Leaders in Lending
Leaders in Lending

Episode 85 · 5 days ago

Driving Loan Growth Digitally In Uncertain Times

ABOUT THIS EPISODE

The lending environment in 2022 is vastly different than it was in 2019 – rising rates and inflation have made lending more expensive for consumers. However, leveraging AI and machine learning can help banks continue to serve their existing customers' borrowing needs as well as acquire new customers.

In this episode, Candace Caruso, SVP Chief retail Lending Officer at WSFS Bank, and Ed Walters, VP, Accounting Management at Upstart, discuss their partnership and how the Upstart Referral Network and bank-branded solutions have have helped WSFS expand their customer base safely in an uncertain economic landscape.

Join us as Ed and Candace discuss:

  • Expanding digital delivery channels for more efficient lending with better customer insights
  • How WSFS is leveraging AI for more accurate credit decisioning
  • WSFS’ strategy behind delivering a differentiated service to grow their loan portfolio in a competitive landscape
  • Leveraging the Upstart Referral Network and its bank-branded solutions to provide a seamless digital experience to both their existing and potential customers

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, and more. Let's get into the show. The Consumer Bankers Association is pleased to welcome you to today's webinar how w s F S is driving long growth digitally and uncertain times sponsored by Upstart. My name is Isabella and is my pleasure to facilitate today's event. As a reminder, the views expressed in this webinar are those of the presenters and do not represent the views of c BA or its numbers. It is now my pleasure to introduce our speakers, Candice Caruso, s VP Chief Retail Lending Officer at w s f S Bank and Ed Walters, VP Accounting Management at Upstart. Candis and Ed welcome great, Thank you Asabelle, and to the Consumer Bankers Association for hosting us today. So Candice, are you are you ready? I'm ready? Great, Let's let's let's begin. I think what we should do is let's start by giving the attendees a baseline of our organizations to help provide context on how we're working together. In Candia, I'll have you go first to kind of share who is Whispers and didn't describe the markets that you serve absolutely UM, so thank you. So with this bank is a regionally focused institution UM. Our primary regions are Pennsylvania, New Jersey, Delaware UM and certainly we do carry into other communities for some of our lending teams, but that's from primarily where our branch footprint exists, so we have UM. As of our June earnings, we had ninety four branches UM scattered throughout that region. WHISNAS is also one of the oldest institutions by banking institutions under the same name. We're almost two hundred years of experience in serving customers throughout and we've also grown organically as well as through acquisition, so there's been tremendous opportunity, particularly in the last four years for wests Bank UM. We are consumer focused as well as commercial and small business focused bank UM. Relative to the commercial and small business we have nine billion in commercial loan exposures within our footprint, seven hundred million in small business. We also are you know, extending mortgages through our mortgage landing team. In one we had one billion in loans originated without throughout the mid Atlantic footprint. And then also have a private banking team focused within our region. Nationally, we do again have some services there. We have wealth and trust with our recent acquisition of brind Mar Trust UM that also was a tremendous UM complement um and growth opportunity for our trust businesses and has allowed us to certainly be known as a key player in our region but also nationally. Cash Connect is a unique business to UM with fass Bank, which is all about safe deployment of UM you know in house cash shops for retail based businesses as well as a t M solutions. Additionally, we have new l Finance which is a compliment as well to our commercial and small business lending, but is focused in the equipment financing space and we can get UM a decision within you know hours and closing withindeeds for equipment financing with that solution, it's vertically focused and is nationwide. And then we do have a complement of strategic partnerships UM so certainly a deeply rooted bank within our region, a UM one that has grown to this size. So we've also gone through different stages of kind of needs and growth, and I'll talk a little bit about that today relative to kind of where we're at and what our focuses. So with that it I'll hand it back to you. Great, thanks, Candice. So let me um kind of give you just a quick overview of of up Starts. So up Start is a leading artificial intelligence lending marketplace designed to improve access to affordable credit while reducing the risks and cost of lending for our bank partners. So when you think about by lending and leveraging AI, up starts a marketplace, upstart power banks can offer higher approval rates and experience lower loss rates while simultaneously delivering that exceptional digital first lending experience that customers demand. Just with with the Amazon environment, everyone is expecting kind of instant, fully digital experiences these days. And then up starts mission is just singlely focused on enabling effortless create credit based upon true risk. So let me explain...

