Fintech company Brex's co-CEO: Next couple weeks are going to be pivotal for our industry

I would say that these next couple of weeks are definitely going to be pivotal for our industry, right. I think that founders don’t know what to do and what to trust anymore. And I think that, you know, the next couple of weeks will inform how we should manage our money. And I think that the answer of, hey, we should all just move our money to big banks is pretty bad for our society, for our industry and even for our customers. Because you know, if if if big banks, they don’t have to provide amazing service, people just go to them because they’re the biggest and too big to fail. That delivers poor service instead of like amazing service. When there’s competition, you just fight for the customer, correct. And and I think there are other ways to keep your money safe. So one of the things that we’re trying to educate customers is in the distinction between bank accounts and like brokerage accounts because bank accounts, any bank that you’re giving your money to, you’re giving them the, the, the rights to lend your money out and buy securities. And a lot of the things that made, you know, both the 2008 crisis and now the Silicon Valley Bank issue happened, right. It was a mismanagement of deposits versus on brokerage accounts, which is they’re just getting paid to all you to buy. The underlying treasure is you’re the one that’s deciding how to take the risk. You want to buy money market funds, which you know are very safe, right. Or whatever you want to do. And I think that’s an important distinction. We need to teach people. Yeah, Doctor Lawmar was saying exactly that to me in the In the longer conversation, I also want to ask you about what changes and regulation might be necessary to to ensure deposits. I spoke yesterday with Adrian Alun, who’s founder and CEO of Forward, trying to rethink the doctor’s office. He’s got doctors and healthcare workers across 25 cities on his payroll. Here’s what he said about spreading operating funds potentially across multiple banks. So one thing a lot of people say is, hey, just go split it up amongst a lot of banks. Well, can you Can you imagine going up to your payroll provider and being like, so here’s the deal, I’m going to send you money from these seven banks today and these eight banks next week. It’s like it’s just not practical and it’s not reasonable. And so certainly, certainly would be beneficial for society to come up. And you know, whether it’s government or the banking system to come up with kind of an alternative way of protecting assets, Henrika, what needs to happen here? Yeah. So I would say that there actually already exists a solution to this. So for example, at Brex, right, like we offer up to 2.25 million in FDIC insurance and going up. And the way we do that is by automatically placing your money into increments of $250,000 across nine banks. And we’re working to expand that to as many banks as possible. So you don’t have the issue of the payroll provider. They can just debit your Brexit account and we’ll manage putting all the FDIC funds across the multiple banks. So I think this is a solved problem and our our, our regulatory system for customers already has systems such as the the brokerage accounts I was explaining with the money market funds and this way of distributing deposits across many banks is just not common, right. Customers just just don’t know they were there was like blank trust into the banks and I think like more education on what customers are doing with this money is very positive and that’s what we need.