Personal View

The Rise of Fintech Is Real

After meeting with influential figures in D.C., an EMBA student—now alum— shares his insights and clarifies his goals in the area of fintech

Personal View

At Treasury: EMBA 15s Praveen Ankala, Scott Stover, Julia Felts, Lucky Sandhu, Helen Cademartori, Grace Reyes, and Sandeep Garg

During the financial crises of 2008, when mortgage lending received the hardest hit, I was running a small mortgage brokerage. My company survived against all odds, but it became clear to me that I had to acquire additional skills to build a stronger and more resilient lending platform. I decided to enroll in the Berkeley MBA for Executives (EMBA) program.

Throughout my studies, I keenly sought a scalable and sustainable business model. Midway through the program, I teamed with my classmate, Kanak Rai, to understand the emerging phenomena of crowdfunding and marketplace lending. In challenging the status quo, we organized the first-ever and sold-out fintech event at Berkeley-Haas in November 2015. A panel of industry leaders provided their take on the challenges and opportunities in marketplace lending and discussed the impact of impending regulation on fintech marketplaces.

Armed with excellent insights from this event, I travelled to Washington, D.C., in December 2015 with my EMBA cohort for an immersion week led by Professor Laura Tyson. Thanks largely to her tremendous D.C. network, we got to meet with more than 25 of the most influential people at some of the most prestigious locations in the nation’s capital, including the Federal Reserve Board Room, U.S. Department of Treasury, the White House’s Eisenhower Office Building, and the Senate Finance Committee Hearing Room in the Dirksen Senate Office Building. Some important insights emerged during these visits.

Capitol Hill’s post-crisis transformation

Since 2009, better regulatory infrastructure has been constructed to prevent a similar financial crisis in the future. The result: the advent of the Dodd–Frank Wall Street Reform Act and the creation of a beefed-up Consumer Financial Protection Bureau to rigorously enforce regulation within the financial services sector.

Acute focus on fintech

It was fascinating to witness how extremely well informed Capitol Hill regulators were about the emerging fintech startup ecosystem in Silicon Valley. They are closely monitoring the activities of the new non-banking fintech platforms to ensure that no shoddy banking practices of the last decade are perpetrated going forward. This regulatory scrutiny is expected to further tighten in the coming months and years.

The rise of fintech is real

One very important validation for me during the week came in listening to several key regulatory figureheads. The emergence of fintech is being fully embraced by lobbyists, lawmakers, and leaders—all the way up to the White House.

Building bridges

Regulators conveyed a clear message: they want fintech companies to proactively partner with them. Going forward, it’ll be highly strategic for fintech companies to collaborate closely with lobbyists to influence policy and to stay in full compliance.

A magical moment

A personal highlight for me during the D.C. immersion was listening to Haas Prof. Emeritus and Federal Reserve Chair Janet Yellen and Member of the Board of Governors Daniel Tarullo speak to us at the very table where they conduct and oversee all important monetary policy decisions. I found myself absolutely fascinated by the realization that our nation’s economic history and ongoing trajectory were created in those very chairs where we all sat.

The end of the Washington, D.C., immersion also marked the end of a remarkable EMBA journey alongside my high-caliber and accomplished cohort. Kanak and I are working with current MBA students and faculty to start a fintech club at Berkeley-Haas. Also, armed with new knowledge and access to Berkeley-Haas’ stellar and far-reaching network—on clear display throughout my MBA experience and most certainly during the epic finale in D.C.— I am continuing my entrepreneurial journey now by working to build a foundationally robust online lending company.

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Lucky Sandhu, BS 96, EMBA 15 (shown below with Prof. Laura Tyson), is the president and co-founder of Reliance Financial, a premier mortgage brokerage based in San Ramon that has funded over half a billion dollars in residential mortgages. He is responsible for driving the company’s vision and developing market, product, and operational strategies. Earlier in his career, Sandhu honed his client service expertise as a CPA at Ernst and Young LLP (1996–99) and then as a management consultant with Cap Gemini Ernst and Young (1999–2003). In 2015, he received Berkeley-Haas’ highest volunteer honor, the Raymond E. Miles Alumni Service Award.

Lucky Sandhu, BS 96,  EMBA 15