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Sponsor Banking Redefined : Column's Blueprint for the Future
Episode 514th March 2024 • Fintech Confidential • DD3, Media
00:00:00 00:43:16

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In this dynamic episode of Accrued, a Fintech Confidential series presented by LoanPro,  hosted by Tedd Huff and co-host Colton Pond, They explore the cutting-edge solutions Column is bringing to sponsor banking. Brian Fishbein, Column's Head of Investing and Treasury, joins the discussion, providing an insider's perspective on how Column is challenging traditional banking norms. By focusing on enabling developers and builders to create novel financial products, Column is uniquely positioned as a nationally chartered bank dedicated to sponsor banking initiatives.

The episode covers Column's commitment to increasing visibility and control within credit programs, their deep understanding of compliance activities, and the ability to address and resolve issues promptly. These aspects are vital for fintech partners and a testament to Column's innovative and responsible approach to financial services.

Further, the conversation highlights Column's unique value proposition. It distinguishes itself from traditional sponsor banks by prioritizing developer needs and allowing for rapid innovation within the regulatory framework. Brian Fishbein's diverse background, from his engineering degree from Princeton University to his significant experience in the financial sector, provides valuable insights into Column's strategies and operations.

As the discussion unfolds, it becomes clear that Column's vision extends beyond merely offering new banking services. It's about creating a more inclusive, efficient, and responsive financial ecosystem, leveraging technologies like blockchain for enhanced security and transparency. The episode concludes on a reflective note, considering the broader societal impacts of fintech innovations, including making financial services more accessible and fostering economic growth.

This episode of Accrued features engaging dialogue with Brian Fishbein and insightful commentary from hosts Tedd Huff and Colton Pond. It illuminates the transformative role of Column in the sponsor banking industry and sets new benchmarks for what's possible in fintech.

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Key Highlights

  • Revolutionizing Banking Infrastructure: How Column's innovative platform is setting new standards for real-time financial transactions and service delivery.
  • The Founders' Journey: Annie and Eddie's inspirational path from identifying market needs to launching a groundbreaking fintech solution.
  • A New Era of Financial Transactions: Column's contribution to making instant payments and streamlined lending a reality for consumers and businesses.
  • Building on Trust and Security: Insights into Column's rigorous regulatory and compliance measures that ensure user data protection and trust.
  • Overcoming Regulatory Hurdles: The strategic approaches Column used to navigate the complex financial regulatory environment during its early stages.
  • Fostering Innovation through Open APIs: How Column empowers developers to create customized financial services and applications.
  • The Future of Inclusive Banking: Column's vision for a financial ecosystem that caters to underserved markets and promotes economic inclusion.
  • Blockchain's Role in Banking: Exploring the potential impacts of blockchain technology on the future of secure and transparent banking services.
  • Challenges and Triumphs: A candid look at the obstacles Column faced and overcame in its mission to redefine banking.
  • Beyond Fintech: The broader societal implications of Column's work in promoting financial equality and fostering economic growth.

Takeaways

  1. Innovation as a Catalyst for Change: Column's story underscores the transformative power of fintech in reshaping the banking industry and addressing long-standing inefficiencies.
  2. Security and Compliance as Cornerstones: The episode highlights the critical importance of building financial services on a foundation of trust, security, and regulatory compliance.
  3. The Importance of Flexibility: Column's success illustrates the need for adaptable financial solutions that meet the evolving needs of a digital economy.
  4. The Potential of Technology to Democratize Finance: Column's initiatives reveal the potential of emerging technologies to make financial services more accessible and equitable.
  5. A Vision for the Future: The episode conveys a compelling vision for a future where banking is more inclusive, efficient, and responsive to global needs.

Column:

Website: https://column.com/

LinkedIn: https://www.linkedin.com/company/column-bank/

X (formerly Twitter): https://twitter.com/column?lang=en

Brian’s LinkedIn Profile: https://www.linkedin.com/in/brian-fishbein/

Fintech Confidential:

YouTube: https://fintechconfidential.com/watch 

Podcast: https://fintechconfidential.com/listen

Notifications: https://fintechconfidential.com/access

LinkedIn: https://www.linkedin.com/company/fintechconfidential

X (formerly Twitter): https://twitter.com/FTconfidential

Instagram: https://www.instagram.com/fintechconfidential

Facebook: https://www.facebook.com/fintechconfidential

Support Provided by:

LoanPro - As default rates continue to rise and margins compress in lending, financial organizations are searching for solutions that combine operational efficiency with innovation. Look no further, as LoanPro allows lenders to enhance their origination, servicing, collections, and payments using the foundation of a modern lending core. Check out loanpro.io to learn more about how 600+ financial organizations have modernized their tech stack with LoanPro.

HAWK:AI - HAWK:AI's game-changing approach to compliance. With real-time monitoring, adaptive learning, and advanced AI, it cuts false positives, simplifying your compliance efforts. Upgrade your surveillance with ease. Visit https://gethawkai.com for more intelligent, more effective compliance.

Time Stamps:

01:25 The Founders' Journey: From Plaid to Column

01:48 Column's Mission: Blending FinTech Agility with Banking Solidity

02:02 Exploring Column's Impact and Brian Fishbein's Role

02:32 Brian Fishbein: A Personal Introduction

02:49 Column's Approach to Banking as a Service  

04:06 The Evolution of Sponsor Banking

04:20 Column's Unique Position in the Sponsor Banking Industry

06:44 The Future of FinTech Banking with Column

07:43 Column's Technology and Compliance Strategy

14:56 Real-Time Data: The Backbone of Column's Innovation

15:34 Leveraging Technology for Credit Program Innovation

18:41 Column's Differentiation Strategy in FinTech

21:38 Navigating Innovation and Compliance in FinTech

30:09 Column's Approach to Sponsor Banking Partnerships

32:56 Column's Strategic Direction and Industry Trends

33:04 The Future of Lending and Technology in FinTech

37:02 Sponsor Banking: A Look into the Future

40:27 Closing Thoughts from Brian Fishbein

41:40 Reflections and Key Takeaways

This is a Production of Diamond D3, Media

ABOUT:

Brian Fishbein: Brian Fishbein has diverse and extensive work experience in the financial industry, currently serving as the Head of Investing & Treasury at Column. He is an alumnus of Princeton University, where he earned a Bachelor of Science in Mechanical and Aerospace Engineering. His role at Column emphasizes his significant contributions to the company, focusing on investing and treasury management, underlining his profound impact on the fintech sector through his expertise and leadership.

Column: Column is distinguished as the only nationally chartered bank dedicated to empowering developers and builders with the ability to create new financial products. The company's mission is centered around sponsor banking initiatives, offering increased control and visibility for fintech partners over their credit programs. Column's approach is unique, providing a framework that supports rapid and compliant innovation within the regulated environment of a financial entity.

Tedd Huff: Tedd Huff is the Co-Founder of Voalyre and the President and founder of Diamond D3, a professional services consulting firm focused on global payments and marketing. He is also a video podcast host and producer of Fintech Confidential.

Over the past 24 years, he has contributed to FinTech startups as an Advisory Board Member, Co-Founder, and Chief Experience Officer, providing strategic and tactical direction for Global Payments OpenEdge, Heartland Payments, Nuvei, and TSYS, among others, focusing on growth while delivering innovation, process improvements and user experience-driven value to simplify the complexity of payments.

