Latest / Leaders in Lending / The ‘Moonshot versus the Pragmatic Approach’ to Digitization

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The ‘Moonshot versus the Pragmatic Approach’ to Digitization · Leaders in Lending

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You're listening to Leaders and Lending from Upstart, a podcast dedicated to helping consumer
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lenders grow their programs and improve their product offerings. Each week, here,
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decision makers in the finance industry offer insights into the future of the lending industry,
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best practices around digital transformation, and more. Let's get into the show.
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Welcome to Leaders in Lending. I'm your host, Jeff Keltner. This
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week's episode features my conversation with Ben Yudell, the SVP of Client Experience at
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Lake Ridge Bank, about a three billion dollars what he calls a classic community
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bank. That was a really interesting discussion. We touched on what he calls
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a pragmatic approach to technology projects versus the more moonshot, bye in the sky
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or shiny object syndrome. I think we're all phrases used to describe a kind
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of different approach. Why they take that approach, what they think the core
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competency is. Meaning of a classic community bank? What does that mean mean
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to him? What role the branches play and that experience and how does that
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fit into a technology enabled future. And we also touched on a couple other
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areas including buy now, pay later, what the I think the interesting topic
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and being pl isn't just the product, but what the innovation represents, how
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it came about it, and why it wasn't banks that developed that innovation,
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and what we can kind of learn from the experience. So a lot of
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interesting topics. I thought it was a really fascinating conversation. So please enjoy
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this conversation with Ben you dell. Ben, Welcome to the podcast, and
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thanks for making the time to join us today. I really appreciate it.
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I'm happy, happy to be here, happy to be here. Maybe you
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should save that until afterward done to make sure you're actually happy to be here
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when we when we finish, so well, a little bit of at halftime,
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and well again, if we need to readjust we'll judge the success of
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it after we've done it. There's a lot of interesting things I wanted to
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cover with you today, but I wanted to start. You know, when
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we spoke Grillier, you talked about the difference between what you call your pragmatic
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approach to innovation some technology deployment, and what you call pie in the sky
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or moonshot approaches you've seen taken by others, And I thought it was a
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really interesting framing of different approaches to the deployment of technology and innovation in the
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context of a financial institution. Tell me a little bit what you mean by
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the more pragmatic approach versus behind the sky. Yeah, I think what happens
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is we get so excited about all the new technology that's coming out, the
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technology that's available to us by providers, and so we look for these gigantic
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moonshot space jumps with how we're operating as a business, either internally or with
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clients. And what happens is, I think with a lot of these moon
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shots, you need to really have a really great level of technological savvy within
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your organization. You need to be really great with change management. There's a
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cost structure that goes into all of that. And so when I when I
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started thinking about that, how many of our organizations that have been doing something
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one way for a long time, even though we know we need to change,
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even though we know that our own going to change, that's still a
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lot of change. And so, you know, you think about becoming more
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efficient, is that some of the simple stuff that happens either with deployed tools,
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you know, I think of like the Microsoft three sixty five products that
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we already buy and we don't use. I think of just simply moving away
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from paper and whether that's PDF and fillable to no code, low code.
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I mean, that's all really cheap, really easy. You can get a
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lot of simple solutions out of that that makes people feel really good about it,
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just being more efficient during the days any there time on higher quality opportunities.
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So again, I just I think that's that's one of the hardest things
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we deal with, is how big of moonshot do we want to make?
