565: A Fintech Unicorn Burnishes its Risk Management Brand | Michael Tannenbaum, CFO, Brex, Inc.

Listen to the Episode Below (00:36:33)

Upon being named CFO of Brex, Inc., in 2017, Michael Tannenbaum joined a realm of accomplished finance executives whose average age is 20 years greater than his.

This is not the first time that Tannenbaum has advanced beyond his professional years, so the label of “whiz kid” has long since lost a little of its adhesive.

However, as a CFO’s son—who recalls reading the Wall Street Journal at summer camp—Tannenbaum has observations about his CFO role that demonstrate more circumspection than one might expect from your average C-suite Millennial.

Tannenbaum joined Brex after having occupied a VP of finance role at SoFi (Social Finance, Inc.), a fintech company best known for student debt refinancing. “I decided that I would join them as the first employee of Brex,” he recalls, referring to Brex’s cofounders, Henrique Dubugras and Pedro Franceschi. 

“When I came on board, we were not in a garage but in the CEO’s house, and from there I became involved in operations and ran marketing and business development,” says Tannenbaum, who also focused on raising capital. Most recently, Brex raised $200 million in debt from Credit Suisse (December 2019), following a similar $100 million deal from Barclays earlier in the year.

However, rather than recap the savvy mechanics behind Brex’s capital-raising, Tannenbaum habitually highlights the firm’s efforts to establish Brex as a risk management brand. “Ultimately, we at Brex need to be known for our brand of risk management because we are asking customers to trust us with their money,” explains Tannebaum, who views enhancing Brex’s risk brand as a 2020 priority. –Jack Sweeney

Subscribe to CFO Thought Leader

Apple | Google | Spotify | Stitcher | iHeart | 

Guest: Michael Tannenbaum

Company: Brex Inc.

Contact: www.brex.com

Headquarters: San Francisco, CA

(The following transcription has been edited for clarity)

CFOTL: Tell us about a finance strategic moment.

Tannenbaum: At Brex, pretty early on, I was kind of familiar with the banking landscape from when I had been in investment banking. The group that I had been in actually served regional banks, so I did a lot of regional bank mergers and acquisitions. Then, at SoFi, I had built a lot of relationships with regional banks. I think that when you start in fintech, there’s always this belief that you’re competing with big banks. That was a lot of the marketing positioning of my former employer, SoFi, but at Brex I saw this opportunity to partner with banks because I was familiar with the card landscape. At least in the commercial card space, outside of the Big Four banks–Wells, Citi, Bank of America, Chase–there are very few financial institutions that actually issue corporate cards.

I decided that even though we were a small company, subscale, no one had heard of us, banks might want to partner with us because they themselves were fighting their own battles with the Big Four issuers, as well as American Express. So we partnered with a number of banks very early on in a way that most people would think was not possible and was unusual. Ultimately in financial services, brands, particularly with regard to trust and stability, are super important.

Today, what’s exciting is that technology is changing so many industries and creating lots of opportunities, as well as disruption and uncertainty. Finance is a kind of universal language. At Brex, we need to be known for the brand of our risk management because ultimately we’re asking both customers and other businesses to trust us with their money–to buy loans from us, to buy deposits from us, to partner with us and give us access to payments networks. To do this, we really need to be known as a high-quality risk management brand.