so I’ve spent half of my career disenfranchising people millions and
disenfranchising people millions and
disenfranchising people millions and millions of people including people like
millions of people including people like
millions of people including people like my parents from accessing the modern
my parents from accessing the modern
my parents from accessing the modern economy and my parents came to this
economy and my parents came to this
economy and my parents came to this country I’m the son of immigrants they
country I’m the son of immigrants they
country I’m the son of immigrants they came to this country in search of
came to this country in search of
came to this country in search of Economic Opportunity and my elder
Economic Opportunity and my elder
Economic Opportunity and my elder brother and I saw firsthand how vital
brother and I saw firsthand how vital
brother and I saw firsthand how vital and important financial access was to
and important financial access was to
and important financial access was to them to start and grow their businesses
them to start and grow their businesses
them to start and grow their businesses to send us to the best schools
to send us to the best schools
to send us to the best schools importantly to send money home to their
importantly to send money home to their
importantly to send money home to their friends and family who really needed it
friends and family who really needed it
friends and family who really needed it and part of that was they instilling
and part of that was they instilling
and part of that was they instilling into us a very very strong sense of
into us a very very strong sense of
into us a very very strong sense of financial education and not only to
financial education and not only to
financial education and not only to ensure that we avoided exploitation but
ensure that we avoided exploitation but
ensure that we avoided exploitation but also that we were put on a solid footing
also that we were put on a solid footing
also that we were put on a solid footing with strong financial behaviors
with strong financial behaviors
with strong financial behaviors responsible financial behaviors but what
responsible financial behaviors but what
responsible financial behaviors but what my parents didn’t understand or realize
my parents didn’t understand or realize
my parents didn’t understand or realize at the time was I was gonna make it very
at the time was I was gonna make it very
at the time was I was gonna make it very hard for them for for them to accomplish
hard for them for for them to accomplish
hard for them for for them to accomplish their own financial goals and it wasn’t
their own financial goals and it wasn’t
their own financial goals and it wasn’t because I would out spend my budget or
because I would out spend my budget or
because I would out spend my budget or misuse a credit card or be so generally
misuse a credit card or be so generally
misuse a credit card or be so generally undisciplined that they need to send me
undisciplined that they need to send me
undisciplined that they need to send me to military school they did send me to
to military school they did send me to
to military school they did send me to military school now it was well into my
military school now it was well into my
military school now it was well into my career starting a family gainfully
career starting a family gainfully
career starting a family gainfully employed where I was given some
employed where I was given some
employed where I was given some opportunity to do some meaningful work
opportunity to do some meaningful work
opportunity to do some meaningful work but true drifts enfranchisement would
but true drifts enfranchisement would
but true drifts enfranchisement would start them after the tragic events of
start them after the tragic events of
start them after the tragic events of 9/11 I was given the opportunity to join
9/11 I was given the opportunity to join
9/11 I was given the opportunity to join the US Treasury Department join our
the US Treasury Department join our
the US Treasury Department join our counterterrorism fight only to use
counterterrorism fight only to use
counterterrorism fight only to use economics and finance to combat illicit
economics and finance to combat illicit
economics and finance to combat illicit threats see we realized that the
threats see we realized that the
threats see we realized that the financial and commercial system that
financial and commercial system that
financial and commercial system that which we all thrive on that is necessary
which we all thrive on that is necessary
which we all thrive on that is necessary for everyday lives is equally important
for everyday lives is equally important
for everyday lives is equally important to criminals right to build and support
to criminals right to build and support
to criminals right to build and support a terrorist organization to launder the
a terrorist organization to launder the
a terrorist organization to launder the funds of drug trafficker a weapons
funds of drug trafficker a weapons
funds of drug trafficker a weapons proliferate er to hide the assets of a
proliferate er to hide the assets of a
proliferate er to hide the assets of a corrupt dictator but their dependence on
corrupt dictator but their dependence on
corrupt dictator but their dependence on that system also meant we could find
that system also meant we could find
that system also meant we could find ways to fort them by attacking and
ways to fort them by attacking and
ways to fort them by attacking and shutting down the networks and
shutting down the networks and
shutting down the networks and financial infrastructure that they they
financial infrastructure that they they
financial infrastructure that they they need to sustain themselves and we had a
need to sustain themselves and we had a
