Aug. 21, 2024

Adapting to Turbulence through Fintech Innovations

Things need to change, oftentimes more than we’d like. This week, host Matt Snow is joined by https://www.linkedin.com/in/adam-goller-7188a94/, EVP and Head of Fintech Banking at https://www.crossriver.com/, for a conversation about transformation...

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Things need to change, oftentimes more than we’d like.

This week, host Matt Snow is joined by Adam Goller, EVP and Head of Fintech Banking at Cross River Bank, for a conversation about transformation and innovation within fintech in the face of turbulent times and shifting preferences. Adam shares his insights on how smart strategy, rapidly evolving technology, and—most importantly—a willingness to adapt, is resulting in creative solutions for today and tomorrow’s challenges.

Join us as we discuss:

  • The shifts in entrepreneurship and banking during global events like the 2008 Financial Crisis and Covid-19
  • Why user experience solutions need to accommodate shorter attention spans
  • The challenges of integrating AI in heavily regulated sectors like banking
  • How the expanded skill sets of today’s students impacts what technical knowledge is required in finance
WEBVTT

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You are listening to Leaders in Lending from Upstart, a

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podcast dedicated to helping consumer lenders grow their programs and

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improve their product offerings. Each week, here decision makers in

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the finance industry offer insights into the future of the

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lending industry, best practices around digital transformation, and more. Let's

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get into the show.

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Welcome to another episode of Leaders in Lending. I'm your host,

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Matt Snow, joined this week by Am Gawler from Cross

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River Bank. Adam, thanks for joining me.

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Thank you, Matt. Really great to be here.

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Yeah, always good to catch up with you. Maybe why

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don't you start by introducing yourself a little bit and

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telling everyone what you do across River today.

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Absolutely so, I have been the Cross River filledness that

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the better part of sixteen years, since the very beginning,

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and it's been quite a journey. And my current title

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today I run all of fintech banking and really what

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that is is really relevant to this call because we

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are essentially powering non banks offer banking products. We started

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with lending many many years ago and they have really

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transitioned to be a full stack, full product, robust supplier

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of banking products for non banks and so today what

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we offer is you know, lending capabilities, card capabilities to

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pothitic capabilities.

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As well as a lot of payment capabilities.

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Great and you know, I've been really interested lately and

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was thinking about our conversation about companies that started in

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you know, maybe more tumultuous times in history. So you're

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part of the founding team back in you know, the

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wake of the GFC starting Cross River. Maybe talk a

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little bit about that, like what generated the idea, like, hey,

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here's a great time to start a bank.

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That's funny.

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We actually had a philosophy that our CEO, Jill always

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talks about is that hire people who have been through

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some bad times as well. People have only been through

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positive cycles or good times tend not to know how

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to react when things don't go well. And so many

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of us were working in industries or companies that were

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impacted by the GSC, the Great Financial Crisis, mostly around

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the mortgage industry. Myself, prior to Across, I came from

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a rating agency. I was specifically focused on residential mortgage

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back securities our mbs, and so obviously we were significantly

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impacted at the time, and so I saw really the

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peak of the mortgage industry, and also the big downfall

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from all the CEOs and the creative underwriting that was

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done over a number of years. So it was a

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really interesting time of former bank. As you can probably imagine,

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there were not many banks that were lending at that time,

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and so what it really brought was an opportunity for

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us to do something a little different.

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The initial idea.

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Was really to raise money to build a bank that

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was going to have fresh capital, sort of no bad habits,

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and start anew at a time when banks weren't really

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lending at all. And so that was the first strategy.

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It wasn't really a fintech play to begin with. What

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happened over time as we started to build, we realized

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that scaling a bank is really tough when you're going

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only direct to customer, and so we started learning about

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these partnerships, initially through a company called Queen Sky, where we.

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Could leverage the expertise of others.

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To build not only our balance sheet, but also to

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build programs that would enable banking not only to be

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direct banking support.

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Interesting, you know, and I've I don't know if you

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follow the podcast founders. Dave of our founder and CEO.

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It's very fond of that one as well, And I

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think something interesting similar about that. I think, you know,

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with entrepreneurs or founders, it seems like there's always a

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really strong idea for a company, but also like the

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ability to pivot, Like how did you guys find that

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balance of like, here's something that we're going to go

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like a you know, full steam ahead against an idea,

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and then also being nimble enough to pivot when and

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stay true to that.

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In my view, that starts with the culture.

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I think you mentioned Dave, and Dave honestly you know

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from came from from Google and other companies he worked at.

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But to me, if the CEO has a culture of.

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Being an entrepreneur and being open minded to ideas, I

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think that shriggles down to all the employees. What really

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we learned from an early you know, our early years,

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was that if we look at every opportunity, have many

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opportunities to pursue. And so if we saw ten ideas

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and only two of them came to fruition, that's absolutely fine.

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But for us, it's about being open ninety is going

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in with a fresh outlook and not turning over every rock.

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Assuming that everything with possibility, and if you go in

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with the attitude that everything's possible, you wind up with

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something great.

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Yeah. I like that approach. Did you find were there

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consistent themes are ways that you evaluate those opportunities? Was

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everyone kind of aligned on that same type of approach

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or was there a lot of debate around like, no,

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this is the opportunity and why? Yeah?

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So I don't think there was a ton of debate.

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I think you know, as a young institution with a

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limited capital at the time, we had to be very efficient,

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and so I think there was a balance between what

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is the most scalable opportunity, so it has to have

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a lot of scale because you're not going to invest

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in it. Did enough scale at the same time, like

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what is the capital required to turn a profit? Because

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if a lead time or though the life was you know,

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three four years out to turn a dollar of profit,

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it wouldn't make sense to pursue that as well. So

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it was almost the balance of the fish between cost

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and profit as well as sort of the you know,

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heech required and other investments of time that it sort

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of did not allow us to pursue.

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Yeah, that makes sense, and actually so I went out

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and did a little research to see what other companies

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were founded kind of in the wake of the GFC.

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I'm sure you've heard of these, but you know, nerd Wallet, Uber, Venmo,

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groupon Groupon I was surprised to see is actually still around.

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I think they have like maybe half the customer base

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that they did at their peak. But you know, those

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other companies seem to do pretty well starting at that

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time as well.