...quickly how does that work. So banks can partner with Upstart on two fronts. There's the Upstart referral network and then they can also partner within the bank's digital infrastructure. Sometimes referred to as a white label solution, the Upstart referral network allows banks to subscribe to the marketplace with the desired monthly volume that is matched to to like core underwriting criteria that the bank defines. So when a barrower comes to up start, their matched to a single lender that is providing them the best rate possible where they meet that lenders underwriting criteria. The borrower then is originated on that lenders paper and then becomes a customer of the bank or credit unions. That's really important. It's it's not alone purchase, it's actually alone origination, and so the relationship is you're getting a customer. So it's a very effective tool to drive customer acquisition within a bank's economic and risk tolerances. The white labeled solution is integrating upstarts technology in a fully bank branded experience to sort the learning needs generally focused on your existing customers or any prospects that may come to your website or walk into your branches. Banks have the flexibility to leverage one or both of these solutions to meet their business needs and winess is what we'll talk a little bit more later today is is using both, so they'll give you kind of perspective on both. So um and we can take kind of the slides down. Now that's the that was the that was the slide content for today. So moving into today's discussion, you know, we all acknowledge that the lending environment in two is much different than it was in two thousand nineteen pre pandemic. What hasn't changed. Our consumers still have expectations for improved digital experiences and letting needs still exist. Uh and in quite frankingly, the banks want to continue to serve the financial needs of these consumers, all while staying within a bank's economic and risk tolerances. But what has changed is we're an a rising rate environment, so it's making lending more expensive to the consumer. And then along with higher inflation, recession concerns, these have all added to and created additional barriers or challenges and consumer lenning, which we'll talk a little bit about more today. So what we like is before we actually get into some of the discussion questions, we've got two polling questions that we'd like to ask the attendees here today to fill out to give us some contents, so can we can we jump to the first poll question is Abelle, So the first question here and I'll give everyone a chance. I won't read all the responses, but it's really we want to get a chance to hear from you on what is your organization's current sentiment on consumer learning, particularly on personal learning? Okay, it looks like majority of the group lending but with higher rates. And then the second is really ending hasn't hasn't changed much in the past six months, can't as any any reaction. Is anything surprising here? UM on this first question, I would say not surprising. So community banks UM lakelist fas tend to be a bit UM more customer focused and centric and having more connectivity to the community. So we recognize that we're in a rising rate environment, so lending with higher rates is natural. I think that's just the environment we're in today, and customers need to adjust to that higher rate relative to all the different lending solutions that we provide. UM, but we need to continue to lend. And then also UM, whether it be to our board or shareholders, are stockholders and stakeholders, we have an obligation to also have loan growth Um, so none of this is really surprising for me, but as a good confirmation relative to some of the conversation we're going to share today. All right, let's show the second pulling question. These are the only two UH audience participation besides Q and A that will ask you to participate to it. So, um, this next question is I want to get a sense of what is everyone's digital approach right now in in consumer learning, trying to trying to get a sense of who's still working through it, who is being able to solve it self developed, or who has partnered, say for example, with the fintech to to deliver a solution to the consumers. Alright, so almost half the group still requiring a branch visit to close. What's your reaction to that, Candice, Well, I would share that certainly, that is where customers have been served historically. However, UM, we're very much about channel choice for our customers because I think we're any kind of the um that transitional stage age of moving from kind...

