Parlez-vous Female In Tech

Conversation with Ramya Joseph (Founder, Pefin) and Catherine Flax (CEO, Pefin) 

Foreword

The headlines of the past year have been filled with the issues of gender equality and the very serious topic of pervasive sexual harassment faced by women across industries. These challenges are especially acute within the technology industry and venture capital.

The World Economic Forum says it will be another 217 years before global gender parity is achieved. But why do women still not have equal footing when equality makes the most social and business sense? It is an economic imperative to expedite these changes. In a recent report, The power of parity: Advancing women’s equality in the United States, McKinsey Global Institute estimated that the US alone could add up to $4.3 trillion in annual GDP in 2025 if women attain full gender equality.

In venture-backed startups especially, the gender opportunity gap is wider than other areas of the economy. As reported by an article in Fortune earlier this year: “While the percentage of the deals that went to women increased last year, women actually lost ground when it comes to the share of VC dollars. In 2016, women got just 2.19% of venture capital funding.”

This is not because there is a lack of female founders, and definitely not due to a lack of talent. According to the latest Kauffman Index for Startup Activities, almost 40% of new entrepreneurs in 2016 were women.

It is with that statistic in mind that this new series was born.

I remain hopeful, that, with the collective effort from all genders, across cultural divide, the tide will be turned sooner than expected. Talent can be found anywhere, regardless of demographics (age, gender, ethnicity, location, etc.) and social circles. For those of us who are in the innovation economy, it is our job to step up and shine a spotlight on these brilliant founders and leaders who are trying to make a difference in the world. We must demonstrate courage, work harder and work together - every single day.

Dare to dream.

Spotlight on Ramya and Catherine

For this inaugural edition of “Parlez-vous Female in Tech”, I have the distinct pleasure of introducing two amazing people who run the fintech startup Pefin in New York City. It leverages artificial intelligence (AI) technology to perform a full financial assessment with the client’s life events (such as starting a family or buying a home) in mind, along with his/her spending patterns, debt, investments, social security rules, etc. They can also provide personalized, ongoing fiduciary advice at a monthly charge.

I have gotten to know Catherine Flax and Ramya Joseph fairly well over time. I respect and admire their commitment to the financial well-being of their customers. Read on and I hope you too, will share my sentiments.

TL: Can you give us a brief description of Pefin? And what is the meaning behind the name?

Pefin is the world’s first Artificial Intelligence (AI) financial advisor. The platform provides intelligent, unbiased, and personalized financial planning and advice. Pefin’s mission is to look after the financial best interests of users in a way that embraces the unique individuality of their lives. 

The name "Pefin" stands for Personal Financial Intelligence.

TL: Ramya, what inspired you to start the business? You were working in Wall Street if I recall.

I was a VP in proprietary trading managing multi-billion dollar portfolios at Goldman Sachs.

I saw friends went through financial rough patches, which was troubling to me. It hit close to home when my father was laid off from his job in 2011. I wanted to assuage my father’s concerns about needing to find a new job given that he was in his early 60’s. I decided to use the tools of my trade to help him to better understand his financial condition, and what that would mean for him in his retirement years. 

To get a clear picture of his financial position, I created a large and complex spreadsheet that took weeks to build. I was able to show my father that under all scenarios he could retire comfortably, but was left with the nagging feeling that there had to be a better way. What does the average person do? Who helps them? That is what inspired me to start Pefin.

TL: That’s a fascinating story. I always love hearing about the passion that drives a founder to pursue his/her dream and start a business. And you had a Master’s degree in Artificial Intelligence (AI) and Machine Learning way before AI became a buzzword in the industry. Can you tell us a bit about that?

I had a modest upbringing, raised by my parents who had immigrated to the US shortly after I was born. Our financial situation was such that I needed to put myself through school, which I did, earning an undergraduate degree in Computer Science at the University of Maryland. I then joined IBM where I co-filed my first patent at the age of 23. These early days of my career were both a combination of being practically minded (getting into a profession where I was certain there would be work) but also blended with innovation, inspiration, and looking into the future.

