Transcript
Hello out there in fintech land. This is Sam Kilmer, managing director of Cornerstone Advisors and your host of the Fintech Hustle podcast.
I am here in the hallways of New York City’s Marriott Marquis Hotel.
We’re right outside the Marquis Ballroom, across from the Cantor Room and Jolson Room.
Couldn’t get any more New York than that.
What you can’t see behind us, behind our rock-star guests, is Times Square.
We’re here at FinovateFall 2024.
I’m really honored to have such a great crew.
I should say, we.
Stacy Bryant, our guest co-host with the most, is joining.
She happens to be in town as a rock star herself.
She’s up on stage doing some stuff while we’re here, and so glad to be here.
Let me tell you a little bit about our rock stars.
First of all, Barb MacLean, senior vice president, head of technology and implementations at Coastal Community Bank in Washington, as I recall.
I think I have my geographies correct, but doing work with people all over the place, as I recall.
Danny Payne, a director from Jack Henry in the digital area.
Thanks for joining us, Danny.
And Nick Evens, who’s the CEO of Curql Collective, which is a credit union venture fund that I’m sure he’ll probably have a thing or two to talk about in terms of what’s going on there.
And as I mentioned, with both banking and fintech background, my colleague, co-host with the most, Stacy Bryant.
So we’re glad to be here.
I just want to start off having our guests, because we have so many varied backgrounds here.
We’ve got banker, we’ve got fintecher, we’ve got investor.
Just tell us a little bit about their day in the life and the backgrounds.
Why don’t I start?
Barb, tell us a little about a day in the life at Coastal.
It probably doesn’t get any more exciting than a place like Coastal.
I’ve been very fortunate to be there for the last couple of years.
My part of that is finding the ways to enable the bank through technology.
How do you be business-driven, technology-led as a community bank?
That is one of our theses on how we can be different in the market.
How do we bring Coastal’s brand of banking to more people outside of our branch network in Washington and that sense of community-driven banking for the masses?
You can only do that through technology if you don’t have a branch network to do it.
We work very closely with our banking-as-a-service partners on that.
My role in it is, how do you also remake yourself to entirely rewrite your whole technology stack to pull that all off?
Because you need those modern tools in hand to actually move as quickly as your customers want you to.
So that’s a bit of the day in the life for me.
A minor project or two, it sounds like.
And also having cool jackets in the process.
Wow.
Is that like your third or 14th cool jacket?
Excellent.
Danny, other than great sneaker game, and I see the Jack Henry attire, you’ve got your AFT pin on.
You’re representing, my friend.
What’s your day look like?
Yeah.
Well, every day is an adventure at Jack Henry.
It’s funny.
A lot of the things you just mentioned are a lot of things that we’re working on every day, which is, how can we continue to modernize our tech stack in ways that help serve our community banks and credit unions nationwide?
I think the most important thing, and while I live in the world of digital, it’s not really just a digital thing that we need to work on.
It’s not just one problem that we need to solve.
You have to look across the ecosphere of what banks and credit unions are trying to solve for their end users, and how we continue to evolve ourselves as a fintech to make sure that we’re not just keeping up and allowing them to compete against the Chimes of the world.
How are we going to where the hockey puck is going to be?
As you run into situations and you see, “Hey, I just saw an ad on TV that Chime is offering $500 payment advances to their customers. Hey, Jack Henry, how are you going to help me solve that for my customer? How do I compete with that?”
So that’s a big part of what we worry about and think about every day.
It’s not just, how do we catch up or keep up?
It’s about, how do we think ahead for our customers?
Very cool.
And last but not least, Nick.
Also on point with sneaker game.
How’s a day in the life at Curql?
Yeah, thanks very much.
I think what you’re going to hear is that we’re all saying the same thing, only differently.
A day in the life of Curql.
Our mission at Curql is very easy.
We bring fintech to credit unions.
The day in the life is, we actually recently followed Cornerstone Advisors’ recent survey around what keeps CEOs up at night.
So it’s commercial services, fraud, cybersecurity, deposits and, oh, opex, sorry, operational efficiency, where I think a lot of the AI will fall.
Our second fund is now open and we’re making investments out of Curql Fund II.
We’re prioritizing those five.
Our first two investments out of Curql Fund II are looking at deposits and how to grow deposits, and then around commercial services.
You see a lot of the fintech here at Finovate focused on a lot of those priorities that you’ve identified in your surveys around what’s keeping both bank and credit union CEOs up at night.
So that’s what we’re doing right now.
Our second fund is open and we’re raising money still while we’re starting to invest out of the fund.
As the movie said, more money, more money, more money.
Bring it.
Since we ended with you, Nick, let me start with you on this one.
Stacy, we’ll get you going here too in just a second.
You mentioned what you’re seeing here at Finovate.
What are you guys seeing here?
