their
driver's license or whatever.
You make an API call to mycompany.
My company, gig Economy,employs a bunch of random people
on, like, motorcycles ore-bikes or something, and they
(13:36):
send someone to that person'shouse and they knock on their
front door and they said hey, Iknow you don't have a driver's
license or whatever.
What do you have right?
Do you have a power bill inyour name.
Do you have like let's talkabout?
Same Maule (13:50):
right, that is funny , that that actually is.
Do you go to elementary school?
Maia Bittner (13:54):
I love that you did that, though.
It would be good.
Same Maule (13:56):
Because, but it is.
Can you prove who?
Maia Bittner (14:07):
you are by a power bill or a phone bill with your
mailing address on it to showproof.
I mean, we laugh about this,but that's real yeah, it would
work, totally and unless theydidn't, but that way means
they're probably not the personthey're saying they are you know
why I'm laughing.
Same Maule (14:17):
There's this actually is a product out there.
I believe it's in india, wherethe or it might be in china,
where the traffic is so bad.
There's a service where you cancall somebody to come up.
They will find your car on.
They'll be on a littlemotorbike, little moped.
They drive up to your car.
There's two people on it.
The one person gets out theydrive your car home.
Maia Bittner (14:36):
Oh, they just trade you.
Same Maule (14:38):
Yeah, yes, and you get a back and they take you
home.
Maia Bittner (14:40):
I love this Because you're stuck.
I love this.
That's a great idea.
You're stuck in traffic,totally.
It's an actual product.
Same Maule (14:47):
Yeah, that actually exists.
I wish I had thought of that.
That is fantastic.
Yeah, I mean the whole ID as aservice, identity as a service,
right.
I do think there's a gap herein the market.
I tell you, it is extremelypainful and this goes in a lot
of ways, because we have KYC,that's know your customer, and
(15:07):
then you have KYB, which is knowyour business KYB is in even
worse shape actually than KYCit's like an even harder problem
.
I'm glad you said that, becauseit is true, right I mean, and,
to be honest, riskier on thebusiness side, because it's even
risky of who am I dealing with,right and when we're getting
(15:31):
back to due diligence andknowing who you are engaging
with from a business standpointand the the, the fail points
there, or the pain points there,can be much larger and exposure
risk exposure can be much.
Maia Bittner (15:43):
Yes.
Same Maule (15:44):
So you can see why companies have sprung up and
done incredibly well and thereare multiple, but I'll name one,
Alloy and the team there,because they've had an
incredible amount of success.
And I'm saying them because Iremember when Laura and the
other two founders were sittingat a table at Barclay Rise and I
(16:04):
would walk by them and see themhuddled together talking, and
now they're a unicorn.
Maia Bittner (16:11):
I know now they're a multi-billion dollar company
by the way an old Navy.
Same Maule (16:15):
Yeah, I'm wearing a 20-year-old hoodie right now.
Everybody that's ripped toshreds because I missed out on
that one too.
Well done, everybody.
Maia Bittner (16:21):
We did not build Alloy.
I know it's a a huge problem.
I'm an investor in a kybcompany base layer.
You should look it up.
When I google base layer, Ijust see adorable kids outfits
that are made out of likeorganic merino wool.
But nice if you need a kybsolution.
Um base layer is a good one.
(16:42):
Speak of kyb sam.
Let's talk about Mercury.
Same Maule (16:54):
Yeah, I think again we've given Brax, mercury and
other companies great shout-outs, because I do feel that they
have really hit a gap in themarket We've talked about small
businesses, SMBs.
Yeah, fantastic companies.
Small businesses, small SMBsyeah, fantastic companies.
But again, a story that reallygot a lot of press but no one
really went deep on it when theytalked about, you know they're
(17:14):
going to start.
Basically they're going to haveto off board I believe that's
the term right Certain clientsthat they had seen come on.
And you know we're talkingabout countries like North Korea
, iran, libya, russia,ukraineraine, which is now on
that list the list changes, bythe way.
Everybody, um and you.
You do kind of fall into anissue here, um, for those of you
(17:36):
who don't know, I'm doing thisoff the top of my head, but
believe it's right, max levchinis originally from the ukraine.
Max levchin, the co-founder ofum, paypal and now with the firm
um.
So do we want to offboardsomebody like max lefchin?
No, and max, please come on theshow because I find you
fascinating and you're brilliant.
(17:58):
But essentially, what mercurydid was a good thing.
They cleaned up.
This isn't a bad story.
Maia Bittner (18:04):
I think this is actually a good story well, and
I have there's a coupleinteresting details.
Let's get into the weeds,because I feel like people
aren't so.
First, if you've ever built ane-commerce operation, which I
have uh, you might be familiarwith the concept of freight
forwarders, which is a real baneon your existence.
So, freight forwarders thesefunky businesses, what they are
(18:26):
is, if so, um, united Stateslike, if you live in the United
States, you're able to buy a lotmore things online than if you
live anywhere else in the world,because the United States is
very big and also has a reallybig consumer culture, and also
there's a bunch of companiesbased here that only ship here
and a bunch of other reasons.