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It's not a coincidence, I think, you know, if you

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think about zooming out of the business industries, but in

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banking industries, if you think about life in general, it's

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not uncommon that many of the best things come out

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of you know, trials and tribulations, and the best ideas

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are firmly out of need. You know, when they say that,

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you know, necessity is the mother of inventioned that's not

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a lie. Right, When someone has a problem they need

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to solve, that's the quickest way to get to a solution,

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because when you're just ideating around the room and throwing

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ideas out, Okay, we'll pursue this, we'll pursue that, when

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you're actually in crisis mode, and COVID was a good

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example of that. When so much came out of COVID

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and even the GFC. Right when you think about the

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proliferation of banking and the access to banking that happened

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post GFC the last ten years, that was accelerated thirty

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to forty years of banking life.

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Yeah, I totally agree. And you mentioned, you know, coming

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out of COVID too. I did a quick search, but

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didn't find any like meaningful companies maybe that were started

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are still around since then. I saw one stat that

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you know, the IRS saw a huge increase of the

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number of companies started. So I think there's an average

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of like one hundred to one hundred and twenty five

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thousand applications a month for new new companies that peaked

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up over one hundred and fifty thousand, and that trend

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has seemed to stick around. Any companies that you've seen,

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like start out of COVID that kind of capitalized on

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that environment that you were mentioning or think have some

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staying power or changed even change the landscape for FinTechs

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and banks.

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I'm trying to remember the names of companies, but there

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are definitely products that we saw that came out of COVID.

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I think I know we were involved, I want to

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say the name in building a product with a current

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customer of ours that was a unique spin on an

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existing product, and it was really almost like came out

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of the idea that people aren't leaving the house anymore

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and types of financing maybe that would enable that to

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be easier for customers who weren't going to the point

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of sale anymore in one case, and the same thing

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for other areas of banking, where there were folks who

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understood some of the core problems that COVID showed us,

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and whether it be healthcare financing, there were solutions that

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came about from people realizing that certain things just weren't

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going to continue to exist the way they were before.

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Yeah. And I've heard you talk before too about you know,

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maybe the speed or the accessibility of banking and the

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innovation that continues to happen. There is that something you

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continued to see or think it is still a lot

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of opportunity within financial services.

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Yeah, it's so interesting. We're still seeing a lot of that.

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It's a great question, and I think there's almost this

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balance where on one hand, we're still seeing a ton

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of creativity in banking, A lot of folks who are

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trying to do things slightly differently to the next competitor.

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At the same time, because it's financial services, there's this

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inherent almost slow slowness to it is regulatory pressure. You know,

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the rigor of the process to get them something off

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the ground is so much stronger than perhaps in other industries,

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So it does balance itself out. There is a lot

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of like creative you know, ingenuity coming out of companies

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that we work with. At the same time, there's natural

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rigor to the process and filtering of the process that's

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created by the regulatory environment.

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Yeah, what other things do you think enabled that? I mean,

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I can think of one just being kind of the

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digital nature of so much of our currency and how

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much you know, the reliance on physical currency decreasing over time. Technology,

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Like what other enablers are maybe newer that are helping

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companies to advantage of that.

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It may not be new or you're alluding to almost

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things like AI as an example, things that are accelerating,

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maybe some of the banking services. But to me, in

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my own view, there's just the proliferation of things becoming

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more commonplace. As an example, the comfort of people who

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use their phones for everything, right, Whereas in the past,

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applying for a loan on your phone would have been insane, right,

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But today people are willing to go into his store,

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you know, using just their phone and clicking on a

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button and taking financing for that. Transactions that are happening

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in real time, like real time payments would have been

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a real scary thing for people, you know, five ten

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years ago. But money is moving so quickly and people's

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willingness to move that money quickly understanding that there are

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risks involved in the in the lack of friction in

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the process. That really says a lot about people's trust

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in the controls, trust in the systems, and the advancement

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of thought amongst the general population.

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Yeah, that is a really good point. I hadn't thought

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of that, you know, the consumer's comfort and using other technology.

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That maybe paves the way for banking to take advantage

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of the idea of using a phone as a primary

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way of transacting. Opening new accounts, moving money definitely couldn't

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have been led by banking. I don't think until other

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companies made that much more safe, comfortable, you know technology.

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It's funny because if you think about it, my kids

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are this way. I literally with with my kids where

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my kids. Last week we were going out somewhere and

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I said to my son, who drives now he's seventeen,

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I said, do you have your phone? He said yes,

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And I said you have your wallet? He said no.

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And can you imagine a world where someone is more

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likely to take their phone with them their wallet because

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to him at his age, his generation, the wallet is insignificant,

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but the phone, that's not insignificant.

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Yeah, I've noticed that a little bit too in my life.

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And I know you're a bit of a runner, but

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like even you know, I used to have like the

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really thick wallet with all the cards, like everything, like

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everything in there. And I get to the point where,

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you know, maybe I can just run with my watch

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and if I need to pay, like I can, you know,

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want to just stuff for a cup of coffee afterwards,

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or I get lost, I can pull up a GPS

236
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like even on my watch, and I may not even

237
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need the phone.

238
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It's funny because when you run a marathon, depending on

239
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where you're going to get there can be a challenge,

240
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like because you want to drive because it turned to

241
00:11:25.000 --> 00:11:26.320
park and then getting a car over at the end

242
00:11:26.320 --> 00:11:28.440
of the race, and so what do you take with you?

243
00:11:28.480 --> 00:11:31.080
So usually the starry lander's already food, there's drinks, you

244
00:11:31.080 --> 00:11:33.559
do need anything like that. But for me, it's it's

245
00:11:33.600 --> 00:11:35.600
obviously my phone, so I can listen to something, so

246
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I can reach people. And then it's as little as possible,

247
00:11:38.600 --> 00:11:40.200
so you have something like the little pockets in your

248
00:11:40.240 --> 00:11:41.919
shorts you can fit a credit card in or an

249
00:11:41.919 --> 00:11:44.879
ID in, but essentially your phone is the only thing

250
00:11:44.879 --> 00:11:46.679
you're really taking with you and you're carrying on you

251
00:11:46.960 --> 00:11:48.279
other than a few bucks in case you want to

252
00:11:48.279 --> 00:11:51.919
buy something. But so to me, like that whole process,

253
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you know, just reinforces the fact that, like we're realizing

254
00:11:55.480 --> 00:11:58.879
more and more that like our digital footprint, our identity footprint,

255
00:11:59.200 --> 00:12:02.120
our banking foot print, everything we do is really embedded

256
00:12:02.159 --> 00:12:06.919
in that device. And the more that the banking financial

257
00:12:06.919 --> 00:12:11.799
services are enabling their product to be offered and engaged

258
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through that device, I think the more prolific the adoption

259
00:12:15.080 --> 00:12:15.360
will be.

