Leaders in Lending
Leaders in Lending

Episode · 1 year ago

Modern Differentiators: Exceptional Experience & Relationship Management

ABOUT THIS EPISODE

Throughout history, most financial institutions have viewed loans as commodity products. Pricing and distribution — the economics of the selling model — have been the primary differentiators when bringing loan products to market.

However, according to Richard Wada , Chief Lending Officer at Patelco Credit Union, there’s a huge opportunity to differentiate through exceptional experience, and more importantly, through strong relationship management throughout the borrower life cycle.

In this episode, he highlights why it’s such a powerful play.

We discuss:

- How solid relationship management can be a competitive advantage

- Promoting the financial health and well-being of members

- How referrals can drive deeper product engagement than traditional acquisition

- Having access to members versus self-directed engagement

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There's enough huge opportunity to differentiate through two things. Is through, you know, an exceptional experience which you hear quoted a lot, but I think you know, more importantly, is through really strong relationship management. 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. In more let's get into the show. Welcome to leaders and lending. I'm your host, Jeff Keltner. Today we feature my conversation with Richard Wada, the chief lending officer for Patel Coo Credit Union, about a nine billion dollar credit union with four hundred thousand members. Pretty Big Credit Union. Sort of a trend of conversations with some more credit union leaders that I've really enjoyed over the last couple of weeks. Richard really dives into his contrary and perspective about how you combine relationships with digital experiences to really develop trust with your consumers and your members and how that leads to becoming the lender of choice. I think really one of the key things that every financial institution I talked to is trying to do. How do you become a trusted adviser and get repeat business from your customers? And then we also talk a lot about the focus on the members financial health how that plays out in terms of products, offerings, outreach, etcetera. I think it's a really interesting conversation about a number of areas that every FII talked to is really interested in. You know, how you really develop relationships and trust and how you focus on helping people improve their financial health. Is a great conversation, a lot of great insights and so please enjoy all right, Richard, thanks for joining the podcast today. I really appreciate your making the time great to be here. Jeff. Yeah, so I wanted to start. You know, we had a little conversation before we started reporting and one of the questions I often ask is you know something that you disagree with common wisdom, and you had a kind of country and point of view that I thought would be really interesting to dig into. So can you can you tell us what your countrarian perspective is of things that people get wrong generally in the space? Yeah, I think you know, I've been thinking about how big banks and, you know, many other lenders have viewed loans historically and currently, and I think that there's sort of a prevalence of the thought that loans are real commodity products out there and volume and revenue and the economics are tightly associated with just pricing plays or, you know, distribution plays or the you know, the the raw terms and in terms of repayment etc. And the more I was thinking about it is I I think that, you know, big banks have long held that, but I think the fintext to have kind of been originate to sell model. For sure, they're packaging and securitizing these products, originating to sell like a true commodity, and I think there's a huge opportunity to differentiate through two things. Is through, you know, an exceptional experience which you hear quoted law,...

...but I think, you know, more importantly, is through really strong relationship management of that borrow throughout the life cycle and, you know, as a reward for creating that differentiation based on the experience that a borrower has with the lending institution, with the product, not just in the account origination process but all the way through, while in portfolio. If should they experience, you know, financial hardship, how does the institution manage a borrower through that experience? That's the way to create true differentiation for the institution, for the product and really kind of to earn the right to be a customer or members lender of choice throughout their throughout their life, you know, as they experience various borrowing needs throughout the course of their life. I feel like there's a lot there to dig into. When you think about relationship management, you talked about in portfolio and kind of hardships. I love to dig into that because certainly do the with covid that's been a very hot topic. How do we manage people who are in distress situations? But I wanted it to start with. Are there things you're doing for during the origination experience, you know, kind of in the more upfront process that you that you think of as particularly effective a building that relationship or trust in terms of how you engage with the member before you're actually have the IM portfolio? And then we can dive into the portfolio side to yeah, I think you're right. If you can't get past that first step of just an exceptional origination account opening experience here you're kind of out of luck as it goes to and kind of loyalty player relationship build. And so we've spent a lot of time over the last twelve to eighteen months in two areas. One is sort of our credit box, which you know, isn't the most visible place where you might expect a lot of attention be from a member experience perspective. But to the extent that we can overlay, you know, our credit models with other attributes to better understand or existing members or prospects and sort of alleviate some of the hurdles that under we put in place throughout the origination process, like conditional provals with multiple verifications or stipulations that need to be cleared. I mean the up start. You guys are market leader. It seems like you're seventy two percent goes to seventy eight percent, you know, and in a matter of months. But I think to the extent that we can create more automated kind of decisioning without those kinds of stipulations and taking the burden off the member and putting it on us through more intelligent credit risk models, is one is one piece and then the second part is it's kind of around. I just think it's so basic. It's really our direct to consumer model. And again, this is where I mean we all would aspire to be like some of the vintext like upstart in terms of,...