So way more shipping.
I live next to the Canadianborder, so a fun feature that we
(18:48):
have is there's all of these POboxes, like private PO box
companies that are like alongthe border, so that people in
Canada can list this addresshere they can buy way more
things, and then they just popdown and pick up things from
their PO box.
Now, freight forwarders,interesting concept from their
PO box.
Now, freight forwarders,interesting concept is if you
(19:09):
live in a country that's not theUS, you can sign up for a
freight forwarder in the US andyou put their address as your
shipping address when you buythings online and then when they
get things in the mail to you,they forward it to you in
whatever random way and so, likethey basically cover those
costs, they'll package upshipments right, so you can buy
a bunch of stuff and then theyput everything you bought in one
month in together.
So it's a little bit moreaffordable than shipping things
(19:29):
independently internationally.
Now, if you are trying to onlyserve customers in the United
States, which maybe e-commercecompanies don't care about, but
banks really care about, freightforwarders kind of throw a
thorn in your right becausethey're just forwarding anything
you said.
So if you think like, oh, I'msending a card to a US address,
(19:51):
it might not be a US address,now the analog I feel like for
businesses and for banking isbusinesses now like kind of
anybody can register a businessin the United States and you can
use a registered agent whichmanages a lot of the paperwork
that you have to get from statesthat you're registered to do
(20:12):
business in.
Same Maule (20:13):
And, by the way, that's a good thing.
By the way, that's a good thing, let's say that being able to
start a business.
Maia Bittner (20:18):
It's kind of a funky business.
Same Maule (20:20):
Yeah, but it's the ease of starting a business.
That was one of the things thatmakes the United States
incredible it does.
It's one of the easiest placesto start a business.
Maia Bittner (20:28):
That's a really interesting thing, because the
US is kind of cranky aboutbanking people that don't live
here, about banking people thatdon't live here and, to be
honest, I don't know what likewe should bring them all like
dude.
We should profit off of all ofthese people who want US-based
bank accounts, which are prettydifficult to get for people who
don't live here.
Same Maule (20:50):
I have no issue with that, by the way.
Agree, but that's what it said.
Maia Bittner (20:54):
So these registered agents?
Right, it's easy to start abusiness.
When people were signing up forMercury accounts and when
Mercury asked them, where isyour business located, instead
of using their address, whichwas somewhere international,
they used the address of theirregistered agent, which is not
really how you're supposed touse the registered agent.
I mean, they will receive mailfor you and it's a whole thing,
(21:18):
but it's not your place ofbusiness, it is not where your
business is.
So they use that addressinstead of their real address
for their place of business,mercury.
This probably was a little bitlax.
Frankly, they probably need tomaintain a list of known
registered agents and not allowpeople to list those as their
(21:38):
place of doing business.
But KYB is hard, as we know,right A bunch of things, and so
they did.
And then, if you look at thedata that they use, right, to
find out if these are reallyserving bank accounts for people
who are not in the US, onething they looked at a lot is
they looked at the IP address ofwho was logging into the bank
account, right, and if that IPaddress is, you're always
logging in from Ukraine and youare never logging in from the
(22:02):
United States.
It is hard to make the argumentthat your business is based in
the United States if you arenever accessing your bank
account from the United States.
Same Maule (22:11):
And some of you listening might think well, this
freight forwarder thing soundsrather fishy and rather kind of
under the cover.
Just so you know, ups considersthemselves a freight forwarder.
Go to the UPS site and look atit.
They literally will tell youbecause I'm looking at it right
now we are more than just afreight forwarder.
We're here to be your supplychain wingman, end to end.
(22:33):
So there's big business in this.
Maia Bittner (22:36):
Companies like.
Same Maule (22:36):
Flexport is a good example of this.
Maia Bittner (22:38):
Because we live in a global economy.
This is how our global businessworks.
Yeah.
Same Maule (22:43):
And so that means you're going to have these pain
points, which means let me helpeverybody out, and Maia knows
this because she startedbusinesses.
Pain points are opportunity,100%.
Pain points are alwaysopportunity to find a product
and to find a solution into youknow to jump in there.
So again, I'm going to say thiswe're talking about the weeds
(23:07):
here.
Um, Mercury, personally, goodjob.
Um, I, I'll give you a littlebit of applause for this.
There's even more details.
If you dig into this becausenow we could bring a choice bank
you start getting into theweeds and you really start
getting a headache Because, bythe way, nothing is simple when
(23:28):
it comes to banking or payments.
It is a spaghetti wire mess ofunbelievable proportions.
But that's why there'sopportunity in this.
So here's what I would tell youEvery time you read a headline
please go a little bit deeper.
Maybe just go a touch deeper.
Well, ask yourself aboutincentives, Go down there.
Maia Bittner (23:50):
Right Like why would Mercury have allowed all
these accounts to open?
Same Maule (23:55):
right.
