Exploring the Future of Finance

This week, I had the privilege of participating in the Milken Global Conference in Los Angeles. SoFi, for the first time, joined the conference as a Presenting Underwriter, and in addition to supporting the institute and its initiatives through that sponsorship, I was able to participate in meaningful conversations with thought leaders from around the globe on the theme of the conference, "Building Meaningful Lives", (as were several other SoFi executives) on panels throughout the week.

On Monday, together with Brian Chin, Managing Director and CEO of Global Markets, Credit Suisse; Tom Farley, President, New York Stock Exchange; Louise Pentland, Executive Vice President, Chief Business Affairs and Legal Officer, PayPal; Igor Tulchinsky, Founder, Chairman and CEO, WorldQuant LLC; I explored the "Future of Finance" with CNBC's David Faber. The conversation explored how technological advances and an evolving regulatory environment are reshaping financial services, and after the panel, I caught up with Walden Siew, Senior News Editor at LinkedIn, to elaborate on the topic. That Q&A follows here.

Walden Siew: What is SoFi doing to get your company ready for the technology changes sweeping the financial services industry?

Mike Cagney: We started SoFi because we saw an industry that wasn’t responding to new realities: a new generation coming of age, new technologies maturing, and new financial needs. The incumbent players weren’t rising to the challenge, so we did, with a vision for a new kind of finance company. 

So we’re not just getting ready for the tech changes sweeping the financial services, we’re driving those changes. For us, this translates developing innovative products that provide our members with speed, transparency and alignment. Speed means serving members how they want, when they want, with top-tier service. Transparency means no surprises, no hidden fees, and no unnecessary jargon and legalese. If we can’t help, we tell you why. And alignment with our members means going beyond products and services – we help them prosper in their careers through coaching and tools, and help entrepreneurs get funding and develop products. 

WS: With the rise of automation, in what areas are you becoming less reliant on human skills? 

MC: Much of the value we’re able to offer our members is in our unique underwriting, and that’s all tech-driven. Through just five pieces of information entered by borrowers on our online application, we’re able to make an instantaneous credit decision that gives qualified borrowers a rate and draws on some of the most comprehensive underwriting out there.  

But as we continue to grow and scale, humans are still imperative to our success – many of our borrowers are comfortable doing everything online, but money can be really personal. There is still some comfort derived from talking through their financial decisions with a real person. We discovered early on that our demographic wants an online experience until they don’t, and then they want the ability to pick of the phone to ask their questions. 

We’re working to use technology to cut off those questions, but for now, offline interaction is necessary for process. Beyond that, the community element is one of our biggest comparative advantages. In fact, ten percent of our member base has attended one of the SoFi member events we host nationwide. We’re seeing that as we bring more of the product delivery experience online, the value of offline interaction increases. 

WS: What are the skill sets at SoFi where AI or automated technology is a better than a human?

MC: Beyond the underwriting and working to improve the online experience, I don’t see this as an either/or proposition. Ultimately, we need people to direct that technology, but AI presents the opportunity to free up human capital – when we improve the processes through technology, we can reallocate human capital elsewhere. They’re not being displaced, they’re still innovating and can have much more societal impact that we have today. 

WS: What are the type of skills and background that you are looking for with new hires at SoFi?

MC: We look for folks who mirror our core values: speed, transparency and alignment. They’re passionate about trying to make financial services better, and like our member base, they’re driven and ambitious. 

WS: Looking ahead, what do you see as the main growth areas for your company? Talk to us about your growth strategy.

MC: Our goal is to be at the center of our member’s financial lives, but financial lives are lived on a daily basis. To be at the center, we have to provide daily utility. In 2017, we’ll do just that with a deposit offering unlike anything else in the market, and improvements to our wealth management platform. We’ll continue to grow in terms of funded loans in the meantime, and look forward to international expansion in 2017 as well. 

You can view the full Future of Finance panel discussion here. Join the conversation on LinkedIn by writing your own article here and include #MIGlobal in your post.