It was because of that orientation towards what was possible that I decided to pursue two masters’ degrees from Columbia University, one in Artificial Intelligence/Machine Learning and the other in Financial Engineering. At the time, I didn’t know it would lead to starting my own company; I was just fascinated with the topics and knew that there would be many interesting applications of this knowledge.

TL: And Catherine, you have had an impressive corporate career in Wall Street and around the world. In your view, how has the financial services industry changed in the last 15-20 years?

I have been incredibly fortunate to have had a very interesting and varied multi-decade career on Wall Street. In the mid 90’s there was much more of a “wild west” feeling to Wall Street, where many new products and new asset classes were emerging with regularity. I came from a merchant energy trading company to Wall Street in the early days of those markets being deregulated, which meant that there was an incredible amount of creativity and innovation.

Over the past 20+ years, many of the markets have significantly matured, and the regulatory environment has also changed substantially, often for good reason. The place where transformation is now moving at lightning speed on Wall Street is with technology. 

Consider today how robotics, big data, artificial intelligence, and Blockchain are all completely rewriting not only how banks do what they do, but also what a bank actually is. We are just at the beginning of how the financial services industry is being reshaped by these transformations in technology. Our grandchildren won’t know what a physical bank branch is, or an ATM machine – they may not even know what cash is. Having intermediaries, such as in the world of sales and trading (my former area), will also be a thing of the past. The people who have worked in banking in the past have always been extremely good at reinventing themselves; I have no doubt that will continue to be the case. 

TL: So, what prompted you to join Pefin?

I was living in London in 2012 but was back in NY for a visit. Ramya and I had been friends for years, and she brought her laptop to the hotel room where I was staying to show me the technology and platform that she was creating. I was completely enthralled by the concept and delighted to see the progress on bringing this monumental project to fruition. At this point I was the Chief Marketing Officer for JPMorgan and very consumed with my own career- but found what Ramya was doing very interesting. 

When I relocated back to New York, the discussions about Pefin became more frequent and I was getting more involved in the world of FinTech, eventually joining the board of the blockchain company, Digital Asset Holdings, and becoming a leader in Innovation at BNP Paribas. In 2015 Ramya asked me to be a formal advisor to Pefin, which I enthusiastically accepted.  

In mid 2016, Pefin was beginning a search for a CEO to grow the company to the next level, once the Product was built and launched, and Ramya asked me to help find the right CEO. The search for a CEO proved difficult; it was challenging to find the right mixture of skills as well as the right cultural fit.

I didn’t know that Ramya had considered me to be her “dream CEO” which she later told me; but she hadn’t initially raised the topic with me, thinking it was unlikely that I would want to step away from my career, which she knew I loved. However, that all changed one day in 2016 when we discussed whether making a transition to a startup could possibly be the right next step for me. It seemed like a perfect match at the perfect time, just as the product was being fully launched. The next phase needed an experienced executive CEO with the ability to evangelize, and effectively market Pefin to the world. I felt- and feel- so strongly about rebuilding trust in financial services, and bringing fiduciary and affordable financial advice to everyone, that it was obvious to make this move. 

TL: Future of work is one of the hottest topics in 2017. McKinsey estimated that between 400 million and 800 million individuals could be displaced by automation and need to find new jobs by 2030 around the world; 75 million to 375 million may need to switch occupational categories and learn new skills. What is your view point on automation in financial services?