Maia Bittner (23:55):
Looking for growth et cetera, like things like
that.
But why would they have done itand why would they close them?
Now Sometimes people are like,oh, mercury's closed all the
accounts because they'reassholes.
Sorry, they're in business tomake money, right, they're not
going to do something that isnot going to make them money if
they don't have to.
And so you got to look at thoseincentives to drive those
decisions.
Same Maule (24:16):
Yeah, and for everybody who's looking at
Mercury and you're like, oh, youguys are horrible, here's what
I suggest Go out and look atHSBC and their money laundering
scandal.
Yes, 2012 was, I believe.
They paid almost a two billiondollar fine for that.
They were laundering money fordrug cartels, by the way, and
this also happened to Wachovia.
(24:37):
This happened to LehmanBrothers.
The list will go on and on andon for this.
So let's not single out Mercurywhen we're talking about this
and looking at this.
Just understand that moneylaundering is a massive issue,
somewhere between 2% to 5% ofglobal GDP.
By the way, for the estimateswhen we're talking about money
(24:58):
laundering, so it is somethingthat has to be tackled.
Maia Bittner (25:01):
We get it, and the government puts the banks in
charge of detecting andpreventing this.
And so then which?
Same Maule (25:07):
is interesting, by the way, when consumers get
pinched by it.
Maia Bittner (25:09):
The thing is, it doesn't necessarily have to be
like that 100%.
Same Maule (25:13):
I agree, but that's how we do enforcement.
Maia Bittner (25:16):
And the consumers blame the banks who are like,
look, we would rather not detectand prevent money laundering.
Let's be real, we would ratherprofit off of drug dealers.
We're only doing this becausewe have to.
Same Maule (25:29):
There's a lot of effort.
I suddenly feel all the hatemail coming in for that comment.
But hey, everyone know everyone.
You can do a little bit ofresearch, do a little bit of
reading.
It's it is.
It is a challenge, we get it, Iwill.
But again, this is a space thatLord just KYC itself and
(25:50):
identity.
How many times have we talkedabout identity, Maia?
Yeah, you know.
Maia Bittner (26:00):
It's such an interesting problem.
It's such an interesting spacebecause we want to make it
really easy for people to signup for accounts for things
online, but we're missing that.
Fraud mitigation of like if youhave a physical person walk
into a bank branch, that'sreally meaningful.
So without that, we have tosupplement that with other data
and like what is that and whatdoes that look like?
In the case of Mercury, it doesnot look like letting people
(26:20):
sign up with po boxes that wereassigned to their registered
agents.
Same Maule (26:24):
now we know um maybe it means, but also process that
yeah, but a process that 20years ago wasn't an issue, right
?
I mean something that has comeabout because of technology,
because of the convergence oftechnologies and because of a
global market and convenience.
And I like buying cheap goods.
Hey, I really like buying mytelevision cheaply and my iPhone
(26:47):
.
So, unless you want to pay forit, you know, unless you want to
pay five grand for an iPhone,there's a reason it's
manufactured elsewhere.
Okay, so all that said,everybody, we could continue to
go down rabbit holes, but atsome point we've got to wrap up.
We want to give a shout out toMoney 2020.
It's great being part of theirnetwork.
We really enjoy this.
If you want to learn more anddive deeper on this, reach out
(27:12):
to Maia and I on LinkedInTwitter.
We love these conversations.
Please let your friends knowabout the podcast, give us a
five-star ranking, tell yourfriends about it, spread the
word.
We'd love, love, love to talkto you about future shows and
what you'd like us to do, Maia.
Maia Bittner (27:28):
We'll see you next time.
Same Maule (27:29):
I love these conversations with you.
Maia Bittner (27:30):
Hopefully have an answer on identity for you then,
Otherwise we're just going tokeep talking about it.
Same Maule (27:36):
All right, everybody , we'll see you next time.
Maia Bittner (27:39):
Bye.
Hello, hello.
Welcome back to yet anotherepisode of Artificially
Intelligent.
I am your FinTech intern, eagerto learn early to show up.
I have coffee.
I'm Maa Bittner.
I am here with my co-internco-host, Sam Maule.
Same Maule (00:23):
Hey Maa, how are you doing?
Welcome, welcome, I'm good thisis one of those.
I'm like already rubbing myhands, I'm like dying to get
into this.
Maya and I were talking earliertoday and we're like what
should we talk about?
We're both geeks, we're nerds.
This is horrible, but it's agood thing.
And uh, I know we both saw thestory in TechCrunch about
(00:45):
Mercury.
This came out around July 23rd.
The headline is Digital BankingStartup Mercury Abruptly Shut
Service for Startups in Ukraine,Nigeria or Other Countries.
Maia Bittner (00:58):
Mercury so mean.
Same Maule (01:01):
I think that's a slightly misleading headline,
don't you?
Maia Bittner (01:04):
think I agree, totally, totally.
Let's clear it up for peopleyeah, it's.
Same Maule (01:11):
Yeah, that was one of those headlines that it looks
really good, but I don't knowhow accurate I would call that.
