BMO Harris' digital push, California's sandbox skeptic and a giant slayer
Sandbox skeptic: As commissioner of California's Department of Business Oversight, Jan Lynn Owen is at the epicenter of the digital revolution and as well versed a regulator as you will find on fintech issues. It helps that she has worked both at a big bank (JPMorgan Chase) and at a tech giant (Apple). But given the risks of the changing financial services landscape, she is unambiguously cautious about the fintech industry, which she says is full of young entrepreneurs in skinny jeans who lack the regulatory experience to safely launch their business. She is also critical of the sandbox approach as a way to foster innovation, with the Arizona initiative being particularly worrisome to her. “Sandboxes make me nervous,” she said. “I can’t get past the fact that, in my head, I see kids playing in a sandbox.” Other topics she discusses in this interview include the federal fintech charter, pot banking and alternative data.
A digital push in the works: BMO Harris Bank is shifting its strategy under Erminia "Ernie" Johannson, the new group head of U.S. personal and business banking. In an effort to fuel growth, BMO Harris will revamp its digital operation, put more emphasis on mobile apps to attract retail customers, and target small businesses in the Midwest. The $112 billion-asset Chicago bank, a unit of Canada’s Bank of Montreal, has typically grown faster in commercial lending, while retail and small business lagged, so Johannson sees an opportunity. "Scale is now based on what you can do in digital," said Johannson, who relocated to Chicago from Toronto after being appointed to her role in February. She acknowledged that the competition is fierce, with much bigger banks “spending billions on technology” to improve and expand their digital offerings. “But I'm not fearful because I also know what I can leverage from the North,” she said, referring to BMO Harris' parent company.
Who’s who of blockchain leaders: As part of a series of stories looking at how corporations and governments are experimenting with blockchain technology, the New York Times offers an overview of key players in the industry, including Amber Baldet, Elizabeth Stark and Valerie Szczepanik. The paper says the outspoken Baldet, until recently the head of JPMorgan Chase’s blockchain lab, “always seemed too big a personality for an old-fashioned bank.” Baldet left to start Clovyr, an app store for blockchains. Stark is the chief executive of Lightning Labs, a startup that is building tools that can layer new capabilities on top of the bitcoin blockchain. And Szczepanik is the Securities and Exchange Commission’s senior adviser on digital assets and innovation. Read the story for more on the leaders shaping the future of blockchain.
Pawn in position: With leadership of the Consumer Financial Protection Bureau already facing plenty of uncertainty, a looming court decision could worsen the chaos. The appeals court seemed skeptical of a claim by Leandra English that she is the rightful acting director, but also raised questions about whether Mick Mulvaney should be allowed to run the bureau. Meanwhile, one of Mulvaney's top deputies at the Office of Management and Budget, Kathy Kraninger, is the administration's nominee to be the permanent CFPB director. Kraninger, who spent most of her career at the Department of Homeland Security, is a controversial choice, as she likely played a role in the Trump administration’s immigration policy. Kraninger is scheduled to appear in front of the Senate Banking Committee on July 19, where Democrats are expected to ask about her involvement in the decision to separate migrant children from their parents at the U.S. border. Though she faces an uphill battle, that is apparently part of the White House plan to extend Mulvaney’s tenure for as long as possible.
Let the games begin: Rep. Maxine Waters, D-Calif., made headlines this past week for her scathing criticism of the White House (her harshness even provoked a rebuke from House Minority Leader Nancy Pelosi). But expect more to come if Waters takes over as chair of the House Financial Services Committee next year. Instead of dry talk about leverage ratios and deposit insurance, the banking panel could find itself at the center of the national political debate, with examinations of President Trump-led changes at the CFPB among the topics on the agenda.
Tell me again, who is it that doesn’t understand here?: JPMorgan Japanese Investment Trust and TBC Bank are among 10 “dark ages” companies in the FTSE 350 that have zero women on their boards, according to a report Wednesday from the Hampton-Alexander Review. The CEOs and chairs of some FTSE 350 companies had shocking justifications for their bias toward men: Women do not understand “extremely complex” issues, do not “fit comfortably” into the boardroom, and do not want to deal with the “hassle or pressure” of sitting on a board. Overall, women hold about a quarter of board seats at Britain’s 350 biggest stock market-listed companies, which is far short of the 33% target the U.K. government set for 2020.
If she can see it, she can be it — Traders edition: The effort to recruit female traders has been intensifying over the past year, as the emergence of the #MeToo movement and growing shareholder calls for disclosures on workforce diversity have banks scrambling to change this “alpha-male territory.” A study by an executive search firm found that women generally account for 12% to 15% of trading roles at banks, but programs like Barclays’ Sophomore Springboard, JPMorgan Chase’s Women Who Trade and Goldman Sachs’ new Trader Academy in London are working to boost those numbers. The Trader Academy, which Goldman plans to expand to the Americas this year, offers eight months of mentoring, networking and job shadowing for 16 female college students. Priya Karani helps with Barclays’ recruiting effort by talking to female college students about her job trading healthcare derivatives. As a biomedical engineering student at Duke University, “I was never interested in a career in trading at a bank because I didn’t know it was an option,” Karani said. (Separately, check out this profile of Lauren Simmons, a 23-year-old equities trader for Rosenblatt Securities who is the only woman to hold this position full time at the New York Stock Exchange.)