Colton Pond: Colton Pond is a seasoned marketing executive with a strong fintech and financial services background. In his latest role, Colton is the CMO for LoanPro's API-first lending platform, aiming to meet the increasing market demands. His track record includes a significant tenure at Truv, where he led the marketing team to achieve a 300% growth in year-over-year revenue. Colton has also held key marketing and sales positions at MX, Lucid, and HealthEquity, demonstrating his ability to drive success and innovation within the fintech sector.

Diamond D3, Media: A media creation, management, and production company delivering engaging content globally

Transcripts

Brian Fishbein:

How do we improve our APIs?

Brian Fishbein:

How do we make things simpler for customers?

Brian Fishbein:

How do we make this a better product overall for the folks

Brian Fishbein:

that we wanna work with?

Brian Fishbein:

That might mean that we expand into incremental customer bases.

Brian Fishbein:

We start to think about,

Brian Fishbein:

how do we better serve other financial institutions that might actually wanna

Brian Fishbein:

take advantage of our payments rather than necessarily just kind of like non-banks.

Brian Fishbein:

It's mostly just a lot of, let's put our heads down, let's

Brian Fishbein:

figure out how we kind of solve, continue to solve these problems.

Brian Fishbein:

Because there continue to be a lot of problems out there.

Brian Fishbein:

Tedd Huff - Fintech Confidential: Welcome to Fintech Confidential, bringing

Brian Fishbein:

you the people, tech, and companies that change how you pay and get paid.

Tedd Huff:

Welcome to Accrued the FinTech confidential series presented by Loan Pro.

Tedd Huff:

In this series, we're deconstructing the complexities

Tedd Huff:

of lending, exploring compliance, optimization, and modernization.

Tedd Huff:

Personalization through insightful conversations with industries.

Tedd Huff:

Best.

Tedd Huff:

I'm Tedd Huff and with my co-host Colton Pond.

Tedd Huff:

We're here to guide you through the intricate lending world.

Tedd Huff:

Whether you're deep into Lin Tech or just intrigued by how technology is reshaping

Tedd Huff:

lending, you are in the right place.

Tedd Huff:

Colton, welcome back man.

Colton Pond:

Thanks.

Colton Pond:

It's good to be here, Tedd.

Colton Pond:

I, I'm trying to have as many backgrounds in these episodes as possible.

Colton Pond:

So new background again today, but it's good to see you.

Tedd Huff:

in this episode, we're turning our attention to Column, a Beacon

Tedd Huff:

of innovation in the FinTech space.

Tedd Huff:

Born from Visionary Minds of William and Annie.

Tedd Huff:

Hockey.

Tedd Huff:

Before the husband and wife team joined forces, William gained his

Tedd Huff:

deep understanding of the FinTech space from being a co-founder of

Tedd Huff:

Plaid and a former Bain consultant.

Tedd Huff:

Thier journey took a pivotal turn when the strategic, strategic

Tedd Huff:

acquisition of NorCal Bank,,

Tedd Huff:

laying the groundwork for a bank designed for the digital age.

Tedd Huff:

Column shows what can happen when you blend the agility of FinTech with

Tedd Huff:

the solidity of a traditional bank.

Tedd Huff:

it's created for developers and builders in the FinTech arena, offering direct APIs

Tedd Huff:

to craft brand new financial products.

Tedd Huff:

and it sets up a fascinating discussion for today's episode

Tedd Huff:

as we explore Column's journey and Brian Fishbein critical role reveals how deep

Tedd Huff:

his finance background and innovation are reshaping the future of FinTech banking.

Tedd Huff:

We will uncover how Column blends traditional banking's robust

Tedd Huff:

framework with groundbreaking innovation and Brian's leadership.

Tedd Huff:

Investing in treasury also emerges as a key force in rewriting the playbook

Tedd Huff:

for credit sponsorship technology.

Tedd Huff:

Colton, I did my best of introducing Brian, but I know you've got a

Tedd Huff:

personal relationship with them.

Tedd Huff:

So I'd love for you to kind of fill in some of the blanks before he gives

Tedd Huff:

us his his falling into FinTech story.

Colton Pond:

I mean, what's awesome about this is, uh, so Brian, you are our first.

Colton Pond:

Episode talking about banking as a service industry, or credit sponsorship

Colton Pond:

or banking sponsorship, and what a great place to start with Column on

Colton Pond:

the innovation that y'all are doing.

Colton Pond:

I hear nothing but amazing things, uh, on what you are personally doing

Colton Pond:

at Column and with the broader team.

Brian Fishbein:

It's been super interesting.

Brian Fishbein:

I mean, I've been, been doing this in some form or fashion for a

Brian Fishbein:

little over a decade at this point.

Brian Fishbein:

Um, starting with kind of the traditional banking side where it was a lot of.

Brian Fishbein:

Looking at, you know, post origination, us buying loans, financing 'em, or

Brian Fishbein:

doing securitizations for some of the larger scale programs to then moving

Brian Fishbein:

to a more investing seat where we would look at earlier stage companies

Brian Fishbein:

and think about how do we wanna invest in equity or, or

Brian Fishbein:

actually acquire those companies.

Brian Fishbein:

And that all kinda led to, you know, spending a lot of time thinking about

Brian Fishbein:

credit and loan programs and how you kind of build and scale those in a.

Brian Fishbein:

It really makes sense and, you know, how do you access the ecosystem?

Brian Fishbein:

Who do you wanna be working with?

Brian Fishbein:

What are kind of the best in class, uh, companies to be working with?

Brian Fishbein:

you know, a lot of that experience indirectly kind and, you know,

Brian Fishbein:

frankly, directly shaped how we,

Brian Fishbein:

think about things here at Column, right?

Brian Fishbein:

When, uh, we start looking at new businesses and new lending products

Brian Fishbein:

and, and how do we build these credit programs in a way that actually makes

Brian Fishbein:

sense and is actually more aligned with, uh, the companies we wanna work

Brian Fishbein:

with, rather than, you know, how banks

Colton Pond:

Jumping right in If we look at the sponsor banking industry

Colton Pond:

or banking service industry, a lot has changed over the past year.

Colton Pond:

It.

Colton Pond:

I, I find it one of the most exciting times when things change

Colton Pond:

because that's when you know real innovation is happening.

Colton Pond:

And so for those that are listening and in the audience today that aren't familiar,

Colton Pond:

if you don't mind, give us a quick overview of the current sponsor banking

Colton Pond:

industry and then how Column's approaching the problem different and unique.

Colton Pond:

'cause y'all are truly, as Tedd said, as in his intro, uh,

Colton Pond:

a bank built for developers, which generally you don't hear.

Colton Pond:

Help us understand the industry and what you all are doing differently at Column

Brian Fishbein:

There, there's obviously been a lot going on.

Brian Fishbein:

Um, I wanna rewind for a second though, because I think it's super interesting to

Brian Fishbein:

actually think about kind of the history of sponsor banking and how people think

Brian Fishbein:

about it and, you know, what really is new and novel and different, right.

Brian Fishbein:

Um, sponsor banking, you know, a lot of people think about was kind of a post

Brian Fishbein:

GFC 2010 and onward type of, um, thing that banks started to fall into as they

Brian Fishbein:

look for other ways to drive revenue.

Brian Fishbein:

But really when you think about it, it, this goes back a lot farther.