Essentially what Mercury saidwas they no longer service US
domiciled customers withbusinesses and residential
addresses from certain countries, which would include the
Ukraine.
That's a little bit differentthan the headline there by the
(01:33):
way, quite a bit more nuanced.
Yeah, just a little bit, butthis does open up a conversation
around KYC, kyb and AML.
So I just threw out three greatterms that get tossed around in
banking and in payments andfintech all the time, but I
don't know that we ever doveinto this topic, Maia.
Maia Bittner (01:55):
No, and as soon as you suggested it, I was like,
yes, let's talk about KYC, I'min.
Same Maule (02:03):
So basically, everybody, we're going to talk
about fraud, we're going to talkabout money laundering.
We're going to talk aboutmaking sure that, as a financial
institution or a paymentscompany, or take your pick that
you actually know who yourcustomers are.
But before we go there, we gotto do trivia.
We're talking about moneylaundering.
I love that term and I swear,Maia, you're going to get this
(02:25):
right and I'm going to getannoyed, but where did the term
money laundering come from?
Officially, by the way, Maia.
Officially.
Maia Bittner (02:33):
Ooh, I don't know.
I would guess officially itcomes from like a movie, like
it's not even a term frombankers or finance or regulators
.
Same Maule (02:46):
I got this wrong.
I got this from Finra, by theway, but I always thought it
went back to Al Capone and themoney laundering he did in
Chicago, and again he had toomuch cash.
He had to basically take hiscrooked cash and make it
legitimate, and he did buy abunch of laundromats, so I
assumed that's where the termcame from.
(03:11):
It's not it actually came out ofWatergate the first time the
actual term money laundering wasused.
I know it was back in 1973 whenthe term first was used.
And Maia, to prove how old I am, I remember Nixon retiring.
I was driving back with myfather from working on our
fishing boat in Detroit, stoppedto get ice cream and my dad
said you need to listen to this,this is very important.
And Nixon resigning on theradio.
(03:34):
So there you go everybody.
I just dated myself, but that'swhere the first time the money
laundering term was used.
But it really didn't kick inbig time until reagan's war on
drugs, the 80s really kicked itoff.
That's when we really saw kindof mass adoption by the banks,
(03:54):
um, and then it cost massivesteam.
So war on drugs, that wentreally well, everybody, yep,
just say that.
But then caught big time.
Uh, steam basically, um, comingout of 9-11 and that's what I
was gonna say I was like.
Maia Bittner (04:14):
I think this is the story about 9-11 this is 100
.
The thing with KYC.
I mean there's a lot of thingsabout KYC apparently it comes
out of the war on drugs orwhatever, I didn't know because
I feel like the main vibe withKYC is just like you cannot bank
(04:37):
terrorists, like dear god, donot provide banking services,
and that is the number one thing.
And we gotta do all this otherstuff and sideways and upside
down and backwards.
But that's the thing is, it'slike you can't be banking a
terrorist.
You got to be really damn smartand that's basically 9-11.
Same Maule (04:54):
Yeah, I mean, that's when this really I was going to
use the wrong word.
This is when it I was going tosay exploded.
This is when it took off.
It blew up, it was coming out.
Maia Bittner (05:04):
It's when KYC really blew up.
Same Maule (05:06):
But this is, I mean, this is when, basically trying
to follow the money trail, andthis is when governments across
the globe really started workingtogether.
I mean, you could say somepeople would point back to the
banking acts that took place inthe 70s and 80s.
I, I would say it really didn'tcatch steam steam until after 9
(05:28):
, 11, and then it really wastaken seriously.
So, basically, you know,countries, businesses out of
specific countries were blocked,and then a list of individuals
you know was developed andshared.
So you know, and that's whereyou get into this anti-money
laundering.
It is amazing when you look atthe actual stats around this,
(05:50):
though, how much money isfloating around illegally.
Maia Bittner (05:55):
So, Sam, I have built a KYC program.
And just as you said right solike.
One of the important things youdo with KYC is you like, you
got to have evidence that youknow the identity of the person
who's signing up Right, so like.
Often people use examples oflike if they know the social
security number, that is proofthat somebody is the identity
(06:18):
that they're claiming.
Or if they upload a driver'slicense or things like that, so
there's different ways thatpeople can prove it.
Or if they upload a driver'slicense or things like that, so
there's different ways thatpeople can prove it.
Then this is so I built this.
This is the most insane thingto me.
What you do is you take thisperson who signed up right and
you check that their identity isvalid.
Now there's a bunch of ways todo that.
None of the ways are even thatgood.
Mostly we trust the creditbureaus as arbiters of identity,
(06:44):
but that doesn't even like.
They're not officially, likethey just sort of collect data
from probably trusted sourceslike lenders and it's all kind
of.
It's almost like I don't knowif you know how DNS works right,
where there's no centralizedauthority, but it's distributed
and things get updated slowly.
That's almost how identityverification works in the
country is.
It's this whole distributedsystem.
