Leaders in Lending
Leaders in Lending

Episode · 1 year ago

Education Loans and Credit Unions: LendKeys’ Partnerships Approach

ABOUT THIS EPISODE

Around the time of the Great Recession, there weren’t many lenders originating educational loans. Most of them had exited the business because of the volatility of the market.

This void opened up the perfect opportunity for credit unions to help consumers achieve their educational goals while lowering the average age of their membership at the same time.

Vince Passione, Chief Execut ive Officer and Founder at LendKey , joins the show to discuss how his company saw this emerging need in the market and how they work with credit unions to digitally originate and sell in-purchase loans for education among other verticals.

We discuss:

- Starting out in educational loan refinancing

- The trend towards unsecured loans for home improvement

- What’s coming in the auto finance space

- Working with regulators early and often

Want more lending advice? Find us on Apple Podcasts, Spotify, and here.

Listening on a desktop & can’t see the links? Just search for Leaders in Lending in your favorite podcast player.

What we realized was that there was really in need for someone to step in and to recapitalize the balance sheep for student loans because, post the great recession, a whole bunch of lenders exited that business. You are listening to leaders and lending from upstart, a podcast dedicated to helping consumer lenders grow their programs and improve their product offerings. Each week here, decision makers in the finance industry offer insights into the future of the lending industry, Best Practices around digital transformation. In more let's get into the show. Welcome to the leaders and lending. I'm your host, Jeff Keltner. This week we're featuring my conversation with the CEO of Lynn Key, Vince Passion. Vince has been in the lending industry for a long time, both at len key and previously as a president of dealer track, one of the automotive players in automotive lending, and I think it's a really interesting conversation. This is something I'd like to do a little bit more of and future episodes, which is bring in voices from the Fintech side, and they are kind of defining new paths, new products, new capabilities in the lending space and add those voices to the mix that we have here on the podcast. So I'm grateful to events for being kind of the first FINTECH executive to join us here and I think it's a really interesting conversation. We talk about student lending, the lend keys, work with credit unions in particular and why vens things are the the hidden gem and of finance industry, no offense to my bank listeners, and also a little bit about the automotive lending space and what vence is seeing there in his history at dealer tracks. So these are very insightful conversation and hopefully the first off several conversations with fintech executives that can bring a little bit of a different perspective torque conversations about lending events. Thanks for joining the podcast today. I appreciate your and make the time. Hey, jeff, it's great to be here. Thank you your kind of breaking ground. Is Our first fellow fin tech to join the PODCAST, but I'm really excited to have you. Know your perspective here. You've been in the lending industry for a long time, so I think it'll be a lot of interesting insights for our listeners. Feel very privileged to be the first. Now, do you want to give us a little bit of your history and specifically tell me a little bit about what Lenn key does, since not everyone may be a familiar? Sure so, but we founded lend key back in two thousand and nine and and really we've founded the business to really be a lending as a service platform and we do simple. We just help our clients digitally originate and and sell and purchase loans and we use a couple core at court capabilities in order to do that, which I think you'll find very familiar. The first is we help move digital new generation and you know, as I always say, credating is a probably the best kept secret in the financial services industry. So we need to make sure the consumers new they were there. So we did LEA Gen for them. We're multi asset of digital origination platform. So we do education loans, we do education refinance loans and then we do unsecured home provement loans. Now, having stormed in the education space, we need to be a turnkey solution. So, as I can origination, we also do own servicing and we have a call center where we handle the origination calls and the servicing calls to the clients and then the we we are. We are balance sheet light solution, so very similar to up start, we originate directly on the balance sheets of our...