With every material innovation, as with the industrial revolution, or the agricultural revolution before that, the world changes materially for the workers affected. This transformation of technological innovation will sweep all industries, and financial services is one of them. There are some really important issues to address here:

• Education has not kept pace with the skills needed in this new economy. As many jobs are eliminated by automation, many more will be created, but with different skills. Children in school are still being taught for Industrial revolution era jobs, and current workers are not finding ways to transform existing skills. Companies and the educational infrastructure will need to work together to create pathways for existing and future workers to thrive under the new requirements.
• Humans liked dealing with humans at certain critical moments. Although I love my automated, online doctor for simple and obvious medical issues, when something is life threatening I want a human involved. Similarly, for 90% of everything relating to my finances I would prefer the ease, certainty, and computational power of an automated financial advisor. But if I want to structure a highly bespoke trust structure for a high net worth family office, I will want a team of lawyers and financial professionals to advise me. Recognizing where human involvement and an excellent bedside manner are going to be highly valued is important in making both business and career decisions.
• Science fiction has been remarkably prescient in anticipating trends. Watching an old Star Trek episode, the technology that seemed so far-fetched (the communicators, the video conferencing, and the ability to speak in multiple languages with real time "translation", etc) is now inexpensive and part of our world today. What is next? The world is far from static and there will be new roles, new jobs, new industries.
• More immediately, we need to just drive down the streets in most US towns to see that there is a tremendous amount of infrastructure that needs to be built. There are plenty of jobs that need to be done today!

TL: I love the perspective. It’s definitely more positive and upbeat than the “doom and gloom” that we hear nowadays. What do you think will be some of the important trends to watch out for in the next year? 

Natural Language Processing (NLP): Up until now this has been a curiosity or a “toy”, but will quickly become the dominant way that humans and machines interact. Solving problems of being visually impaired or having limited dexterity, as well as addressing illiteracy, NLP will be a transformational technology for many people. There is still work to be done to refine the existing technology to make it fully usable, but it is well on its way.

Convergence of AI and Blockchain: Dispatching Bots to act on behalf of people sounds very futuristic, but will start to become part of the mainstream dialogue in 2018. Whether for shopping, mortgage applications or other tasks that are now part of most human’s lives, we will soon be able to leverage the security of blockchain and dispatch our own Bots to act on our behalf and to improve the efficiency of many aspects of life.

Identity: 2017 was a watershed year when most people, whether as a result of the Equifax or Uber hacks, realized that we are all significantly at risk. The cost is astronomical for individuals and society. Watch for solutions that put the power back in the hands of individuals, allowing them to control how, when, and by whom their identity is used.

Find the intersection among what you love, what you are good at, and what the world needs.

TL: Being a woman in technology can seem challenging at times, as we have all witnessed. Any particular advice you’d give to someone new to the field?

There are tremendous opportunities for women (and men) in fintech. Whenever there is a true meritocracy (and it doesn’t get more clear that rewards are based on performance than in fintech), there are opportunities for top performers to succeed. At Pefin, fully half of the senior team (including the Founder and the CEO, as well as many of the senior engineers) are women. It is clear that there are opportunities for everyone who want to innovate, work hard, and change the world! 

Here are a few things to keep in mind:

• Find the intersection among what you love, what you are good at, and what the world needs. If you position yourself in that space, you will succeed. 
• Never be afraid. Speak up, take risks, follow your gut, and be bold. Not everything is going to work out and you will make mistakes, but make your mistakes be mistakes of action rather than fear and inaction. 

TL: This reminds me of a famous quote from Theodore Roosevelt: “The only man who never makes a mistake is the man who never does anything.” With that said, any final words of wisdom?

Life is short, do what you love. Every amazing person that you admire is made of flesh and blood just like you. They had an idea, they worked hard, they were doggedly determined, they got knocked back and got back up, and they made stuff happen. We all have seeds of greatness inside us. We just need to be willing to push through the hard stuff to get to the good stuff! 

Also, friendship really matters. People think of networking as some cheesy and artificial past time, but the world is really built on genuine relationships. Look at this picture of the two of us from when we first met 20 years ago, and again today. Build meaningful relationships and you will be surprised at how and when they evolve! 

TL: That reminds me, thank you Brad Leimer for introducing me to Pefin. And congrats on the official launch, Catherine and Ramya! I can't wait to see what next year will bring.

Left to Right: Catherine Flax and Ramya Joseph, 2000 and 2017

 " Believe you can and you're halfway there." ~Theodore Roosevelt