Leaders in Lending
Leaders in Lending

Episode 81 · 1 month ago

Cultivating Innovation as a Traditional Bank

ABOUT THIS EPISODE

Innovation is not just about adoption of technology, it’s also a change in mindset. Especially for some traditional banks that have been operating for over a decade, this mindset shift in the lending space usually involves influencing multiple stakeholders at a financial institution: from credit, risk and regulatory sides of the business. So how do you influence the risk averse and push innovation, especially in today’s tough climate of mortgage lending?

Our guest today Leisa Kinnin, SVP Lending Product Manager at UMB Bank, together with her team helped to launch a downpayment assistance program that provides help to qualified borrowers who cannot meet the high upfront costs of purchasing a home. Leisa has spent her entire career in lending and knows this team effort requires institutional process change to meet the tech changes she sees in the industry.

Join us as Jeff and Leisa discuss:

  • How traditional banks can leverage fintechs for digital experiences
  • Influencing decisions without a seat at the top of the org chart
  • Serving underserved communities   

Want to learn more about how Upstart partners with Banks? Check out this case study mentioned in the episode.

You're 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, and more. Let's get into the show. Welcome to Leaders and Lending. I'm your host, Jeff Keltner. This week's episode features my conversation with Lisa Kennan, the s VP and lending product manager at umb Bank. At Lisa's got a lot of experience in the lending space, and I think it was really interesting to hear about her career trajectory. UH, to hear kind of where she started and some of the great stories from that, as well as some of her work to drive innovation and innovative mindset and particularly working with stakeholders across the institution to bring new ways of thinking. Really not just about digitization and new experiences, but refining processes and remaking process used to make that possible. Um, they're doing some really interesting things in the mortgage space to make mortgages more accessible to people who really need them. I thought it was really interesting and Lisa has maybe the most interesting piece of career advice that comes from, believe it or not, a dairy farm. So it's worth wakening and waiting to lean for. I really enjoyed this conversation, and I'm sure you will as well. Please enjoy this discussion with Lisa Kennon. Lisa, I appreciate your making the time to join us on the podcast today. It is really exciting to be here with you, Jeff. And you're coming to us from the middle of a heat wave, I understand, so you're gonna have to hopefully keep the temperature down in there. Unfortunately, um the Midwest is getting one last blast of summer before fall arrives officially and in the temps on Thursday, so we're looking forward to some closer to fall temps later this week. Uh So, I've begun starting all of my podcasts with the same question, which I always find interesting, which most of us did not grow up dreaming of being bankers as children, and yet and yet here we are. So tell me a little bit about the path that led you to this career, because I think, like I feel like it's not where any of us kind of intended to go and yet and yet we all ended up here, and I usually find a story quite as interesting as I thought about, especially in our pre conversation and thought about what we would talk about today. I guess I'll just go ahead and say that I've I have now reached the thirty ninth year of my career and it has been in lending from virtually day one, which is shocking considering, you know, I grew up. I grew up on a dairy farm in the Midwest, and and didn't see this is where I would go. But um, I you know, I think it's that first job out of college thing and that uh, you know, some early advice in my career that you know, take every opportunity to learn something new, and every time you're given a chance to embrace something that's possibly even a little out of your comfort zone or um larger than what you thought you could do, you might surprise yourself. And so that has proven very true in my career, and lending has been an area that has really taught me a lot and given me an opportunity to work for some great people and some great institutions. Well, yeah, yeah, you still like my first closing question, which is the best piece of career advice. And that's actually the advice I get people as always look for a job that feels a little outside your comfort zone, one that you go I can't quite believe they're giving this to me. I don't quite feel like ready for it, but I feel like maybe I could figure it out. And that's like that little edge where you're where you're learning and growing as well as being producted. And I feel like that's the particularly early in your career, in the sweet spot you really have to find. And Jeff, don't you think that it's also the finding the right leaders who really bring that out in you and and um, you know, I think back on several really good leaders, but a couple in particular that you know, told me what they thought I could do, and I was like, you know, in my head, I never said it out loud, but in my head, I thought you were crazy. You know that It's not something I've ever aspired...