...clients. Now, given the assets we deal with, especially education, it's important that COM regulatory perspective, they're originated in a certain way, there's a certain process in the very specific regulatory framework and they have to do service to certain ways. So we have built a very, very stringent compliance framework and we have been through thousands of audits at this point because we have a three hundred twenty five clients on the platform that we've originated about four billion dollars of loans for now. I think what makes us unique is that we really develop this expertise from day one of creating what I call network lending programs, where we realized from the very beginning creatings are very cooperative and they and they participate loans all the time and they do it for a couple of reasons. They do it for capital preservation when they need to preserve capital, but they also turn around to sipate loans for geographic diversification. So from day one we allowed our clients to real time participate loans out when they're being originated, and we have built out some really robust networks, one for education, one for education refinance and one for home improvement. And then recently we did was open that network pop so that our clients, when we saw, you know, the pandemic hit and and the recession, that it is a result of it, we realize that, hey, they're going to be a bunch of assets on the balance sheets of credit names that need to be deployed. They're going to be looking for all kinds of loans. Let's help other ntext so we launched a product, POL Lero, earlier this year which allows all the originators to drive traffic to us and then we move it through our network in these we call private phoe flow networks. So that's who we are, what we are. So about three hundred and twenty five clients been around for about ten years and most almost eleven years now, servicing credit uns of community banks. It's hard to believe and you cross that decade mark. Isn't and we're about six months shy, but I think it has been that long. So tell me a little bit about student loans, like why the education mark. I mean that was kind of where you got, where you started off right was in the the student and in the educational on refinancing. What was it about that segment that you that thought, you know, made you think, hey, this is a space that needs a better solution or there's room for a new player. Well, well, can you remember? Two Thousand and nine wasn't that long ago. So we still have the business in the shadow with the great recession, very similar to yourselves, and and what we realized was that there was really in need for someone to step in and to recapitalize the balance sheet for student bones because post the great recession, a whole bunch of lenders exited that business people like Sally may cut their originations in half because they were highly reliant upon the securization markets at the time. So we saw the need and said, well, who better to serve that need? They credit UNIS also at that time, we would think back two thousand and nine, the average ages of the create new members probably about fifty five years old. So credit needs, need to get young. Student loans were great way for them to help them member finance their education and also to acquire a younger member or...

...to really sort of go multigenerational because they had the parents. Now they need to get the family. So and it really worked out well. Credit. It weren't many credit us in the privacy loan of business back in two thousand and nine. Today there's over a thousand pretty us there on originating education bones and, as you know, right because your business like mine, we're out there trying to help consumers find the best price on these loans, and credit uns have a lows cost of funds. So it served the consumer. It help crediting service their members and help pretty US really put great assets, pre performing assets, on their on their books. And let me ask you, know you think about you talked about digital lead acquisition and I often think of financial institutions, in credit unions of particular, kind of focusing on their current member base when it comes to lending products. What was it the kind of drove you? You know, you see that, you acquire the deposit, you cross all the loan whatever, but you're you're really talking about, you know, doing digitally generation for them, for these net new clients are mostly to their current client base. I'm I'm curious how you got into the kind of digitally generation and why your clients find that to be so important as a part of the solution versus just kind of doing a standard, I mark it out to my current member base approach. Yeah, so I think the first is it made all the sense in the world for credit news to really grab evitate towards this. Is a way for me to get a new client because, as I said, think about the age of an average crede new member. They need to get young and getting exposure into the schools, getting exposure into affiliate channels where we could drive education refinance loans made sense them. So the majority of the traffic is traffic that we drive for them. In the education space. In the home improvement space, it's a product that's sold, not fought. So in the home improving space we are dealing with contractors. So the probability that that contractor is dealing with the member is probably pretty low, but he is the best way to acquire those loans and in our case we have contractors selling pools and spas. It's mostly the luxury market right now, where that contractor is able to then turn around and and represent a credit means loan to their client and closing it. So they need to get young and in some cases the product is being sold by, call it, a merchant right in. Yeah, I'm curious about the you know, their unsecured loans, right. Your home improvement loans are not like helocks. You know, I get called all the time from various groups, either he lock executives at a bank or committees representing different institutions and and they're seeing the kind of home equity lines of credit or home equity install the loans dropping generally and balances. Do you see a trend towards this kind of unsecured for home and improvement purposes? I'm kind of curious about that product because, you know, Helock has been one of the kind of non mortgage consumer loans of choice in terms of at least banks and to some extent credit unions historically, and this seems like a different thing that's filling a similar needs. I'm kind of curious what you're seeing in that space and how you see those kind of competing sitting side...