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And is squeeze at this point in time in our organization's development, I juice
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forth to squeeze one of my favorite phrases. But I think it's so interesting
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and a lot of what I'm hearing from your description is kind of like,
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in some ways the kind of front office versus bad Off as a kind of
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fancy new I mean, we're now in the moment where everybody's got a chatbot,
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or at least the chatbots keep evolving, right, and the new large
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language models are out there, and everybody wants this kind of whiz banging interface,
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and yet so much of the opportunity is in producing the processing time,
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reducing the inefficiency internally simplifying internal operations. Do you see it primarily falling down
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along those kind of like external facing crazy new product or new feature or blockchain
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or something totally different than what you're doing, And we're like, let's let's
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kind of meet the meat and potatoes that the bread and butter and actually like
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kind of fixing the internal and kind of back office elements. Yeah, that
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take a really great question, you know, part of the backstory for me
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and coming into this as we literally just merged with another bank, and so
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you really get to start to see how people want to make some decisions on
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resources and strategy and allocation. And it's not that one is writing one that's
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wrong. It's just different. And you know, I think about all this
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technology we might spend to add new systems or add more digital and you know,
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I think online accounting is a really Online account owning is a really great
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example where we fread a lot about the quality of that client experience. But
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I don't think we get a lot of clients who are like, you know,
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I got halfway through this online account own forget this, I'm going to
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go somewhere else, right, They kind of trudge through because they want to
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go with you, because you have the promotion. And it still takes five
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ten minutes and they're done, and you know it. Don't get me wrong,
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it might not be the best experience, but they have account that's open
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now and they're happy. And I think you take that cost we could have
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had to go from like a B level to an A level. How much
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are we how much just happening in the branch where we're doing stuff by paper,
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We're pushing paper around, we're filing stuff into two different systems. You
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know, we don't have a file system that's great for auditing, So we
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file this document here and then we ship something off to the audit team or
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the compliance team or depiles it ups. And so when you think about how
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we spend our money and resources, you know, across our industry, we
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love that moon shot, but if you know, you think about the costs
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that if we could take ten thousand dollars the moon shot and invested into a
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program that allows us to be simply more efficient with that client experience on the
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front and or more efficient in the branch, do we have time for more
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of our clients? You know, I think that's that's that's where you know,
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I think it especially at the senior level management side of the world,
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we get really excited about these shots and nobody's talking to bankers, tellers,
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frontline staff, credit analysts about, um, what can we just streamline that
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makes you better, better with your role, better with clients. So I
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I I that's that to me. There's a lot of wins that can take
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place there, and that's probably winning hearts and minds. I think as well
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when you consider, you know, wanting to really look after the people that
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look after our clients, and how do you think about I mean another interesting
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distinction, which is kind of the self driving I mean self ring kind out
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really the analogy here, but the kind of like user control, pure digital,
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no human interaction version of digital, right, we would still have it.
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The digital account opening is mental like there's no banker involved, right,
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there's no human in that process, and you're just totally self service. It's
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probably a better phrase and self driving. And yet there's also this version of
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technology. It's like, how do I enable my staff when you're talking to
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them, to have a holistic picture of you and your needs and your history
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with the institution, to have the right processes and be the best version of
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you know, an advisor, a consultant, the banker for you in that
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moment, which is a very different set of technologies and processes and change management
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that going to a total You know, when I have a digital richination solution
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where you can get a mortgage, you never talk to human being well or
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do I want to make my mortgage officer a more effective mortgage officer and have
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better tools and faster processing in their hands without trying to replace them. And
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I'm curious how you think about the deployment of technology and then pieces aren't pure
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technology that are involved in putting those tools in the hands of a human to
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use in the context of a conversation. Yeah, what I really think about
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and I think about this a lot as I talk to my friends and peers
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and some of these conferences and you kind of, you know, over lunch
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or over drinks, you talk about what everybody's doing. I think what I
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really find is everybody wants to move forward in really big ways to be more
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productive, more growth, more successful, but they really seem to lose sight
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of their original strategy that they want to carry forward. So back to this,
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this moonshot idea with a lot of how we talk about technology. You
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know, for us, we're a community bank. We're serving you know,
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the cell central part of Wisconsin. We've got twenty plus locations. You know,
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I think in many ways we are very probably a classic community bank.
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And how many of our clients in these communities only want digital or how many
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only want this face to face. So from our strategy, we're trying to
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provide that solution that's you can bank with us digitally, or you can bank
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with us in person, or you can contact us. And I think what
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starts to happen with some of this decision making and this bright shiny object that
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that that moon shot is we start to get out of balance and how we're
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trying to to work with our clients. And so I think for me,
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it's very much about the strategy focus on who do you want to be at,
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how do you want to apply that, how does that fit? And
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I think we we wrap our decisions around that relatively well. And you know,
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I think that's what helps us be successful with clients, at least in
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our marketplace. And I think if you're a digital player that really wants to
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have you know, that a plus digital only experience wonderful. If you want
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to be this high touch, high in person white glove treatment, wonderful.
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I think it's when we start veering away from those too far that we need
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to come back and find some some balance with how were operating as an organiza.
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I think the phrase a classic community bank is interesting. How do you
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think about the strategic Like what is your the strategy? How would you encapsulate
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what it is that you can do differently and differentiate as a classic community bank
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in the new age? Like what does that strategy look like for you?
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Yeah, I think what it looks like for us, And I think in
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many ways for a lot of classic community banks, we want to be able
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to bank how clients want to bank with us. The reason I say that
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is we're not going to have the resources to have an amazing digital experience that's
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going to compete with the Bank of America. But I do think on the
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flip side, we can have a stronger in branch experience that's going to be
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better than some of these larger players. I think if we invest wisely in
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the digital side, we can be stronger than some of the smaller financial institutions
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in our world, and I know they're going to stay. They want to
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compete on that customer experience. So I think it's it's trying to find both
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of those. So we're not going to be again a really amazing at technology,
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but we're also going to have I think this real strong commitment to clients.