...to. But thankfully I took their advice and walked through into some opportunities, and I'm very thankful for that. Yeah, great great managers, great leaders really do that. They help you kind of like a great coach. They help you see maybe even more clearly than you do. They see what you can, what you can do and can become, and then they push you to to reach for that night. Totally agree. That's great. So tell me about that first job. You know, you said that first job out of college sets you on the career path. You've been in lending for thirty nine years. It's a lot of experience and lending, but I want to I think there's interesting stories to where you guys started. So what was your what was your experience first first job out of college and lending? So my first job out of college was actually I was hired to be the you know, this is this is my first job after I have a degree in business. I'm hired to be someone's administrative assistant. And um that uh, that was um not not necessarily humbling, but just you know, every every recent college grad needs to learn that. You know, you you're gonna have to pay your dues. You may have paid your dues in classes, but you're gonna have to pay your dues and learn the real world. So anyway that that grew into an opportunity to be It was for a consumer finance company that is no longer around, but they were a national company, and it grew into an opportunity to be the first female branch manager for that finance company in um the South Memphis. That must have been an interesting experience. I mean, like you think about thirty nine years being a lot of experience, but you also it's hard to think back, but I imagine there weren't a lot of women in finance, women in managing branches. That it was pretty groundbreaking back then to be in that space. I imagine you were kind of the first in and it had to be a different kind of environment than what we see today. Yeah, there were several men who were several decades older than me, and so not only was I probably the ignorant recent college grad to them, but they sort of snickered behind the scenes that you know, let's see her go out and make her first collection call and knock on some doors to collect loans, and you know, um I would at the time. Those were dues that were kind of challenging at times, but I look back on it. There's a lot of roles in lending where you're silo. Do you either do the origination of the loan or you do the closing of the loan. Or you do the servicing of the loan. And that job gave me the opportunity to earn to learn everything from you know, calling on the dealers to finance their five dollar security doors, to you know, booking the contract to call on the customer if they didn't pay, to knocking on their door if they didn't pay. So yeah, it was it was a really unique opportunity. That sounds knocking on the door for people who don't pay. Do we even do that anymore? I feel like there was a pone calls and skip trace, but I don't. I don't. I don't think we still send people have to collect. That's a fascinating beginning. I I think probably insurance liability doesn't allow that anymore. So but um, yeah, I think you and I talked in an earlier conversation about one of my best stories from the collection scene was going out to a mobile home and knocking on the door and coming in and then arriving back at the office realizing that I had fleas on my shoes and in my dress pants and so that was not the most fun collection story. So oh, but it's you know, it's one you don't forget. And they talked about a business with fleas in it, but I don't think they usually mean literal the business that's right, but certainly certainly paid your dues. I'd love to jump a little bit more to the to the current day. You've got a ride ranging portfolio in terms of lending products that you look after, where do you see the opportunities and and I'm curious how you think about opportunities in this moment, because it is almoment when...

I see, particularly for more conservative financial institutions, a little retrenchment, a little pulling back. The macro environment is uncertain. It is probably putting it kindly in terms of how most people feel like that we're in for a risk environment. And yet I think often that's a moment when there's an opportunity to go out and get ahead of the curve. Where where do you see how do you think about this moment? In other places you see opportunity that you think is worth investing in. Well, it's not going to be a unique opinion, and so I wouldn't claim for that to be. But um, just the opportunity for a traditional, relatively conservative bank, and there's many of us out there right now to look to someone that has some fintech experience, the expertise to um build a stellar customer experience. You know, in my years and banking, we we tend to think that we need to engineer a technology to fit our existing process instead of realizing that you're going to have to evolve your process if you truly want to evolve your your delivery of the product, your delivery of the stellar customer experience. And frankly, you know, the Amazons of the world and and you know, those type of companies have forced us to face the fact that it's table stakes for customers and we can either you know, find ways to partner and learn from each other possibly um or we can get left in the dust by those that are innovating. And that's that's where I see opportunity for many of us in a in a more traditional bank. I love that advice in that perspective because I think so often we get caught up in you know, the new technology and layering it like I want to. I even hate the phrase digital transformation because I feel like it's like everybody wants a digital experience, and well, if you if you don't start with the process question and just go well, how do I to make the thing I've got digital? Then you don't, you don't really do that, You don't you don't get to the right answer. And I think your your point about starting with what's the customer experience? How do I, you know, rethink my processes in the context of technologies to deliver the best experience? Is really it's not how most institutions think about development, and yet it's the only real way to to to build the right experience. I think it's just it's just spot on advice for how you have to approach that. I'm curiously there are there Do you have examples where you're doing that or things you've seen where that's worked and you've seen your execute I think it's it's also easy to say and harder to do sometimes in terms of execution. I would love to hear your stories there because I think it's it's such great perspective on how you have to approach this question. Well, um, you know, Jeff, honestly, the question uh drives me back to some hard lessons that I've learned personally, and then companies I've worked for have learned where you know, the exactly the wrong way to do it has been the approach, Well, this doesn't fit our old process. We're going to have to customize this whatever to to fit our old process. And so I hope that those of us who have stumbled over that rock several times, are you know, reminding folks. I will not say that I always succeed at that, and I probably should speak up more, but I think I'm answering your question, But I would just say that, you know, we challenge each other with that thought, you know a lot, and we don't always succeed. You know, it's hard. I mean, I mean I I work for an institution now and have worked for institutions in the past to have, you know, more than a hundred years of experience in serving their communities and their stockholders, and that's that's worthy of a great deal of respect. However, you know, the customers we serve are evolving, and we have to assume that we don't know everything, and so um to think that we have the perfect process and we'll just fit into a new way to deliver the product is probably going...