...by side, etc. Yeah, so I think there's a very specific time and place for an unsecure home pervent loan and it's mostly being driven by the demands of the contractors that are out there doing this. So in the in the luxury market, it's pretty similar. It's about speed. You have a contractor WHO's at the point of sale. They are now sitting with a client. They might be pitching them on replacement windows and might be pitching him on a new roof and and as a result of doing that, especially when you think about HVAC right in many cap many times, they really want to know that they can get this customer approved and they can move forward in the sales process. And is no different than that. We see when you show up in an auto deal if you did today right and you purchased a vehicle, it's all real time and you know, this is what we did in my previous like big deal with track is is really that instant decision and the ability for that that merchant to move forward in a transaction. So I think it's being driven by the demands of contractors who are out there and merchants who want to turn around and know that they at the point of sale, they can get quoted on a rate. As a result of doing that, just like any even by now paid later, it affects the purchase price well and affects a conversion rate like it effects a purchase price. But ultimately, I think a lot of binoculators all us about how do I get the buyer who's here in the moment through the funnel converted and actually able to purchase and not? You know, whenever you could say hey it, come back an in the hut case of Helocks, I hear a lot of bangs. I guess still a thirty, forty five day process. That's not a great answer for contract come back and forty five days. I'll tell you if I've got my loan. That's not a great answer. No, you're right. You're right, Jeff. And also you think about in the repair market, and we'll all come on it right now. We're going to go into heam season. Right. No heat calls. The consumer turns on their leating system, it doesn't come turn on. They make it. They make it. A he called to the contractor shows up, tells them we have to replace your heating system. They can get it done, probably in twenty four hours. That's not enough time for you. Go get a helock and you didn't expect this to happen, so you're going to put it on your credit card or you can get it on secure whom improvement bone and you can get it in real time. Interesting do you think about the real time aspect outside of decisioning, in terms of how quickly you can get someone not just from here I am what do I qualify for, but all the way through to getting the dollars in the loan in the you know, funded in the barrowers account. I mean all the time in education of a little bit of a runway because typically the start of in school lending season is probably right after July fourth, but the majority of our loans are booked in the last three weeks of August and those those funds have to be in the school by the time that student shows up and is get moving into the dorm. So we've got we've got a real deadline that's associated with it. The Reef by side it's really up to the bar right the bar is paying off into the service or so it's really up to the bar or how quickly they want to move through the process. On the home improvement side, it is about speed. The contractor is starting a job, if it's a if it's a construction project and they're going to dig...

...a hole for a pool, they want a third the payment before they dig the hole. If it's a repair project, many cases they're going to want to get paid as soon as they're done and in some cases, like a weak call, they make it done in twenty four hours or let's yeah, interesting. Do you see like do you look at on the refly side, where there's not kind of an external deadline the way you have and the in school, or the home improvement where you got to you know, a guy with a the excavator sitting out in your front yard? Go on, I need a third down before I can I can go back there and dig the hole for your pool. Or, you know, for us, I had my my AC on my roof blew out like five times one summer. I blue fuses because it was a hundred five degrees and I was running a home depot buying new fuses going I think I needed I need enough grade. How fast can you come here and get me an AC there's not going to blow up every time it clears a hundred? You know, I didn't want to wait. But on that reefly product, you do have more of a bar where, lad but it do you find any like you know, drop off from borrowers as the process is slow, or any improvement to your business as you're able to simplify or shorten the time frame that it takes a typical bar where to get through that experience. Absolutely and we spend a lot of time looking at ways to take friction out of the process. This you know, your original personal security moms. You though, it's like great, your experience is your you apply and you pretty much and done with the process. You can look pretty quickly. There's a few friction points and over the over the years we've eliminated them over time. But you know, I always tell people it's about the three P's, it's about the product, it's about the price and it's about the process and where they wanted up at the process. Make it as fast as possible. You know, you show me, you know me and get me through the process as fast as possible. And one of our big clients, you know that's there. That's the mantra. Is shown me. You Know Me. What does that mean? It means, Hey, you don't need to ask me my name, my address, my you know, you don't need me to fill this out and you can pretty fill it. You know my income because of a member of your credit. You need just get me through this as fast as possible. So it absolutely affects conversion and as you know that that conversion rate really helps when you're out there competing for leads in the market. Yeah, when you're doing digitally acquisition, the conversion rate, I mean twenty five percent increase in conversion rate, it's a dramatic drop in your cost to acquire. So as you're out there in a competitive market place, outs differs between profitable and you know the thing that happens when you're not profitable for too long, which is usually non continuous of business, if you keep losing money. So absolutely, I love that. By the way, show me. You Know Me. It's not I can't say credit for as one of my clients. It's not mine. I won't take credit for but I you know, I got a highlight one that I think makes sense, because that's a it's interesting, Montre. It sounds so simple, but I mean I think so many institutions execute so badly on that. And not to not to pick on any I I won't tell you who my bank is, but I went through a mortgage refly process with the bank. Has Got my K and my checking and they've got and man, I go to a form, please into your name, please enter your address. I'm like you have I told you I wanted to fight revise my mortgage. You Send Me My statement every month to the address, like you know what...