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I think we have to start thinking then about what does that really mean?
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Because everybody listening to this podcast is going to say, well, bad,
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we have an amazing commitment to our clients, and I think that the
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question is like, what does that really mean and stuff like For us,
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that means you walk into the branch, We're going to be able to solve
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issues of topics within the branch. We're not kicking them off to somebody else.
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We don't have to make phone calls to answer solutions, we don't have
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to get back to them. They're empowered to help clients. They're empowered a
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wave fees if that's an issue, right, I think when you call us,
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you know, with a wrong phone call, you're getting in touch with
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a live person, something that I know is difficult to do in these days.
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Right, when we communicate to individuals, we're communicating we're using our names.
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If you need to follow back up to an email that I sent you,
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you can actually find me, and we make it easy to find me.
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So you know, not that those are solutions for everybody, but when
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I when I think through, you know, how do we validate that when
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we say we want to be a strong player in the community and be easy
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to work with in person. That's that's what that means. And then you
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know, we'll we'll build out our online and mobile to be you know,
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pretty darn good too if you're not A plus a pretty darn good too.
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And Clutch are going to be happy with that, right because they're getting a
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fair deal and they enjoy working with us. We are their their their advisor.
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Well use another phrase there, that's I think a classic wins silk shiny
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object syndrome, which is I think it's a question of like, is the
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A plus digital experience really the thing that wins a client's trust, that wins
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a client's business over time, or is it something else? And you can
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pour a lot of money into having the slickest digital experience and a lot of
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the I mean, frankly, if you're trying to keep up with the Big
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four or five, like their their annual tech budgets look like most people's operating
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budgets, right, So you can't really compete on that level. But the
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question is like, is that what it takes to compete or does my client
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want something simpler and do I pour my resource into something else. I think
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it's important their table stakes, But if you look at a lot of the
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studies that come out, you know, people want institution that's you know,
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nearby where they live, maybe where they work. They want a low fee
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situation on easy access to the money, which is often interpreted these days by
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you know, ATM digital payments. And then what else you need? You
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know, you need mobile deposit, you need an app like those are all
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basic table stakes. And I'll tell you when we you know, talk to
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my team or we talked to bankers about what our clients asking the banker.
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The customers aren't coming in say now I need to compare your mobile app with
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the cell the banks mobile app before I make a decision. Like they're coming
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in because they looked at your website and they looked at refuse and they called
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you and it was just a welcoming environment that you know, people think they're
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gonna have a good relationship with Right, we spend all this money on stuff
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that people are going to figure out after the after down the road, and
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I'm not even sure that's a retention topic for a lot of these topics either.
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Right, if your mobile deposit is clunky or slow, I can't imagine
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you're going to have very many clients for like I'm out of here, right,
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they're gonna Yeah. I can't say as I've like opened up five mobile
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banking apps to check to check the mobile check deposit and go, hey,
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this is mine. This is my deciding factor around where I'm going to bank,
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is who's got the slickest mobile check deposit capability? I agree. I
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think it's such a great case for our marketing friends on the brand you're creating
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and putting out, is that a brand that's welcoming to your community or you
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know, I have some friends that work at banks that have some websites that
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are very very very much created by bankers, long time bankers, and you
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know, for our family members that are down in banking, where do you
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see the branch fitting into the future, Like what is the We've talked about
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the branch and the kind of experience you can deliver there on the phone being
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a differentiator. But how do you think about the way the branches work,
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how you change your strategy with what the branches are intended to do, built
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out for, and what kinds of interactions you expect to happen in the branch
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as you move forward. Yeah, I think about it from this perspective.
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I think if I think branches are not going away, of course they're consolidating,
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they're getting smaller. You know, some people have a strategy and no
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branch is wonderful, right, but but big pictures, they're not going away.
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So what I think about is why are people coming to our branch?
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It's probably because they need to open an account right checking account online? They
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don't want to do it or check it account lending, they don't want to
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do it online. So how do we make that process really streamlined so we
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can't use that time to build a relationship. I think people are a luxury
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these days, And I wish I knew where I heard that quote from,
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but I think that's so true with you know how often you need to support
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and just can't talk to somebody quickly or somebody person, So I think it's
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solving that. But most people come in and you know, we have two
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check it accounts. We're not spending time talking about how they're going to use
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the account. We're gonna you know, this one or this one. Here's
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the benefits, and then we go for We get everything set up, and
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that needs to be easy. I think the other thing is it's this problem
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solving, right. They don't want to go online, they don't want to
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make a call, or they try to do that. It's just hard to
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communicate. So that's a very different model than transactional based. I think what
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that means is there's something to be said about investing into an inviting environment.