...of the branch experience, which historically was the only option, and now especially with the acceleration of you know, P p P and other things that have gone on in the marketplace that have created an expectation by customers that they want to be served through other channels and certain instances, particularly through consumer products. UM. That probably is why you're sitting in on today's presentation. So all makes sense, UM and affirms that you know, partnership is one way to provide that delivery channel back to your customer. Well, and I almost think that that that kind of leads us right into the first question you mentioned a little bit about, you know, looking at what's the right channel, what are the what are the consumers preferences? So can we start the conversation today really talking about what are some of your goals in regards to being the chief learning officer in consumer lending and what you're trying to do for your business to to serve the consumer. So one of the things that is k is we UM, we always are looking for relationships and so they could be their new relationships or existing relationships. So certainly UM, that is a strategic focus for us is you know, understanding who our existing customers are, how we can deepen those relationships, and how we can acquire new customers or new households. UM. With that being said, we are also sensitive to the environment and the digital age that we now operate in and the highly competitive landscape that we're we have in the broader financial service, not just the banking space. So with that, we have a multi year delivery transformation that we've been working on and continue to work on. UM part of that is meeting our customers, as I alluded to earlier, where they want to be met, So that could still be in a branch, but it could also be by phone. It could also be through some of the digital delivery channels, whether that be through partnership or in half solutions that we provide back to our customers. UM second on the delivery transformation front is really UM looking for those opportunities to create efficiency for our customer and also to create UM better insight relative to our customers needs and also performance of loans. Particularly with the economic cycle anticipated for next year, we need to be UM sensitive to that and really to have that insight and those predictors is going to be helpful. But we're we're expected to modernize his institutions, so that's really a core focus of ours and UM. The acceleration that happened because of the necessity for adoption for digital tools while we were all you know, at home working and kind of pivoting during COVID times. Have are not going away. If anything, now they've become more table stakes of what's expected of us in the industry. And then also with consumer lending, we strategically had decided that a partnership model for specific solutions was a way that we could of agility, scalability and really kind of have um the the insight their relative to the performance and and the focus from the partnership as well as a team within the bank to help us get there from a growth perspective. No, it's good and totally aligned with you. On the the the expectations have have evolved and they're they're they're not regressing right because the folks have have gotten used to operating in a certain way and it just keeps evolving of how they're expecting to be able to do business when and where they want to do do the business right. It's not just you have to go to one Spotty can be I'm at a I'm at a child's sporting event, and I want to be able to transact or do do some type of business and do I do I have the capabilities to achieve that absolutely. So then as you as you think about the consumer and I'll actually to kind of so this may be from two perspectives. One from from your your industry view UM, as you as you talk to your peers, as well as kind of what you're seeing within your own business. UM, how have spending habits of consumers changed or any other I'll say their needs change over the over the past couple of years. Like, how have you seen any shifts UM, either from what you've learned from your peers or what you're seeing UM at your own organization. Sure, So from a peer standpoint, if you look across like credit card utilization UM, it's been increasing. There's there's demand there. It's also an indicator that some of that liquidity that was UM you know out there from a different stimulus programs or different recovery programs may have already been leveraged or utilized UM. So with that being said, within Westness Bank, we've seen UM credit card applications increase, certainly, our upstart demand UM increase UM, and...

...we anticipate that that will continue. UM. Also, the desire to consolidate, you know, credit card debt is something that also we recognize UM is a key opportunity and may provide some cost savings back to our customers. So all of those calls actions are out there, and if you don't provide the solution to your customer, they're going to look for another way to meet that need. And you know, that's one of the reasons that you know, we found it to be a great compliment UM to leverage up Start in off French your existing customers as well as for new new customer opportunities. So as you as you talk a little about you know, understanding the consumer and wanting to serve them, we let's talk a little bit about data and automation. So can you talk about, you know, how how does the need for for using better data about the consumer as well as increased automation, How does that like impact your approaches? Your is your thing about consumer learning, So I would share that data, clean data. It's critically important in getting insight and intelligence around customers behaviors, needs and also um as indicators of kind of you know, the next product that may best serve them. So there's there's certainly UM a lot of necessity as a bank today and a lot of connectors where we can gather data about our customers to better serve those needs. The challenges, especially in the banking community where there's consolidation and things like that, is, UM, how do we bring those data sources together and then how do we create efficiency UM. So with that we also have a focus on automation UM. And then also, you know, consumer learning specifically is really right for the opportunity be UM you know, for partnership models and things like that to help us get additional insight on customers that we haven't yet had the opportunity to serve, or for underserved communities in our geography. So UM, that has been something we look to continue to learn about and you know, find out where there you know, maybe other services that we can even cross sell into our consumer lending portfolios. UM. And then also with the c RARA modernization and other things like that, we as banking organizations are going to have to report on the data. So cleanliness and the ability to provide that transparency back to our reguladers as equally as important important as that business intelligence that we're gaining to come up with new solutions are better offerings to meet our customers in the way that they want to be met and with the services that they are looking to benefit from. No, it's great, thank you for for that that that insight. And let's let's double click a little bit on partnerships UM. As you've kind of mentioned it is and then as you went over your over your slide, uh, it shows that the WHISTPAS has a number of fintech partnerships already. So so fintech partnerships is not something new to the organization. Can you can you share with the group kind of your approach to partnerships. How are you how are you identifying the need when need determining it is where we want a partner versus this is where we're trying to develop something on our own. Absolutely. I think one is you have to look at the resources within your organization and the product suite that you'd like to offer UM. There there are fintech partners out there such as upstart that can deliver and show up in a way UM that will allow you to serve those needs, but you need to have very specific requirements around UM engaging those partnership opportunities. One being is it's a reflection on your brand, so you want to make sure that the that there's a mission, a community focus that all the things that are true to your brand as a banking organization align with the partner that you're deciding UM to be out there in the community. Whether it be a weight labeled solution, a co branded solution, or whatever the case may be, it's a representation of your brand back to that customer. UM. They're also as far as product offering UM. You know you you have to look at you on the consumer side your strategy like what services do you offer efficiently today? Where is their ability to optimize and and what technology UM is available that otherwise you wouldn't be able to provide to your customers. So does the partnership provide that focus and acceleration that you're looking for as well as that agility UM would be something that you know would be key with any partnership opportunity. We have a group of individuals UM within the bank that all they do is...

