On today’s Tank Talk! We welcome Addie Lerner, founder and general manager of Avid Ventures and Charley Ma of Alloy to talk about “The Rise of APIs in Fintech Explosion.”
Guests Background:
Addie Lerner is the Founder and Managing Partner of New York City-based Avid Ventures, a $68M early stage venture capital firm that has invested in fintech companies including Alloy, Nova Credit, Staircase, Lockstep, and Rapyd. Prior to starting Avid, Addie was a Principal at General Catalyst and before that she was a Senior Associate at General Atlantic in NYC and London. Addie started her career in investing at Goldman Sachs as an Analyst in the Special Situation Group.
Charley Ma is currently the GM of Fintech at Alloy the identity operating system for banks and fintechs in NYC. Prior to Alloy, Charley was an early hire at Ramp in the corporate card space and Plaid in the API infrastructure space. Charley started his career at JPMorgan Chase, working across several strategy groups covering payments, APIs, blockchain, and fintech. He is also a somewhat active angel investor, primarily focused on fintech + infrastructure and has invested in companies including Unit, Moov, Finch, Codat, and many more.
In this episode we discuss:
01:32 The definition of fintech
03:19 The difference between tech-enabled and tech-powered
04:13 What APIs are and how they are used in fintech
06:08 Closed APIs versus Open APIs
06:50 The benefits of APIs
08:11 The growth of APIs since 2014
09:56 The explosive growth of Plaid and other Fintech companies
11:23 How Covid and other factors are pushing traditional payment processing and alternative payments
15:06 How other countries are leapfrogging the US in payments
18:49 The growth of fintech for investor and credit platforms
21:45 Using APIs to get credit decisions from non-traditional sources
25:24 What is white-labelling
27:20 Regulations around fintech
31:06 The rise of the Neo-Banks
33:55 Alloy’s technology around regulations
35:48 The importance of data-sharing
38:20 The rise of internal regulatory focus at startups
40:31 The use of blockchain and cryptocurrency in mainstream financial institutions
44:05 Speculation on the Visa/Plaid breakup and a potential Plaid IPO
48:30 When will APIs come to insurance
49:15 What is the risk associated with relying on another companies API
53:30 Open banking and consumer demand and protections
55:38 Negotiating fees when starting out
Books Addie Recommends:
Churchill: Walking with Destiny by Andrew Roberts
Book Charley Recommends:
The Anatomy of the Swipe: Making Money Move by Ahmed Siddiqui
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Tank Talks 031 - The Rise of APIs in Fintech Explosion Addie Lerner and Charley Ma