You check it.
(07:05):
The credit bureaus have a realproblem with you know, like John
Smith Sr, John Smith Jr, JohnSmith III.
They can't disambiguate thesepeople.
They have the same addresses.
They don't know.
They also have a big problemwith you know people who have
different first names and thesame last name, stuff like that.
(07:26):
Okay, so you check with them.
Then, once you've figured outtheir identity, you got to make
sure that they're not on theOFAC list.
Now what's the OFAC list?
That's the list of terroristsyou mentioned earlier.
That is provided by the Officeof Foreign Assets Control.
So they have a list and they'relike by the way, these are all
the terrorists, and the way thatyou know someone's a terrorist
(07:48):
is if they're on the list, andif they're not on the list,
they're definitely not aterrorist.
So that's all you have to do is, when somebody signs up for an
account is, make sure they'renot on the list of terrorists.
Same Maule (07:55):
Now the OFAC list it's a list.
Maia Bittner (07:57):
It's a list.
It's a nightmare because again,we we don't have like a real
centralized idea of identity.
So the OFAC list is this listof names.
Now, sometimes it's like firstname, last name, sometimes it's
like last name, comma, firstname.
Sometimes the middle name isthrown in there, sometimes it's
(08:21):
not.
A lot of terrorists that arefrom countries that we're really
worried about they tend to usethere's only like a couple first
names that are really reallyreally common.
Okay, so all of those, and thenthey don't have that many last
names either, right?
So all of those names are onthe OFAC list.
So there's some people, there'slike thousands of people who
are kind of blocked out of thebanking system.
They also have a hell of a timeflying.
I will tell you that TSA isbecause we don't have a good
(08:51):
sense of identity and they havethis one of very common names
from these countries that we'reworried about.
So the system is very clunkyand is not working very well and
I was stunned when I firstunderstood how it worked.
Same Maule (08:57):
It is yeah Again.
Sometimes, when you look underthe hood for our friends in the
UK Bonnet, it is terrifying.
Oh my God, that's it, that's it.
Maia Bittner (09:12):
If you Google KYC, it's like you have to verify
that somebody owns the identitythey're claiming to do and that
it's not a terrorist.
It's like, yeah, that soundsgood.
Right, like makes sense.
Verify ownership of identity,make sure they're not a
terrorist.
Then you're like, when thedevil's in the details turns out
, we have no way of verifyingthat somebody is the identity
(09:32):
they're claiming.
Like really, like we don't.
You know, I don't know.
Stripe has this new thing whereyou like take a picture of your
passport and then it takesselfies of you and it's always
complaining I think I, you know,know, I look like hell.
Like look, I have two kidsunder two.
Same Maule (09:45):
Like I don't know I don't look like my passport
photo.
Yeah, I remember.
Maia Bittner (09:53):
We have no way of knowing if you're a terrorist.
Same Maule (09:54):
Yeah, a couple of years ago, it's probably like
it's been a while now, almost 10years ago.
I remember N26, so the neobankout of Germany, part of their
KYC, part of the onboarding theyhad built in the video chat, so
on your phone and on yourlaptop, to where you would
(10:15):
actually speak with a live agentof the bank and you would hold
up your government issued andyou had to be there and do that.
Yeah, but it's funny.
That's like 10 years ago.
I remember showing that to somefolks and they were like, oh
wow, that's a little bit overthe top.
And I'm like, really no, youconsider that over the top,
(10:38):
that's kind of what we need todo.
Maia Bittner (10:40):
One of the things an idea I have or I'm not sure
if this exists, probably Asia,I'm sure Asia does this, but
let's pretend it's an originalidea of mine, not something I'm
copying from Asia again is toturn ATMs into identity
verification centers, because ifsomebody is at an ATM and you
(11:00):
know they're at that locationfirst of all, that's worth a lot
, right, and we would talk aboutthe trouble that Mercury is
getting into.
That's a data point.
Same Maule (11:05):
That's a data point.
Maia Bittner (11:06):
If they have access to the continental United
States, that's a data point.
And then if they have their IDwith them and they show it on
the camera.
Right, it's harder to like muckwith the system and to fake
things if it's not your cameraand not your system.
Same Maule (11:25):
I think it could be a cool new future for ATMs.
Yeah, it is funny, everythingcomes back to the ATM.
But you know what?
The ATM, the branch you takeyour pick.
That's the challenge that weface.
Right, we live in an onlineworld, we live in a mobile world
with our phones and everythingRight, but how do you ensure the
security, how do you ensure thecompliance?
Components of that are allincluded but still provide that
(11:49):
ease of use, and so all of theseare friction points at
onboarding, which, I'm going tobe honest, you need friction
points at onboarding.
That's kind of a good thing.
Maia Bittner (12:00):
Friction is a feature, not a bug.
I see people they're like oh,it's too hard to sign up for the
whatever account, we're goingto make it easier.
I'm like that's the opposite ofwhat you want to do.
The people who can make itthrough that friction are low
risk and high intent.
