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Leaders in Lending | Ep. 122

Combating Financial Fraud: Fintech’s Game-Changing Role

Kyle Hauptman, Vice Chairman at the NCUA, shares his views on how AI and fintech partnerships can empower credit unions to fight fraud.



Kyle Hauptman

Kyle S. Hauptman was nominated by the President to serve on the NCUA Board on June 15, 2020. The U.S. Senate confirmed him on December 2, 2020, and he was sworn in as a member of the NCUA Board on December 14, 2020. The NCUA Board approved his designation as Vice Chairman of the NCUA on December 18, 2020. Prior to his joining the NCUA Board, Mr. Hauptman served as Senator Tom Cotton’s (R-Arkansas) advisor on economic policy, as well as Staff Director of the Senate Banking Committee’s Subcommittee on Economic Policy. Previously, Mr. Hauptman was Senior Vice President at Jefferies & Co. He worked at Lehman Brothers as a bond trader in New York City as well as in their international offices in Tokyo and Sydney, and served as a voting member on the U.S. Securities and Exchange Commission Advisory Committee on Small and Emerging Companies. Mr. Hauptman served on President Donald J. Trump’s transition team in 2016 and was Senator Mitt Romney’s (R-Utah) policy advisor for financial services during the 2012 presidential campaign. Mr. Hauptman holds a Master of Business Administration from Columbia Business School and a Bachelor of Arts from University of California, Los Angeles.






Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions. A three-member Board of Directors oversees the NCUA’s operations by setting policy, approving budgets and adopting rules. Each Board Member is appointed by the president and confirmed by the Senate. The president also designates the Chairman of the NCUA Board. No more than two Board members can be from the same political party, and each member serves a staggered six-year term. The NCUA protects the safety and soundness of the credit union system by identifying, monitoring and reducing risks to the National Credit Union Share Insurance Fund. Backed by the full faith and credit of the United States, the Share Insurance Fund provides up to $250,000 of federal share insurance to millions of account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions.  The NCUA also plays a role in helping to ensure broader financial stability as a member of the Federal Financial Institutions Examination Council. This council is responsible for developing uniform principles, standards and report forms, and for promoting uniformity in the supervision of depository financial institutions. The NCUA’s Chairman is also a voting member of the Financial Stability Oversight Council, an interagency body tasked with identifying and responding to emerging risks and threats to the financial system.

Key Topics Covered

  1. Adapt or close: staying relevant in today’s tech-powered world
  2. The relationship between regulations and fintech partnerships
  3. Preventing scams and fraud using revolutionary AI


For so long, new tech has been utilized by fraud artists, costing many unsuspecting victims countless dollars. Now, AI tools and strong fintech partnerships could be used to stop fraud in its tracks. 

With quickly evolving innovations, financial institutions must be at the forefront of tech. Kyle Hauptman, Vice Chairman at NCUA shares his views on the changes facing the industry and how they can be beneficial for everyone. 

Join us as we discuss: 

  • Adapt or close: staying relevant in today’s tech-powered world
  • The relationship between regulations and fintech partnerships
  • Preventing scams and fraud using revolutionary AI

Staying relevant in today’s tech-powered world

Innovation is, and always has been, necessary for survival, no matter the industry. That said, the core of what credit unions do has not changed for centuries: helping people with financial management. 

“That core of it hasn't changed, but they always innovate — they were there early with ATMs way back in the day, and credit unions network with each other, even banks,” Hauptman said.

As a regulator, developing a tolerance for failure is a challenge, but that very practice is essential for the art of innovation in finance. 

Invention — the sister of innovation — requires a pragmatic approach. An acceptance that with new solutions comes new problems.  

“One of the things I always say — and it's not always applicable — is to fail small if you can. It always depends on what you're trying to do, but have a $5 failure, not a $5 million failure,” Hauptman said. “Test something, try a little transaction. Test, test, test, test, try to minimize your failures.”

The relationship between regulations and fintech partnerships

Many institutions want risk management to be black and white when, in reality, it operates in a gray area. 

“With cost benefits, you have to realize not innovating is a risk,” Hauptman said. “When you realize that by staying still, you will hit an iceberg eventually, once you know that not changing is the riskiest path, it can positively change your cost-benefit.”

The future of digital assets and blockchain

Right now, Hauptman claimed the industry is in a “Gold Rush stage” of Bitcoin. Dreamers and thinkers alike are crowding into this perceived pile of money and overvalued assets. 

The industry has seen this type of response before with the World Wide Web flood of fraudsters and investments leading to a crash. But with that crash came clarity.

“Once you shift away all the debris, and you have a helpful bear market, that's what cleans out a lot of problems and also cleanses scams and con artists,” Hauptman said. “They clear the brush out. I think when it's all said and done, there'll be concrete, actual uses.”

Digital assets that make it possible to send money instantly — and more — have proven use cases that help prevent fraud. A crypto winter clears bad actors.

Preventing fraud through AI

Many credit unions are still experimenting with incorporating AI's use cases particularly in the area of fraud detection. Scammers have seen the value of AI as well, with some AI systems are even capable of replicating the voices of real people. 

“We talk about fraud detection — if somebody can call up and sound like me and look like me on a video or whatever — yeah, all technology will be used by a scammer, and all technology is helping to fight scams. So that'll happen both ways,” Hauptman said.

The key is focusing on leveling up defenses alongside fraudster advances to stay on pace and come out on top. In order to evolve their fraud prevention capabilities, credit unions and beyond must forge partnerships with high-value fintechs. 

Stay tuned for new episodes every week on the Leaders in Lending Podcast.


Stay tuned for new episodes every week on the Leaders in Lending Podcast