need to sustain themselves and we had a lot of really early good traction a lot
lot of really early good traction a lot
lot of really early good traction a lot of successes we identified and
of successes we identified and
of successes we identified and sanctioned individuals and companies
sanctioned individuals and companies
sanctioned individuals and companies that were facilitating terrorism
that were facilitating terrorism
that were facilitating terrorism globally we were freezing hundreds of
globally we were freezing hundreds of
globally we were freezing hundreds of millions of dollars associated with
millions of dollars associated with
millions of dollars associated with these networks we all of while
these networks we all of while
these networks we all of while strengthening global anti money
strengthening global anti money
strengthening global anti money laundering and compliance frameworks to
laundering and compliance frameworks to
laundering and compliance frameworks to make it harder riskier costlier for bad
make it harder riskier costlier for bad
make it harder riskier costlier for bad guys to do their work but we were also
guys to do their work but we were also
guys to do their work but we were also creating a system and a set of
creating a system and a set of
creating a system and a set of circumstances that would make it
circumstances that would make it
circumstances that would make it incredibly difficult for
incredibly difficult for
incredibly difficult for well-intentioned legitimate everyday
well-intentioned legitimate everyday
well-intentioned legitimate everyday everyday transactions to transpire see
everyday transactions to transpire see
everyday transactions to transpire see as a result of rising global compliance
as a result of rising global compliance
as a result of rising global compliance and regulatory needs and in requirements
and regulatory needs and in requirements
and regulatory needs and in requirements hundreds of millions of people were
hundreds of millions of people were
hundreds of millions of people were being negatively impacted and it was
being negatively impacted and it was
being negatively impacted and it was having a disproportionate impact on
having a disproportionate impact on
having a disproportionate impact on certain types of customers in particular
certain types of customers in particular
certain types of customers in particular poor countries low moderate income
poor countries low moderate income
poor countries low moderate income individuals certain types of entities
individuals certain types of entities
individuals certain types of entities like charities money service businesses
like charities money service businesses
like charities money service businesses correspondent banks all thought to be
correspondent banks all thought to be
correspondent banks all thought to be more vulnerable to terrorist financing
more vulnerable to terrorist financing
more vulnerable to terrorist financing exploitation or certain kinds of
exploitation or certain kinds of
exploitation or certain kinds of transactions global remittances
transactions global remittances
transactions global remittances international money transfers because
international money transfers because
international money transfers because they too were potentially vulnerable to
they too were potentially vulnerable to
they too were potentially vulnerable to exploitation by illicit actors we were
exploitation by illicit actors we were
exploitation by illicit actors we were spending so much time looking for these
spending so much time looking for these
spending so much time looking for these bad guys that we were forgetting about
bad guys that we were forgetting about
bad guys that we were forgetting about the national security implications of
the national security implications of
the national security implications of financial exclusion see as a result of
financial exclusion see as a result of
financial exclusion see as a result of growing financial compliance burdens
growing financial compliance burdens
growing financial compliance burdens many banks began the process of
many banks began the process of
many banks began the process of de-risking in other words denying or
de-risking in other words denying or
de-risking in other words denying or cutting off access to a number of very
cutting off access to a number of very
cutting off access to a number of very legitimate well-intentioned individuals
legitimate well-intentioned individuals
legitimate well-intentioned individuals in the financial system and this is
in the financial system and this is
in the financial system and this is having gross consequences on an
having gross consequences on an
having gross consequences on an international level and this is
international level and this is
international level and this is happening for two reasons one because
happening for two reasons one because
happening for two reasons one because compliance and risk management is
compliance and risk management is
compliance and risk management is expensive right as a result of increased
expensive right as a result of increased
expensive right as a result of increased compliance it’s not only from the US but
compliance it’s not only from the US but
compliance it’s not only from the US but globally we have seen the number of risk
globally we have seen the number of risk
globally we have seen the number of risk and compliance measures in the
and compliance measures in the
and compliance measures in the regulatory environment scale
regulatory environment scale
regulatory environment scale dramatically this is what it looks like
dramatically this is what it looks like
dramatically this is what it looks like just from 2000 to 2016
just from 2000 to 2016
just from 2000 to 2016 coupled with the fact that our growing
coupled with the fact that our growing
coupled with the fact that our growing financial regulatory blueprint this is