260
00:12:16.279 --> 00:12:19.879
Yeah, and that's probably enabled a little more consumer choice

261
00:12:20.320 --> 00:12:21.799
or have you seen that in terms of who they

262
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choose to bank with and the types of products and

263
00:12:23.679 --> 00:12:26.360
services and versus having to go to like your local

264
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branch and talk to a banker and kind of you know,

265
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interact with the financial industry through through a person or

266
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a physical location. Now I could download an app, I

267
00:12:35.519 --> 00:12:38.159
can search for loans, I can figure out who has

268
00:12:38.159 --> 00:12:40.399
the best deposit rates, and you know, move that money

269
00:12:40.440 --> 00:12:42.320
around pretty easily just on that device.

270
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The best example of like like my kids, that kids

271
00:12:45.480 --> 00:12:47.480
today have so little patience to talk to anyone for

272
00:12:47.519 --> 00:12:49.559
a long period of time. Their attention spend is a

273
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lot shorter, and so the less they have to talk

274
00:12:51.639 --> 00:12:53.559
to someone and get something done, the better. They'd rather

275
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interact on their phone, have maybe a short conversation. So yeah,

276
00:12:56.759 --> 00:12:59.120
the more you can do to reduce friction in the process.

277
00:12:59.519 --> 00:13:01.799
It's interesting saying that what I see a lot here

278
00:13:01.960 --> 00:13:04.320
in the companies we work with is that there's so

279
00:13:04.440 --> 00:13:08.320
much energy expanded and dollars expended on improving the UX.

280
00:13:08.799 --> 00:13:10.399
And you think about it, like, if a product is

281
00:13:10.399 --> 00:13:12.159
the same, why does the UX matter so much? And

282
00:13:12.159 --> 00:13:14.279
it's exactly what you pointed out, which is that if

283
00:13:14.320 --> 00:13:18.240
the friction is even one iota less and conversion is

284
00:13:18.279 --> 00:13:20.200
a second shorter, you.

285
00:13:20.159 --> 00:13:23.240
Will get a far higher adoption rate and conversion rate.

286
00:13:23.279 --> 00:13:27.039
And it's really meaningful again without naming names, that there's

287
00:13:27.080 --> 00:13:29.159
a company we work with who we're talking about a

288
00:13:29.200 --> 00:13:31.080
certain change we want them to make to a disclosure

289
00:13:31.600 --> 00:13:34.360
in an online form and they were somehow able to

290
00:13:34.440 --> 00:13:36.759
run stats and they thought there would be up to

291
00:13:36.799 --> 00:13:40.480
a seventy percent reduction and conversion from one change in

292
00:13:40.519 --> 00:13:43.320
the UX and that that was about a year ago.

293
00:13:43.519 --> 00:13:46.000
That was the eye opening for me because they have

294
00:13:46.080 --> 00:13:47.720
it down to a science where they can actually tell

295
00:13:47.759 --> 00:13:53.120
you if you change this one feature or one part

296
00:13:53.120 --> 00:13:56.240
of the experience, you actually will see a meaningful change

297
00:13:56.240 --> 00:13:58.879
and adoption conversion, whatever you want to call it, and

298
00:13:58.919 --> 00:14:00.360
therefore revenue and profit.

299
00:14:01.600 --> 00:14:04.279
Yeah, I think that you know, data driven approach is

300
00:14:04.320 --> 00:14:08.480
so important where every interaction can interaction can have such

301
00:14:08.519 --> 00:14:11.639
a dramatic impact. So knowing and testing and learning those

302
00:14:11.639 --> 00:14:13.240
things is critical to say ahead.

303
00:14:12.919 --> 00:14:15.080
Absolutely, I mean I think that you know that that

304
00:14:15.080 --> 00:14:17.399
will become even more important over time the more we

305
00:14:17.440 --> 00:14:20.960
moved to a completely digital environment. It's funny because even

306
00:14:21.360 --> 00:14:24.399
I'll call it like a older generations or adopting some

307
00:14:24.440 --> 00:14:27.559
of the technology and they're getting more comfortable interacting online.

308
00:14:27.559 --> 00:14:29.559
I mean, I have my my father's a good example

309
00:14:29.559 --> 00:14:32.000
where like you know, I'll buy something for the whole family.

310
00:14:32.039 --> 00:14:34.240
The don't want to pay me back. And he used

311
00:14:34.279 --> 00:14:35.559
to write a check and leave it an m O

312
00:14:35.639 --> 00:14:37.639
bit my door, and I said, Dad, that's it's kind

313
00:14:37.639 --> 00:14:39.440
of its kind of it's kind of annoying. And so

314
00:14:39.799 --> 00:14:41.519
one day I was at his house. This goes back

315
00:14:41.519 --> 00:14:43.679
probably a year and a half ago, and I went

316
00:14:43.679 --> 00:14:46.480
to his phone. I downloaded Zell to the Chase app.

317
00:14:46.519 --> 00:14:48.480
I'm like, you can send money this way to me.

318
00:14:48.960 --> 00:14:51.639
And he's done it now twice successfully over the last year,

319
00:14:52.559 --> 00:14:54.360
and our lives have changed forever for the better.

320
00:14:54.919 --> 00:14:57.759
Right, Yeah, you've converted him to that that way of

321
00:14:57.799 --> 00:14:58.759
our awesome.

322
00:14:59.279 --> 00:15:01.799
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335
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Thanks and now back to the show. So what other

336
00:15:44.279 --> 00:15:47.039
things are you seeing partners do to innovate, Like, is

337
00:15:47.080 --> 00:15:49.360
the use of API or the idea of open banking

338
00:15:49.519 --> 00:15:52.879
continuing to be something that people are adopting.