Brian Fishbein:

Genesis, and it's probably even earlier than this, but if you think about

Brian Fishbein:

it, is kinda large corporates working with large financial institutions to

Brian Fishbein:

acquire customers in a different way.

Brian Fishbein:

And the, the very easy example of that is,

Brian Fishbein:

citi, you know, had a relationship with American Airlines starting in 1984 to,

Brian Fishbein:

you know, basically do sponsor banking.

Brian Fishbein:

We just think about it differently and.

Brian Fishbein:

The, the real difference here is you had massive scale because you had such

Brian Fishbein:

meaningful operational needs when you didn't have all of this technology

Brian Fishbein:

that the only people that could do it were the top five banks in the

Brian Fishbein:

country and the, you know, fortune 500.

Brian Fishbein:

If you fast forward to kind of post 2010,

Brian Fishbein:

what you saw with this proliferation was really more a function of, um.

Brian Fishbein:

Better technology enabling people to do things when they didn't have that

Brian Fishbein:

gigantic scale and actually access kind of the same sorts of distribution

Brian Fishbein:

channels that you saw historically.

Brian Fishbein:

Um, and so you see that kind of evolution occur where it's not just

Brian Fishbein:

credit cards anymore, you can start to think about offering term loans.

Brian Fishbein:

But you know, when we think about Column, and I'll get into this in a

Brian Fishbein:

little bit, there's a lot of other traditional financial products that

Brian Fishbein:

you can offer that folks have kind of.

Brian Fishbein:

Focused on from a niche perspective.

Brian Fishbein:

So if you think about like the Venmos of the world, right?

Brian Fishbein:

That is, you know, payments, which was traditionally a thing that was

Colton Pond:

Yeah.

Brian Fishbein:

um, and, and then kind of got disintermediated as companies

Brian Fishbein:

like that started to, uh, gain more traction because they had a better

Brian Fishbein:

experience and better technology.

Brian Fishbein:

Um, and so you've seen this kind of, not just in credit but across the board

Brian Fishbein:

and that has kind of carried through to today, where if you look over the

Brian Fishbein:

course of the last couple of years.

Brian Fishbein:

More and more banks have realized that the way to access their customer base and the

Brian Fishbein:

way to actually broaden their business is not necessarily by saying we're gonna stay

Brian Fishbein:

within kind of our geographic footprint or our swim lane, but we're going to

Brian Fishbein:

go more broadly and work with other folks who might have better distribution

Brian Fishbein:

channels, might be better at marketing, might know how to reach customers

Brian Fishbein:

in a way that we typically don't.

Brian Fishbein:

over the course of the last year, I think you've seen a lot more of the same, but

Brian Fishbein:

the, the difference has been how people think about these partnerships and how

Brian Fishbein:

people think about the risks related to them and how you actually manage them.

Brian Fishbein:

Right?

Brian Fishbein:

Like part of the fallout from SVB and some of the others.

Brian Fishbein:

I think about the impact on the sponsor banking industry has been,

Brian Fishbein:

you know, really how do banks actually understand the activities

Brian Fishbein:

that their end customers are doing?

Brian Fishbein:

Are there liquidity risks or other things related to those businesses

Brian Fishbein:

that people don't really understand?

Brian Fishbein:

so I think that's been, you know, super interesting to see because all it has

Brian Fishbein:

brought a lot of stuff that, you know, when we think about what we built, um,

Brian Fishbein:

and again, we can talk about it a little bit to the forefront in terms of how

Brian Fishbein:

we actually manage this relationships and make sure that not only can we,

Brian Fishbein:

you know, best serve our partners and our clients, but also make sure that

Brian Fishbein:

we're doing it in a way that, you know, will keep us around for the long term.

Tedd Huff:

as I hear you talk about the.

Tedd Huff:

The bank sponsorship or credit sponsorship side of the house.

Tedd Huff:

It really makes me think back.

Tedd Huff:

I mean, I, I've been in the industry for over 25 years and I've helped

Tedd Huff:

multiple banks and fintechs go through the process of saying, what does it

Tedd Huff:

take for us to sponsor the FinTech?

Tedd Huff:

What does it take for me to be sponsored?

Tedd Huff:

By the bank as a FinTech and really helping them navigate through that white

Tedd Huff:

space that isn't very well called out.

Tedd Huff:

And it's really was really cool when I was doing the research on

Tedd Huff:

Column to see how you've, you've simplified quite a bit of it,

Tedd Huff:

but it still has me wondering like, how are you specifically looking to innovate

Tedd Huff:

in the credit and lending space and.

Tedd Huff:

What was that aha moment that led you guys to really start to focus

Tedd Huff:

on the credit sponsorship piece?

Brian Fishbein:

I think The reality is.

Brian Fishbein:

Credit sponsorship is a core part of our business because when you think

Brian Fishbein:

about traditional finance, right?

Brian Fishbein:

Lending products are a core part of any bank or lender or you

Brian Fishbein:

know, financial company and even a lot of non-financial companies.

Brian Fishbein:

And so right from the jump when we acquired the bank, um, that was

Brian Fishbein:

always kind of in the cards in terms of how we were thinking about that.

Brian Fishbein:

The problem really became, you know.

Brian Fishbein:

Are we going to do it the same way that everybody else does it?

Brian Fishbein:

Or are we going to try to bring our technology to bear to um, really

Brian Fishbein:

kind of provide a better service and a better solution for folks?

Brian Fishbein:

And so, you know, that goes back to kind of how we think about

Brian Fishbein:

what our approach is and our differentiation is relative to others.

Brian Fishbein:

It really comes down to three things, right?

Brian Fishbein:

The technology is a core piece of it, and we've talked about

Brian Fishbein:

that a little bit, but like.

Brian Fishbein:

That is a driving factor in everything we do, both externally and internally

Brian Fishbein:

facing so that we can actually build these robust systems and serve our

Brian Fishbein:

customers in the way that we want.

Brian Fishbein:

So it's not just, oh, there's a really great API to originate a loan, but

Brian Fishbein:

there's all of the stuff behind that that says, are we doing this from

Brian Fishbein:

an appropriate risk perspective?

Brian Fishbein:

From an appropriate compliance perspective?

Brian Fishbein:

What else is actually happening behind the scenes to enable our customers

Brian Fishbein:

to reconcile, to manage their LMSs?

Brian Fishbein:

The LoanPros of the world.

Brian Fishbein:

In a way that doesn't break in a month when they try to do a

Brian Fishbein:

reconciliation for kind of their internal finance and accounting.

Brian Fishbein:

Um, and then the, the, the second thing as we think about it is really focused

Brian Fishbein:

on these direct relationships that we wanna have with our partners rather

Brian Fishbein:

than necessarily working through kind of other vendors or other software.

Brian Fishbein:

And that gets back to the technology, which is we built that for ourselves so

Brian Fishbein:

that we don't need to rely on other people with things that we don't necessarily

Brian Fishbein:

kind of fully understand when we want to originate these sorts of products.

Brian Fishbein:

and then kind of to your third point, credit in a nutshell is great and

Brian Fishbein:

you can really be super successful.

Brian Fishbein:

And we've seen that obviously with a lot of other banks in niche.

Brian Fishbein:

But kind of where we think our value is to a lot of these companies is much more

Brian Fishbein:

in the breadth of the offering, right?

Brian Fishbein:

Um, there are folks that only want to lend money and that's great, and we think

Brian Fishbein:

that we can serve those really well.