financial regulatory blueprint this is
financial regulatory blueprint this is how we manage the financial system an
how we manage the financial system an
how we manage the financial system an increase of enforcement actions we’re
increase of enforcement actions we’re
increase of enforcement actions we’re just the global banks alone received
just the global banks alone received
just the global banks alone received over three hundred and twenty billion
over three hundred and twenty billion
over three hundred and twenty billion dollars in fines through last year for
dollars in fines through last year for
dollars in fines through last year for negligence or lack of financial
negligence or lack of financial
negligence or lack of financial compliance controls this is on top of
compliance controls this is on top of
compliance controls this is on top of risk and compliance departments that are
risk and compliance departments that are
risk and compliance departments that are over twenty percent of the operating
over twenty percent of the operating
over twenty percent of the operating budget of most banks so this is a very
budget of most banks so this is a very
budget of most banks so this is a very very very risky endeavor but a very
very very risky endeavor but a very
very very risky endeavor but a very expensive endeavor but de-risking is
expensive endeavor but de-risking is
expensive endeavor but de-risking is having a massive massive negative
having a massive massive negative
having a massive massive negative consequence for the globe he realized
consequence for the globe he realized
consequence for the globe he realized that in the United States alone twenty
that in the United States alone twenty
that in the United States alone twenty more than twenty five percent are either
more than twenty five percent are either
more than twenty five percent are either unbanked or underbanked globally that’s
unbanked or underbanked globally that’s
unbanked or underbanked globally that’s two and a half to three and a half
two and a half to three and a half
two and a half to three and a half billion people as hundreds of millions
billion people as hundreds of millions
billion people as hundreds of millions of international money transfers get
of international money transfers get
of international money transfers get frozen you’re talking a vital line for
frozen you’re talking a vital line for
frozen you’re talking a vital line for assistance to poor countries at four
assistance to poor countries at four
assistance to poor countries at four hundred and forty billion dollars yearly
hundred and forty billion dollars yearly
hundred and forty billion dollars yearly of global remittance flows that’s three
of global remittance flows that’s three
of global remittance flows that’s three times foreign aid many poor countries
times foreign aid many poor countries
times foreign aid many poor countries rely on this for vital financial
rely on this for vital financial
rely on this for vital financial assistance my own parents and many of
assistance my own parents and many of
assistance my own parents and many of their friends started going to their
their friends started going to their
their friends started going to their Indian grocers to send money home
Indian grocers to send money home
Indian grocers to send money home unreliable maybe but certainly efficient
unreliable maybe but certainly efficient
unreliable maybe but certainly efficient for them when other channels get knocked
for them when other channels get knocked
for them when other channels get knocked off institutions were getting blocked
off institutions were getting blocked
off institutions were getting blocked out correspondent banks were starting to
out correspondent banks were starting to
out correspondent banks were starting to lose access to their Western and US
lose access to their Western and US
lose access to their Western and US counterparts even charity’s friends of
counterparts even charity’s friends of
counterparts even charity’s friends of mine that were working Ebola relief in
mine that were working Ebola relief in
mine that were working Ebola relief in Africa or vital humanitarian natural
Africa or vital humanitarian natural
Africa or vital humanitarian natural disaster relief in South of Southeast
disaster relief in South of Southeast
disaster relief in South of Southeast Asia and the Caribbean most recently
Asia and the Caribbean most recently
Asia and the Caribbean most recently weeks and weeks of payment delays in
weeks and weeks of payment delays in
weeks and weeks of payment delays in many charities just unable to establish
many charities just unable to establish
many charities just unable to establish a bank account because of increased
a bank account because of increased
a bank account because of increased scrutiny and what happens is when
scrutiny and what happens is when
scrutiny and what happens is when economically otherwise economic actors
economically otherwise economic actors
economically otherwise economic actors are denied formal services they go to
are denied formal services they go to
are denied formal services they go to alternatives payday lenders check
alternatives payday lenders check
alternatives payday lenders check cashers loan sharks these guys are
cashers loan sharks these guys are
cashers loan sharks these guys are performing a vital service but often are
performing a vital service but often are
performing a vital service but often are costly and serve to exacerbate poor
costly and serve to exacerbate poor
costly and serve to exacerbate poor financial decisions which underscores an
financial decisions which underscores an
financial decisions which underscores an even bigger epidemic that we’re facing
even bigger epidemic that we’re facing
even bigger epidemic that we’re facing which is the destruction of her
