I first met David Coulter earlier this year while discussing the vision and strategy of Varo with Warburg Pincus. Recently, I sat down with Dave to talk with him about the state of the banking industry and his involvement with Varo.
Dave, you’ve spent so much of your career in consumer banking — why have you devoted so much time and energy to financial services?
I always hoped I could add value somewhere.
When I graduated from Carnegie Mellon (then called Carnegie Tech), Lyndon Johnson was president. I took a job at the OEO (the Office of Economic Opportunity) which he had established to fight the war on poverty and racial injustice.
A question of great interest to the OEO was whether a minority-controlled bank could succeed in Pittsburgh. In my role, I had the opportunity to help in the founding of New World National Bank, which, at the time, was one of the first minority-owned banks established in the 20th century.
Many of our clients were those who had been excluded from the financial system. Businesses that had been denied the capital they needed to grow because traditional financing sources had deemed minority-owned businesses “too risky.” People who did not feel comfortable walking into a bank. Our job was to serve the people who feared they would be treated badly if they didn’t dress the right way or didn’t speak the language fluently. Whole populations of individuals and organizations were being held back because of the lack of adequate financial services.
“Whole populations of individuals and organizations were being held back because of the lack of adequate financial services.”
I became convinced that economic inclusion was critical to achieving the President’s vision of a Great Society. In those days, we went to work with a real commitment to social policy, for the good of the little guy. That isn’t the perception anymore, but there are still those of us that are working hard to add value to our communities.
What do you see as the banking industry’s major accomplishments over your time? What are the most compelling contributions from the industry today?
Our country has experienced tremendous economic growth over the last fifty years, and I think the banking industry has been a principal driver. The industry has helped channel financial resources and capital to where they are most needed and most beneficial — crossing county, state, and international borders to do so.
I believe the industry has done a fantastic job integrating technology to create convenience. I distinctly remember visiting the first ATM in Pittsburgh to retrieve $20 when the evening called for it. The most basic items in our wallets – credit cards and debit cards – are great examples of this. The industry has essentially placed revolving and instant credit in our hands for us to use anywhere, from the local grocery store to a small town in Norway. These are illustrative of the democratization of a convenience that only a privileged few knew not too long ago. And today, the industry is creating even greater reach for consumers through online and mobile banking.
How do you see Varo shaping the future of fintech and banking? In your view, how can Varo be a “game changer” in the industry?
Varo’s mission is to create better financial outcomes for its customers. We have the opportunity here to start with a blank slate and build an organization around this purpose. And the organization we have chosen to build combines the most creative and innovative minds in the technology sector with a wealth of financial services experience and the best learnings from the “old world” of the industry.
“Varo’s mission is to create better financial outcomes for its customers. We have the opportunity here to start with a blank slate and build an organization around this purpose.“
The financial crisis served as a catalyst for significant creative disruption. Many new players have emerged to embrace technology and to piece together solutions for specific problems. I think they hope to be disruptive to the financial industry by being separate from it. Even though they generate financial assets, I think these firms think of themselves as technology companies only.
“Varo is shifting the focus, I think rightly, from discrete products to complete solutions.”
But Varo is shifting the focus, I think rightly, from discrete products to complete solutions. With deep knowledge of the industry, Varo can get out in front of its customers, identify their needs, raise financial literacy, and ensure customers have the tools they need to effectively manage their finances. In this way, we hope to democratize financial well-being, the same way ATMs democratized convenience.
What is your personal aspiration for Varo?
Throughout my career in financial services, I have sought to be among those innovating and developing better solutions for consumers, particularly in areas such as policy, technology, and culture. This is part of what drew me to the work at the OEO and the New World National Bank.
Yet for all the time I have spent in the industry, I never had the chance to start from scratch. My greatest hope for Varo is that we are able to fully embrace what I recognize now as a once-in-a-career opportunity to start with a clean slate.
“From a position of such infinite possibility, we have the opportunity to lead and raise the bar in the industry.”
From a position of such infinite possibility, we have the opportunity to lead and raise the bar in the industry. My hope is that we will be regarded as leading the industry in how we think about financial services, how the industry should evolve, and how best to enhance the communities we support. I would take great pride in hearing “you guys led the way.”
David Coulter Bio:
David A. Coulter is a special limited partner of Warburg Pincus. During the past 10 years, he served in roles at the firm including vice chairman as well as managing director and senior advisor focused on the firm’s financial services investment activities. From 2000 through 2005, Mr. Coulter held a series of positions at J.P. Morgan Chase and was a member of the Office of the Chairman. He also served as chairman and chief executive officer of BankAmerica Corporation. Mr. Coulter is a director of Aeolus Re, MBIA, Santander Asset Management and Triton Container International. He is also a board member of Lincoln Center, Carnegie Mellon University, Third Way and the Northern California Asia Society.
Header Image Credit: Mike Braun