Brian Fishbein:

But at the end of the day, I think what we've seen a lot of

Brian Fishbein:

it and can talk about trends a.

Brian Fishbein:

Is folks that want to kind of broaden the customer relationship

Brian Fishbein:

and broaden that customer wallet.

Brian Fishbein:

And so what does that mean?

Brian Fishbein:

Expanding into other loan products, expanding into other financial

Brian Fishbein:

products like DDAs, offering money, movement services, et cetera.

Brian Fishbein:

And when you think about that, right, it's a holistic offering where we can say,

Brian Fishbein:

we can do loans, we can do um, payments, we can, we can offer a deposit account

Brian Fishbein:

that really starts to get people excited and really gets us excited when we.

Colton Pond:

Yeah, so I, I love lots of aspects of what you talked

Colton Pond:

about, Brian, and what, uh, Column is doing, and I, I really view Column

Colton Pond:

and, and the work that you're doing at Column is strategic moves in the.

Colton Pond:

Banking sponsorship industry.

Colton Pond:

Um, help us understand your view on how you see that experience, then

Colton Pond:

shaping what the future looks like and how, uh, that future of, of credit

Colton Pond:

sponsorship and lending technology and marrying that with compliance.

Colton Pond:

What does it look like, uh, moving forward?

Brian Fishbein:

I think a lot of it is really around how do we reduce a lot of

Brian Fishbein:

the kind of manual operational compliance and oversight requirements, right?

Brian Fishbein:

The, the reality is like, Originating a unsecured installment loan is not

Brian Fishbein:

a super challenging process that requires a lot of innovation, right?

Brian Fishbein:

The application process and the disbursement process

Brian Fishbein:

is kind of what it is.

Brian Fishbein:

And like anybody can do that.

Brian Fishbein:

And I don't think that that we would say there's like a ton of differentiation

Brian Fishbein:

on literally that ability, right?

Brian Fishbein:

I think you see the differentiation is really, you can access our APIs

Brian Fishbein:

to start doing things in real time.

Brian Fishbein:

your giving us

Brian Fishbein:

all of the data that you would otherwise be collecting and might be bashing and

Brian Fishbein:

sending at the end of the month through an Excel file or through some other means

Brian Fishbein:

in kind of real time such that we can say, yep, we have created a loan account

Brian Fishbein:

for this individual borrower that maps one-to-one with your internal systems.

Brian Fishbein:

and, we know that borrower is a good borrower and we can disperse funds,

Brian Fishbein:

and then you can start to say, okay, what do I build on top of it now that

Brian Fishbein:

I have this kinda real time insight and what can I start doing with that?

Brian Fishbein:

Well, if you just stop there, that's our loan origination business.

Brian Fishbein:

We can kind of do credit sponsorship and that's great, but then you can

Brian Fishbein:

start saying, okay, we have a servicer.

Brian Fishbein:

We integrated with Column already.

Brian Fishbein:

We have this kind of data model that maps to our own internal,

Brian Fishbein:

uh, processes pretty cleanly.

Brian Fishbein:

Well, when we start collecting money.

Brian Fishbein:

We can start really allocating that at the account level without having

Brian Fishbein:

a giant pool of servicing account.

Brian Fishbein:

And then we can start saying, okay, incremental complexity on that.

Brian Fishbein:

I have securitizations, I have loan buyers, I have other pockets

Brian Fishbein:

of capital where those are the actual owners of those cash flows.

Brian Fishbein:

When I want to, you know, I.

Brian Fishbein:

Um, make sure that I am cleanly allocating funds to the right place.

Brian Fishbein:

I can start doing that without having a person sitting in the middle

Brian Fishbein:

to kind of do all of that work.

Brian Fishbein:

And so that really addresses a lot of like operational concerns that frankly I've

Brian Fishbein:

seen When you think about what, what do a lot of people spend their time doing?

Brian Fishbein:

Because it's really important to get those sorts of things right.

Brian Fishbein:

But then you also start to see the other side, which is you have all this data

Brian Fishbein:

that enables such a rich, um, view of kind of the compliance and backend as well.

Brian Fishbein:

That also lets you start saying, well, if there are, uh, trends that become,

Brian Fishbein:

that become emergent, you know, we start noticing that adverse action letters

Brian Fishbein:

aren't being sent or something else.

Brian Fishbein:

You're not seeing that 90 days later you are seeing that kind of day one, Hey, we

Brian Fishbein:

saw these rejects, but we didn't see this other thing that was supposed to happen.

Brian Fishbein:

Let's make that in the bud before it becomes a real issue.

Brian Fishbein:

the idea is, you know, mitigate a lot of the risks that you would otherwise

Brian Fishbein:

need to mitigate through a lot of manual

Colton Pond:

Yeah, Tedd.

Colton Pond:

Tedd, we always come.

Colton Pond:

Consistent themes, right?

Colton Pond:

Real time data.

Colton Pond:

We talked about it.

Colton Pond:

Episode with Bast the importance of getting realtime data in a different

Colton Pond:

context, but it's same themes of like, how do we get access to that realtime data?

Tedd Huff:

Well, and then how do, how do we that data?

Tedd Huff:

How do we leverage that data comes up and what I think is really unique with, with.

Tedd Huff:

Columns approach.

Tedd Huff:

approaching it from a completely different direction than any of

Tedd Huff:

the guests we've talked to so far.

Tedd Huff:

'cause it's all about technology, it's all about the data.

Tedd Huff:

It's all about getting it and making it useful.

Tedd Huff:

I'd really like to understand Brian, like how are you guys using the technology

Tedd Huff:

and the technology partnerships to really reinvent the way credit programs and

Tedd Huff:

fintechs really support their customers?

Brian Fishbein:

It is a good question.

Brian Fishbein:

It's a lot it, it does come down to a lot of real time data sharing and real time

Brian Fishbein:

kind of integrations across folks, right?

Brian Fishbein:

I think when you start seeing.

Brian Fishbein:

Uh, batch processes or Excel file transfers or something else, you start to

Brian Fishbein:

risk losing, you know, either urgency in kind of the process because you need

Brian Fishbein:

to action on some piece of information more, uh, more quickly than you might

Brian Fishbein:

otherwise be able to, or, um, data loss because you, you know, there is a person

Brian Fishbein:

on the other end that is processing it.

Brian Fishbein:

When we think about it, you know, a really good example is.

Brian Fishbein:

Okay, you want to disperse loans to folks, you know, same day or in real time, right?

Brian Fishbein:

There are certain limitations of the payment system, but once you kind of

Brian Fishbein:

get past timing of if you want a loan at 11:00 PM at night, like, you know, it's

Brian Fishbein:

gonna be hard for you to get that wire.

Brian Fishbein:

You can start to say, well, if I'm receiving an Excel file next

Brian Fishbein:

day for the originations that were approved yesterday, right, the

Brian Fishbein:

soonest I can disperse is next day.

Brian Fishbein:

Whereas if we're saying we are directly integrated with your application

Brian Fishbein:

process, somebody walks in the door at 2:00 PM, fills in all their information

Brian Fishbein:

and it all looks good, and they're approved for a thousand dollars loan.

Brian Fishbein:

There's no reason why at 2 0 5 we can't actually be initiating that disbursement.

Brian Fishbein:

And so you start to think about, well, how do I create a better

Brian Fishbein:

customer experience for folks?