which is the destruction of her
which is the destruction of her financial health right do you realize
financial health right do you realize
financial health right do you realize that in this country
that in this country
that in this country almost 50% of Americans cannot cope with
almost 50% of Americans cannot cope with
almost 50% of Americans cannot cope with an unexpected expense of $400 or more
an unexpected expense of $400 or more
an unexpected expense of $400 or more almost two-thirds of Americans struggle
almost two-thirds of Americans struggle
almost two-thirds of Americans struggle financially with just basic budgeting
financially with just basic budgeting
financially with just basic budgeting and expense management financial health
and expense management financial health
and expense management financial health is just as important as physical health
is just as important as physical health
is just as important as physical health but the fact is to a traditional bank if
but the fact is to a traditional bank if
but the fact is to a traditional bank if you’re low income you’re high-risk if
you’re low income you’re high-risk if
you’re low income you’re high-risk if you have volatile income you’re
you have volatile income you’re
you have volatile income you’re high-risk if you’re new to the financial
high-risk if you’re new to the financial
high-risk if you’re new to the financial system
system
system you’re high-risk if you’re sending money
you’re high-risk if you’re sending money
you’re high-risk if you’re sending money to and from an international
to and from an international
to and from an international jurisdiction of frontier market
jurisdiction of frontier market
jurisdiction of frontier market especially one consider an IRA high-risk
especially one consider an IRA high-risk
especially one consider an IRA high-risk you are high-risk we’re spending all
you are high-risk we’re spending all
you are high-risk we’re spending all this time looking at at the the
this time looking at at the the
this time looking at at the the financial implications and asking
financial implications and asking
financial implications and asking implications of money laundering
implications of money laundering
implications of money laundering terrorist financing that we’re actually
terrorist financing that we’re actually
terrorist financing that we’re actually failing to understand the nash security
failing to understand the nash security
failing to understand the nash security implications of financial exclusion now
implications of financial exclusion now
implications of financial exclusion now everyone understands the term a
everyone understands the term a
everyone understands the term a needle-in-a-haystack we focus so much on
needle-in-a-haystack we focus so much on
needle-in-a-haystack we focus so much on finding the illicit needles that we’re
finding the illicit needles that we’re
finding the illicit needles that we’re forgetting about the importance of the
forgetting about the importance of the
forgetting about the importance of the hay itself not only in terms of the
hay itself not only in terms of the
hay itself not only in terms of the disruption to well-intentioned
disruption to well-intentioned
disruption to well-intentioned well-meaning legitimate transfers but
well-meaning legitimate transfers but
well-meaning legitimate transfers but also the richest of data in information
also the richest of data in information
also the richest of data in information that those legitimate transfers
that those legitimate transfers
that those legitimate transfers represent there are solutions first off
represent there are solutions first off
represent there are solutions first off we can’t see regulation only as a burden
we can’t see regulation only as a burden
we can’t see regulation only as a burden it can also be a value-added asset right
it can also be a value-added asset right
it can also be a value-added asset right all anti-money laundering compliance
all anti-money laundering compliance
all anti-money laundering compliance programs come down to one question do
programs come down to one question do
programs come down to one question do you know your customer what their
you know your customer what their
you know your customer what their financial intents are what their
financial intents are what their
financial intents are what their financial needs are what their source of
financial needs are what their source of
financial needs are what their source of funds are what their expectations are
funds are what their expectations are
funds are what their expectations are these are the exact same questions to
these are the exact same questions to
these are the exact same questions to serve proactively serve clients in need
serve proactively serve clients in need
serve proactively serve clients in need and yet the very information that global
and yet the very information that global
and yet the very information that global compliance departments collect on you
compliance departments collect on you
compliance departments collect on you and know your customer customer due
and know your customer customer due
and know your customer customer due diligence often sits unleveraged in
diligence often sits unleveraged in
diligence often sits unleveraged in those compliance departments unused the
those compliance departments unused the
those compliance departments unused the very analytics processes we use to
very analytics processes we use to
very analytics processes we use to analyze illicit financial crime can be
analyze illicit financial crime can be
analyze illicit financial crime can be used to understand credit profiles and
used to understand credit profiles and
used to understand credit profiles and legitimate need where we actually
legitimate need where we actually
legitimate need where we actually address actual risk not perceived risk