339
00:15:53.799 --> 00:15:54.399
Yeah, I think so.

340
00:15:54.519 --> 00:15:58.159
I think that having a centralized location for controlling all

341
00:15:58.159 --> 00:16:00.440
of your financial services, I think is really important to people.

342
00:16:00.480 --> 00:16:02.840
So when you think about these apps that will allow

343
00:16:02.879 --> 00:16:06.639
you to have all your accounts sort of routed visible

344
00:16:07.000 --> 00:16:10.120
from one place, that's super important. Just as one example,

345
00:16:11.200 --> 00:16:13.919
last week, I was realizing that, you know, I've been

346
00:16:14.000 --> 00:16:17.120
at now called three and a half companies over my career,

347
00:16:17.720 --> 00:16:19.120
and you have your four one K from the first

348
00:16:19.159 --> 00:16:21.000
one and the second one and keep rolling them over.

349
00:16:21.399 --> 00:16:23.399
But sometimes you also want that like diversity of like

350
00:16:23.440 --> 00:16:25.440
you know who's the vendor on that account and they

351
00:16:25.440 --> 00:16:28.360
perform differently, and so an app now that they can

352
00:16:28.399 --> 00:16:32.440
you could basically consolidate and centralize all of your retirement

353
00:16:32.440 --> 00:16:35.679
accounts into one place in your broader portfolio and see

354
00:16:35.679 --> 00:16:38.399
everything in one place. That's really powerful for a customer

355
00:16:38.399 --> 00:16:41.799
because again, time is important to them, efficiency is important

356
00:16:41.799 --> 00:16:44.720
to them, and control is important to them.

357
00:16:44.759 --> 00:16:46.919
Yeah, I think the control is the key point that

358
00:16:46.960 --> 00:16:49.240
you mentioned in that diversity. I think a little bit

359
00:16:49.279 --> 00:16:52.000
about maybe this isn't a perfect analogy, but you know,

360
00:16:52.039 --> 00:16:55.120
like an entertainment where we had the cable industry that

361
00:16:55.120 --> 00:16:57.000
no one loved and you're paying these huge fees for

362
00:16:57.039 --> 00:16:59.240
all these channels you never watch, and then we start

363
00:16:59.240 --> 00:17:02.080
to get streaming services and now everyone's like, I've got

364
00:17:02.200 --> 00:17:04.119
you know, twenty different apps. I don't know where to

365
00:17:04.160 --> 00:17:05.759
go to find the show I want. So how do

366
00:17:05.799 --> 00:17:08.880
you like balance that control? Yes, you know, it's great

367
00:17:08.920 --> 00:17:11.880
that we have all these new players creating really interesting

368
00:17:11.920 --> 00:17:14.839
content and you've got a lot more control over what

369
00:17:14.920 --> 00:17:17.160
maybe what you can watch and what you want to

370
00:17:17.200 --> 00:17:21.359
pay for. But now there's such a diversity of providers, Like,

371
00:17:22.039 --> 00:17:23.480
I just want things simpler again.

372
00:17:24.000 --> 00:17:26.799
Yeah, simple, it's hard to come by. I would say.

373
00:17:27.000 --> 00:17:29.680
Banking has become simplified, Like even if I go into

374
00:17:29.720 --> 00:17:31.599
my own banking, I bank with Chase personally, and for

375
00:17:31.680 --> 00:17:34.279
most things that I do, I can do most things

376
00:17:34.279 --> 00:17:36.799
from that one app, not going externally. So I think

377
00:17:36.839 --> 00:17:40.000
that even the bigger banks have adopted, have adapted and adopted,

378
00:17:40.599 --> 00:17:44.319
you know, I guess, uh internal capabilities for allowing people

379
00:17:44.319 --> 00:17:47.559
to do things in one centralized location. I think, unlike

380
00:17:47.680 --> 00:17:51.559
maybe entertainment, which is someone's driven by like you know, okay,

381
00:17:51.599 --> 00:17:53.039
I have one person in the family who wants to

382
00:17:53.039 --> 00:17:56.160
watch this, and one party want to here, there's really

383
00:17:56.279 --> 00:17:59.319
generally one person's controlling sort of all the accounts for

384
00:17:59.359 --> 00:18:02.440
the family in many cases, and so it's easier to

385
00:18:02.440 --> 00:18:03.119
be centralized.

386
00:18:03.160 --> 00:18:05.480
There's not lots of yelling at you to get different apps.

387
00:18:06.119 --> 00:18:09.880
Yeah, yeah, that's fair. And maybe I want to circle

388
00:18:09.920 --> 00:18:12.160
back to something you alluded to earlier around you know,

389
00:18:12.200 --> 00:18:15.119
the starting of cross River and the idea of culture,

390
00:18:15.160 --> 00:18:18.000
Like when you think about building a team, you know,

391
00:18:18.039 --> 00:18:20.119
how do you quantify something that maybe is harder to

392
00:18:20.119 --> 00:18:23.480
pin down, like culture? What makes a good founding team,

393
00:18:23.640 --> 00:18:26.279
a good you know, start up, a good company that

394
00:18:26.640 --> 00:18:28.759
really can operate efficiently together?

395
00:18:29.880 --> 00:18:32.480
Great point. Actually, this is actually a great question. I

396
00:18:32.519 --> 00:18:33.400
thought about this a lot.