...it is. But they, you know, they were like they've never met me before when I went into the process. I don't. I think it really has an impact. These days, more than ever, consumers expect more, all right, they they get more from Amazon, they get more from Uber and they expect more from their financial institution that maybe has the most sensitive pieces of information and their most valuable assets. Absolutely, I agree and I'm sure, look, you're doing that in we were product as well. It is about conversion rate. Is the reason why our clients come to us. They're trying to build relationships with both existing clientspan relationship and is using clients, and they trying to build relationship to new clients. And you know, I've listened to a couple of private podcast when we talk about Fintech relationships and why they're being built, and a lot of what was driving it is the ability to digitize his experiences and to improve turn time in conversion rates, but also, to that point, to really make it a customized experience. So the consumer says, well, you do know who I am. Right, how many times we see I remember my years, my early days of City Group, when I sa two of the branches. When is the CTO? And every once in a while you'd see an exchange on the teler line. Right and what was it? It was somebody on the line. It was upset and they said do you know who I am? And then when they finish, like you know, I have a mortgage with you, I have this with you. The answer is no, they don't. That's the reason why you're on the line and your last on the line and you weren't put on special service line. Interest saying I'm curious. You mentioned your kind of history, a dealer track, and you know you talked about you guys are in education and refinancing and in school and your end, you know, with your partners in the kind of unsecured home improved loans. What do you see coming in the auto space? I mean we're obviously have gotten into the refly space. That upstart with our partners. I think that's a fascinating space. But I'm also seeing the kind of emerging ECOMMERCE, the kind of traditional indirect being not a very I think a lot of lenders don't love that because I don't feel like they get a very strong member relationship through an indirect aut alone, even if they can put a lot of assets on the book. So it feels like an area right for disruption. I'm curious if you have any thoughts on what you see coming in the auto finance space, because it feels like, you know, a lot as a foot there. Look for years and years and years, I should say for decades right, no one would touch the indirect model. It was just, you know, credit unans have relationships with dealers and makes all the sense in the world. I think a couple of things have happened and and obviously the pandemic generated a great deal of it pushed us over the over the over the edge which was how do you go from indirected direct and and how do you get the consumer consumer to do it and, more importantly, how do you get the dealer to be comfortable doing it? When carbon has a very good example where you have a founder who started a buy here or buy here, pay here type business in the self prime space, who said, let me figure out if I can disintermediate myself and create a carbon and and I think it's a very, very interesting model. And what they've created, right, with the entire experiences online and the cars delivered to your home, Tesla, where they said, look, we're...