...you know, the tremendous marketing prowess. But we, as a smaller, you know, four hundred thousand member, Nine Billion Dollar Credit Union, have taken leaps and bounds to improve our direct consumer capabilities so that we're reaching borrowers when they have needs or with a propensity to want to borrow. So we're not hassling our members or prospects who have absolutely no need, you know, for the product. Based on our targeting criteria, are understanding of their existing product ownership and then we're pulling him into a much better digital experience. So, you know, I this is where I think all the action has been. Really has been on that account opening experience, and so we've played a lot of catchup ball over the last to twelve, twelve to eighteen months. We put in place that whole kind of soft poll prequel check your rate capability for auto loans and personal loans and credit cards, which is pretty you know, advanced for a for a credit union our side. Yeah, and then we've also invested very heavily in our digital application with sort of new architecture to enable all these third party integrations. So, like many others were using, you know, income and employment verification through some of the other providers like Plat in Finnicity, we're getting killy blue book values from for our Auto Larner books important off of the the applicant and there's more certainty around the valuation of the collateral and so so I think we're set up pretty well in terms of who we're sort of reaching out to and then how we're engaging them into our franchise through a much more modernized and seem less digital account opening experience. I love those two things. A direct to consumer model. Your point about targeting the right person with the right offer, not bothering them and knowing kind of when there's a need or a propensity is so critical. And then I want to ask one more question on this credit box and some of kind of tying into what you said earlier about becoming the lender of choice. Are you finding one of the what things I've been very curious about, because many financial stitutions kind of really need to have members that interact with them multiple times. From a financial point of view, it's obviously one of the objectives that when they need a loan, they're coming to you. Are You finding ways to leverage your knowledge of the consumer who's already a member in terms of either targeting or, from a credit box point of view, ability to make the right offer to them, because you know them better than you know the guy on the street who's sending him a you know, direct mail or digital ad like they've been transacting with you for a while and it feels like that ought to turn into not only trust but the ability that to better understand risk make a better offer. Are you finding ways to kind of leverage those technology investments in terms of winning the repeat business by really improving the experience or the credit offers you're able to make to those members? Yeah, I think. Well, there's a lot, a lot in there. So the first part of their question is absolutely we're able to utilize our existing member relationship information, be it tenure, depth of product owner should any derogatory, you know, within the plots on...