Brian Fishbein:

And it's through things like that, which, you know, again, come back to, we need to

Brian Fishbein:

know and we need to get this information for us to be able to action on it.

Brian Fishbein:

And so the question is, how do you actually kind of

Brian Fishbein:

drive through that process?

Brian Fishbein:

I think the second thing, um, is around some of, you know, the credit and

Brian Fishbein:

compliance aspects, which is right.

Brian Fishbein:

have a program where we agree on kind of what are we going to originate, what

Brian Fishbein:

does that box look like, et cetera.

Brian Fishbein:

And it's very easy for you to say, okay, we need to run manual

Brian Fishbein:

checks to confirm that all this is actually working as appropriate.

Brian Fishbein:

but, a lot of this stuff is very quantitative, right?

Brian Fishbein:

You can basically just set up rules in the background that say like, this is the box

Brian Fishbein:

that we're supposed to be operating in.

Brian Fishbein:

These are the types of customers that we're going to accept.

Brian Fishbein:

And very quickly screen and flag whether or not things are actually

Brian Fishbein:

working as they're supposed to.

Brian Fishbein:

If they're not, it enables you to quickly fix it versus end up in a situation where

Brian Fishbein:

you say, oh, we've actually originated loans that we didn't necessarily

Brian Fishbein:

think we wanted to, but because it was kind of a referral model, um.

Brian Fishbein:

We're backwards looking to try to solve that problem rather

Brian Fishbein:

than, um, addressing at home.

Colton Pond:

I love that.

Colton Pond:

So along those lines, Brian, uh, there's really, uh, three

Colton Pond:

consistent themes in this podcast series that we've heard from folks.

Colton Pond:

how do you drive optimization?

Colton Pond:

And everyone right now is like, how do I drive greater margins?

Colton Pond:

How do I drive profitability?

Colton Pond:

How do I drive efficiency in what I do?

Colton Pond:

if you wouldn't mind, would love to understand how Column's approach as

Colton Pond:

a sponsor bank with technology is helping the fintechs you partner with

Colton Pond:

drive differentiation and increase optimization of their credit program.

Brian Fishbein:

Yeah, so I think we've talked a little bit about optimization.

Brian Fishbein:

All of those things around data drive more operational efficiency,

Brian Fishbein:

People can spend their time doing more interesting things.

Brian Fishbein:

And so maybe I won't har harp on that too much.

Brian Fishbein:

Where I think there is a little bit, um, more interesting differentiation

Brian Fishbein:

really comes back to, well, if you've solved the technology aspect and we offer

Brian Fishbein:

this really flexible product, right?

Brian Fishbein:

From a technical's perspective, there's no limit to what you

Brian Fishbein:

can do with our offering, right?

Brian Fishbein:

You can pair different financial products together to create something that you

Brian Fishbein:

know, provides more value to the user.

Brian Fishbein:

You can offer both with a credit card and a loan in the same platform, and

Brian Fishbein:

let everybody kind of understand and view that without necessarily needing

Brian Fishbein:

multiple sponsor banks that don't necessarily talk to each other and

Brian Fishbein:

might have reconciliation issues.

Brian Fishbein:

And so you start to say, okay, if everything is technically, possible

Brian Fishbein:

from an engineering perspective.

Brian Fishbein:

Then how do we actually add that differentiation and it, it comes back

Brian Fishbein:

to, well, now we've got a lot of free time that our operations and compliance

Brian Fishbein:

folks internally at the bank have that they're not thinking about, okay, are we

Brian Fishbein:

actually doing what we think we're doing?

Brian Fishbein:

Or how do we need to be testing and managing this because we have all

Brian Fishbein:

this automated alerting and data, and so then it's okay, we talked

Brian Fishbein:

about this very vanilla product.

Brian Fishbein:

What do we want to add on top of it?

Brian Fishbein:

What are the things that we think we can do differently?

Brian Fishbein:

How can we get creative?

Brian Fishbein:

To actually meet the true customer need versus just saying, you know,

Brian Fishbein:

we have this program, this is how we do credit sponsorship, and

Brian Fishbein:

this is the box that we fit in.

Brian Fishbein:

And I think that's one of the interesting things about Column from a differentiation

Brian Fishbein:

perspective, is we've really invested in the people and the relationships such that

Brian Fishbein:

we don't necessarily say this is the box that every single one of our customers

Brian Fishbein:

and partners needs to operate within.

Brian Fishbein:

It is, okay, you want to do something a little bit differently.

Brian Fishbein:

You wanna structure this loan product with, you know, these sorts of terms.

Brian Fishbein:

we do that?

Brian Fishbein:

Is that within the bounds of, you know, the regulatory framework?

Brian Fishbein:

And if it is, then how do we do it?

Brian Fishbein:

Um, and I think that's different from, you know, what we've seen with

Brian Fishbein:

other sponsor banks where, you know, you might be a commercial lender,

Brian Fishbein:

but they also do consumer lending.

Brian Fishbein:

And so you have to comply with all the consumer rights as well because

Brian Fishbein:

it's really easy to standardize.

Brian Fishbein:

Right.

Brian Fishbein:

And I think that's just not the approach that we take when we think

Brian Fishbein:

about these programs because to.

Brian Fishbein:

That then prevents them from differentiating from others in the market.

Brian Fishbein:

Tedd Huff, Fintech Confidential - Host (Detached audio): As you talk about availability of data,

Brian Fishbein:

you talk about the flexibility of the use, like all of these things, the hairs

Brian Fishbein:

on the back of my neck start to stand up.

Brian Fishbein:

'cause I, I can only see, you know, your chief risk officer, your chief

Brian Fishbein:

compliance officer, just cringing a little bit every time you say it.

Tedd Huff:

But you know the story that that's been.

Tedd Huff:

Talked about both in our previous episodes and in the industry in

Tedd Huff:

general been how to, how do we balance between innovation and compliance?

Tedd Huff:

I mean,

Tedd Huff:

just today we had a, um, a consent order go out on a financial institution and

Tedd Huff:

they have two technology partners that are being massively impacted by it.

Tedd Huff:

And I would really like to understand how does Column navigate?

Tedd Huff:

This balance, especially with all of the regulatory things that go

Tedd Huff:

into between the commercial and the consumer that you just talked about.

Brian Fishbein:

Yeah, it's a, it's a really great question.

Brian Fishbein:

Um, it's very topical, obviously.

Brian Fishbein:

What I said about not just externally facing technology, but

Brian Fishbein:

internally facing technology, right?

Brian Fishbein:

And so we've developed a ton of things in-House that are like solely designed

Brian Fishbein:

to help our risk and compliance teams understand what's going on.

Brian Fishbein:

When you think about it relative to.

Brian Fishbein:

How some of the others have structured their programs in this space, right?

Brian Fishbein:

We create these products that are meant to give us the level of insight that,

Brian Fishbein:

our risk and our compliance people would expect without creating such

Brian Fishbein:

crazy obligations on our partners.

Brian Fishbein:

And again, that's because we have.

Brian Fishbein:

These APIs, um, that and, and, and, uh, data models that allow us to get that

Brian Fishbein:

granular and really help our partners when we think about kind of what is the

Brian Fishbein:

information that they're giving and what are they getting back from us, right?

Brian Fishbein:

And so, you know, what's a really concrete example?