...not we're not even to have deal of ships. Right, you'll go take a look at the car if you want to look at it in the show room. Not a dealiction of exact I'm inventory. We just have a couple models to check it out, sit in it. So look, I think, I think the pandemic has and a great deal to digitize things because we just had to and as a result, consumers, at a necessity, even baby builders, right, have moved to the digital channel because they had to. And we've had a couple of shots at this, right, we had, we had, we had two thousand. We ever was a Greatcom you know, push right. Then we had two thousand and nine, the last great recession. But this one really push us over the edge because it was it was the inability to get to the physical channel. Plus, look at look at the kind of of capacity that we had to do it with, right, because back and back into Tho we couldn't create the kind of customer experiences to lack of bandwidth. So I'd say that technology was their desire was there, unfortunately because of the pandemic, and I think as a result we took a process that really wasn't great. Right, we all watch that CARBONA commercial. Right about what I'm not've gone to some of those sales schools with dealers and what they actually do, and I got to talk to my manager. Used to call it the box. We put you in the box and then we try to sell you. So it's a much better experience and I think what we're seeing more of is that dealers are coming coming full circle and recognizing that the dealerships are going to become all like showroom. Just set an appointment to show up a dealership to drive the vehicle, but most of what you're going to do you're going to do from home. You're going to configure your vehicle, you'll turn around the researcher vehicle and then you'll complete the transaction if you want to to go into the dealership. So I think that's a very big change. I mean, you talked about refly and and I think refly is really important. It's a product very similar to we entered into the education reply space with very few consumers know it's available and especially now price of the vehicles continue to go up. Right, think about it. Now, the average length of an auto loan is about six and a half years. The average balance and balance with a lot of loans, about thirty FIVEZERO. So so it makes all the sense in the world, especially in this inflationary times are in, for consumer to turn around. They're paying on average of a four hundred and call it four hundred and fifty a month for this auto. If they refinance this product and they add two more years on the back of it, they can drop that payment down to three hundred and twenty five. Can Save that money to maybe invested in a warranty. So if there is an issue because I'm going to hold a car longer, it's called what are they service point. So there's lots of reasons for that to happen. So I think that's another big piece. You're going to see consumers pay more attension to that payment because they're going to have to deal with it longer, because they're going to hold their vehicles water. Yeah, the other thing I thought your point is really interesting about the availability of the technology. We we see something similar and refly space, which is kind of the number of conning. The cost of execute the refly kind of indicates how many people you can refinance and save money, because you got to recoup your cost. And as...

...technology has, you know, allowed US things like electronic lean and title transfers, you know have a being able to reduce the cost of actually making the refile own available, you can pass that on in terms of more consumers that you can save enough money to make sense switching. And so I think there's a that the technology is coming where, hey, we can automate a lot of the verification, we can do instant rate checks that are automated through we get, we can pull that manual cost out of the system and now the number of people we can actually put into a refly and save enough money to buy a warranty package or be meaningful in their budget actually increases quite a bit. And so it's kind of a moment where the product kind of is its opportunity is expanding because of the the prevalence of technology to make it more available and more cost effective for lenders. And it was, you know, ten years ago or kind it's hard to think. The two thousand was twenty one years ago. But twenty one years ago, I don't know. I'm not going to do that math again. That's appreciate you're making me do that math to the events. Let me ask you. So you've been added for a decade with linkey one. Are the biggest things you've learned in the biggest maybe the biggest thing that surprised you? And that journey? It's a I'm sure then a lot of twist and turns along the way. Yeah. So so look, I think people sometimes look at the say had you had you require that any customers, and I tell people look at it. You have the patients. You really have you patient. Our clients are are very discerning. I worked in City Group. I was on the other side right. I was a CTL, so I was a purchaser of technology and I felt we were difficult. But I've got credit UNIS, a hundred million dollar acid credit UNIS. I've got a ten million dollar asked the credit on the platform. They're very discerning. They have to be right. They're highly regulated there, there, there, and their the NCUA, really requires them to conduct diligence very deep diligence, especially when someone's servicing for them. So I learned to be very patient. I was drop around and say, you know, I started this business I had black hair, not this full head of gray hair. So you do need to be very patient and I joke with my clients about it because I say yeah, I'm still around and I'm very patient. So that was the first thing. The second thing was, you know, you really do need to engage the regulator from day one and think about it. I called the regulator in two thousand and nine. I called the head enforcement the NCA and I introduced myself and I said I am going to put creditings into the education clience business in a low participation model, and the reaction was, after he listened for about five or ten minutes, he said, Vince you, you have a target on your back and we're going to put you out of business. And honestly, I spoke to him not too long ago. We joke about it now, but we continue to engage the regulator every step of the way. We made ourselves known to the regulator boat on the distute, on the crediting side and on the community bank side and regulators and never endorse your product, but providing the opportunity for them to know who you are as a business owner, to make them very clear about what the product does, to make yourself available to the examiners when they're when they're in the field revealing your product, really critical, really critical. I think you know that because you guys have following some of those same, same paths. So I think it is important to really engage the the regulatory environment when you're...