...to be a recipe for some big headaches. How do you think about working I mean, one of the challenges I think that's a bit unique to financial institutions is the the number of groups, committees, individuals who get involved. And let's say we're finding there's a credit committee and a and a regulatory compliance team and a risk committee that's often separate through the credit committee. And sometimes that process or that slow down and the rethink happens from not the product owner but the other stakeholders that have to be brought along on the journey. And I'm wondering if there are lessons you've learned about how to do that effectively to bring those other stakeholders along and the idea of hey, maybe we need to change how we think about a credit policy or a process that we have that could be improved that the old process isn't gonna work, we can accomplish the same goals. Because I feel like that's the often that the challenge isn't someone in the bank having a great idea, but it's the how do I get all the people who can say no or slowed down that innovation from happening, and how do you help navigate that and bring those stakeholders along so that they're you know, helping you accomplish that goal as opposed to standing in the way. So I think what I've learned about it and I'm still learning, is that I probably early in my career I thought that I had to be the top dog to drive that change that I needed to be. And it's not that I aspired to that, but I thought, well, apparently I'm going to have to be the you know, CEO or chief credit officer or whoever that is to to drive this. And what I've learned is what honestly leaders challenged me with over the years, and I think it's proven true, and that is, no, you need to learn how to influence and gain credibility, and you gain credibility by you know, it's the hard work of showing that you're willing to get in the trenches with others and work side by side with them, um to learn the lessons together. It's not necessary early about being the person who has the role at the top of the org chart. It's even more impressive if you can influence those around you who maybe even or higher rank in the organization. But the success of gaining the credibility and some of it is frankly, you know, having some years where you have have worked in the industry and you have something to say, and you express it in a respectful way, valuing the experience that they bring to the table, but also using your influence management skills, and and that's that's not that's not an easy thing to do, but it's uh. Probably the fastest way to to begin to try to drive change is to gain credibility and use your influence. Your point is is so interesting because so often people think that UM, particularly junior plays like, well, this is like if you're senior enough and you just say it and it happens. And it turns out that even the even the CEO can say we should do X, and that does not mean that in an institution that's got lots of groups, that that's just going to become the way things are done. There's well I always said that, but this is the way we do things and this is the process, and it doesn't fit and stuff blocks. So even if you think you can become the CEO and magically just you know, snap your fingers and everything will, it doesn't work that way. It is about building influence and understanding the point of view and bringing people along to understand how something can be made to work. So so lesson I've learned. I think everybody maybe sees it now a little bit more in politics, But the president doesn't like you can be president United States, doesn't mean what you want just becomes the way things happen. There's still a process of getting getting people involved and on board and influencing. Yeah, that that's a great that's a great analogy the president of the United States, you know, and and I do have a great deal of empathy for for CEOs and chief credit officers and chief product officers and those those roles that honestly, if they don't have, if they haven't cast a vision that's brought...