Brian Fishbein:

If you think about,

Brian Fishbein:

some of the reconciliation issues that you might have seen in, in FBO accounts, for

Brian Fishbein:

example, where it's hard for the bank to figure out what the balances actually are.

Brian Fishbein:

The way that we think about it is fundamentally different, which is

Brian Fishbein:

it's not just a giant pot of money,

Brian Fishbein:

it is a pot of money that is very specifically allocated to specific

Brian Fishbein:

accounts where we will require within our data model to understand

Brian Fishbein:

kind of what are all of the,

Brian Fishbein:

end customers that people are working with, even if they're

Brian Fishbein:

not necessarily customers of the

Tedd Huff:

So as soon as you said pot of money, all I could think

Tedd Huff:

about was Lucky Charms and the Rainbow and he, me, pot of gold.

Tedd Huff:

Like that's, for some reason that's exactly where my brain went.

Tedd Huff:

But I'll, I'll let you finish it.

Tedd Huff:

Just.

Brian Fishbein:

But it's kinda right.

Brian Fishbein:

It's all, I mean, the marshmallows melt and dissolve and it all just like

Brian Fishbein:

mixes together and you have no, I mean, not to take the analogy too far, but

Brian Fishbein:

it, it's very hard to, uh, kind of disaggregate once you go down that path.

Brian Fishbein:

and it has all these knock on effects.

Brian Fishbein:

When you think about like, what does pass through insurance actually mean if you're

Brian Fishbein:

a customer with an FBO account, right?

Brian Fishbein:

If you hold more than $250,000, but you can't readily identify what,

Brian Fishbein:

who, whose funds those are at any given point in time, it's really

Brian Fishbein:

hard to say, well we think that we can actually insure these funds.

Brian Fishbein:

and so When you like kind of get down to it, right?

Brian Fishbein:

If you have a model where there is kind of this one-to-one

Brian Fishbein:

mapping and reconciliation.

Brian Fishbein:

You should never end up in a scenario where you're meaningfully off on a

Brian Fishbein:

dollar balance, or if you are, it's going to become apparent that day, not

Brian Fishbein:

months later, where you're, you can't really kind of like disaggregate and

Brian Fishbein:

untangle everything that happened.

Brian Fishbein:

what is the compliance and risk impact of that?

Brian Fishbein:

You get much better and richer insights into what's going on.

Brian Fishbein:

Which means like there are going to be really, really good actors,

Brian Fishbein:

or there might be some places where

Brian Fishbein:

customers need more attention and we can really focus on making sure that we're

Brian Fishbein:

addressing those rather than necessarily saying like, we have a checklist.

Brian Fishbein:

We're just gonna go through everybody because we don't

Brian Fishbein:

actually know who is who we

Tedd Huff:

It's interestingg you talk about the, the sub ledgering

Tedd Huff:

and the importance of that and making sure that it's all in real time.

Tedd Huff:

There have been a number of clients that I've worked with.

Tedd Huff:

When we went to talk to a bank about getting the sponsorship

Tedd Huff:

we were able to bring them, the technology, a partnerships to show

Tedd Huff:

that sub ledgering technology.

Tedd Huff:

But it's really nice to see that.

Tedd Huff:

Folks like Column are, are offering that as part of the service versus

Tedd Huff:

having to figure out who do I partner with, who do I build it with?

Tedd Huff:

How do I make sure it maintains compliance?

Tedd Huff:

There's a lot of different things that fall into that, but as you were

Tedd Huff:

talking about it, it's like, yeah, that that is a really hard part of the job.

Brian Fishbein:

Yeah, and I mean, to bring it back to credit, right?

Brian Fishbein:

If you think about kind of how loan servicers operate our, uh, fund

Brian Fishbein:

like models where there's just a, again, it's a, a pool of funds where

Brian Fishbein:

you're just dispersing kinda out of that without really understanding,

Brian Fishbein:

you know, necessarily, you know.

Brian Fishbein:

What money is allocated to whom until later, right?

Brian Fishbein:

You end up with this model where, um, it does create room for those right?

Brian Fishbein:

Did like the a thousand dollars that was supposed to get paid to

Brian Fishbein:

one investor actually go there or did it go somewhere else?

Brian Fishbein:

And when we think about it, this kind of more detailed, uh.

Brian Fishbein:

Tagging in our data model actually enables you to avoid those issues.

Brian Fishbein:

Does it represent a shift from how some other folks might do it?

Brian Fishbein:

Absolutely.

Brian Fishbein:

But do we think that ultimately it better serves our clients as well

Brian Fishbein:

as obviously, you know, ourselves for risk matter perspective?

Brian Fishbein:

Absolutely.

Brian Fishbein:

And you know, again, eliminates that need down the line for a person to

Brian Fishbein:

like spend their days untangling all this information because it

Brian Fishbein:

should already kind of prospectively work from a automated systems

Colton Pond:

And you, you hit the nail on the head there, Brian, in that there's

Colton Pond:

a lot of people that view innovation and compliance at odds with each other.

Colton Pond:

Uh, one of the, the themes we've seen is they don't need

Colton Pond:

to be at odds with each other.

Colton Pond:

They can, they can balance, uh,

Brian Fishbein:

okay.

Colton Pond:

um, so help.

Colton Pond:

If you were to speak to a Skepticist, someone that's a skeptic out there

Colton Pond:

and like, ah, I can't innovate because I need to drive compliance.

Colton Pond:

Uh, what are some of the advice and insights you would give?

Brian Fishbein:

The reality, uh, is that you know, uh, maybe this is a

Brian Fishbein:

unfair thing to say, but that statement you know, more a function of you

Brian Fishbein:

needing to kind of put in more work in terms of what you want to do, right?

Brian Fishbein:

The regulatory environment isn't actually as strict as everybody.

Brian Fishbein:

Makes it out to be on some metrics, are certain things that

Brian Fishbein:

you always have to do, right?

Brian Fishbein:

If you lend to a consumer, you have to give them a truth and lending statement.

Brian Fishbein:

But like once you get beyond those requirements, more about, you

Brian Fishbein:

know, we need to actually treat this customer fairly and while we

Brian Fishbein:

offer them a financial product.

Brian Fishbein:

And if like, that's the philosophy with what you're offering, which is

Brian Fishbein:

we have somebody out there who has a demand for this type of product and

Brian Fishbein:

we think we can offer in a clear way.

Brian Fishbein:

There's no reason why you can't Right.

Brian Fishbein:

And I think that's like the, the core of it, which is you might run into

Brian Fishbein:

other people who say, I can't innovate because is this checklist of several

Brian Fishbein:

thousand things and the bank do it.

Brian Fishbein:

Maybe that is, you know, more of a limiting factor.

Brian Fishbein:

I think that's what we try to shy away from when we think about kind of, this

Brian Fishbein:

is not one all, but you know, we every day have conversations between our.

Brian Fishbein:

Legal risk and compliance people talking to customers who say like,

Brian Fishbein:

here's the way that I wanna do it.

Brian Fishbein:

Here's this tweak.

Brian Fishbein:

Here's this thing that I think would be like super interesting and why

Brian Fishbein:

we think our customers need it.

Brian Fishbein:

And you know, our response is always like, okay, like let's iterate on that.

Brian Fishbein:

Let's figure out how we can actually do that the right way rather than.

Brian Fishbein:

You know, we can't do it.