...manage our partnership relationships. They are focused on onboarding, on making sure that there is that ongoing communication of expectations, if there's tweaks to the program, if there's feedback from auditor compliance, all that is part of the process. UM I would also share that know what you do well and know where a partnership is going to allow you to serve your customer best. Again, there's alternatives out there in the first financial service space where they can get their needs met elsewhere. If it's going to be an impediment for you to try to build something, or if it, um you know, really is a distraction to your core strategic model for you to try to do it yourself, a partnership might be a more sensible option. But it doesn't come without responsibility. Um, that's for sure. Well, and that's that's where I was going to kind of kind of slide in the next question, right is particularly lending. Lending is not a set and forget it is this and you can't you can't do that with with partnership. So can you can you talk a little more about how And there's I've got a couple of questions on oversight and stuff because I think that's important for folks to understand. But can you talk on how you're managing these these partnerships today to ensure that they're constantly meeting your business objectives? Because you describe there's there was an original need that that started of why you may engage in the partnership, but then you're you're having to continue to validate that are you still achieving those business objectives? And at times the business objectives are going to continue to evolve, So can you can you talk about like what are the what are the mechanisms that you have in place to to ensure that the relationship and the partnership is hitting the objectives. So one place to start is, of course you should have that business case so you go through the discovery. You need to have that business case to understand the opportunity, the return on investment. Also to have clearly defined expectationations for the partner, not not just around originations, but also around serving that customer and UM, you know, ensuring that for the length of that lending relationship to UM, whatever the tentacles are, the back and forth relative to the service piece, UM, they're being met because you as the banking institution still have all the same obligations back to your you know, regulating bodies UM, so that doesn't go away. You also still have the internal audit and compliance requirements as well that you need to meet. UM. I would also mention that it's really important UM to kind of share that business case across the executive level of of your organization. We can talk more about the stakeholders that you know, should we have seats at the table, but UM, that executive sponsorship is really key with partnership model and really understanding the appetite bringing partners into your organ and also whether it be a dedicated team or your vendor management group, how what what is the process to bring that partner UM into the organ make sure that they meet all your requirements, make sure that the expectations, and then really have a launch strategy to bring it out there. UM And for us, we had been UM providing on secured loans prior to upstart. We found that for UM, for our selection of Upstart, we found that the technology efficiency and the the mechanism of kind of expanding that credit box was something that UM up Start frankly just offered you know us a better solution and more proven solution with a you know, a track record that we felt confident in. So definitely do your due diligence on your partner relationship to really understand how they're going to show up for you, how they're going to UM you know, really support you throughout that relation and ship. It's like you know, any other partnership, marriage, whatever you wanna call it. Team. UM, it's definitely about collaboration. No, and I'll add um, obviously you're familiar with this, but I'll kind of give the audience kind of a perspective from from from where I sit is UM. When we when we work with our learning partners, it is about establishing the main KPIs of the of the program. And so we look at it as what are the economic goals, what's the risk tolerance that that they want the program to be built under, Like what's the annualized loss rate target? And then what's the volume that they want to achieve both monthly and from a portfolio and all of those metrics you should be monitoring them at the minimum monthly. But then those targets can evolve, and so where you may start, particularly as we've seen the macro environment change, the economics target of say a program that started two years ago could look quite different today because of a rising rate environment or the lost lawrance may...