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I think a comfortable environment you offer, you know, crappy coffee that people
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don't want to they're gonna they're gonna leave half of it because it's junk,
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rather than sit there and talk to you because it's enjoyable. I think about
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how investing into the property of being first class and it looks like you can
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take care and secure money. I mean all of us can think through driving
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through town and seeing different levels of should we say repair of certain businesses,
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including banks, and you know who's going to drive into that bank. If
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you have a choice, you've got three banks, that's you strong, why
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would they take a hard ride into yours and go So you know, I
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might be getting a little long winded there, but I think we really have
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to think about if people need everyday transactional items, they're probably not coming to
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the branch. It's because they have a financial need to open an account to
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talk about alone. They have a problem. And I think we're also seeing
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a lot of the studies say that the younger generation they know that going online
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can be a little challenging for accurate information. When you see somebody that is
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younger in your branch, that might be the only time all year they visit,
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and you cannot oil that opportunity to be right, I think I think
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maybe I'd summarize that all by saying, I think where we're at is the
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value of in person is much higher than we think it is, and we've
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really got to recognize that and have a really strong approach to how we're interacting
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and engaging with clients in the branch. Are there things you're doing in terms
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of how you train branch staff or how you prepare people, because it's I
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mean I do think there's this massive shift going on, not recent but kind
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of continuing, which is kind of the shift from transactional interactions in the bank
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in the branch to something more consulted. Me. I'm not coming into deposit
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of check anymore. I'll do that on my phone. I'm coming in to
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ask a question. And so I don't need people who can just deposit checks
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and hand out I need people who can. I need a staff that's prepared
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to handle difficult questions as a predominant role that they're playing in the branch.
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And how do you prepare the staff for that reality because it's a different it's
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kind of a different job in some ways than it was ten or twenty years
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ago. And I think if we looked at the average age of our our
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bankers, for instance, the banking team is only getting younger. And if
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they're getting younger, they have different life experiences. So it's you know,
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it's a different conversation when you've you know, never opened a CD or a
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money market or a whole equity, or you know, you have a small
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credit card because you're scared of credit, and now you're talking to somebody that
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has an established financial picture So there's two things that stand out to me when
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I hear that. The first is I think examining the products that you have.
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If your products require math, if they require fine print to understand a
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how is a banker who's under the age of thirty really going to quote sell
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this product? How are they going to explain it? I think we often
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think about we need to coach and train bankers to sell our products well,
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but if you're trying to sell them a complicated products, it's not a lot
19:33
of selling, it's a lot of telling. It's it's a lot of explosion.
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And I think that really makes the banker's job more difficult, and then
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it doesn't connect well with the customer. You know. The only thing that
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comes to my mind is we we as bankers, we really love to put
19:51
rules together and we love to have things black and white. And if you
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think about why people leave a bank, it's because of customer service and fees,
20:00
right, and those are very entertainer very interrelated. But what I think
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about is how do we empower our frontline staff to just simply take care of
20:07
issues and do more. And when you get down to it, there's not
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a lot of activities that bankers can do unchecked in a branch. That's going
20:17
to crush the bank. Right, So they gave away four hundred dollars in
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fees on accident, not the biggest deal in the world to banks, right.
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Maybe they gave out an exceptionally high interest rate, not the biggest deal.
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Kind of hard to scroup lending if you think about sexualized underwriting and guter
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systems that we have. So, you know, I think a lot of
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my when I talk to peers, they put these restrictions on what a banker
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can and can't do. And the reality is that only makes it harder to
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service a client in the branch. It makes it harder to build some loyalty.
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It's more friction for a relationship. And I think really examining that is
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a way to win some hearts and minds with your team and with your clients,
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and just it just makes some things easier in the branch. Right.
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The last thing you want to do is have somebody walk in the branch.
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They can't get an answer. They got to call their manager over, they
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got to elevate it up the chain. And you know that's not loyalty building
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us to build. I love that I love that story and that concept,
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Like I think a lot of organizations trying to figure out how we push down
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authority to the person who's in the room and has the most information to make
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a decision. But also it reminds me if I think one thing, so
21:30
many financial incisions kind of can can go astray in the sense of risk management
21:36
being prevention of any kind of risking it well, like, how badly can
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they screw this thing up? And are we willing to take that risk given
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the cost it might be associated with it? And or do we do we
21:45
lose sight of the upside of giving that that branch employee ability to make the
21:49
decision real tell will they do exactly what the what the centralized risk management you
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would have done? Probably not exactly, but how much is it going to
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cost us? And how much good will do we build with the customers by
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enable that local employee or something like, am I making a good trade off?