Brian Fishbein:

And sometimes you actually say like, okay, somebody has an idea.

Brian Fishbein:

And like, we actually can't do that.

Brian Fishbein:

Like, that would be against the law.

Brian Fishbein:

can't, you can't all, uh, get a hundred percent hit rate.

Brian Fishbein:

But I think the answer is the first answer from our, our team and like, this is what

Brian Fishbein:

we really try to agree with our culture and, and kind of how we've hired out is

Brian Fishbein:

it's not, no, it's like how do we do that?

Brian Fishbein:

Right?

Brian Fishbein:

Maybe this exact iteration doesn't work, but something close

Brian Fishbein:

to it

Tedd Huff:

Well, that comes into the the yes but type philosophy, right?

Tedd Huff:

Not a no because, but a yes, but philosophy and you know.

Tedd Huff:

For those fintechs that are, are listening to you, Brian, and, and

Tedd Huff:

looking at the website and seeing all these great technology offerings

Tedd Huff:

you guys have, and they're thinking, I love what Brian's saying and I

Tedd Huff:

love what Column is, is offering and I want them to be my sponsor bank.

Tedd Huff:

important is it for them to combine the tech, their technology,

Tedd Huff:

and the personalization and, but also at the same time.

Tedd Huff:

What's the likelihood of them having you become their sponsor bank?

Brian Fishbein:

I think it depends on exactly what they're trying to do.

Brian Fishbein:

We, uh, we work with a lot of people and we are continuing to

Brian Fishbein:

onboard people every single day.

Brian Fishbein:

Um, and there are very, very simple use cases, right, where we have folks

Brian Fishbein:

who just wanna open a bank account for their own personal use to user APIs

Brian Fishbein:

because they do high volumes of payment.

Brian Fishbein:

Um, and then there are extremely complex use cases and I think, you

Brian Fishbein:

know, when we think about kind of those complex use cases and the complexity

Brian Fishbein:

of the product, right, the expectation set, obviously scales as well.

Brian Fishbein:

And so if you are, you know, a, um, business that wants to offer.

Brian Fishbein:

A, you know, non-traditional lending product to subprime consumers.

Brian Fishbein:

I think there's going to be, you know, a, a higher level of discussion and a

Brian Fishbein:

higher level of scrutiny applied to we think about entering into that sort of

Brian Fishbein:

partnership relative to a very basic, you know, I want to pay my bills, right?

Brian Fishbein:

Um, you know, when we think about kind of like what is our qualification and, and

Brian Fishbein:

how do we think about our customer set?

Brian Fishbein:

Uh, we work with companies that are, you know, on the smaller scale and are

Brian Fishbein:

still kind of building out their, um, product and building out, you know,

Brian Fishbein:

their team.

Brian Fishbein:

And then we work with, you know, very, very mature organizations that

Brian Fishbein:

already know how they're supposed to do everything and this is their, you know,

Brian Fishbein:

for their fourth or fifth bank partner.

Brian Fishbein:

Um, but I mean, apart from kind of the usual suspects, which is like.

Brian Fishbein:

We don't support crypto today.

Brian Fishbein:

We don't support cannabis today.

Brian Fishbein:

Things like that where I think you start to get into more regulatory

Brian Fishbein:

considerations than necessarily like product considerations, right?

Brian Fishbein:

In terms of what that business actually looks like.

Brian Fishbein:

everything that we put on our website is, are things that we

Brian Fishbein:

do with customers every day,

Tedd Huff:

it was fun.

Tedd Huff:

Um, going through and, and looking at it.

Tedd Huff:

I remember looking at Column long ago and then just seeing the, the.

Tedd Huff:

Distance that you guys have come, how far you've taken it so far.

Tedd Huff:

And there's been a lot that has changed since the inception of

Tedd Huff:

Column, and obviously you can't keep doing the same thing and expecting

Tedd Huff:

the same, or, better results.

Tedd Huff:

So I would love to understand, you know, from, from your perspective and

Tedd Huff:

the strategic direction of Column.

Tedd Huff:

What do you see as trends in lending and technology with fintechs and banks and

Tedd Huff:

what they're gonna need to prepare, not just for 2024, but for the years to come?

Brian Fishbein:

When we think about kind of, uh, the future, right?

Brian Fishbein:

I.

Brian Fishbein:

For us, it's a lot more of continuing to build out the, the technology

Brian Fishbein:

that we've already started on.

Brian Fishbein:

How do we improve our APIs?

Brian Fishbein:

How do we make things simpler for customers?

Brian Fishbein:

How do we make this a better product overall for the folks

Brian Fishbein:

that we wanna work with?

Brian Fishbein:

and That's just gonna be

Brian Fishbein:

a continuous challenge for us to always be upleveling ourselves.

Brian Fishbein:

You know, that might mean that we expand into incremental customer bases.

Brian Fishbein:

We start to think about, you know, how do we better serve other financial

Brian Fishbein:

institutions that might actually wanna take advantage of our payments rather than

Brian Fishbein:

necessarily just kind of like non-banks.

Brian Fishbein:

That's like when we think about our internal roadmap, it's, it's mostly

Brian Fishbein:

just a lot of, let's put our heads down, let's figure out how we kind of

Brian Fishbein:

solve, continue to solve these problems.

Brian Fishbein:

Because there continue to be a lot of problems out there.

Brian Fishbein:

We are by no means offering every single financial product that a

Brian Fishbein:

traditional bank can offer yet.

Brian Fishbein:

I think we've kind of just scratched the surface.

Brian Fishbein:

But I think when you think about kind of the industry more broadly, right?

Brian Fishbein:

There's, there's two paths at this point, right?

Brian Fishbein:

There are folks out there who have made their entire business.

Brian Fishbein:

Credit sponsorship and these lending partnerships, and

Brian Fishbein:

that's really great business.

Brian Fishbein:

And you can, you can look at their call reports and you can

Brian Fishbein:

see, um, how well they're doing by kind of just focusing on that.

Brian Fishbein:

And I think that's going to continue, right?

Brian Fishbein:

There's always gonna be folks out there that say like, this is our swim lane.

Brian Fishbein:

We know what we're really good at and we're going to continue to do that.

Brian Fishbein:

And then I think what you're gonna see is kind of the alternative, which is.

Brian Fishbein:

A recognition that there are businesses out there where lending is not their sole

Brian Fishbein:

business, or having multiple bank partners is not actually the optimal path for 'em.

Brian Fishbein:

And how do we actually start driving more of that consolidation where,

Brian Fishbein:

you know, you're not working with seven bank partners, you're only

Brian Fishbein:

working with a couple across products.

Brian Fishbein:

The flip side of that, of course, is everyone kind of recognizes

Brian Fishbein:

that there's now a bunch of concentration risk in the industry.

Brian Fishbein:

And so while you want your banks to offer multiple products, I

Brian Fishbein:

think you're gonna start seeing redundancy in the fact that there's,

Brian Fishbein:

two or three banks that do all of these things for these customers, because

Brian Fishbein:

they're really going to be focused on, well, if one of them suddenly can't

Brian Fishbein:

operate or needs to scale down, or, you know, god forbid, shuts down, um, how

Brian Fishbein:

do we continue operating our business?

Brian Fishbein:

That redundancy trend is then gonna drive more competition, most likely, right?

Brian Fishbein:

As you start to see other banks that can,

Brian Fishbein:

generate incremental earnings and generat incremental revenue streams.