...adjust because of the environment we're in. You may not want to take on as much as much risk, and so so where we look at it as is having those defined kpi s and then reviewing them on a regular basis, so you can make adjustments of what does success look like. Because it's in this environment, particularly in the past six months, I think you'd agree the the the KPI is continuously be reviewed and adjusted as as the is. The market kind of drives those changes. Yeah, and I think loan volume, your acceptable loss ratio, your yield, all of that are factors. And the best part of part the partnership model is that you have levers that you can adjust along the way if appropriate. But you also don't want to keep changing things too often where you can't get enough data. So, um, you know there is a science to it as well. Yeah, that's that's a great point. So you mentioned a little bit about the stakeholders because I think that's also for anybody that's that's that's getting into a partnership, particularly in consumer lending. It's for the for the CLO to be successful. Um, you know, obviously you're you're owning the business, You're you're accountable for the results, but it does take the support of stakeholders across the bank in order to make a program like this successful. And so can you share a little bit about those critical stakeholders and and what are you doing to keep them engaged in UM in supportive of the program. Absolutely so UM. One I would share is that the stakeholder management is a key priority and making any partnership of success which UM these decisions should not be a decision of one. It's it's something that we need to have the right seats at the table, especially in the early stages of a new partnership, to really again pull the right levers, determine really what our goals and objectives are. You do define a model to start with, but you know them. There's different perspectives relative to those those executive sponsorship opportunities. So we I would suggest, of course your chief credit officer, your risk officer, your financial your chief financial officer, chief retail banking officer of applicable fair lending officer, UM, all really important people to have in that room and get support around and get comfortable UM around supporting UM any partnership of particularly UM you know in the consumer lending space. UM, those individuals will have valuable feedback, they may have good questions, you can work them through the model. It's all about kind of building UM out a model that makes sense for your organization and what your goals are and also what you know a successful loan growth looks like for you. UM. And then part of that is balanced with UM you know, engaging committees providing quarterly business reviews monthly KPIs providing out monthly report. So it's not just the the initial executive sponsorship, it's also that continued engagement so that they feel connected with this, just like as if you were originating these loans within your own organization. Yeah, and I think the business reviews UM where we we find those valuable and to kind of give everybody context with with each of our lenders, we let them determine do they want business reviews to be quarterly semi annually, And really that's an opportunity to bring the extended stakeholders together and everyone from both sides for the partnership can kind of come together and assess, Hey, where is the program and then where where are the business is going and to make sure your partnerships are aligned. So so that is something that I've I have found both from from my seat when I was in on your side of the table and then now on this side of the table, of when you when you can have those periodic checkpoints of bringing up a level and just just look at kind of macro relationship. It's also it's it's helpful to keep everybody uh all pointing to the to their true north. Right. Absolutely, So let's talk specifically about the up Star partnership. And then you know, I mentioned earlier that you're you're kind of using uh, you're using both products. You're both using the Upstart referral network for for for the client acquisition as well as the white label to serve your your existing client base. Can you can you talk a little bit about the reasoning behind the two, how how you've used the two to complement your consumer learning program. Absolutely. So it goes back to kind of our strategical So one is we want to grow households, we want to grow new customer relationships. So part of that is done um, you know through the Upstart channel of originating new business for us, bringing those two Whiskers Bank, having them get an introduction potentially to Wis Bank through their Upstart loan. And with that then we can we have marketing campaigns that then...