...people in to have confidence in them, people will, you know, not and say yes and then go back and do the thing that they originally fought was the right thing to do. Anyway, So it's um. Institutions have their own momentum, and it's not it's not like a car that you're holding the steering we love. It's a it's a much more nuanced experience um to manage and that influence and understanding what's going on in the other person's side and the other person and that their half of the business and how you how you influenced. I think is critical. Hey, Sarah buch here thev up of consumer lending at First Federal Bank of Kansas City. A few years back, our executive team knew we needed to grow our unsecured personal loan portfolio, so we turned to Upstart. Three years later, I am proud to share that we've scaled our loan volume target from five thousand a month to twelve million a month and acquired over a thousand new customers. If you want to hear more about our partnership, check out the full case study on Upstart dot Com forward slash Lenders. Once again, that's all Start dot Com Forward slash Lenders. All right, let's get back to the show. I also want to talk about a little bit. You've done some interesting things in the mortgage space of late that you that you mentioned to me, and I'd love to understand a little bit what those ares. I think it's a you know, it's it's near and dear to our heart, how you kind of innovate into products that can help people who maybe aren't being helped by current products. Would love to hear what you guys have been doing in that space. We we have had a great deal of success at our institution and other institutions I've worked at with UM lending to wealthy clients and and you know, customizing products for them, and so that's an important space. It's an important customer base in the bank. But we hadn't done as well with more underserved communities, and so very much a team effort. I do not own this the credit for this, but we are extremely pleased that we've rolled out a down payment assistance program that UM you know, to give credit where credit is due. You know, our our Chief Credit Office or UM said, we want to be industry leading. Our CEO said, we want to be the best at this, and so we have last fall launched a down payment assistance program that that provides both you know, with under certain criteria for bar wers that meet the qualifications of the program, whether it be income wise or where they are purchasing the property, etcetera, we provide either a grant or or a down payment assistance towards closing front closing costs or both UM. And it's it's UH. It is not a UM. It is not considered forgivable. It is forgiven at the moment. It is granted in hopes of investing, not only in our communities, but in a h and when I say our communities, the communities where we have branch locations that we serve, but also the individuals in those communities who, frankly not a secret to anyone that knows anything about lending. You know, housing prices have been very unreasonable and out of reach, not alone, not not even to begin to speak to the lack of inventory in the affordable home space. So we felt like it was our responsibility as an institution to step into that need, and we're very proud of of what we've done there. It absolutely was a team effort. It absolutely involved real give and take with credit with our compliance folks are community and fair banking resources. So you know, if if I thought about it, Jeff, I'd have the numbers right on top of my head. But we've had an impressive number of applications and we've reached some good milestones in the success in that program. We're very excited about programs like that and how they might help us UH do a better job of serving all of the individuals in our communities. Yeah, I love that because it's mean. One of the ironies of lending is that UM...

...often the people who at least need credit are have the most access to it. Like it's kind of like an a venture capital when you've got a business, Like if you need money, it's hard to get and as soon as you don't need money, everybody wants to give it to you, and we're profitable. Now we don't need your money. No, no, it takes some more money. I don't want any more money. So you know that that sense of how do we get money to not just those who have a need, a well to do person buying a home, but those who don't have easy access to it. I think it's such a critical part and it always warms my heart because I think as someone who came to banking from the outside, um, I don't think I appreciated how much most bankers are really focused on truly serving the consumers in their community, the people who are left out. It's not always easy to do at an institutional level to get people comfortable with the risk and the credit quality and what's going on from that perspective, but I do think most people are are in it for the right reason to say, how do we like help the people who need help, get get credit to people who need it and who deserve it, but maybe you're not typically seen that way. Agree. Agree, and I appreciate the opportunity to talk about it because it really is. You know, you and I were talking earlier about influence management. I mean, this was not one person driving this initiative. It was multiple people who came together and tried to think differently about how we do lending. You know, the easiest thing in the world is to maintain our pristine balance sheet and um, you know, avoid credit losses and find the most as you said, often the borrowers who have the most assets and or the least risky for the bank. It's harder to step outside and say, how can we really change how we do this to serve a different community. So it's it's great to have an opportunity to talk about it. Love it. So I've got three questions I ask everybody at the end of the podcast. Is there some great insights you've You've already sort of answered one. I'm gonna make you give me a different answer, which is what's the best piece of career advice you've ever gotten? So you kind of started off with that, but I'm gonna make you give me a different piece here so we get dead too for this episode. Um, you know, I've talked about career advice that I received from mentors and leaders, but um, I can't forget you know, my dad and the example he set. Both of my parents provided incredible opportunities for me, both through education and just um you know, the leadership that they showed in my early years. But I hope that this is okay. But my dad was a dairy farmer and he he did not have a fancy operation. He and his brother milked a hundred cows a day and they did it, you know, bending down, and you know, they did have milking machines, but it wasn't a fancy operation anyway. The advice he gave myself and my siblings was always just remember, no matter how glamorous the opportunity looks, there's always muddy utters to wash no matter where you work. And you know, because cows, cows walk around in mud and you have to you know, have to clean them up before you and so the but the message there and why it's important is you know, you have to be willing to do the hard work to succeed, and there's a lot of work behind the scenes that is not glamorous or attractive, but it's required to qualify you to succeed in the more glamorous aspects and the more financially rewarding aspects. So that's why it was important advice. I think it's fantastic advice, and I love ones with like sayings like this that I can remember there's always muddy utters to wash. But I'm not sure how many you're how many people you'll tell that one to know at least everybody listens to podcast is going to hear it. But you know, I actually give that exact advice to my kids when they see, you know, certain aspects of your career whatever that look like fun or they you know, they see, you know, one of my kids is really into tennis right now, and he sees people winning tournaments, like, you know, like it's it's not all going out and winning a tournament, right It's like there's hard work and there's parts of that that are not fun, and you've got to be willing to do both to earn the right. And so I think that messages is really critical that people understand it, Like every job has it on glam recide and if you're not willing to do that part, you're not going...