Those are the customers youwant.
All the other ones you don'twant.
Same Maule (12:19):
Oh, I love it Low risk, high intent.
That's how you know Maia builtsomething.
I love that Low risk, highintent.
Maia Bittner (12:25):
All right, good little phrase, sam.
I was thinking about starting acompany in this space.
Let me pitch it to you.
Let's see what you think herewe go.
So there are some people andmaybe kind of a lot of people,
right.
So we're talking, it's like ohyeah, it's so important, it's so
required, your ID, stuff, likethat.
Okay, so a lot of people,including in the United States,
who do not have a good way toprove their identity, they might
(12:48):
not have a photo ID.
This is a whole thing with thelike voter inclusion laws.
They might not have a driver'slicense, they might not have a
birth certificate, right, it'sall kind of clunky.
And so if these people can'tprove their identity, are they
locked out of the modern bankingsystem?
If these people can't provetheir identity, are they locked
out of the modern banking system?
(13:15):
So here's my startup ideaIdentity verification for the
long tail.
And so for these likeunder-documented people, here's
what it would look like.
Somebody fails your KYC, right,because they don't have their
driver's license or whatever.
You make an API call to mycompany.
My company, gig Economy,employs a bunch of random people
on, like, motorcycles ore-bikes or something, and they
(13:36):
send someone to that person'shouse and they knock on their
front door and they said hey, Iknow you don't have a driver's
license or whatever.
What do you have right?
Do you have a power bill inyour name.
Do you have like let's talkabout?
Same Maule (13:50):
right, that is funny , that that actually is.
Do you go to elementary school?
Maia Bittner (13:54):
I love that you did that, though.
It would be good.
Same Maule (13:56):
Because, but it is.
Can you prove who?
Maia Bittner (14:07):
you are by a power bill or a phone bill with your
mailing address on it to showproof.
I mean, we laugh about this,but that's real yeah, it would
work, totally and unless theydidn't, but that way means
they're probably not the personthey're saying they are you know
why I'm laughing.
Same Maule (14:17):
There's this actually is a product out there.
I believe it's in india, wherethe or it might be in china,
where the traffic is so bad.
There's a service where you cancall somebody to come up.
They will find your car on.
They'll be on a littlemotorbike, little moped.
They drive up to your car.
There's two people on it.
The one person gets out theydrive your car home.
Maia Bittner (14:36):
Oh, they just trade you.
Same Maule (14:38):
Yeah, yes, and you get a back and they take you
home.
Maia Bittner (14:40):
I love this Because you're stuck.
I love this.
That's a great idea.
You're stuck in traffic,totally.
It's an actual product.
Same Maule (14:47):
Yeah, that actually exists.
I wish I had thought of that.
That is fantastic.
Yeah, I mean the whole ID as aservice, identity as a service,
right.
I do think there's a gap herein the market.
I tell you, it is extremelypainful and this goes in a lot
of ways, because we have KYC,that's know your customer, and
(15:07):
then you have KYB, which is knowyour business KYB is in even
worse shape actually than KYCit's like an even harder problem
.
I'm glad you said that, becauseit is true, right I mean, and,
to be honest, riskier on thebusiness side, because it's even
risky of who am I dealing with,right and when we're getting
(15:31):
back to due diligence andknowing who you are engaging
with from a business standpointand the the, the fail points
there, or the pain points there,can be much larger and exposure
risk exposure can be much.
Maia Bittner (15:43):
Yes.
Same Maule (15:44):
So you can see why companies have sprung up and
done incredibly well and thereare multiple, but I'll name one,
Alloy and the team there,because they've had an
incredible amount of success.
And I'm saying them because Iremember when Laura and the
other two founders were sittingat a table at Barclay Rise and I
(16:04):
would walk by them and see themhuddled together talking, and
now they're a unicorn.
Maia Bittner (16:11):
I know now they're a multi-billion dollar company
by the way an old Navy.
Same Maule (16:15):
Yeah, I'm wearing a 20-year-old hoodie right now.
Everybody that's ripped toshreds because I missed out on
that one too.
Well done, everybody.
Maia Bittner (16:21):
We did not build Alloy.
I know it's a a huge problem.
I'm an investor in a kybcompany base layer.
You should look it up.
When I google base layer, Ijust see adorable kids outfits
that are made out of likeorganic merino wool.
But nice if you need a kybsolution.
Um base layer is a good one.
(16:42):
Speak of kyb sam.
Let's talk about Mercury.
Same Maule (16:54):
Yeah, I think again we've given Brax, mercury and
other companies great shout-outs, because I do feel that they
have really hit a gap in themarket We've talked about small
businesses, SMBs.
Yeah, fantastic companies.
Small businesses, small SMBsyeah, fantastic companies.
But again, a story that reallygot a lot of press but no one
really went deep on it when theytalked about, you know they're
(17:14):
going to start.
Basically they're going to haveto off board I believe that's
the term right Certain clientsthat they had seen come on.