...offer um other solutions to the customer, whether it be depository relationships because they are regionally aligned with primarily where the branches are located within our network, so that we can have that customer grow with us and mature with us UM. So certainly that has been a great tool in reaching customers that in many cases have did not have an existing relationship UM with with with FAS Bank historically or WSFS bank, depending on where you're regionally located. UM. And with that we also are have just begun UM doing a lot of urn or cross oil campaigns to our existing customers as well, which allows us to pre qualify the customer based on different data points that we have with the partnership with Upstart, do direct mail, digital campaigns as well, whatever works best within your organization UM, and then you know digitally, given this is digitally offered, a digital campaign I would suggest as most efficient UM to reach those but you know, that is all something that is we can then benefit UM from that relationship with Upstart in UM in really kind of not only engaging new households, but deepening those customer relationships. And we're also really excited about our pilot which we're working for offering this more strategically through the branches so the branches were so excited about the upstart program we already began referring it. So we have seen some uh organic activity that we've we recognize as with existing customers, and that's just through word of mouth advertising. But we do have a salesforce strategic UM initiative that will be layered into our delivery where it will be branded with fas go out to our customers through and upstart app UM and UM. That will enable our branches to then offer a unique application link back to the customer to a real time So there there's a lot of opportunity and connectivity to these customers. Although you're doing it through a partner, it doesn't disconnect you from building a rapport and a relationship and really also of course presenting other solutions back to that customer, whether it be depository or other lending tools or even wealth um if appropriate UM that you know maybe a great compliment. No, that's great. And you're is, you're is. You're looking at the both both aspects, right, you have you have you have both levers available to you to to drive growth, whether it's with your existing client base, so your deepening relationships as well as bringing in the new new customers to the bank, which then starts a new relationship. And the exciting thing is from being this digital first, right, So these are these are individuals that are going through a fully digital experience and so now they're they're more apt to continue engaging with you as you make investments across other digital capabilities, just can continue to add on to that experience, which is which is exciting. Absolutely. So, So let's talk about the controls you have in the program, because I think that's we we've talked about kind of lending in difficult times, and we've talked about rising rates and and and we've talked about the reviews that that that we're doing, um you know, periodically and the KPI. So so specifically the when you're working with a partner, and particularly in consumer lending, and I always use this phrase, it's not a set and forget it. You just don't say, okay, up start or whoever you're working with, just go original loans. There's there's there's oversight, there's controls, there's adjustments that you can make. So can you talk a little bit about of of the parameters you can control and how you give the guide rail to UH to originate. Sure. So one of the best parts UM about working with upstart is it's highly configurable. So we UM have leveraged that and have gleaned insight UM, particularly as you know, we have different levels of production that we're looking for on a monthly basis, things like that. UM it gives us the ability to really take that marketplace approach and UM look across not just within our organization how our portfolios doing, but learn from kind of you know, the behaviors of the customers, what they're looking for, figuring out like how we should be priced within the market to get the types of responses that we need. Also, an important UM leaver, at least from our chief credit officers point of view and chief risk officer is really what is that acceptable loss ratio? And like kind of as our as our portfolio matures, how does that all layer in? UM. So you know, certainly, UM, the configurability gives you...

...real time to say, you know, within UM a week's time that I want to make some changes and then you know, in a short period time you'll see that impact. UM. It also goes back to kind of the connectivity, So you really need somebody that's going to own the partnership programs and as someone that is UM, whether it be yourself, whether it be UM, you know someone that is a director of fintech partisan whatever that you know, right position is within your organization, but UM, it really is important UM to leverage the fact that you're getting kind of that that real time feedback on what the customers want, what your team wants internally, get that out there. And then also, UM, from a risk talented perspective, you define that, yeah, and I think that's that's great to highlight, right, is is you have individuals on your team, of individuals in our team that are working hand at hand and really a daily basis of of looking at the program, looking at the results, understanding what the different lovers do and then can make assessments together all based upon data and then make recommendations to to you and and the rest of your your support committee on what what adjustments need to be made so you stay within the i'll say the foundation of the of your your business goals. So that's just really thank you for sharing. So a couple more questions then we'll open up to see if the if the audience says, uh, the attendantes have anything is so if if a bank's considering a fintech partnership today, why is now a good time to move forward? So I would one on the fintech partnership side, these customers have a need. They're out there in the community that likely are your existing customers. So one to make sure that you are UM continuing to show up for that existing customer bass equally as important as important as those new acquisition opportunities. UM. But if you you know, you want to kind of know UM that if you're going to go into the space that you're working with a team that experiences knowledgeable, has the the the bench to kind of deliver on the originations, but also has a credible risk profile. And what we were really impressed with UM was the the the ability to kind of measure risk in a more unique way and a more inclusive way. UM. And then also just the UM the the intelligence of kind of knowing UM you know what what that would produce from a yield perspective. All of that, but even with the economic cycle that is out there, as community banks, we need to show up for our community. So we need to continue to lend, and we have to find ways even though it might be at a higher cost. Given the rising rate environment, we have to find ways to show up for our customers, provide solutions, and do them in a way that UM allows us to continue to learn and continue to monitor that risk because we won't stay in that cycle forever and to get ahead of that curve relative to the adoption of this technology, UM is key and it will take your time to get it through your vendor management team or whatever the appropriate UM level of due diligence. You also set to compliment that in on boarding a partnership relationship now thank you, and where going to add is UM going back to the theme of hey, we're in kind of choppy waters, unknown unknown waters for for a period of time, and I will by no means try to be an economo is to predict the future. There's there's smarter people that are trying to do that every day. But when you look at of when is the when is the right time to maybe start looking at a partnerships is where where I think sometimes when these environments are good, is I kind of equated to of you're you're not looking If you have a boat, you don't want to try to fix the boat in the summertime. In the summertime, you want to be out on the lake. You want to be on the boat, enjoying it. And in the winners when you want to be cleaning it up, fixing it up, getting it ready for summer. And so the environment we're on now, although folks are are much more cautious, as you said, there's there's still there's still a need for consumer lending. And so to me is this is where it's advantageous for a bank to be exploring these relationships, starting the groundwork, getting the stakeholder engagement, doing the due diligence, and then potentially even getting...