address actual risk not perceived risk
address actual risk not perceived risk we need stronger and smarter risk
we need stronger and smarter risk
we need stronger and smarter risk management not simply more compliance
management not simply more compliance
management not simply more compliance management number two we need to take a
management number two we need to take a
management number two we need to take a whole system’s approach and look at
whole system’s approach and look at
whole system’s approach and look at positive we
positive we
positive we Ward’s not just punitive measures to
Ward’s not just punitive measures to
Ward’s not just punitive measures to provide for financial inclusion and that
provide for financial inclusion and that
provide for financial inclusion and that whole systems approach me and everyone
whole systems approach me and everyone
whole systems approach me and everyone has a role here regulators need to
has a role here regulators need to
has a role here regulators need to encourage positive financial innovation
encourage positive financial innovation
encourage positive financial innovation with measured risk while the US
with measured risk while the US
with measured risk while the US regulators are somewhat risk-averse UK
regulators are somewhat risk-averse UK
regulators are somewhat risk-averse UK has set up a financial industry sandbox
has set up a financial industry sandbox
has set up a financial industry sandbox bringing banks and innovators together
bringing banks and innovators together
bringing banks and innovators together to explore new technologies some of
to explore new technologies some of
to explore new technologies some of those technologies and mobile
those technologies and mobile
those technologies and mobile communications and digital ID can break
communications and digital ID can break
communications and digital ID can break down the barriers for access and perform
down the barriers for access and perform
down the barriers for access and perform vital customer due diligence at the same
vital customer due diligence at the same
vital customer due diligence at the same time technologies like the blockchain
time technologies like the blockchain
time technologies like the blockchain can build surveillance and trust in the
can build surveillance and trust in the
can build surveillance and trust in the system while protecting privacy and
system while protecting privacy and
system while protecting privacy and autonomy at the same time policy makers
autonomy at the same time policy makers
autonomy at the same time policy makers need to look at community based
need to look at community based
need to look at community based financial engagement as a driver to that
financial engagement as a driver to that
financial engagement as a driver to that access not simply look to cut them small
access not simply look to cut them small
access not simply look to cut them small business lending Community Development
business lending Community Development
business lending Community Development financial institutions are often the
financial institutions are often the
financial institutions are often the best position to understand local needs
best position to understand local needs
best position to understand local needs and assess local risk and financial
and assess local risk and financial
and assess local risk and financial institutions need to look at community
institutions need to look at community
institutions need to look at community based groups and social services
based groups and social services
based groups and social services low-income housing workforce development
low-income housing workforce development
low-income housing workforce development as financial access points because those
as financial access points because those
as financial access points because those groups are often the ones that have the
groups are often the ones that have the
groups are often the ones that have the highest trust in communities especially
highest trust in communities especially
highest trust in communities especially when trust in banks is at an all-time
when trust in banks is at an all-time
when trust in banks is at an all-time low an understanding is also low
low an understanding is also low
low an understanding is also low and finally educators schools need to
and finally educators schools need to
and finally educators schools need to build financial education into the
build financial education into the
build financial education into the curricula do you understand that five
curricula do you understand that five
curricula do you understand that five out of 50 states in this country
out of 50 states in this country
out of 50 states in this country actually require one course for a
actually require one course for a
actually require one course for a graduating senior right and their
graduating senior right and their
graduating senior right and their studies upon studies that show that
studies upon studies that show that
studies upon studies that show that there’s a direct link between the level
there’s a direct link between the level
there’s a direct link between the level of education and the sustainability of
of education and the sustainability of
of education and the sustainability of positive financial responsibility but we
positive financial responsibility but we
positive financial responsibility but we send our folks out into the community
send our folks out into the community
send our folks out into the community financially illiterate as a friend of
financially illiterate as a friend of
financially illiterate as a friend of mine said knowledge without access may
mine said knowledge without access may
mine said knowledge without access may be harmless but access without knowledge
be harmless but access without knowledge
be harmless but access without knowledge is destructive just look at the recent