And you know we're talkingabout countries like North Korea
, iran, libya, russia,ukraineraine, which is now on
that list the list changes, bythe way.
Everybody, um and you.
You do kind of fall into anissue here, um, for those of you
(17:36):
who don't know, I'm doing thisoff the top of my head, but
believe it's right, max levchinis originally from the ukraine.
Max levchin, the co-founder ofum, paypal and now with the firm
um.
So do we want to offboardsomebody like max lefchin?
No, and max, please come on theshow because I find you
fascinating and you're brilliant.
(17:58):
But essentially, what mercurydid was a good thing.
They cleaned up.
This isn't a bad story.
Maia Bittner (18:04):
I think this is actually a good story well, and
I have there's a coupleinteresting details.
Let's get into the weeds,because I feel like people
aren't so.
First, if you've ever built ane-commerce operation, which I
have uh, you might be familiarwith the concept of freight
forwarders, which is a real baneon your existence.
So, freight forwarders thesefunky businesses, what they are
(18:26):
is, if so, um, united Stateslike, if you live in the United
States, you're able to buy a lotmore things online than if you
live anywhere else in the world,because the United States is
very big and also has a reallybig consumer culture, and also
there's a bunch of companiesbased here that only ship here
and a bunch of other reasons.
So way more shipping.
I live next to the Canadianborder, so a fun feature that we
(18:48):
have is there's all of these POboxes, like private PO box
companies that are like alongthe border, so that people in
Canada can list this addresshere they can buy way more
things, and then they just popdown and pick up things from
their PO box.
Now, freight forwarders,interesting concept from their
PO box.
Now, freight forwarders,interesting concept is if you
(19:09):
live in a country that's not theUS, you can sign up for a
freight forwarder in the US andyou put their address as your
shipping address when you buythings online and then when they
get things in the mail to you,they forward it to you in
whatever random way and so, likethey basically cover those
costs, they'll package upshipments right, so you can buy
a bunch of stuff and then theyput everything you bought in one
month in together.
So it's a little bit moreaffordable than shipping things
(19:29):
independently internationally.
Now, if you are trying to onlyserve customers in the United
States, which maybe e-commercecompanies don't care about, but
banks really care about, freightforwarders kind of throw a
thorn in your right becausethey're just forwarding anything
you said.
So if you think like, oh, I'msending a card to a US address,
(19:51):
it might not be a US address,now the analog I feel like for
businesses and for banking isbusinesses now like kind of
anybody can register a businessin the United States and you can
use a registered agent whichmanages a lot of the paperwork
that you have to get from statesthat you're registered to do
(20:12):
business in.
Same Maule (20:13):
And, by the way, that's a good thing.
By the way, that's a good thing, let's say that being able to
start a business.
Maia Bittner (20:18):
It's kind of a funky business.
Same Maule (20:20):
Yeah, but it's the ease of starting a business.
That was one of the things thatmakes the United States
incredible it does.
It's one of the easiest placesto start a business.
Maia Bittner (20:28):
That's a really interesting thing, because the
US is kind of cranky aboutbanking people that don't live
here, about banking people thatdon't live here and, to be
honest, I don't know what likewe should bring them all like
dude.
We should profit off of all ofthese people who want US-based
bank accounts, which are prettydifficult to get for people who
don't live here.
Same Maule (20:50):
I have no issue with that, by the way.
Agree, but that's what it said.
Maia Bittner (20:54):
So these registered agents?
Right, it's easy to start abusiness.
When people were signing up forMercury accounts and when
Mercury asked them, where isyour business located, instead
of using their address, whichwas somewhere international,
they used the address of theirregistered agent, which is not
really how you're supposed touse the registered agent.
I mean, they will receive mailfor you and it's a whole thing,
(21:18):
but it's not your place ofbusiness, it is not where your
business is.
So they use that addressinstead of their real address
for their place of business,mercury.
This probably was a little bitlax.
Frankly, they probably need tomaintain a list of known
registered agents and not allowpeople to list those as their
(21:38):
place of doing business.
But KYB is hard, as we know,right A bunch of things, and so
they did.
And then, if you look at thedata that they use, right, to
find out if these are reallyserving bank accounts for people
who are not in the US, onething they looked at a lot is
they looked at the IP address ofwho was logging into the bank
account, right, and if that IPaddress is, you're always
logging in from Ukraine and youare never logging in from the
(22:02):
United States.
It is hard to make the argumentthat your business is based in
the United States if you arenever accessing your bank
account from the United States.
Same Maule (22:11):
And some of you listening might think well, this
freight forwarder thing soundsrather fishy and rather kind of
under the cover.
Just so you know, ups considersthemselves a freight forwarder.
Go to the UPS site and look atit.
They literally will tell youbecause I'm looking at it right
now we are more than just afreight forwarder.
We're here to be your supplychain wingman, end to end.
(22:33):
So there's big business in this.
Maia Bittner (22:36):
Companies like.
Same Maule (22:36):
Flexport is a good example of this.
Maia Bittner (22:38):
Because we live in a global economy.