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And I put tons of rules and restrictions around that employee? And I
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think sometimes we optimize for the risk minimization as opposed to the right balance between
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empowering those lower level employees and building customer customer respect and loyalty. I think
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what I see happening in and fiess I kind of talk more broadly across banking
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with you peers and conferences and whatnot, is we're making these decisions and vacuums.
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So we're making a decision about I'm only going to let bankers wave up
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to forty dollars and fees for I need to get a manager evolver. It
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needs higher level approval. While the whole time that client is just ticked off
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right the banker can't fight for the client. And then over here in this
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bucket, you might have a finance team or a strategy team saying, our
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average client is here for eight years and we make x hundreds or thousands of
22:51
dollars on the client. Like theoretically for us to give away so many fetes
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and they'll break even and lose money on our clients. As a portfolio,
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it's way higher than forty dollars, So give away a one hundred dollars and
23:04
move on. Or you think about these programs we run where we give away
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you know, cash or incentives, Like in some ways it's almost like if
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I'm willing to give away three hundred dollars for a new client relationship. I
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almost feel like you'd be willing to give away three hundred dollars in fees because
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what's the difference, right, You want the want the cloning. And it's
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not perfect math, of course, but it's these things happening in a vacuum
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or you know another example, our risk or compliance team, or an operations
23:33
team or ranch too. You know, we're all we're all in this together.
23:36
You make a decision because this happened, and then it goes down the
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chain and all of a sudden, people are like, but I can do
23:44
this task over here and that's way more risk. Well that we didn't look
23:48
at it as a whole. We didn't have this evaluate well. We just
23:51
said something happened once, so I'm going to adjust for it. And then
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we don't realize how the unlevel that to kind of plane field is for everything
24:00
else. So it's oh, that's what makes it fun, right, But
24:03
it's also creates a lot of opportunity. It keeps it keeps me, he
24:07
keeps it busy. Yeah, I love it. There was one other topic
24:11
I wanted to bring up and get your thoughts on, which is kind of
24:14
the innovation in the payment space. Particularly the buy now, pay later.
24:18
I know we talked about this a bit, and what is it that has
24:21
driven the adoption that? In some ways is not it we talked about.
24:22
It's not a new pot. I mean buying something and paying for it later
24:26
on credit. It's like we've had that for a long time. And it
24:30
is also something that came from outside the banking sectors. So what do you
24:33
think it was that is driving the interest in that product? And why wasn't
24:37
it something that financial institutions came up with you a while ago as a way
24:41
to bring consumers on board. Yeah. I first of all, I think
24:44
buy now, pay later is one of the more fascinating consumer topics right now.
24:48
I mean the ability for early non financial players to do a better job
24:52
of marketing financial products is wild to me, right, I mean that should
24:57
be very interesting, and I opening everybody in our space. What I think
25:03
it is is we are so tied into our legacy of how credit cards work
25:10
and how personal loans work that as soon as we have to start getting out
25:14
of that box being a little more innovative, it's just really challenging. And
25:18
I get it. You know, there's there's compliance needs and there's exam and
25:22
audit needs, and we as bankers don't like to take some of that risk.
25:29
But I also wonder allowed how much of that risk is what we're impartying
25:32
on ourself, right if we go buy now, pay later, loan U
25:38
versus a credit card for five hundred dollars to somebody like like it, and
25:42
I'm going to have my compliance for my you know, my risk management friends
25:47
maybe push back on that statement, but you know, big picture, what's
25:52
what's that big risk? Right? And so I think you take that and
25:55
even without doing something innovative. I just think this is a great case of
26:00
these innovators understanding the marketplace better. I saw stat recently that surprise me.