...some type of a program installed in ramping up, kind of a controlled ramp up so that when when it's sunny skies again and it's the the lake is calm, uh, you're out there enjoying the boat versus then you're deciding, oh, wait, I want to catch up. Because I think what we saw during during COVID is our partners that were already on the program. Once things you understood a little bit about what was happening after that initial shock, those were the lenders that were able to take advantage and really serve the needs of the consumers, while uh, the rest of I'll say partners were evaluating what they should do right, should they should they establish a relationship with us or another lender or or partner somebody else. And so that's where that's where I kind of see a time like this is always good because you can take it slow, you can monitor and as you talked about getting the clean data so that you can learn. So um, definitely, there's there's never there's never a bad time, I think to be to be exploring partnerships. And so before we've got some we've got some good questions which will come back to and I think one of the questions kind of leads to my last one, which is just what's what's next for for the organization? Is you're is you're looking at other things you want to do and and I'll kind of kind of tied into one of the questions from an attendee was was kind of asking a little bit about goals for the rest of twenty two and as you're heading into twenty three, what's uh, what's what's on your radar? Well, so I did touch on this earlier. So we definitely are continuing to focus on delivery transformation digital transformation client experience. So UM, we recognize that our customers want the optionality of you know, getting their transaction needs transaction needs as well as their lending needs met through digital channels as well as through branch or or other means. So certainly we're investing in that, whether it be through partnership or whether it be through UM internal delivery of those solutions UM. So you just have to decide where what the right place UM for you to focus relative to your own version of that might be. But I think the expectation is UM that we as financial UM institutions need to show up for our customers in that way. So certainly our foot's not off the guests relative to that in you know, partnering, but we are being selective. So we decided upstart solution for on secured lending was the rights delivery mechanism for us and the right tool for us to engage those new customer relationships as well as deepen those existing that we've been speaking about. I would also share that you need to be continuing look to look for opportunities UM, whether that be for other compliments and deepening UM partnership relationships or also finding new partners that maybe UM maybe enable you to reach those UM delivery channels more efficiently. So that's always something we're looking at. And then we also UM, you know, want to make sure that we're learning more about our our customer and leveraging those business intelligence. We are salesforce UM organization. We use a lot of the tools that many of you may be familiar with, and so we're really trying to be thoughtful around UM centralizing customer data, reaching our customers and the way that they want to be met. And although that big picture may seem flashy, there's a lot of hard work that goes into achieving all of those goals. Yeah, now it's it's a we'd we unfortunately don't have unlimited time or unlimited resource, right, So a lot of it is is is prioritization and and really assessing the impacts so UM. As we jumped to some of the Q and A, one of the questions here it was was just around staffing to support a program like this, Are you open to sharing at least you don't have to go into specifics, but kind of a ballpark of the type of FT structure that what one would need to support a program. Yeah, if you have a So for we do have multiple partnerships, we do have some individuals that are kind of shared roles as well. UM related to kind of the the accountability to partnership, we had decided that it made sense to have a director UM level position to kind of lead the strategy UM and lead the the charge relative to kind of keeping those stakeholders at the table informed. So we did make the investment in a director of Fintech, UM Partnership and Digital Delivery and UM. So that is something that may or may not make sense for your organization. You have to go through your own discovery based on your size. UM.