This is how our global businessworks.
Yeah.
Same Maule (22:43):
And so that means you're going to have these pain
points, which means let me helpeverybody out, and Maia knows
this because she startedbusinesses.
Pain points are opportunity,100%.
Pain points are alwaysopportunity to find a product
and to find a solution into youknow to jump in there.
So again, I'm going to say thiswe're talking about the weeds
(23:07):
here.
Um, Mercury, personally, goodjob.
Um, I, I'll give you a littlebit of applause for this.
There's even more details.
If you dig into this becausenow we could bring a choice bank
you start getting into theweeds and you really start
getting a headache Because, bythe way, nothing is simple when
(23:28):
it comes to banking or payments.
It is a spaghetti wire mess ofunbelievable proportions.
But that's why there'sopportunity in this.
So here's what I would tell youEvery time you read a headline
please go a little bit deeper.
Maybe just go a touch deeper.
Well, ask yourself aboutincentives, Go down there.
Maia Bittner (23:50):
Right Like why would Mercury have allowed all
these accounts to open?
Same Maule (23:55):
right.
Maia Bittner (23:55):
Looking for growth et cetera, like things like
that.
But why would they have done itand why would they close them?
Now Sometimes people are like,oh, mercury's closed all the
accounts because they'reassholes.
Sorry, they're in business tomake money, right, they're not
going to do something that isnot going to make them money if
they don't have to.
And so you got to look at thoseincentives to drive those
decisions.
Same Maule (24:16):
Yeah, and for everybody who's looking at
Mercury and you're like, oh, youguys are horrible, here's what
I suggest Go out and look atHSBC and their money laundering
scandal.
Yes, 2012 was, I believe.
They paid almost a two billiondollar fine for that.
They were laundering money fordrug cartels, by the way, and
this also happened to Wachovia.
(24:37):
This happened to LehmanBrothers.
The list will go on and on andon for this.
So let's not single out Mercurywhen we're talking about this
and looking at this.
Just understand that moneylaundering is a massive issue,
somewhere between 2% to 5% ofglobal GDP.
By the way, for the estimateswhen we're talking about money
(24:58):
laundering, so it is somethingthat has to be tackled.
Maia Bittner (25:01):
We get it, and the government puts the banks in
charge of detecting andpreventing this.
And so then which?
Same Maule (25:07):
is interesting, by the way, when consumers get
pinched by it.
Maia Bittner (25:09):
The thing is, it doesn't necessarily have to be
like that 100%.
Same Maule (25:13):
I agree, but that's how we do enforcement.
Maia Bittner (25:16):
And the consumers blame the banks who are like,
look, we would rather not detectand prevent money laundering.
Let's be real, we would ratherprofit off of drug dealers.
We're only doing this becausewe have to.
Same Maule (25:29):
There's a lot of effort.
I suddenly feel all the hatemail coming in for that comment.
But hey, everyone know everyone.
You can do a little bit ofresearch, do a little bit of
reading.
It's it is.
It is a challenge, we get it, Iwill.
But again, this is a space thatLord just KYC itself and
(25:50):
identity.
How many times have we talkedabout identity, Maia?
Yeah, you know.
Maia Bittner (26:00):
It's such an interesting problem.
It's such an interesting spacebecause we want to make it
really easy for people to signup for accounts for things
online, but we're missing that.
Fraud mitigation of like if youhave a physical person walk
into a bank branch, that'sreally meaningful.
So without that, we have tosupplement that with other data
and like what is that and whatdoes that look like?
In the case of Mercury, it doesnot look like letting people
(26:20):
sign up with po boxes that wereassigned to their registered
agents.
Same Maule (26:24):
now we know um maybe it means, but also process that
yeah, but a process that 20years ago wasn't an issue, right
?
I mean something that has comeabout because of technology,
because of the convergence oftechnologies and because of a
global market and convenience.
And I like buying cheap goods.
Hey, I really like buying mytelevision cheaply and my iPhone
(26:47):
.
So, unless you want to pay forit, you know, unless you want to
pay five grand for an iPhone,there's a reason it's
manufactured elsewhere.
Okay, so all that said,everybody, we could continue to
go down rabbit holes, but atsome point we've got to wrap up.
We want to give a shout out toMoney 2020.
It's great being part of theirnetwork.
We really enjoy this.
If you want to learn more anddive deeper on this, reach out
(27:12):
to Maia and I on LinkedInTwitter.
We love these conversations.
Please let your friends knowabout the podcast, give us a
five-star ranking, tell yourfriends about it, spread the
word.
We'd love, love, love to talkto you about future shows and
what you'd like us to do, Maia.
Maia Bittner (27:28):
We'll see you next time.
Same Maule (27:29):
I love these conversations with you.
Maia Bittner (27:30):
Hopefully have an answer on identity for you then,
Otherwise we're just going tokeep talking about it.
Same Maule (27:36):
All right, everybody , we'll see you next time.
Maia Bittner (27:39):
Bye.
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