397
00:18:34.799 --> 00:18:36.599
One of the things I think it's important to understand

398
00:18:36.640 --> 00:18:38.680
is that at different stages of life of the company,

399
00:18:39.160 --> 00:18:41.680
it requires different people and what I mean by that

400
00:18:41.799 --> 00:18:44.200
is that we were starting a new company. You need

401
00:18:44.240 --> 00:18:47.000
a couple of things. People who are creative because you're

402
00:18:47.000 --> 00:18:51.519
building from the ground up. People who have patience because

403
00:18:51.559 --> 00:18:53.680
it takes time to build something. It takes time to

404
00:18:53.720 --> 00:18:57.960
get to the public offering, it takes time to build

405
00:18:57.960 --> 00:19:01.240
the product build a company. And then in addition to that,

406
00:19:01.359 --> 00:19:04.319
I think you need people who are less stuck in

407
00:19:04.359 --> 00:19:08.079
their ways, people who are flexible. As you as the

408
00:19:08.079 --> 00:19:11.640
company matures, you start, you start having this need for

409
00:19:11.759 --> 00:19:14.240
people who have a lot more rigor and have a

410
00:19:14.240 --> 00:19:18.720
lot more process focused, you know, ideals, and have have

411
00:19:18.920 --> 00:19:21.680
backgrounds that enable them to create those controls to make

412
00:19:21.720 --> 00:19:24.319
sure that as you're growing, you have the right controls

413
00:19:24.319 --> 00:19:27.039
in place. And so there is like this like life

414
00:19:27.039 --> 00:19:29.480
cycle where you need different skill sets at different points

415
00:19:29.480 --> 00:19:32.640
of the company's history. But overall, I think when you're

416
00:19:32.640 --> 00:19:35.079
interviewing people, you have to ask a very diverse set

417
00:19:35.119 --> 00:19:37.480
of questions. I know, I remember interviewing for a company

418
00:19:37.480 --> 00:19:39.119
for a job on Wall Street one time and they

419
00:19:39.160 --> 00:19:41.920
asked you like this, like a riddle, and it was

420
00:19:41.920 --> 00:19:43.079
the first time I had heard it was like a

421
00:19:43.359 --> 00:19:45.319
there's one apple and a hat, and then you leave

422
00:19:45.319 --> 00:19:46.279
these two apples and you come back.

423
00:19:46.319 --> 00:19:47.559
I don't know there are riddle exactly, but it was

424
00:19:47.599 --> 00:19:48.160
something where I.

425
00:19:48.119 --> 00:19:51.079
Was like, like, is this an interview for a banking

426
00:19:52.200 --> 00:19:55.079
like product or a company or this is like something else,

427
00:19:55.119 --> 00:19:57.680
And so it's it's coming with the question that can

428
00:19:57.759 --> 00:20:03.440
test you know, almost personality along with skill set real scenarios,

429
00:20:03.799 --> 00:20:08.079
asking them questions that force them to provide real life

430
00:20:08.119 --> 00:20:11.160
examples of situations where they're able to be able to

431
00:20:11.200 --> 00:20:14.319
solve problems and deal with things that have come up.

432
00:20:14.640 --> 00:20:16.559
So you got to test for like how they deal

433
00:20:16.599 --> 00:20:19.920
with adversity and how they deal with you know, you

434
00:20:19.920 --> 00:20:22.839
mentioned before change in direction, right to be very nimble,

435
00:20:23.079 --> 00:20:24.880
So those are all important things and that's the skill.

436
00:20:25.920 --> 00:20:29.839
Yeah, yeah, I totally agree. I think you mentioned translating

437
00:20:29.839 --> 00:20:32.359
the interview to back to reality how these people going

438
00:20:32.400 --> 00:20:34.680
to operate in an in the actual job can be

439
00:20:34.880 --> 00:20:37.079
kind of hard because interviewing itself can be a bit

440
00:20:37.119 --> 00:20:38.880
of a skill that people can get really good at

441
00:20:38.880 --> 00:20:44.400
answering those riddles or stereotypical interview questions. Do you have

442
00:20:44.480 --> 00:20:46.359
like a go to set of questions or a way

443
00:20:46.359 --> 00:20:50.160
that you like to assess folks ability to handle adversity

444
00:20:50.200 --> 00:20:50.960
or change in direction.

445
00:20:52.079 --> 00:20:54.599
Well, I always ask questions like tell me something you

446
00:20:54.599 --> 00:20:57.160
feel that, and they're always like caught off guard, like,

447
00:20:57.200 --> 00:21:00.200
you know, because everyone suspin it to a positive, you

448
00:21:00.279 --> 00:21:03.200
know direction, And so it's like they start telling you

449
00:21:03.240 --> 00:21:04.720
what they failed at, and then you want to drill

450
00:21:04.799 --> 00:21:07.480
down further. Okay, why did you fail? How would you

451
00:21:07.480 --> 00:21:09.160
do it differently the next time you were in the

452
00:21:09.200 --> 00:21:12.440
same situation? So to me, it's like and they oftentimes

453
00:21:12.480 --> 00:21:14.720
take it as like I told them they fail, but

454
00:21:15.119 --> 00:21:17.480
I'm really asking them, like show me that you're a

455
00:21:17.720 --> 00:21:21.200
you know, humble enough to meet you failed, b you

456
00:21:21.240 --> 00:21:25.039
are thoughtful enough to understand why it failed. And then

457
00:21:25.160 --> 00:21:28.640
three you've actually cared enough to look at for the

458
00:21:28.680 --> 00:21:31.480
fact and say, I know how I do this next

459
00:21:31.519 --> 00:21:32.000
time better?

460
00:21:33.599 --> 00:21:35.880
Yeah? I like that. I think that's key. I look

461
00:21:35.920 --> 00:21:38.400
for things like that too around you know, self awareness

462
00:21:38.559 --> 00:21:40.960
or you know, nothing ever goes perfectly. So what did

463
00:21:40.960 --> 00:21:43.599
you learn from the situation? Were you overwhelmed by it

464
00:21:43.720 --> 00:21:47.559
or were you able to actually reflect, adapt and learn

465
00:21:47.640 --> 00:21:48.640
from it from the next time.

466
00:21:49.079 --> 00:21:51.000
I think those are key, exactly right, And I think

467
00:21:51.000 --> 00:21:53.640
that that willingness alone, I think tell a lot about

468
00:21:53.640 --> 00:21:56.160
a person and so those are good questions for me.

469
00:21:56.519 --> 00:21:59.519
Some of my go to questions, gotcha, Yeah, I.

470
00:22:00.079 --> 00:22:03.559
Had leaders very early on as I was starting managing

471
00:22:03.559 --> 00:22:06.559
in my career in part upon me that you know,

472
00:22:06.640 --> 00:22:10.559
hiring is one of the most important responsibilities within a company.

