Building the Future of Capital Markets with Blockchain

Mili Tomar (0:16)

Welcome back to another episode of the Wharton FinTech Podcast. I'm your host, Mili Tomar. And in today's episode, we are excited to welcome Michael Tannenbaum, Chief Executive Officer of Figure Technology Solutions. Figure is a leading blockchain-based capital markets company and the largest non-bank HELOC lender in the country, having originated over 30 billion in home equity loans. Leading Figure is Michael Tannenbaum, who brings a wealth of experience building and scaling some of FinTech's most recognizable names. Prior to Figure, he held senior leadership roles at SoFi, where he helped scale its consumer lending business, and at Brex, where he was part of the team that built its corporate card and expense management platform.

In today's conversation, we'll delve deeper into Michael's career journey from investment banking to leading one of FinTech's most innovative companies, explore some of the structural gaps in mortgage and consumer credit markets, how blockchain is being used to address them, and what the future of capital markets as a whole looks like as tokenization and AI continue to reshape the industry. We hope you enjoy the episode.

Michael, welcome. Thank you so much for joining us today. To get us started, could you introduce yourself? We know that you started your career in investment banking at JPMorgan and spent a number of years in the C-suite at some of the biggest names in FinTech. We'd love to hear a bit about what prompted that transition from traditional finance into FinTech and ultimately what led you to figure.

Michael Tannenbaum (1:55)

Thanks for having me. I've had a bunch of rules both in early stage FinTechs or scaled up FinTechs. The through line has been I've been an operator at a variety of scales and really close to the metal, as they say. He started, as you noted, in investment banking, but I specifically was in the financials group. So FIG or focus on banks, insurance companies, FinTech. And I always liked that space. I studied mortgages in college, actually as a research associate at the business school, doing a lot of research with the real estate institute there. So it's always been an area of interest of mine. And I went my more traditional path, initially in investment banking, and then went into private equity out in San Francisco. I decided to go to San Francisco because I wanted to get on the ground for a company. My father actually was a CFO of Biotech startups, which is under Lawson, that's kind of the industry there. And so I grew up with an interest in being on the ground for entrepreneurial organizations. And a big part of the reason why I chose to go to private equity in San Francisco is that's where tech and also FinTech was emerging at that time. 2012 is when I moved. And I was tracking a bunch of different FinTechs as part of my just interest, what you're reading about them on TechCrunch. When I started to approach the end of my two year program at private equity, I started reaching out to a bunch of different FinTechs and had a number of conversations landed on SoFi. It was a business that I really understood because they were working with a very attractive customer base and getting them early and then expanding the products that they sold into. And then from there, I was promoted a number of times at SoFi.

Ultimately, I left to join REC super early before it was even called REC. So it was just an idea. Corporate credit card, link to the expense management. I joined that company when I was based in the kitchen and had just the two founders who themselves were eight years younger than I was. I called myself CFO, but at the time, I was sort of chief of nothing. So it was just a fake title.

And that company scaled as well, just like SoFi did, it became quite big. And just so recently, Capital One put five billion in change. And then I joined Figur as the CTO. Figur and SoFi have Mike Gagney as the founder and comment. I joined in the winter of 24, and I took the company public this fall in September. And we've now been trading on ASEC for about seven, eight months.

Mili Tomar (4:32)

Congratulations on taking the company public. That is so exciting. We wish you all the very best. I now wanted to shift gears a bit and talk about the problem space that Figur operates in. So just to set the stage, what are some of the biggest structural challenges and barriers in the financial ecosystem and lending ecosystem today?

And what is Figur solving for and how?

Michael Tannenbaum (4:58)

I talk about Figur at a high level as doing for more asset ownership, what the Internet did for content creation. And if you're familiar with that analogy, prior to the Internet, a lot of the power in content was owned by the distribution later. So newspapers, for example, there weren't star content from journalists, and instead it was all intermediary through the newspapers. And similarly, people paid for those who were being resuscitated. And then the Internet came and democratized access. Most content became free and ad supported. And you have the rise of, essentially, whether it be podcasters or journalists or substack or all these things that have allowed and kind of restored economics to people that would have had historically had to be employees of. And similarly, at Vinger, what we've done is we've approached asset ownership, whether it be an asset creation. So in our case, a lot of it is mortgage. And we've turned over a lot of the economics of creating a mortgage to the people that manufacture them. Right? To the new banks, FinTechs, mortgage companies. And at the same time, we've also improved the economics of the ultimate asset owners, which are the investors. And all of the middlemen that kind of sat between those players are being disrupted through our blockchain-based capital market. That's at the highest level. More specifically, what we've done is we've taken the cost to originate a mortgage, for example, and changed it from about $12,000 to $1,000.