...their their credit with us. So we've incorporated that into a custom relationship score, which is part of our risk model. Yeah, and so as a result of that, it's exactly where you were going, Jeff Is. We're, I like, on the friction side. We're able to know our member better and so we're not asking for as many stipulations, but we're also able to have better preapproval rates are existing members and the offer. So we're offering work, more more credit accessibility and also much more significant mine, mine assignance associated right with those, with those offers. And I think we're also doing some things in portfolio. We call them top ups to rights, as we're seeing the payment behavior on see an existing person alone, then we'll reach out midterm in that and with that information, be able to offer additional extensions of credit or makes sense. That makes it. It reminds me of that. You say some of this is not rocket science or not complicated, but I was just talking my kids this morning or minding them that a lot of winning and success in live is not about doing the complicated thing. It's about doing the basic thing well and actually executing on that. And is, as simple as it may sound, the number of institutions I talk to you that don't have good customer scores at least, can't incorporate them in terms of reducing friction or extending better offers and preapprovals. Is Real. It's it's great because I think that is there. I did want to go go back to the you know, at first you talked about expanding, you know, the origination, but also the servicing, and talk about how you think about that focus on relationship and trust extending into the servicing. I'm sure covid has given you many examples of ways to deal with that in terms of hardship programs, but how do you think about, in the context of the portfolio and the servicing experience for existing products, that establishing and maintaining a strong relationship with your consumers? Yeah, sort of, sort of the premise that we're built around, and this is our really established charter since our CEO has been on board five years ago, is is really doing everything that we can to promote the financial health and wellbeing of our members and that's the core of our our mission and our point of differentiation versus much larger, much more well capitalized institutions. So we have to bring that to life with our our membership that, you know, in every interaction, and so the loan is a great interaction for us to begin doing that. And give you one example, Jeff, is we have a feature called level up. Level Up. Yeah, let's say you came came in and into Patalco and and you didn't have stellar credit and so we risk base price and so let's just say instead of our best rate of two hundred and ninety nine for a auto loan, you ended up with a ninety nine auto loan. Well, with level up, we assess your payment behavior...

...every twelve months and with twelve consecutive payments, will reduce your note rate by fifty basis points up to either, you know, the best rate we offered at that time or a maximum of one hundred fifty basis points. So in that life cycle we're trying to do everything we can to promote great payment behavior and making it worthwhile, you know, in terms of some tangible value that can actually save our our members some money. And then you know you're making a point about sort of the basic things. Well, I think one of the things is there's a balance between standardization and customization of offerings, right, because you're looking for both efficiency as well as member centricity. If I had my brothers, I would from a payment perspective, I would put every bar on auto pay right. And it's the limiting a lot of the noise that comes in around, you know, statementing, remittances, managing posting payments, all that. All that stuff right. But you know, some of our members, you know, are uncomfortable with that because they may have lumpy cash flows or they may literally be living on a paycheck to paycheck perspective and you're making some decisions and may have to actually borrow or go to overdraft or whatnot. So so we offer just a lot of different payment options. So, and that might seem just really simple, but you can, you know, pay by branch, you can pay by phone own we have a fast paid digital service. So you don't have to be an enrolled in online banking to pay to off US transactional count that you hold elsewhere. We try to make it easy. So we send out alerts right so that those who aren't on auto pay, you know, will have an opportunity to, you know, at least plan three five days. However, they want to set their alert so that they're not in jeopardy of missing a payment or, you know, potentially having some negative impact to their their credit bureau. So I think that's on us to make sure and and sort of manage the borrower so that they're doing everything they can to maintain their credit responsibly with us and, if you know, and and ideally actually improve their credits. Course they pay down, pay down their debt and have more traits. It's this concept of level up is is fascinating to me. I could ask you question for this for a long time. But how do you think about the economics of that, because obviously there's you know, any lender who makes a loan to a slightly riskier consumer, you know you've got some defaults in there. You have to earn the the interest for the overall portfolio on those that don't default, and so in some ways you can almost refinancing your own loan down to a lower rate and reducing your returns. How do you think about modeling that financially? And I'm really curious how you get the institution focused on products that are financial wellness oriented, because I can see many institutions going hey, what number of people are going to get refinanced off us at a lower rate? And if that's not happening, for get lowering the rates. We took the risk, let's take the profits. Forget it. In Instan tuitionally, if you're managed at...