473
00:22:10.720 --> 00:22:13.920
Getting it right is very important. So taking the time,

474
00:22:13.960 --> 00:22:17.880
I think is also important when you're screening interview with

475
00:22:17.920 --> 00:22:20.559
people to make sure you're not making rash judgments because

476
00:22:20.559 --> 00:22:22.200
it can be very painful when you get it wrong.

477
00:22:22.480 --> 00:22:24.720
Well, I agree, and the hardest thing as you become

478
00:22:24.720 --> 00:22:27.720
more senior in an organization, you often have a media

479
00:22:27.720 --> 00:22:31.039
and candidate if they've already been screened by HR, and

480
00:22:31.079 --> 00:22:33.799
then the direct report and then the senior manager. And

481
00:22:33.799 --> 00:22:36.240
so if you're the person of significance and they're coming

482
00:22:36.240 --> 00:22:38.720
to you and you're the fifth person that they're meeting,

483
00:22:39.240 --> 00:22:41.640
to go through the regular interview questions almost as silly

484
00:22:41.640 --> 00:22:43.400
and pointless. You want to do some of it to

485
00:22:43.400 --> 00:22:45.559
make your own assessment, but at the same time, you've

486
00:22:45.559 --> 00:22:47.279
got to find a way to be more thoughtful about

487
00:22:47.279 --> 00:22:50.519
what are like the key questions to differentiate yours from

488
00:22:50.559 --> 00:22:51.880
others who already asked that question.

489
00:22:52.799 --> 00:22:55.359
Yeah, and well, so then how do you balance that,

490
00:22:55.519 --> 00:22:58.759
you know, the more approach or the mentality standpoint, and

491
00:22:58.839 --> 00:23:02.599
just the technical especially you know with things like you

492
00:23:02.599 --> 00:23:04.680
guys are trying to do maybe haven't been done yet,

493
00:23:04.720 --> 00:23:06.839
So you can't evaluate someone's track record, like how do

494
00:23:06.880 --> 00:23:10.200
you do something that maybe hasn't been done? How do

495
00:23:10.240 --> 00:23:13.599
you evaluate just that technical ability?

496
00:23:14.640 --> 00:23:17.000
Here's the good news. And this also speaks to things

497
00:23:17.000 --> 00:23:19.920
that have changed in our system. So in the education system,

498
00:23:19.920 --> 00:23:23.400
as an example, everyone who's in school today, it used

499
00:23:23.400 --> 00:23:25.680
to be, you know, if you were on a track

500
00:23:25.720 --> 00:23:29.200
for financial services call it accounting finance, right, you were

501
00:23:29.240 --> 00:23:32.480
learning a specific skill set, some idea of general education,

502
00:23:32.599 --> 00:23:35.039
but a certain skill set. And if you're you know,

503
00:23:35.160 --> 00:23:37.039
in the you know, going for a law degree, you're

504
00:23:37.119 --> 00:23:39.920
learning a certain skill set. I think that the baseline

505
00:23:39.960 --> 00:23:43.440
has expanded, Like there isn't a skill set you're targeting

506
00:23:43.440 --> 00:23:45.440
today or that you're going for it today that wouldn't

507
00:23:45.440 --> 00:23:49.559
provide you with a solid foundation in things like computer usage,

508
00:23:49.680 --> 00:23:51.359
like basic technical skills.

509
00:23:51.359 --> 00:23:53.799
And so I think when you're meeting selling today, even someone.

510
00:23:53.680 --> 00:23:54.880
Who has a law degree is going to be a

511
00:23:54.920 --> 00:23:57.599
lawyer for your firm or in compliance, they're coming with

512
00:23:57.640 --> 00:23:59.640
a knowledge of Excel, and they know how to use

513
00:23:59.640 --> 00:24:01.880
certain like a system that they would use in the past,

514
00:24:01.920 --> 00:24:04.240
and it's almost like taking you through granted, whereas in

515
00:24:04.279 --> 00:24:07.079
the past, perhaps if you were in pursuing a technical.

516
00:24:06.720 --> 00:24:08.759
Area, you were in train in an area.

517
00:24:08.839 --> 00:24:12.160
And that's why you're seeing, in my view, between LinkedIn

518
00:24:12.240 --> 00:24:15.119
learning and other forms of education are what I call

519
00:24:15.200 --> 00:24:16.079
continuing education.

520
00:24:16.400 --> 00:24:16.880
You're seeing a.

521
00:24:16.880 --> 00:24:20.160
Lot of people upskill themselves in later years of their

522
00:24:20.200 --> 00:24:22.720
career because they realize that some of the folks that

523
00:24:22.720 --> 00:24:25.440
they're competing with are folks who are quote quote unquote

524
00:24:25.440 --> 00:24:28.680
cross trained and dual trained, whereas they have a specific

525
00:24:28.680 --> 00:24:30.400
skill set. And so you're seeing a lot of folks

526
00:24:30.839 --> 00:24:34.480
educate themselves further along in their career to sort of

527
00:24:34.640 --> 00:24:37.680
help bridge the knowledge gap they had previously with some

528
00:24:37.720 --> 00:24:40.599
of the more technical areas of banking and other other areas.

529
00:24:41.319 --> 00:24:42.960
Yeah, I like that. I think that's so true. And

530
00:24:43.000 --> 00:24:45.440
that's usually something I ask in interviews as well as

531
00:24:46.039 --> 00:24:48.720
you know, I'll see from their resume maybe they list

532
00:24:48.759 --> 00:24:51.279
a software package or something they use, or ask how

533
00:24:51.319 --> 00:24:53.240
did you learn that, what's your favorite hack or like

534
00:24:53.599 --> 00:24:55.599
shortcut you found that becomes part of it, just to

535
00:24:55.640 --> 00:24:58.440
see like are they happy with the status quo? How

536
00:24:58.440 --> 00:25:01.880
do they continue evolve use tools maybe a new and

537
00:25:01.920 --> 00:25:02.440
novel way.

538
00:25:02.519 --> 00:25:04.319
Absolutely, I mean I think it's kind of like the

539
00:25:04.559 --> 00:25:05.240
basics today.

540
00:25:05.279 --> 00:25:07.960
And if you're coming into a company in any industry

541
00:25:08.319 --> 00:25:10.119
and you have no technical knowledge of the of the

542
00:25:10.119 --> 00:25:12.640
tools that are going to use in that industry, you're

543
00:25:12.680 --> 00:25:16.079
obviously you know, you're your chance of being hired a

544
00:25:16.160 --> 00:25:16.960
far less.