...going to do it. We're trying to do. You can't. We can't disrupt that environment. No, I that's that's really advice. I'm curious if you see any shift in, I won't say that the level of discernment of your clients, but I feel like more credit unions and community banks are becoming comfortable with the idea of partnering with Fent text and their muscle around diligence, review oversight as something they're strengthening, they're getting better at and I think the regulators are getting more used to it. Understand how they react to and I'm curious if you're seeing that in your business, where you know there's a little more clarity, a little more comfort with the ability to engage in these kind of relationships, the way to oversee and what's going to be expected by the regulators may walk on the door, you know. So the answer is yes, but we also need to be honest with ourselves. What's driving some of it? You know, we all understand there's a liquidity crisis. They're the number of the posits that have flown into into these organizations is unprecedented. The loan to share ratios of credit us now is probably the lowest I've ever seen since I started working in credit us. So there's probably somewhat seven hundred billion dollars of assets that need to posits that need to be be somehow invested, and the regulator is very much aware of that, because that's not a good thing for the credit new system or the banking system in general. So so there is a forcing factor right now that says there's no it's impossible for them to turn around and do this on their own. And the reason why I say that it is not to put a damper on the enthusiasm. It's because when that turns around, and it will, they're going to be just as discerning as they always were because, remember, there's an insurance fund behind behind everyone of these agencies and that's what they're there to protect. Right. We don't want to turn around, you and I and help our clients acquire loans that don't perform and in their in their in their enthusiasm to go out and get these portfolios, we need to make certain, because, like you right, we assist them and underwriting and pricing, that they really are acquiring portfolios they're going to perform all the long haul, because that's still exist today and all that diligence is about making sure right that they're originating these loans properly, these loans are going to perform and they're going to be service properly. Yeah, that's I think it's very true. It's a good point out. I don't know that I would say the level of oversight or diligence is to reducing so much as people kind of under understand better how to do it, where to do it and you know and they're comfortable that if they do it well, it's a place they can go to. But you are right. The liquidity crisis, as you get took me a while to understand somebody from the from a text base. I went well, extra cash in the balance she's good right, like when your business generates more cash, that's that's all go as a good thing and of course turns out in the Credit Union, in the banking space, like excess cash is not a good thing. You've got to let mean those our assets are aren't being put to work, and so it is a challenge that I think is driving a lot of relatively short term activity because people are need to solve that in pretty rapid order. Yeah, I'm now now on the positive side the equation, having met with the regulators...