...a top line or bottom line revenue perspective, from a compensation like that's the thing that would make sense, not just from a shareholders return point of view on some level, but also from a, you know, my compensation point of view as well. So I'm curious how you think about aligning the institution around an objective like financial health and getting people to put offerings like this in place where they can seem kind of counterintuitive from the institutions point of view and maybe from the individual managers point of view. That would be, you know, a good thing to do, even if it's the right thing for the consumer. Yeah, there's been, I think, a lot of work and research done around the economic value that's associated with financial health and financial well being. Hey, I think up starts right there. Right. You say forty eight percent of adults don't have access to crept, to prime credit, and so I mean, I mean if it's a two hundred and twenty four trillion dollar market place, you know today, I mean you're talking twillions of dollars of potential market value out there, I think because it is. Financial Health and well being is a core differentiator for us and that's part of I mean, that is our purpose. We've actually part of gallops consortium around their financial wellbeing metric. Just so we benchmarked appears and can you tell us a little about that metric for those who are not as familiar, like what was it look like? It's kind of a fuzzing metric, right. I mean I think a lot of institutions focus on net promoter score. Yep, the real way to become, say, you know, a bank of choice or a lender of choice, and the you know this map being simple, right, you get more promoters than tractors, then you're going to get more referrals. But this is softer and that it really measures how well financial institution, and there's banks credit, he is participating in this consortium, how well of an institution does along promoting financial wellbeing to its customer base. And it's really asked in a couple ways. It's it's asked FIA survey is is how comfortable a member is in approaching their financial institution about issues related to financial health and wellbeing is one. The second is do they really believe that their institution has their financial health and well being at interest. That's an index score, and so what they've found is that those institutions that track high on that score actually have greater depth of product engagement and participations hence, you know, greater economic value. And so we've been part of this for about eighteen months and we're at the top of the leaderboard in terms of our called our credit, we felt, the support index, and so it's a bet that we are making and we're making it through really creating an experience or products that provide financial health and well being through an experiential dimension or through actual product ownership versus, say, literature or, you know, access to webinars and all kinds of financial health and welving information. And exact sample of that, Jeff, is, you...

...know, on the deposit side, as we have a reverse tier money market where we're trying to promote savings behavior. So for the first two thousand dollars that saver puts into a money market account, they are two percent and then it tears down at various tier levels, down to more normalized market rates. It's a you know, twenty five basis points and fifteen thousand, et CETERA, etc. So really turned to to promote positive savings behavior and that's behind the spirit of level up, which is product is talked about on on the lending side. I would say that. So there is that sort of notion and, I guess, increasingly cooperated view that financial wellbeing does translate into greater product depth and and lifetime profitability. And the other thing along that is that on the lending side the level up now we have ridiculously load andlinquency and charge offs on our auto portfolio and we have more than eighty percent of all those enrolled in level up have actually received that benefit last year. Wow. So there's a hypothesis here and we have, I think, more analytical work to do around here. I do contend, as a hypothesis, that these types of incentives and products actually are influencing our repayment behavior and driving, you know, better delinquency and lost performance, which again is higher echoic value, so less servicing expense, less cost to creditc yeah, if you I mean it's two ways to earn that. That that point or two you're giving back right, one through better delinquency and one through better relationship. That's really interesting got to think about what I want to ask connected. It's like that's a really interest topic. Are there? I liked your comment about not webinars and informational things around wellness. I'd love the dig I think of that is the like lecturing at somebody problem, or what I sometimes refer to these the eat your Broccoli problem, like I'm going to tell you what you're supposed to do and you know my kids don't want eat their BROCCO. Leading where anybody else's kids and I'm you know, I'm like shaking a finger and forcing and that it seems to be the approach in general. If I had to describe it the most financial wellness products or of vintax or others. You know, the kind of the approach we take is we're trying to get a somewhat a natural behavior from the consumer. If it's savings versus investing. How do you think about that? I mean this seems like, you know, the the savings idea of you know, more for the first couple dollars you get into. There's a real stavis into other other examples of how you approach. That is a really interesting different perspective on how you encourage the behaviors you want and invest in having your members become more financially healthy, which I think is a goal we all have, but but maybe not one that's well executed on in many instances. Yeah, I think there's this is getting back to the relationship component, which it does bring into that element of trust. And is my institution actually a trusted advisor on some of the key financial decisions that I may have to make? What whether they are while, you know, things are going great...