LeeAnne Linderman, director of retail banking at Zions Bancorp. in Salt Lake City, has announced her retirement, effective Aug. 2. Olga Hoff, director of consumer lending and card operations, is set to succeed Linderman. Hoff will be tasked with improving the customer experience in digital channels and helping guide FutureCore, a Zions program to transform its core systems. Linderman, who has been with Zions for 26 years, oversaw the retail banking division since its creation in 2015. She is a regular on the list of the Most Powerful Women in Banking.
Hanmi Financial in Los Angeles is looking for a new CEO, following C.G. Kum’s announcement that he will retire in May 2019. Bonnie Lee, Hamni’s chief operating officer, has been given Kum’s title of president to help facilitate a smooth transition, as the $5.3 billion-asset company begins a formal CEO search involving internal and external candidates.
Katie Haun, a former prosecutor for the Department of Justice with experience in crypto enforcement, has become the first female general partner at Andreessen Horowitz. She joined the Silicon Valley venture capital firm to help manage a new $300 million fund, which will back blockchain- and cryptocurrency-related ideas and invest in digital currencies directly. Haun said she would help the firm “strike the right balance between innovation and regulation.” She is interested in ideas for using blockchain technology to put people in control of their own data, for security and privacy reasons.
Morgan Stanley has added Mary L. Schapiro, the chairwoman of the Securities and Exchange Commission from 2009 to 2012, to its board of directors.
Deloitte CEO Cathy Engelbert hasn’t been nominated for a second term, touching off a leadership battle. Engelbert, the first woman to run one of the Big Four accounting firms in the U.S., is more than three years into a four-year term.
In case you missed it
For an upwardly mobile career: “Career mobility” — changing countries or job functions — is an often-overlooked way for female bankers to rise up the ranks, according to Ee-Ching Tay, head of Southeast Asia M&A at J.P. Morgan and one of Singapore’s most renowned female bankers. Moving around raises a person's profile in a company and puts them in line for promotions. And investment banking is a good choice, because “for someone in their 20s, you get unparalleled responsibility in deals and client meetings.” Tay also advised women to be proactive about building strong internal networks across the company and take the initiative to ask senior employees — preferably on other teams — for career advice and mentoring. Read more here.
Problem percentages: The Bank of England is failing (read: going in reverse) in its effort to add female, black and ethnic employees in top jobs. Last year, women held 29% of senior roles, down from 30%, and blacks and ethnic minorities slipped to 5%, from 6%, its annual report shows. Governor Mark Carney had set 2020 targets of 35% for women and 13% for black and minority ethnic staff, but it is sometimes appointments made by the government that undermine progress. The Treasury recently put a white man on the bank’s monetary policy committee, choosing him from a list of five candidates that included four women. Then, in a plot twist soon afterward, the Treasury appointed two women to the bank’s prudential regulation committee: Julia Black, a professor at the London School of Economics, and Jill May, an investment banker with experience at SG Warburg and UBS. They will each serve a three-year term.
Giant slayer: In a stunning upset, Alexandria Ocasio-Cortez, a 28-year old Latina running her first campaign, defeated Rep. Joseph Crowley, a 19-year incumbent and powerful political stalwart, in the Democratic primary for New York’s 14th congressional district. Ocasio-Cortez, a community organizer who talked about the need to end “machine politics” as part of her campaign, now faces Republican candidate Anthony Pappas in November. Crowley, the fourth-ranking Democrat in the House, had not faced a primary challenger in 14 years and was positioning himself to be the successor to Nancy Pelosi as the House leader. Pelosi downplayed the Ocasio-Cortez victory as an anomaly, but others saw it as a harbinger. “When you give Democrats a choice in a primary, they’re going to go for the progressive,” said Cynthia Nixon, the “Sex and the City” actress who is hoping to unseat New York Gov. Andrew Cuomo.
#SorryNotSorry: Do you apologize too much? Now there’s an app for that. Or a Chrome plugin actually. The automatic “I’m sorry” can be excessive for some women, in part because of cultural conditioning. Even as young as toddlers, differences are apparent between how boys and girls interact with others, said gender linguist Susan Herring. “For boys, conflict isn’t just okay, it’s encouraged,” while girls are trained to take others’ feelings into account, Herring said. But once you’ve installed “Just NOT Sorry,” which takes approximately 20 seconds, the plugin alerts you whenever you write minimizing words like “I’m sorry,” “I just,” or “I’m no expert” in an email, by underlining such phrases in red, Quartz reports. The plugin also provides succinct pop-up advice as to why you should amplify, and not undermine, your message.
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Chental-Song Bembry contributed to this report.