26:07
I don't I didn't have the data behind us like quote it. But the
26:11
number of you know, millennials and gen z who don't own a credit card
26:15
or never to use it is exceptionally high. And so here they are going
26:23
to final pay later, which they might end up spending more money on versus
26:27
a credit card with rewards through a partner that they could potentially walk into a
26:32
ranch to solve issues with. And and I just I think it's that disconnective
26:36
marketing between the who our marketing teams are comprised of in the industry. You
26:41
know, we've got twenty five years of experience, but I don't, you
26:47
know, I'm not twenty five years old again, so what like it's hard
26:49
to understand. And I think this is this great taste of really using our
26:55
resources eternally within our own financial institutions, and there's there's just this lack of
27:00
connection and I think we maybe one other way to wrap that up is we
27:03
feel often like is that really worth Are we going to get an ROI out
27:11
of it? And I mean maybe not today, but it's part of an
27:17
overall package of developing longer term relationships, which you know, Kennidy is kind
27:22
of funny. We'll get you know, virtually no ROI on some of these
27:25
junior savers accounts and some really early checking accounts because we know they're going to
27:29
build into something more. So why don't why don't we do that in credit
27:33
and help people build credit and have a program around it and and um,
27:37
you know, it's it's not just about handing money, it's it's about that
27:40
education piece. So you know, again I'm kind of rambling on that,
27:42
but I think, um, that's hard for us. That's hard for us
27:47
when we've been around for a while. I get it. I also think
27:49
it's um, there's interesting. I love your reaction to this, this thing
27:52
that occursed me, which is like, I feel like there's this you know,
27:56
kind of easy ability to dismiss just BUYO puy later, you know,
28:00
as a simple example. But where you go, well, I mean,
28:02
customer can already do that if they just use their credit card and then paid
28:04
it off in four months, like the same thing right for payments over a
28:08
month, it would cost you nothing. But I do think that, you
28:11
know, there's this, particularly in a numbers business like financial institutions like banking,
28:18
it can be easy to kind of assume rationality. And maybe one of
28:19
the biggest mistakes we all assume is that people behave totally rationally by the numbers.
28:23
And the reality is consumers reacted differently to a no interest installment plan credit
28:30
then they do to a credit card, particularly after the financial crisis, and
28:32
so many people caught up with the credit card debt. And I think it's
28:34
easy to go, hey, we don't need that, we got a credit
28:36
card. They could use the same thing. Why would anybody do that and
28:37
to miss the point that, like consumers actually really like it, whether or
28:41
not it's meaningfully different in some ways or not, they do and we kind
28:45
of have to react to that. Maybe it's lack of rationality. Maybe it
28:48
is a behavioral economics kind of hits rational just not in the numbers in sense
28:52
way, and a human behavioral economics, you know, psychological way. But
28:56
I think it's easy for us to miss those things, those trends. Credit
29:00
is such a funny thing to me, where we it's inherently so easy to
29:06
think about how we personally use credit and we will just automatically strong and I
29:11
know people use credit differently, and I still struggle without how would somebody use
29:15
credit and how do they want to talk about it? And that's that's much
29:19
harder than a checking account, and it is. I do think it's interesting
29:22
that we are seeing now real innovation in the credit products being offered. I
29:27
mean, BNPL if nothing else is a it's a different expression from a user
29:32
point of view, like a different product. And for many years we've since
29:34
credit cards, we've had kind of the same rough products in terms of what
29:38
pricing may change and the rates change, and we make it easier to get
29:42
and whatever. But like you know, a fundamentally different kind of actual offering
29:47
to the consumer is a bit new and we're seeing that an investment with like
29:49
robo advisors, and I think it's interesting to see that evolve in that innovation
29:53
though I do think ultimately we will find you know, financial institutions and the
29:57
trust say Garner will be where people a turn for those. But it's interesting
30:00
to see real innovation in the actual underlying offerings, which is you know,
30:06
which is a little bit more rare at yeah, and I think even the
30:11
simple piece, so it's just personal loans, you know, we're we're an
30:14
organization that it just hasn't been bread and butter. It's been certainly home equity,
30:18
certainly mortgage, it's a little bit of credit card it. So I
30:21
think inherently we feel like should we do that or not? But when you
30:23
start looking at the math, there is a huge volume of personal loans every
30:30
year, and you take a step back and say, well, what sonship
30:33
of the population doesn't own a home so they can't get a home equity,
30:37
what preciage of the population doesn't want to use whole equity and all of a
30:41
sudden, you've got this gigantic marketplace for helping people with personal loans, and
30:48
you know, it's it's one thing to think whether we should or shouldn't do
30:52
it, but it's another then take a step back and say somebody else is
30:55
doing it and are then going to do a better job, and then now
30:59
takes relationship from us. So you know, what point do we really have
31:03
to get to the that that point of staying we just have to be really
31:07
good with this as well. It's it's a bit of a defensive plug as
31:08
much as it is an offensive play. That's a really interesting point in the
31:12