...in my life or why I may be experiencing some hardship. Is My institution there, you know, looking after my room, my relationship with them for the long term? And so I think, I think you know, one of the things that surprised me coming here from a big bang was we don't have a collections department, and I say that kind of facetiously because it's actually called accounts solutions. We have to linkncy managers and collection agents, but we don't call them, you know, a collections team. There an account solutions team. So our first real role is to help a borrow who maybe experiencing some hardship manage who that hard grip and come out that all, rather than more for optimized you know who outcome. So the why? A lot of solutions there that I think are differentiated. Like we have this skip of a future, which allows a borrower to skip payments up to two times a year for the life of the loan. And then we also have two month defermans. So and that allows a borrower to take a two two month deferment twice during the life of their loan. And so let's just imagine your auto bar and you have, you know, it's your main form of transportation, cargo. Yeah, and you got one fifteen hundred dollar expense. Well, you know if you called into Potalco with that hardship. Right, we've got this program kind of in anticipation of some unexpected expenses, that we can accommodate that hardship with no impact to the borrowers credit history and, you know, an opportunity to understand more about that that member and potentially even put them into one of our third party we have a partnership with the firm called balance. It's a third party financial wellness and advisory Firm. So we pay them at to provide this service and they cover everything from saving and budgeting to Hell and look, my credit score etc. So it gives us those opportunities and that's why we really called collections, account solutions and and again. I mean, you know, I know everybody's having exceptionally low delinquency, some charge offs the days, but I think our practices are helping and and our members are increasingly viewing us as the institution that has their back and in is in it for the long term with them. From a membership growth perspective, you know, we've been eight percent plus in terms of membership growth for the last two years, which is that ranks number one among our peer group for like size credit unions. So I think we're getting a lot of brand momentum around our financial health and well being promised, combined with this kind of relationship view. I mean, the other thing with gallops they have a problem incidence score, which is so that's where it really sort of measures as a percentage of respondence who had a problem, and so that's something that we manage aggressively, both the problem and the and and the resolutions. So still cons us that at that data...

...point that's interesting. Tell me a little bit about the eight percent growth because, I mean, I can't say that I talk to any financial institution who'sn't say growing my customer base, my membership is high on my list. I mean, do you have anything that you attribute that to outside of this focus on relationships? I do think the last two years in particular been a great time to earn trust. I mean people, people remember how you treat them when they when they need to help, more so the how you treat them when you know you know I'm going to buy a house. Every wants to my mortgage. Great, that's Nice, but like when I need a miss a payment and I've got a tough time, like they remember that and I think that really does. It's a moment where you can earn loyalty. So I'm sure that has been great now. But I'm curious, outside of those things, if there's anything you know, the things you've seen that have been that to which you can attribute some of the growth that you think are lessons you've learned in that space, because certainly it's something I hear a lot, is it? We just we need to grow our membership, we need to need to find ways to do that and it's a, I think, a challenge for me institutions. It is an amazing thing when your customers really become your greatest advocates. And so we've been running for the last three years refer a friend program certain incentence in place for both the referring member and the new member, and I think that was pretty pretty timely, especially in the covid period, because a lot of our programs, so all the covid hardship programs that we put in place in terms of loan deferments, workouts, etc. Fee Waivers, all of that activity, emergency loans, really created a lot of advocacy for our existing members. And so we've had just phenomenal success with our refer a friend program and what's surprised US tremendously is that it wasn't just kind of a thin relationship that we were acquiring with the refer a friend for the incentives. We were actually seeing greater participation in other chancillary products from those new referred members than in some of our other traditional membership acquisition channels. So that so that's for sure. You know, one of the big things the and I think this is kind of the piece around personal personal versus sort of all or I'll say rep represented assists, representative assisted programs, are having access to people versus pure self directed engagement with the financial institution. So I think we've had an ability to sort of stitch together certain processes or disconnects for members through some of their challenges, where I think some of the digital only plays don't necessarily have that luxury, and that's carried over into member good will, which is helped fuel not just referrals but also fuel brand. I want to high life. That is what thing you said there was really interesting, and then ask you one more question where I let you go. But the refer friend is driving deeper engagement among products than traditional acquisition. As a fascinating reality...