...and we've seen it across the board. Both the OCC, the FDIC and the NCUA are building in their organizations individuals that are in charge of fintech partnerships where they are going to do outreach. They are going to try to help ntext understand how to partner and what's require with them to partner. Where in the past it was more defensive posture, they are shifting now to more of an offensive posture to say, okay, I am now going to explain to you, Fintech, how you engage with me. In two thousand and nine, when I started calling on credit uns, I to go searching for the letter that the NCUA created which was memo to credit unions on what you have to do to diligence a servicer, and then I built my diligence packages based on that. Today, I would say we're probably months away from these regulatory agencies issuing this stuff directly to n sex, saying this is what you're going to need to do if you want to engage with some of my members. Yeah, we've already seen some of the regulators providing increase guidance, increased, you know, examiner manuals on certain party relationship diligence and you know, we could kind of reverse engineer what that means. We need to be providing as a partner for them to go through that, but it'd be great if they just came direct to the Fin Texas of yours. What here's will we expect from you and in terms of those partnerships? So I hope you're right on that. Months he sadden a'mal. Maybe that can be your bold prediction for us. Is there anything you wanted to talk about that I didn't that I didn't bring up so far in this conversation? Anything you thought we ought to cover that we haven't haven't gone over? Well, look, I think in the spirit of some of the things you discussing some of your other podcast, I would say that partnerships are really important. Building good, strong relationships with credit means is super important. My experience with credit means are they are probably the loyals customers you'll ever get. But in order to do that we have to be failly transparent and we have a big responsibility to do that. That means that they have to understand exactly what we're doing, because we're helping to Chore Customers for them. We're actually servicing their clients for them. So it's important part when we think about partnerships and we go back to lessons learned, transparency is probably one of the key things that we push very hard in the organization. You know, I typically sit like any any any big operation. Every once in a great law you make a mistake and I'll sit with the pursuit of my staff and go well, first thing we do is called a client and tell me made a mistake and explain what happened, apologize and to explain how we're going to fix it, and I think that goes a long way because I sit on having set on the other side of this if I outsource the function to a vendor. I want that transparency. So I think the key to success, and I'm sure you're seeing a to an upstart, is being that transparent to your clients when we're doing what we do every day. Yeah, I think the key to successful long terms trust of your clients, and that trust comes from transparency, honesty, dealing with the cult of mean mistakes get made, that it does happen. Right, you don't love...

...it, but like, yeah, we know what happens inside the institutions. We know it's going to happen on occasion when we're working with them. So I do agree that you got a transparency patients and regular tranngagements free. Good piece of advice for any fantape that wants to get into the partnering with that Fives More broadly. So I think great advice there from the events. And then let me so I end most these discussions with the same three questions. I'm going to I'm going to throw the matching now and see what you got. But the first is, what's the best piece of career advice you've gotten? I'd say pay it forward. I remember when I was promoted by my manager to become a manager and I was very grateful for him mentoring me and help me along the journey that actually become a people manager, which was a huge milestone right and anybody's career and a privilege. And he looked at me he said, I want you to remember how you feel right now, now, and I want you to turn around in your life and your career and make others feel that way and in your future you'll always build will be a people builder, right, and that's how you build successful businesses. So I try to always think of that and when I when I'm coaching my new managers, I always telling the same thing. When they say thank you, I always stopped them and say I want you to have a visual memory of this conversation and think about how you're going to make that happen for all the people in your team now and in the future. I like to pay for and I like stopped that that stop. Remember this moment and how you feel. That's a great, great, great mechanism to get people to remember and I bet many of them do like it. Specific moment than God. I remember that moment, how many feel, and that's what I'm that's what I'm aiming for. I liked I'm up to use out with my kids at some point. I have to figure out when the right moment is, but feel like a very kid friendly piece of advice. Second question what is what is the best piece of advice you've gotten about the consumer lending industry in general? You've been a lot of different segments of it over the you know, over your career. I'm curious what you know consumer lending, consumer finance. What's the best advice you've gotten? The easiest thing to do is to give people money. The hardest thing to do is to get to get it back. Right. We talked about this all the time. Feel like it's hard a girl and he was as easy girl lending business man right to open up a shingle, start handing out the money and, having sat with and deal, attracts and by here, by here, pay here. Right. These are subprime lenders. They always tell me. It doesn't matter how much money they give you, just get somebody to pay you something right, because once you do, that's the key to success. Always, always, just trying to get them to give you something, even if it's a dollar. That's the same thing I hear from my University Alumni Association about I have it. I'm giving giftsure first. Sure you guys that I don't need a lot man, just give me five bucks, but you start to have it as saying, Ham, I guy to pay. So I'm a guy who contribute. I'm a guy who makes the contribution, and that that's sets your mindset and such down the path, keeps you in the payment priority and that's an important thing and I know sometimes, you know, especially when we face things like some the crisis we just went through, people are very concerned about I'm going to lose that consumer. The answer is, if they just keep paying a dollar a month, at least you stay connected to him and you or now in their their mental payment priority, and at some point they'll have the capacity increase that.