...to get to do the fun parts. Um, So I will use that. I will definitely be sharing that with my children over at the dinner table tonight. All right, that's a good, great first of one. So the second one is, what's the best piece of advice you've gotten about the lending industry? And you've got you know, some experience here, So what's the best advice you've heard about you know, getting into or operating in the lending space. You know where where my mind goes on that one is, um, back right before the Great Recession. Um, you know, mid two thousands, I worked for a company that was acquired by another and began to see some really what I would describe very kindly as creative mortgage lending. And you know, some of the things that many of us in the industry knew about, the interest only option arms and the you know, the underwriting standards where it was joked that if you could, if you could show that you could breathe by holding a mirror up in front, you got a mortgage. Everyone got a mortgage. Anyway, you know, I think it I think it just goes back to if you can't understand it, and it doesn't make sense. You need to approach with caution because, um, you know, it appeared then that home values go up and up and up, and this is gonna be okay because they always go up. They don't always go up, and um, you know it's a it's a very basic lesson in lending. Pay attention to the things that you don't understand because they could be something that could trip you up later. I like that. And there's definitely examples and not that not that this history when we know you can look at them and retch as I can go. How did that make sense? I don't know, but it was approved. Yeah, and exactly why. I think it is a great piece of advice for everybody to follow. All right, last last question, what's one bold prediction for the future. I don't think I'm always known as an optimist, but I can always be an optimist that we're going to figure out this economic cycle, just like we figured out all the ones before us that seemed really really baffling. You know, I have a lot of hope in our our financial system that that we can learn lessons from our past mistakes. We can evolve, and so we didn't see coming. We didn't see. You know, all of our predictions were wrong because of the pandemic, but we survived, and I think that whatever is ahead of us that brings angst, whether it be the political environment or the regulatory environment, I am convinced that we will survive, that we will evolve, and that we can um that we can be better because of the adversity that we have to go through to get there. I like that it's a n that's uplifting way to end the podcast. So I appreciate your timely since was a really fun I think a lot of interesting insights and a piece of career advice. I will not forget many others that need washing everywhere. I appreciate your making the time and sharing your perspectives with the audience. Thank you, Jeff. Up Start partners with banks and credit unions to help grow their sumer 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 too. Upstarts AI lending 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 lenning programs, or you're just getting started, upstart can help. Upstart offers an end to 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 upstart dot com slash forward dash Banks. That's upstart dot com slash...

...foward dash Banks. You've been listening to Leaders and Lending from Upstart, make sure you never missed an episode. Subscribe to Leaders and Lending in your favorite podcast player using Apple Podcasts. Leave us a quick rating by tapping the number of stars you think the show deserves. Thanks for listening. Until next time.

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