...that when you can turn your customers in your advocates, not only can they help you acquire, but those relationships end up being deeper and more meaningful, which makes sense. I mean when you get a referral from a friends, you trust that more than the billboards you saw. Are the five hundred bucks in a toaster you got for opening and account, or what the twenty five bits on the mortgage from the bank that you never had an account with for opening the checking account than you like? YEA, I'll put the hundred bucks in for the twenty five bits, because it's a mortgage, but like, how how long is that to stay there before I lose my twenty five bits if I take it out? That's how I saying. And then I also want to hide this last comment. You mean, I thought you described it as selfdirected versus being able to talk to somebody, as opposed to digital, and I think that's so important that we we tend to think of digital as being purely selfdirected, but this sense that you know, you didn't break it down as a digital nondigital. You broke it down into a selfdirected and a human enabled human touch. I think it's a really interesting distinction from digital nondigital says it selfdirected experience, or is it a maybe a hybrid experience where I've got human interaction despite the digital I just that was a really interesting phrase to me, in a different way of thinking about what I think many people will just go ahead. It's digital or it's not digital, and digital being entirely selfdirected at its core. I'm super excited about where we're headed on that front and I think obviously covid was a big sort of impetus behind all this, because literally our branch coverage was compromised, and so we've have launched the virtual branch, which is a way for our membership and prospects to engage virtually with with one of our our team members through a video capabilities. So we're people to sort of impart some of the able to sort of have a more rich interaction with a member in terms of understanding their situation and solutioning much better, and so I'm excited to see where that, where that goes. As relates to more of a hybrid model that's really interly, I find I'm hearing more and more of this sense that we want the human interaction for an advisory, for the solutioning, but then often it's like, okay, I figured out what I want and now, like you know, I don't want the it's like Ming the stores when he comes helps me out and they're like walk me the other guy. I'm good now, like I appreciate the help, but like go back to what I was doing. I can take it from here. And I think that ability to have that hybrid experience where you can inject the human touch and then, in the last time, one to self direct from their college to finish a process and upload the pay stubs and peace or whatever they have to do, is a really powerful model. It sounds like you guys are taking some interesting steps in that direction. It's just great to give members and customers choice so that they can sort of engage and transact how they want to. It's kind of like the payment thing, I said, like everyone. I mean I'd like Ah, but you know some members may not like that. So it's nice to have that flexibility. And you know, I get frustrated when everything I want to do from an investment perspective has to go through one trusted investment advisor. It's you know, I'd sometimes I might wanted so I've actually had to create my own kind of play accounts, so so I can just sort of yes, you could do fiel, free to I want to take this stuff. Just leave leave me a little for here, right, right, I like it. Well, Richard, you...

...know I always close a podcast with the same three questions, but before I get those, was there anything else you wanted to talk about or questions you wished I'd asked? Areas you thought we were should have delved into and didn't know's okay, it just means I did my job well and preparing but I'm okay with either answer, but I always like to give my guests an opportunity to the highlight anything that we didn't get to that they thought was was relevant or useful. Well, I'll just say that, like I do think that, you know, there's so much hype around machine learning and Ai and I just that we could be losing the forest through the trees. The key is just intelligence, right, and especially antal institutions terms of how we operate our businesses. As it relates to you know, we started off by saying who do you reach? And you need sort of more sophisticated targeting models, and I'm not talking about just simple waterfall models. I'm really talking about like propensity models, you know, and so and same with you know, how we manage risk on credit risk and all. I just think you know it's that is where, at least potacco, we are just focusing very heavily on increasing our data sets. I'd really like to find some way to incorporate more behavioral attributes into our pretty risk modeling, so it's not just hard data but what we're seeing in terms of actual attitudes and behaviors and court getting id into some kind of scoring but I think that's kind of the next cool front. I mean, well, it is the cool front already. We agree with you on that. It's a it's a pretty and it is I've always been a little surprised that I went to banking conferences for years I staught. May I still go, but for years I would go and ai would just be like the Chat Bot, like what they met was replaced the banker with the BOT, and I went well, like I actually think there's a lot of interesting stuff in ml and the targeting and the credit scoring and the propensity and the and then like the the consultative conversation about what product is the best hood for you is like a place where the humans are still doing better and it we seem to be really focused on taking that human out of that part of the equation, as opposed to, to your point, going hey, can we have better behavioral models, better propensity models, that can help us find the right consumer at the right time, make a better off or understand that this person's credit worthy? Would maybe they don't, they don't have the best credit score, and extend them credit. And I just I was like, man, you guys are miss appliant. Where we seem to be focused on this thing that's I think the humans do well, and not as much on this other area where I think there's a huge opportunity for machine learning, models data to improve outcomes. And that was just it was frustrated me. For you, I think there's a I think you're right, there's a ship and people are looking at some of the other stuff now. But it was amazing for every year it's just chat boss. I was gonna be a the banker. That branch is gone and the chat bought as ascendant and I felt like there were some back office opportunities that were just a bigger opportunity from an AI point of view, frankly, and one that was the technology existed, because the chatbots can do some some stuff well, but when it comes down to head, don't understand my mortgage options. What's the best choice? or I need some investment advice, like how should I think about an IRA versus a Roth Ira, a versus my k versus a two nine for my kids? Like...

