Talking FinTech with Cross River Bank’s Phil Goldfeder

In a new recurring feature, First Read Tech will be talking to leaders in government and technology about the intersection of the two fields and how New York can lead through innovation. This week’s installment features Phil Goldfeder, senior vice president of public affairs at Cross River Bank and former member of the New York state Assembly.

This interview has been edited for length and clarity.

As more financial institutions embrace technology, what are the advantages of a community bank like Cross River?

Community banks like Cross River are more nimble and able to adapt to changing environments quicker and more efficiently than the larger banks. It’s easier for smaller community banks to recognize potential innovations and adapt; with the bigger banks, it’s like turning a battleship. It’s hard to change legacy policies, legacy systems, enormous bureaucracies that have built themselves in. Cross River has sort of been leading that charge, since 2008, when we were founded, in partnering with technology companies, providing the back end financial services that technology companies are unable to provide. The reason for that is simple. Technology companies want to innovate; they want to create new mechanisms to provide access to financial services, access to payments, access to money, but they’re not banks and they don’t understand what goes into regulatory compliance and consumer protection and the myriad state and federal laws that were built to ensure consumers were safe. And that’s kind of where Cross River and community banks come in. We provide the regulatory foundation and the consumer protection foundation that tech companies are looking for to enable them to build the cool, innovative technologies that will provide access to financial services. 

New York is the financial capital of the world, but we’re really starting to see growth in FinTech companies here lately. Are we going to see more of that growth in the coming years?

You’re seeing technology companies that historically have remained in single verticals, start to expand. What I mean by that is companies that were payments companies, that’s what they did. Companies that did lending, that’s what they did. Today, more and more, you’re seeing the expansion of what used to be single verticals. The more that technology companies expand the vertical offering, I think, there is a more natural inclination to be closer to the financial center, to connect with the more traditional financial center – and that is in New York.

As a former Assemblyman, do you think that the tech knowledge gap that lawmakers tend to have is starting to close by any degree?

As a former member of the Assembly in New York, I saw issues like online gaming, like ride-sharing, and you’re seeing it today with e-scooters – it’s a process. I don’t think people truly understand that the nature of an elected official is to do deep dives on dozens of issues every single day. So each new issue is a process. It’s incumbent upon the technology companies, the banks who are investing in FinTech, to engage with the policymakers and regulators to explain it, to help them understand what the companies are doing, how they’re doing it, and how it’s going to improve the lives of their constituents.

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