545
00:25:17.480 --> 00:25:21.400
Yeah, definitely, And I think Ai you mentioned earlier, you know,

546
00:25:21.440 --> 00:25:23.839
one of those areas that does continue to change. There's

547
00:25:23.880 --> 00:25:28.480
tons of thought leadership out there, YouTube videos, cours erara courses,

548
00:25:28.519 --> 00:25:33.400
whatever to stay educated. What are where the adoption you're

549
00:25:33.400 --> 00:25:35.920
seeing within your partners or you know, maybe just your

550
00:25:35.920 --> 00:25:38.880
general observations. Where where are we in the hype cycle,

551
00:25:38.920 --> 00:25:42.079
Like are there real applications that are starting to take

552
00:25:42.160 --> 00:25:43.880
hold or is there still a lot of experimentation?

553
00:25:44.440 --> 00:25:47.559
You know what your perspective, there's a lot of experimentation.

554
00:25:47.759 --> 00:25:49.599
I feel like it's like everyone has to have access

555
00:25:49.599 --> 00:25:52.200
to something, so I know, right right away when when

556
00:25:52.200 --> 00:25:53.759
it first came out, like we had a lot of

557
00:25:53.759 --> 00:25:56.200
demand internally, I think forty five requests for like chat

558
00:25:56.319 --> 00:25:59.599
ebt right, but a lot of it was wasn't because

559
00:25:59.599 --> 00:26:01.839
they were like, you know, insisting on AI. It's more like, Hey,

560
00:26:02.119 --> 00:26:04.160
if they can prepare my PowerPoint for me for my

561
00:26:04.240 --> 00:26:06.759
meeting next week, I'm all in. And so I think

562
00:26:07.039 --> 00:26:08.640
in different use cases, it's not in the case that

563
00:26:08.680 --> 00:26:10.880
people are like it's about AI. It's about like, what

564
00:26:10.920 --> 00:26:14.359
can AI do to make me more efficient, allow me

565
00:26:14.400 --> 00:26:16.000
to focus on the things that I know I'm good at,

566
00:26:16.720 --> 00:26:18.480
and then take some of the burden off of me

567
00:26:18.519 --> 00:26:19.920
for things that I'm not good at or don't want

568
00:26:19.960 --> 00:26:21.839
to spend time on. And so I think there's a

569
00:26:21.880 --> 00:26:25.559
lot of experimentation going on even today. That said, there

570
00:26:25.559 --> 00:26:27.720
are a fair number of companies, including Upstart as you

571
00:26:27.759 --> 00:26:30.319
well know, who've been using really some form of AI

572
00:26:30.400 --> 00:26:32.359
for a really long time. And so now it got

573
00:26:32.359 --> 00:26:34.720
like a buzzword name. But at the end of the day,

574
00:26:34.759 --> 00:26:38.720
when you're using alternative variables and you're able to provide

575
00:26:38.920 --> 00:26:42.960
scenarios that are more predictive of performance in lending as

576
00:26:42.960 --> 00:26:46.400
an example, that's essentially AI. And so it's almost like

577
00:26:46.440 --> 00:26:48.519
it got a formal name. There are more people using

578
00:26:48.559 --> 00:26:51.880
it today, but really it's not something that's actually truly new.

579
00:26:52.319 --> 00:26:54.240
It's just become more ubiquitous.

580
00:26:54.960 --> 00:26:56.799
Yeah, I think you're right, and maybe using the phones

581
00:26:56.839 --> 00:26:59.119
as the analogy again, I'm sure we'll look back like

582
00:26:59.160 --> 00:27:01.079
twenty thirty years from now and it will be so

583
00:27:01.240 --> 00:27:04.680
commonplace it almost seems silly that we were thinking about

584
00:27:04.680 --> 00:27:07.240
it and the way we do some sometimes today. But

585
00:27:07.880 --> 00:27:10.920
I'm sure other spaces will pave the way and then

586
00:27:11.319 --> 00:27:14.599
banking will catch up and find the use cases once

587
00:27:14.960 --> 00:27:16.039
it's kind of been sorted out.

588
00:27:16.119 --> 00:27:16.319
Yeah.

589
00:27:16.400 --> 00:27:19.000
And the reason why I think, and again a personal opinion,

590
00:27:19.039 --> 00:27:22.920
the banking is generally often behind is because again you

591
00:27:22.960 --> 00:27:26.559
have that rigor you can't. It's a very heavily regulated industry.

592
00:27:26.599 --> 00:27:28.559
You can just jump in and start using new tools

593
00:27:28.599 --> 00:27:31.440
without some concern of what those tools will do from

594
00:27:31.519 --> 00:27:35.240
a security standpoint, from a predictability standpoint, from a fair

595
00:27:35.319 --> 00:27:39.240
lending and government standpoint. So there's so many unintended consequences

596
00:27:39.279 --> 00:27:42.839
of that technology, but adoption can happen as fast. At

597
00:27:42.880 --> 00:27:45.319
the same time, I think over time you'll see adoption

598
00:27:45.400 --> 00:27:48.839
become more ubiquitous. You'll see banking services leverage AI. You're

599
00:27:48.839 --> 00:27:52.599
seeing it already in part today, and I think removing

600
00:27:52.640 --> 00:27:55.640
the friction for banking transactions, we'll use the I as well.

601
00:27:56.559 --> 00:27:58.400
Yeah, I think that's true, and I think you're right,

602
00:27:58.480 --> 00:28:01.640
like the pace of change is necessarily maybe slower in

603
00:28:01.680 --> 00:28:05.000
some spaces, But it's a matter of sorting out where

604
00:28:05.000 --> 00:28:07.480
are the safe applications, where maybe are we getting it

605
00:28:07.519 --> 00:28:11.400
wrong today in a manual way that AI can actually increase,

606
00:28:11.599 --> 00:28:16.240
you know, for lending, compliance, ability to manage risk insecurity,

607
00:28:16.440 --> 00:28:18.599
and how do you insert it into those places where

608
00:28:18.640 --> 00:28:19.240
it's beneficial.