We also do have other data analysts that support UM that role as well, and UM that also includes collaboration with some of the business lines depending on the partnership model. So for upstart UM, you know we have retail loan servicing, there's other pieces of our bank that do touch this relationship and there's connectivity there too. So I would anticipate at least to start one dedicated FT is A is necessary, and then it depends on the size scale and scope of how many partners you're looking to manage and how you kind of grow that within your organization. Um, but uh, you know it is something you want to stay connected with. It also maybe something you need to think about the level of loan volume and growth you look to have from the portfolio before you make that investment as well. So starting with the business case would probably be a great place to start. So then you can really figure out what the right UM structure might be for your organization. Oh good, that's that's very helpful. Uh. There was a question about the referral network and really, um, what what differentiates this from marketing with say financial hubs and and so I I kind of explain just just a high level is the advantage of the the Upstart referral network is it allows Upstart to utilize nationwide multiple marketing channels. So that is we're doing direct mail, digital male social media, we're doing our own kind of pre screening campaigns. Were also have partnerships with aggregators and so we're able to cast this this wide net that really allows us to i'll say, manage a cost to acquire that. Then we're able to then bring all our partners together and just a mass that the share amount of volume and it bats for for our partners and the advantages is if you're an individual lender that's trying to go out and do all of this type of marketing A it's it's it's very expensive and just that the conversion rates aren't is high. And in part of it is because what we're doing is we're bringing just a number of lenders and a number of scale. It's it's allowing us to actually aggregate all of this and then align it up to our lending partners. So that's it's we're we don't just use a single source. We use multiple channels in order in order to drive the volume based upon the capital that we have available. So hopefully I answered your your question. And then the last question we have here is just observations on customer satisfaction between the digital deliveries and comparative branch. Do you want to share a little bit on you know, I know we you and I talk MPs scores, but if you if you talk kind of just sad like, how do you guys get it and and how do you guys compare it? So customer satisfaction is case. So, uh, the way we represent our brand and our communities is that WSFS stands for we stand for service, So that's really important to our brand and that was something that UH we spend a lot of effort and time on in vetting partnerships and making sure that they are going to UM represent us in the same way that we would present to our customer or better UM you know, whether that be on the digital delivery channel. So with that being said, UM we did a lot of due diligence and research relative to UM upstarts reputation and selecting them and kind of identifying that that you know, they would show up in a way that UM you know, really aligned with our desire to you know, have that service truth and community first and UM. What I would also UM share related to that is that we've had tremendous feedback through trust Pilot and other means that that it has really shown up in that way that that individuals that have used UM and been exposed to the whispas brand through UM, you know, the entry point of upstart, that it has reflected in a way that it was really positive. We've got tremendous feedback, so UM certainly one that we've been satisfied and we've gotten good information that it does aligned with kind of how we're positioned within the community and provides that constinuity around service and experience that we were looking for. And I think that's really critical with determining, you know, any partner relationship that they're going to show up for your customer and the way that you would no. Thank you. And I think we I mean, we've seen from our end is from a net promoter scores we look at I mean, UM on average on the upstar platform, it's it's...

...generally in the high seventies low eighties. Are letting partners tend to be tend to be higher, and it's just they because of some of the competitive rates um that they're able to offer and just experience. Uh. If we didn't get a chance to answer your question, UM, we'll we'll at least try to either follow up with you or you can reach out to lenders at upstart dot com and we'd be happy to do a follow up outside of the session. First off, Candice, thank you that the session. I always I always enjoy talking to you because you and I get to get to talk a lot. But it was just great kind of riffing with you for this hour, talking a little bit about the business and and I'm sure our attendees really got a lot of value out of hearing your thoughts and insights today. So thank you, Thank you for the opportunity, and and you know, happy to support other community banks as well. UM. That's one of the great things is because we are regionally focused, we have the ability to help and kind of share and collaborate. So appreciate UM the chance to share. Thank you. Up Start 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 too. Up Starts 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, up Starts 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 learning programs or you're just getting started, Upstart can help. Up Start offers an end to D 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 forward 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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