...that's a that you need. You need a human to walk you through those options and I think that was maybe not the best place to be PUTT in the applying the technology you're going to those banking conferences. That a heavy cost cutting era. I've been going for quite a while now. I mean, you know, came from the technology space, so I needed to learn the industry and that was a good way, but there was definitely a year or two I felt like that was the conversation. Anyway, I appreciate you saying XC. I think it's a good one. So, anyway, these are my final three questions for your Richard, and I I kind of do them. I was a rapid fire, but you know, in quick succession. But I find would be pretty interesting. So what's the best piece of career advice you've ever gotten? Well, we've talked a lot about it and and I actually do remember. Just means you're putting it into practice, which is greatest a mentor mind. Like I thought it was a pretty kind of interesting thing when he said he said. He said at the end of the day, the economic value will be held by those who own the member or client relationship and products and services or in fact commodities. It's a little bit against what I'm saying. I mean I think loans are more than a commodity, but I think the loans are transformed out of commodity by that relationship management component that we talked about. So I thought that was interesting that. I mean this mentor was also a former Mackenzie consultant. So it sounds like something a consultant consider a good sound bite. Fits on a slide nicely. Yeah, my second vice, what's the I guess that's kind of the best piece of advice you've got to consumer lending as well as career advice and consumer letting advice all wrapped up one unless you had something else you wanted to mention. So I also had a great mentor at at a big bank I worked with, and his advice to me was always pretty blunt. And then that was be bold and and so I've sort of internalized that, as that is sort of your point of orientation is I think we need to be bold as our first position, and then you know, we need to take calculated risks and understand those risks, and then you know the mitigainst so it could be everything you know throughout the value chain, whether it's revenue generation, product and development, managing the cost of credit and the risks we risk reward along that spectrum. But I just thought that was really provocative. As you know, that should be your first position is to be bold, and I think a lot of big banks may be lost a lot of that with sort of the age of compliance and regular, regular regulations and, you know, sort of credit risk phobia, and so I just think that that's where the innovation comes from across the value chain. Fortune favors the bold. Yeah, like that. So in that vein, do you have a bold prediction for me about the future? So you, I mean you kind of you kind of let me write into that when I should. I appreciate you with the bold. It's kind of scary for big facial institutions. I just do think that there's just greater disaggregation of products and services. So it's that's just going to happen, be...

...it to big data firms, big online players, big merchants. I mean saw the markets team has gone over to Walmart. You know, they're going to give a bank charter another crack again. You know, maybe that was before their time when they tried it. I think it was in the S Defe s. But I, and you know, I think that does go back to who owns the relationship right. So you know, I Amazon owns the transactional relationship for a big chunk of this country. And to the extent I mean they started off with just a narrow book vertical and so they've expanded it to multiple products and and it just won't surprise me if there is greater disaggregation and sort of dilution of the revenue pool financial institutions going forward. Usually when there's some disaggregation there's a reaggregation somewhere else and you got to figure out how to participate in that. But interesting disaggregation is coming. I like it. Well, Richard, I appreciate your take of the time today. This was a fascinating conversation I'm sure our listeners will greatly enjoy. So thank you. Great talent with you, Jeff. Take care. Take care. Up Start Partners with banks and credit unions to help grow their consumer loan port folios 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 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 ind 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 Ford 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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