personals, and I do think it's It's also the point you made earlier,
31:15
one of those examples where go why I don't why would someone like I don't
31:18
need such a thing? Right like I? But yet that kind of bias,
31:22
we all naturally have to our own use cases the way we would all
31:26
we would I would get a home equity line if I wanted to do that,
31:29
or I would you know, but you know, like that's the banker
31:33
is assuming that the average customer looks like them. It's a sure way to
31:37
not get in the right place for punks, because the average consumer is not
31:41
nearly as informed and uses credit differently than than than the average banker, And
31:44
so I think that's a it's I think one of those things people miss because
31:47
the personal bias is saying, hey, that's not something I would feel like
31:49
the need for. I think a kind of just a funny personal example,
31:53
as I traveled for a wedding recently with a bunch of friends to go see
31:56
you know, our friends get married, and so you got to Danny,
31:59
you got to drinks, and you know you do either do everybody buys around
32:02
or you kind of still just put it in. We'll all split it four
32:05
ways. Right When I have four different you know, credit or debit cards
32:07
sitting on the table, and you know, a couple of my friends are
32:10
more financially inclined, are like, why would you have that card? Like
32:14
why would you have that card? And it's it's like it's like imagine,
32:16
you know, for a little market research to go out with friends and family
32:21
and split it and say why did you get that card? And some people
32:23
are going to be this is the best points card I can get, hands
32:28
down. Others are gonna be like, I like the design, or I've
32:30
had it for twenty years, and it's the first one I pull out,
32:34
And that's so informative to us, not about maybe how we're going to market
32:38
to those to our clients, but maybe more informative about what we what we
32:43
are marketing is maybe not hitting the spot, maybe it's not responating because it's
32:47
it's too narrow of a message for such a broad audience. Well, then
32:52
this has been a fantastic conversation. I've got three questions I end all my
32:54
episodes with Ready for him? All right? Question one, what's the best
33:00
piece of career advice you've ever done? Yeah? The short version is when
33:04
I was when I was much younger, I had a manager of mine and
33:07
I was interested in this job and he said, Ben, what do you
33:09
want to be when you grow up? And I said, I don't know
33:13
what do you want to be? And he's like, I'm asking the questions
33:15
here, and his point was very clearly most of us don't really know what
33:20
we want to be when we grow up. And his guidance to me was,
33:24
you know most people don't, So what are the experiences, what's the
33:27
knowledge? Where do you want to get involved and what do you want to
33:30
try? Who do you want to get to know do all of that,
33:35
because through time, if you do that with earnest, you're going to start
33:37
figuring out like, I'm really good with this, and funny things happen when
33:40
you focus on areas you do well and I don't enjoy doing this, so
33:45
then you stopped doing it, and maybe you're more fulfilled and you're not.
33:49
You know, we all think of our friends who are in this role in
33:52
rules where they're like that you're going to burn out. You are not good
33:55
at that job, right, And so I thought that was really interesting and
33:59
I have always try to impart that on people I work with and mentor on.
34:05
Don't worry about it, but figure out stuff to learn and get better
34:07
at and get involved in and test yourself. And this bubble is going to
34:12
grow in weird shape and that's just fine. It reminds me of the one
34:15
of the most famous commencement addresses ever Steve jobs Is at Stanford, when I
34:19
said, you can only really understand a career looking backward, but you can
34:22
only live it going forward, Like you don't really know where you're going to
34:24
end up, but if you follow the things you're interested in, it'll make
34:28
sense when you look back, but you probably don't don't see where it's going
34:31
to lead. Absolutely everybody wants this specific next step, and it's like,
34:35
I don't know, take ten baby steps and then see which one you rise
34:39
up rather than fall down on and keep moving all right. Second question,
34:44
what's the best piece of advice you've gotten about the consumer banking space in general?
34:47
Oh, that's a that's a great question. I don't know if it's
34:50
so much the advice I've been given specifically, but I think over time it's
34:53
just this reminder that when you live and breathe it every day, it seems
34:59
so easy and you forget about what that standard average person is like. And
35:05
I think the better job we do of asking our friends and family, like
35:07
the card example of having your card in the middle of table, you know
35:13
what would my mom say? Does that make sense? To my dad?
35:15
Is my niece going to be okay with that? Is? Man? That
35:19
would really that would maybe tick off my sister if we did that. And
35:22
I think, you know, using the your friends and family to really say,
35:30
you know that makes sense, that's good advice. I think of some
35:34
of the banks that have gotten themselves in some ethical issues right, would your
35:37
mother be ticked off if you did this to her? Yeah? You know,
35:40
hey, you know, back away. But I think it's also like
35:45
back to the marketing decisions we make as well and the product development decisions.
35:47
So again not a specific piece, but um holistic that i've you know,
35:52
we always talk about for time. Yeah, I remember when I was at
35:55
Google, there's a similar thing where the Eric Schmidt used to say to that
35:58
the whole company go like, just every email, you're right, like,
36:00
assume it's going to end up on the front page of the New York Times.