Is there anything that really jazzes you here, or anything that kind of bums you out or you think is a little bit of a buzzkill?
I’d love your take on what you’re seeing, not only maybe on stage, but in the exhibit hall.
Yeah.
I don’t think we’ve heard the word or the acronym AI yet, have we?
No, we haven’t heard that a bit yet.
The buzzkill is that there’s a lot of compliance and regulatory fintechs popping up using AI.
For people like me, that’s just boring.
But obviously we know it’s necessary in today’s world.
Sorry if I offended anybody there in the compliance and regulatory environment.
But yeah, a lot of AI, compliance, regtech, things like that.
But there’s, you know, it’s all exciting.
We go in cycles.
We go in phases.
This is the regulatory compliance AI phase that we’re in right now.
Barb, what are you seeing?
I think there’s some of what you just talked about.
I like to watch for what’s the truth under the covers of the pitch.
Obviously Finovate is all about the seven-minute demo pitch.
But how can you discern who’s really got a good story underneath?
That answer is actually going to be different for everybody and the perspective that they’re bringing.
Maybe you actually do need a Gen AI-flavored solution because it helps you get started in that area.
But maybe you’re far beyond that as an organization and your goals are a little more concrete or larger-scale than that, and you actually need a real AI solution, if you can call it that.
You actually have some really good defined use cases that you need to scale, and you need something different than, “I just need a veneer on top to help my humans interact with this information in a different way,” which those tools are particularly well suited for.
So that’s always what I’m looking for.
How can I suss out the truth under the pitch?
Some of the demo organizations are really good at that, but some of them are trying to play to a different audience than me in particular.
Danny, what are you seeing or want to see?
Well, both of you answered kind of the same way I was going to answer it.
There’s a little bit of AI involved, it seems like, in every single company and pitch that’s been done.
So I’m going to answer the question a little differently.
What I’ve been looking for is, instead of picking apart the presentation process, because I know how hard it is to stand up there and do that and I would never say, “You’re doing a good or bad job of presenting.”
I’ve been using the time in the hall to ask very specific questions about, what is your version?
Looking through the lens of that vendor and saying, “What is your version of what problems banks and credit unions need to be solving out in the industry?”
Maybe by understanding the angle that they’re coming from, it gives me a better understanding from my lens of, are we in alignment with how you’re trying to solve those problems?
Does that make you a good fit for partnership?
Or does what you’re saying just continue to sound like an elevator pitch in a seven-minute presentation?
Part of being at Finovate for me personally is to listen to the groundswell of what’s going on in the industry.
A lot of that for me happens not really on stage as much as it does in the exhibit hall, by being able to talk to these people and ask them questions about how they see the industry.
So it’s the back-channel, hallway, elbow-twisting stuff.
Love it.
Good point.
I mean, I think we were also trading notes about, if you could just get to the demo, that’d be great.
If you’ve got seven minutes of demo and it’s three minutes in and there’s no demo yet, we already know this is not going to end well.
Well, if you’ve got your AFT pin on, Stacy was with me at AFT Spring when we were in Boston.
We’ve got AFT Fall coming up here in Palm Springs.
Stacy, I think, is this your second Finovate or is this your third?
Third Finovate.
What are you seeing or wish you could see that you’re not seeing here?
Yeah.
AI, AI, AI, right?
Like Beetlejuice.
I think Ron Shevlin had shared something last week and he said, “All right, enough about the AI. What are you doing with AI?”
So Danny, to your point, I think a question here is, as we’re speaking to credit unions, as we’re speaking to banks or even fintechs, what is the objective?
I spoke to, I think it was Christy Wong over at Covet.
I like the fact that it’s not so much AI now.
I think it’s Ashish Garg from Eltropy.
He says there’s riches in the niches.
I’m like the niche queen, right?
So what about the niches?
Christy Wong at Covet, what she’s doing and what her company is doing, is they’re taking estate planning and saying, how do we bring estate planning to Gen Z?
Who are the beneficiaries of these multigenerational folks?
I dove in a little bit deeper there because I like how folks are thinking outside the box, outside of leveraging AI.
That’s what I’m seeing.
I like that.
How about you?
Talk to us about you.
What do you see?
I would say, back to the earlier point about risk and compliance, although they waited too long to get to the demo, I thought Quavo Risk and what they’re doing, where you manage the case all the way through, dispute management.
Thank you.
Dispute management.
I thought their session could have gone better, but I totally see the power of that.
Mainly from a personal perspective.
Every time anybody in my personal network who’s not one of us insider types, just pals of mine, ever talks about their bank, it’s almost never.
But when they do, it’s because they caught fraud.
I think this is the reputational risk opportunity, or serious damage control, of a bank or credit union that has everybody calling them on the same weekend to get a card reissued or manage disputes because some fraud network hit.
How they handle that, to me, that’s like, we talk a lot about CRM systems in this industry, but talk about CRM.