But don't lose them totally, because once you do it's hard to get a bad okay, that's that. You're the first person give me that particular piece of advice and Surmelian, so I like appreciate novelty and the advice keeps it interesting. That my last question for you. That's what's up bold prediction you have for the future? You know it's probably not that bold, but you know, I've always looked at and I've lived through a couple of generations of what I call Fintech. One DOTTO, Fintech to doto, which is technology shows up, it's it's disruptive. People think it's a product of think it's a cut business, but it's really just a product, and then it gets adopted by the banks. I saw this with you know. You know in the Internet people are all it's a product, it's a channel. You know, Internet banking, mobile banking. This time things are a little bit different and especially when you think about whether you quote banking, you service, when you think about it as embedded finance, I think we're going to see as a fragmentation of banking industry over time and I think that the Barrot entry is become so low, barring the regulatory hurdles that are out there where, I think consumers will feel much more comfortable banking in places that people probably wouldn't think they would. And think about it. Right now starbucks is sitting on top of one point five billion dollars of balances on the prepaid cards. So you know, I was around when people the first in the late S, when people said Walmart's going to be a bank right. So I think we're fine at the point where consumers will go to their their service provider of choice and say, you know, I go to I go to star books every morning and I pick up my coffee. Well, this make makes some sense. So I've always been a big believer that banks have the trust, banks have the brands and that's why they're successful at this. But sometimes I wonder now that it might become more fragments, more for a, and how do you square that with, you know, what we see, which is kind of consolidation? I mean, you know, I first kind of the space. I was surprised. You know, five thousand banks, five thousand credit unions, seems like a lot. And then I go back, what was it? One thousand nine hundred and seventy was like it was a lot more. So we're seeing kind of a general trend tours consolidation and the banking industry. How do you kind of think about the a that being different than your prediction about kind of a fragmentation of the space versus what we've seen as kind of a consolidation in general, at least at the level of the traditional financial situations? Yeah, so I think. I think you're you hit the answer at the end right. It's consolidation of the traditional institutions. The fragmentations will occur because people will have highly customized types of banks. You know the bank was so not making it up a bank for someone who is a Labor duty lover. I just feel like we're at that point where, when we talk about show me, you know me that that you can actually do this, where people will just pick their favorite service provider and say, boy, they can provide these services for me. It makes some sense. So you ask for a while prediction. That's why wild please bull and say a while, but I'll I like bull. That's thought provoking. Is always good. Gets...

...us all thinking about what's next and think about kind of different perspectives. I appreciate that events. This was a great conversation. I really enjoyed it. Thank you for breaking the way as our it's our first kind of Fintag guests and hopefully good reception will be our last. Well, listen, thanks for the opportunity to do this. I really appreciate you. was great upstart partners with banks and credit unions to help grow their consumer loan portfolios and deliver a modern all digital lending experience. As the average consumer becomes more digitally savvy, it only makes sense that their bank does to. Up Starts AI landing platform uses sophisticated machine learning models to more accurately identify risk and approve more applicants than traditional credit models. With fraud rates near zero. Upstarts all digital experience reduces manual processing for banks and offers a simple and convenient experience for consumers. Whether you're looking to grow and enhance your existing personal and auto lending programs or you're just getting started, upstart can help. Upstart offers an into end solution that can help you find more credit worthy borrowers within your risk profile, with all digital underwriting, onboarding, loan closing and servicing. It's all possible with upstart in your corner. Learn more about finding new borrowers, enhancing your credit decisioning process and growing your business by visiting UPSTARTCOM forward banks. That's upstartcom forward banks. You've been listening to leaders and lending from upstart. Make sure you never miss an episode. Subscribe to leaders and lending in your favorite podcast player using apple podcast. Leave as a quick rating by tapping the number of stars you think the show deserves. Thanks for listening until next time. The views and opinions expressed by the host and guests on the leaders and lending podcast are their own and their participation in this podcast does not imply an endorsement of such views by their organization or themselves. The content provided is for informational purposes only and the discussion between the host and guests should not be taken as financial advice by companies or individuals.

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