36:02
Would you be proud of what you're saying in that email? Because like,
36:07
welcome to the big leagues, guys, it may actually end up on
36:08
the front page of the New York Times. Like you should be willing to
36:12
stand behind the things you say, even if it may be uncomfortable to have
36:14
to do it publicly, Like you shouldn't be embarrassed or good mind, I
36:17
really shouldn't have it. And you should be able to take pride in the
36:20
way you make decisions of the things that you do and be able to defend
36:22
them with a straight face. And I think that's same thing for speaking up
36:25
at work when something's not working well, or you need to present an opposite
36:30
opinion or perspective. Its it's you know, how do you feel comfortable being
36:38
a part of the solo shuttle? All right, last question, Ben,
36:40
here we go. What is one bold prediction for the future. Well,
36:45
bold prediction for the future. Again, I don't know if this is bold.
36:47
I just I really worry about losing more of our smaller financial institutions.
36:57
And I believe Jeff when we talked, I think we talked before we talk
37:00
about No, we talked after Silicon Valley, right, we talked after Silicon
37:02
Value. Yeah. And I just it's just this other example of how taking
37:08
systematic risk out of or I shouldn't say system the organizational risk out of the
37:13
system, and valuing community organizations. I just think the the the pace of
37:21
digital technology, the pace of change, that's all moving much faster than how
37:27
a lot of our organizations are keeping up with it. Another great example right
37:30
now is AI and I've been playing around with it and it's amazing how it
37:36
can help you with just day to day easy things that I would have to
37:38
search forever to find. And I type it in and this is the expression
37:43
that I want to put into Excel and there's just not the resource system maybe
37:49
keep up with the joneses for that, and that's that's going to crush.
37:51
I think a lot of community focused organizations, smaller organizations, and it's just
37:55
not healthy. And I don't I don't think a lot of these organizations think
37:59
that. And I think that's where that's probably maybe to really answer your question,
38:05
I think that's what worries me. And I think that's the hot take
38:07
is if you asked a lot of banks our size, I don't they didn't
38:14
worry, but they wouldn't they wouldn't be ready to make big changes. Yeah.
38:16
I worry about that too, because I mean I think I think you're
38:20
maybe seeing policymakers and legislators see the reality of the value of the community institution
38:25
today, because what I've seen is as people are getting nervous about their regional
38:31
bank or their community bank and they're saying, Hey, we're going to go
38:34
move our checking accounter. I had a checking account at SVB and now I
38:37
need to go I'm gonna know somewhere else. And they call up Chase and
38:38
they go, how do I sell you know, I'm a new I'm a
38:42
new digital first company. What's your dress? I don't don't have an address,
38:45
we don't know how to we don't know how to help you, right,
38:46
or uh, you know, I'm a new restaurant opening up here,
38:50
Well, how do I you know? Like, those small businesses in particular
38:52
really rely on the capabilities of community financial institutions to support their growth. And
38:58
I think it's easy to think you can do everything digitally, but I think
39:00
those things that those investments in the community are gonna be hard to replicate for
39:04
the for the large national banks. And it's a it's a real service to
39:07
the American economy and to the small businesses and their and their employees to have
39:10
those institutions out there. And at least I see from some of the comments
39:14
from the fact that they that they kind of get that and they want to
39:16
make sure we're not in a position where the sense that big four banks are
39:21
safe and everybody else's, even your deposits, are at risk causes a flee
39:23
from the community institutions that causes their demands. I think that would ultimately,
39:28
at least as what it stands today, be real detriment to the to the
39:31
country. And I think, you know, a lot of times we think
39:34
about it's just money solves the right money adds the digital products that improves the
39:37
experience, which digital transformation and improves the branches that allows you to you know,
39:43
grow branches or or I just associay ad branches or you know, renovate.
39:46
And but there's a talent gap that's going to start to exist. You
39:51
know, AI will go back to that. If there's one or two people
39:53
in your bank doing work with AI and you go to a much larger organization
39:58
and there's fifty people doing it, you know that that's you know, it's
40:02
I like to use often two plus two can equal four, or if there's
40:06
fifty people in an organization with two plus two equals eight or nine or twelve.
40:09
Like that's just that exponential rate of growth that happens from these efficiencies and
40:15
uses of transformation. It's just it really is kind of mind blowing you think
40:20
about the spread between some of these organizations these days. So that's gonna be
40:24
tough. It's gonna be tough, it's gonna take a lot. So that's
40:30
why we're here. Well, I think that's that's why we're here. That's
40:32
what makes it fun. Every day to show up to work right, All
40:36
right? Well, Ben, thank you so much for your time today.
40:37
This was a great conversation. I appreciate your joining us for it. You're
40:40
welcome. I enjoyed it, Thanks Jeff. Upstart partners with banks and credit
40:45
unions to help grow their consumer loan portfolios and deliver a modern all digital lending
40:50
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