How about CRM during fraud, when everybody calls you all at once?
So that actually has my attention.
But I think also, I don’t see the demos getting better.
Anyway, let me come back to something else because I know, Nick, you’ve got to get rolling and I want to make sure we get a chance.
What is something that you see in the industry that you think could be a lot better?
Let’s just say you don’t have to go totally negative like I would and say what sucks right now, or what’s broken.
What is something in the business right now that you look at, whether it’s a problem that’s not getting solved, people that aren’t listening, something that you think could be better in this business that you might want to share?
Not to put you on the spot, but hey, it’s my podcast, so that’s what I’m going to do.
What do you think, Nick?
Well, we could talk about the demos.
Those are definitely broken, right?
But from a product and service standpoint, I think I’m going to talk broader than just something specific.
There needs to be consolidation.
Somebody, I heard somebody say this the other day, maybe a year ago or so.
There are 15,000 fintechs in the world and there need to be about 5,000.
We look for companies that have the mentality of being a platform company.
A lot of these companies, they’re a product, they’re not a company.
Where are they going to end up?
If they’re not thinking that way, then that’s where we see an issue.
If they can’t identify the fact that they’re just a product and they’re not a company, we might even stop talking to them.
It’s that forward-looking, how do you become part of a platform?
How do you make your company a platform play?
I think, Stacy, you said it best.
Ashish identified this three years ago at his company, and he went out and we helped him do two acquisitions.
Eltropy bought Marsview and POPi/o.
His mentality now is, “Hey, I’m a platform company and I’m going to grow and continue to be a platform company.”
Those are the things that I see as a problem right now.
There needs to be consolidation.
Barb, how about you?
I really appreciate that point a ton because for someone who ends up being asked to help procure the technology for a bank, it can be really hard and a lot of, I think, unthought-of and unquantified operational risk for trying to stitch together all of these one-things-done-well by a company, all of these products fundamentally.
So that perspective really resonates with me.
It’s why I’m so glad to be standing in the middle of both of you, because without players like yourselves in the ecosystem, banks like us and others just can’t pull this off by ourselves.
We need folks like a Jack Henry that can help scale it because they’re thinking about it more broadly than just what one institution needs.
How do you make it actually serviceable and deployable for the many?
How does an organization like yours end up funding these so that they’re not just rigidly focused on the one thing they do well?
How can they actually make it more broadly applicable?
Again, for us, each of you plays a key role for us banks in not making it so hard for us to figure it out by ourselves.
Danny?
Yeah.
I’m going to tap into something you just said because I just had a meeting during lunch, and everything that you are saying resonates so well with me.
I think one of the things that is broken in our industry right now is that we have so many of the legacy companies that still work in such huge silos.
Barb, you come to a conference like this and if you run into somebody like me, you expect to say, “Okay, I want to talk to you about Jack Henry.”
You don’t say, “I want to talk to you about Jack Henry Digital,” or, “I want to talk to you about Jack Henry core,” or, “I want to talk to you about security, payments.”
You just expect that if you ask me a question, I’m going to give you the information that you need about what we do, right?
I think one of the things that needs to be solved in the industry is that we need to be better, and I’m including us when I say we, at being ready to have those conversations with our banks and credit unions.
So that we’re not saying, “Well, you know what, Barb, I’m really good at this one thing, but I’m not really good at all those other things, so let me pass you on to my colleague.”
When really what I need to be able to sit down and do is say, “Look, it’s important enough to me that regardless of what my compensation plan says, I want to learn about it and I want to know about it because I want to be an expert in the industry for you.
I want to answer those questions for you and make you feel better about working with me.”
I think that’s something, as us in the fintech industry, we have to be better at.
We have to be better at, it’s not about being a know-it-all.
It’s about being informed enough to help the community banks and credit unions solve the problems they’re looking for.
Very good.
Because I know we all have a lot of hustling to do while we’re here, and I know, Nick, you’ve got a meeting coming up and we can’t have investors waiting.
I wanted to say thank you guys for joining us for this now short-play version of Fintech Hustle.
A 15- or 20-minute quick-hit record.
In exchange for your valuable time that you’ve given us, we’re going to give you this highly sought-after, not yet endorsed by Liam and Noel and the Oasis Reunion Tour, Fintech Hustle vinyl coaster set.
You cannot play these with a needle on a record player, by the way.
I’ve been asked.
I know these are highly valuable.
Be more...
There you go.
There’s one for you and, of course, there’s one for you as well.
Thank you.
And if you’ll wear it, there’s also a bucket hat that could be in the mail to you.
Again, you’d have to want to wear it.
Some people, like Ron Shevlin for example, won’t wear his, so he doesn’t get one.
But seriously, thanks, guys.
I hope you have a great conference, and thanks for sharing some of your insights today.
Cheers.
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