609
00:28:19.359 --> 00:28:21.039
Yeah, I mean in some ways, I know, like one

610
00:28:21.079 --> 00:28:23.599
of the big folks is today, you know, in financial

611
00:28:23.640 --> 00:28:26.880
services certainly fraud, right, it could be fun lending, certainly,

612
00:28:26.920 --> 00:28:28.480
fund and payments. That's where the I think the most

613
00:28:28.519 --> 00:28:31.480
amount of fraud potentially is. But you think about what

614
00:28:31.519 --> 00:28:33.720
a I could do for fraud in terms of, you know,

615
00:28:33.839 --> 00:28:36.920
weeding out on the front end, you know, weeding out

616
00:28:37.000 --> 00:28:39.359
folks who are trying to use your identity and providing

617
00:28:39.799 --> 00:28:44.960
better questioning upfront or better verifications upfront. On the back end,

618
00:28:44.960 --> 00:28:49.440
for banks who are reviewing transactions, it can provide ways

619
00:28:49.480 --> 00:28:52.519
to make sure that they have you know, keywords you

620
00:28:52.599 --> 00:28:55.400
know that are coming up in different searches to flag

621
00:28:55.440 --> 00:28:57.759
certain transactions. There's so many things that I can do

622
00:28:58.319 --> 00:29:01.119
to help make banks more effa get them to look

623
00:29:01.119 --> 00:29:04.480
at more transactions, the right transactions that made false positives.

624
00:29:04.480 --> 00:29:05.160
That's an example.

625
00:29:05.400 --> 00:29:07.279
And so there's so much that the technology can do

626
00:29:07.519 --> 00:29:10.559
to help really proliferate banking and make it more efficiently.

627
00:29:10.920 --> 00:29:14.119
Yeah, I totally agree. Well, maybe it's a good time

628
00:29:14.160 --> 00:29:16.839
to pivot into a final question we can give in

629
00:29:16.880 --> 00:29:21.480
like the landscape of AI the ever changing landscape in banking.

630
00:29:21.599 --> 00:29:25.200
Is there someone you follow, like a thought leader, journalist,

631
00:29:25.599 --> 00:29:29.559
podcast authors, maybe some bit of thought leadership you can

632
00:29:29.640 --> 00:29:31.799
leave us with, like who should we add to our

633
00:29:31.799 --> 00:29:33.880
library or podcast subscriptions.

634
00:29:34.079 --> 00:29:35.599
So I'm not a big podcast guy.

635
00:29:35.720 --> 00:29:37.240
I listened to most of my podcasts and I'm running

636
00:29:37.240 --> 00:29:40.000
on Sunday mornings, and they're very I listened to the

637
00:29:40.000 --> 00:29:42.160
things I used to listen to to Peter Renn's podcast

638
00:29:42.200 --> 00:29:45.359
all the time. But there's folks who send like weekly

639
00:29:46.000 --> 00:29:50.000
or semi weekly emails. Alex Johnson and the Museum comes

640
00:29:50.039 --> 00:29:51.680
to mind. There are others who I think send out

641
00:29:51.720 --> 00:29:55.640
really helpful. There's one called money Stuff that I get

642
00:29:55.640 --> 00:29:58.519
every Wednesday. If focused on credit cards and other other

643
00:29:58.599 --> 00:30:01.880
similar products. So there's some good ones out there that

644
00:30:01.880 --> 00:30:04.799
are industry focused that I like a lot. That said,

645
00:30:04.799 --> 00:30:06.480
as you can imagine, I'm sure you're the same way.

646
00:30:07.240 --> 00:30:10.279
I'm inundated with emails in my inbox and different things

647
00:30:10.319 --> 00:30:13.160
to read, and so it's almost like you click open

648
00:30:13.359 --> 00:30:15.359
and then you hope that by Friday afternoon, over the weekend,

649
00:30:15.400 --> 00:30:16.440
you have time to catch up and all the things

650
00:30:16.480 --> 00:30:18.240
you've opened over the course of the week. If I

651
00:30:18.240 --> 00:30:20.920
tee doesn't make your computer restart, right, so hopefully still

652
00:30:20.920 --> 00:30:21.759
there at the end of the week.

653
00:30:22.200 --> 00:30:24.319
Yeah. Yeah, the number of tabs open. Maybe there's an

654
00:30:24.400 --> 00:30:27.240
AI app out there to like take and consolidate all

655
00:30:27.240 --> 00:30:29.359
the tabs I open into some digest.

656
00:30:29.240 --> 00:30:31.799
Real or read them for you and summarize them, like, hey,

657
00:30:32.079 --> 00:30:36.160
can you read these twenty articles and summarize the most

658
00:30:36.160 --> 00:30:38.000
salient points so I can look out over the weekend.

659
00:30:38.240 --> 00:30:41.079
That's right, well, Adam, always good to catch up. I

660
00:30:41.119 --> 00:30:44.200
appreciate the time today and thanks again as well, Thanks

661
00:30:44.200 --> 00:30:44.559
so much.

662
00:30:44.960 --> 00:30:47.480
I'll start partners with banks and credit unions to grow

663
00:30:47.519 --> 00:30:51.480
households and expand consumer lending through its leading AI lending platform.

664
00:30:52.119 --> 00:30:55.200
I'll start powered banks and credit unions leverage AI to

665
00:30:55.279 --> 00:30:58.599
offer higher approval rates and experience lower loss rates while

666
00:30:58.599 --> 00:31:03.440
simultaneously delivering the exceptional digital first lending experience that consumers demand.

667
00:31:03.960 --> 00:31:06.759
Whether you're looking to grow and enhance your existing personal

668
00:31:06.759 --> 00:31:10.599
and auto lending programs, or you're just getting started, upstart

669
00:31:10.599 --> 00:31:13.880
can help. Upstart offers an end to end solution that

670
00:31:13.920 --> 00:31:16.759
can help you find more credit worthy borrowers within your

671
00:31:16.839 --> 00:31:22.240
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672
00:31:22.680 --> 00:31:25.640
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673
00:31:25.680 --> 00:31:29.480
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674
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675
00:31:33.720 --> 00:31:36.400
That's upstart dot com slash lenders