is destructive just look at the recent
is destructive just look at the recent mortgage crisis and you might be asked
mortgage crisis and you might be asked
mortgage crisis and you might be asked me after all this destruction what am i
me after all this destruction what am i
me after all this destruction what am i doing I’m doing my penance and my
doing I’m doing my penance and my
doing I’m doing my penance and my penance is an effort we called fin
penance is an effort we called fin
penance is an effort we called fin cluesive capital we’re trying to put
cluesive capital we’re trying to put
cluesive capital we’re trying to put some of these strategies to play
some of these strategies to play
some of these strategies to play bringing new technologies and analytics
bringing new technologies and analytics
bringing new technologies and analytics in the blockchain and combining them
in the blockchain and combining them
in the blockchain and combining them with traditional financial services to
with traditional financial services to
with traditional financial services to break down barriers bring down costs
break down barriers bring down costs
break down barriers bring down costs and to bring down friction but enhance
and to bring down friction but enhance
and to bring down friction but enhance security and transparency at the same
security and transparency at the same
security and transparency at the same time we’re linking community-based
time we’re linking community-based
time we’re linking community-based action groups with traditional financial
action groups with traditional financial
action groups with traditional financial services through technology to drive
services through technology to drive
services through technology to drive better inclusion more cost-effectively
better inclusion more cost-effectively
better inclusion more cost-effectively and we’re trying to enhance risk
and we’re trying to enhance risk
and we’re trying to enhance risk management systems to do more on the
management systems to do more on the
management systems to do more on the service side not just the compliance
service side not just the compliance
service side not just the compliance side the net result should be greater
side the net result should be greater
side the net result should be greater financial access and inclusion more
financial access and inclusion more
financial access and inclusion more resilient households and communities and
resilient households and communities and
resilient households and communities and a stronger more secure financial system
a stronger more secure financial system
a stronger more secure financial system prepping for this event I was reminded
prepping for this event I was reminded
prepping for this event I was reminded that President Kennedy was faced with
that President Kennedy was faced with
that President Kennedy was faced with amazingly unique geopolitical challenges
amazingly unique geopolitical challenges
amazingly unique geopolitical challenges and in his wisdom he understood that
and in his wisdom he understood that
and in his wisdom he understood that grassroots development was vital to our
grassroots development was vital to our
grassroots development was vital to our national security it was under his
national security it was under his
national security it was under his leadership that the Peace Corps was born
leadership that the Peace Corps was born
leadership that the Peace Corps was born if we understand that our day to day
if we understand that our day to day
if we understand that our day to day lives require financial access and
lives require financial access and
lives require financial access and engagement and education then we have to
engagement and education then we have to
engagement and education then we have to see that engagement as a fundamental
see that engagement as a fundamental
see that engagement as a fundamental human right which means that a denial of
human right which means that a denial of
human right which means that a denial of it should not be judged or conditioned
it should not be judged or conditioned
it should not be judged or conditioned on the perception of one’s risk or
on the perception of one’s risk or
on the perception of one’s risk or affiliation today the lines of division
affiliation today the lines of division
affiliation today the lines of division are growing and the exacerbated by the
are growing and the exacerbated by the
are growing and the exacerbated by the fact that people are struggling to meet
fact that people are struggling to meet
fact that people are struggling to meet their everyday financial needs and yet
their everyday financial needs and yet
their everyday financial needs and yet we continue to have this debate of
we continue to have this debate of
we continue to have this debate of trading away Community Development Goals
trading away Community Development Goals
trading away Community Development Goals Community Development tools in order to
Community Development tools in order to
Community Development tools in order to protect our national security but I
protect our national security but I
protect our national security but I implore you to look at financial
implore you to look at financial
implore you to look at financial inclusion is not simply a noteworthy
inclusion is not simply a noteworthy
inclusion is not simply a noteworthy social development goal but a vital tool
social development goal but a vital tool
social development goal but a vital tool to our national international security
to our national international security
to our national international security and that’s an idea I think is worth
and that’s an idea I think is worth
and that’s an idea I think is worth spreading thank you
spreading thank you
spreading thank you [Applause]
”
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