Brian Fishbein:

Not necessarily by saying, we're going to lean into this all the

Brian Fishbein:

way, but we can, um, start being one of a stable of banks and, uh, kind

Brian Fishbein:

of managing our programs that way.

Brian Fishbein:

It's gonna be pretty interesting to watch as kinda the industry involves

Brian Fishbein:

the, the, you know, kind of thing in the background for all of this is of course

Brian Fishbein:

the regulatory environment and how people are going to, um, you know, actually react

Brian Fishbein:

to more banks getting into this space.

Brian Fishbein:

What banks are going to leave and what sort of consolidation that

Brian Fishbein:

drives in terms of the business.

Brian Fishbein:

Because I think, you know, at least what we've seen over the

Brian Fishbein:

last year is the regulatory activity has certainly stepped up.

Brian Fishbein:

And I think you're gonna kind of continue to see that scrutiny

Brian Fishbein:

regardless of, you know, what happens in the broader political ecosystem.

Brian Fishbein:

The change that the OCC and the FDIC and the Fed doesn't

Brian Fishbein:

necessarily happen overnight.

Brian Fishbein:

And so, um, it's been pretty clear the stance that, you know, folks have taken

Brian Fishbein:

so far on these sorts of partnerships and what regulators expect from banks.

Brian Fishbein:

Um, but that doesn't necessarily mean that next year is gonna

Brian Fishbein:

be the same thing or that

Brian Fishbein:

, you know, it's not going to cause, uh, ripples in the ecosystem when

Brian Fishbein:

the regulators tell Their, their banks that they have to do things

Brian Fishbein:

a certain way and you know, what does that mean for all companies

Colton Pond:

yeah, I love that.

Colton Pond:

And Brian, several things you brought up there tie into what the future looks like.

Colton Pond:

One of the things we love to do on these episodes is to take a step.

Colton Pond:

3, 5, 10 years in the future, hop in like a DeLorean with Marty McFly.

Colton Pond:

Let's go into the future and let's look at what sponsor

Colton Pond:

banking looks like in five years.

Colton Pond:

I would love your perspective on what it looks like and how it

Colton Pond:

evolves and changes, um, and what those, those themes look like.

Brian Fishbein:

Yeah, definitely.

Brian Fishbein:

I mean, the short answer is this is not going away, and I think it's

Brian Fishbein:

unrealistic to think that's the case.

Brian Fishbein:

The reality is financial technology companies exist for a reason.

Brian Fishbein:

They have clearly shown that, you know, they do a better job of

Brian Fishbein:

serving certain customer segments than traditional banks, right?

Brian Fishbein:

And you can kind of pick your niche or, or what have you, but you,

Brian Fishbein:

you see this across the board.

Brian Fishbein:

And I think, you know, as you think about kind of the banking space

Brian Fishbein:

more broadly, traditional banking in kind of the branch in your hometown.

Brian Fishbein:

That's probably not going away either.

Brian Fishbein:

There's always going to be a cohort of the population you know, wants

Brian Fishbein:

to continue to engage that way.

Brian Fishbein:

But I think you're going to see a larger percentage of the population

Brian Fishbein:

that is growing towards a more tech native, higher expectation set for what

Brian Fishbein:

services should look like when they engage with their financial, um, uh,

Brian Fishbein:

institutions similar to what you've seen with other sorts of software, right?

Brian Fishbein:

Um, and so I think what you're gonna end up seeing is that.

Brian Fishbein:

The space only gets bigger and only starts to kind of continue to take

Brian Fishbein:

market share from what you might think of as traditional banks, which is going

Brian Fishbein:

to continue to drive, you know, the.

Brian Fishbein:

Interest from banking institutions in serving these sorts of customers, rather

Brian Fishbein:

than necessarily saying, we're going to stick to our tried and true strategy.

Brian Fishbein:

And so ultimately I think what you're gonna need to see is some sort of

Brian Fishbein:

shift from a technology perspective for banks to catch up so that not

Brian Fishbein:

necessarily they can serve, you know, end customers, but so that they can

Brian Fishbein:

serve these folks that are distributing financial products and services in the

Brian Fishbein:

way that these customers actually want.

Brian Fishbein:

I think that's gonna be, you know, super interesting to see over the

Brian Fishbein:

course of the next five years.

Brian Fishbein:

But I think the flip side of it, which is, you know, what we've

Brian Fishbein:

seen today is the very, very niche businesses that say we're only going

Brian Fishbein:

to focus on X, Y, Z customer segment.

Brian Fishbein:

Those are going to start to consolidate, right?

Brian Fishbein:

It's very hard to say we're gonna run a single product lender that doesn't do

Colton Pond:

yeah,

Brian Fishbein:

um,

Colton Pond:

focus on people that love,

Colton Pond:

focus on people that love cats, right?

Colton Pond:

Like,

Brian Fishbein:

yeah,

Colton Pond:

yeah.

Brian Fishbein:

Um, and don't get me wrong, that product could still

Brian Fishbein:

be valuable and that customer segment could still be valuable.

Brian Fishbein:

But I don't think that is like the end all, be all in terms of

Brian Fishbein:

how you can run a business just because the reality is the financial

Brian Fishbein:

system is so large and really, I.

Brian Fishbein:

In order to have viable businesses, you do have to operate at

Brian Fishbein:

some level of scale, right?

Brian Fishbein:

Um, and so I think you see there's going to be more folks who say, you know,

Brian Fishbein:

we have these three different kind of customer segments or business lines,

Brian Fishbein:

you know, what else do we need to add?

Brian Fishbein:

And who else out there can we add it to, or, you know, sell to in order

Brian Fishbein:

to actually kind of make this all make sense at a corporate level,

Brian Fishbein:

even if the unit economics are.

Tedd Huff:

So Brian, before we, we.

Tedd Huff:

Close up for the day.

Tedd Huff:

I've, I've been blown away by, by how you guys are at Column, looking at

Tedd Huff:

not only the, the sponsorship, but the technology and the compliance.

Tedd Huff:

I mean, there's, there's so many things that you guys have pulled together.

Tedd Huff:

Do you have a closing statement for us?

Tedd Huff:

You wanna make sure the audience hears that?

Tedd Huff:

Maybe we didn't touch on that.

Tedd Huff:

You're like, I just gotta tell 'em this.

Brian Fishbein:

We've talked about a lot, but I, I think the closing statement is

Brian Fishbein:

really, you know, we are out here to serve kind of the financial community writ large

Brian Fishbein:

and try to provide the best technology out there to enable folks to, to grow

Brian Fishbein:

their own businesses and to support them.

Brian Fishbein:

Right?

Brian Fishbein:

We, our long term success in the way that we think about our business is.

Brian Fishbein:

Totally predicated on being able to serve this customer set rather than

Brian Fishbein:

necessarily, you know, the traditional banking that you might see from others.

Brian Fishbein:

And so, you know, uh, really just want to hammer home the point that that's

Brian Fishbein:

kind of all we're, we're focused on building and doing out there.

Tedd Huff:

Brian, I I want to thank you, um, for, for taking the time

Tedd Huff:

out to sit down with us to, answer the questions and, and really, uh,

Tedd Huff:

participate in, in this discussion.

Colton Pond:

Yeah.

Brian Fishbein:

Absolutely.

Brian Fishbein:

I appreciate you guys having me

Colton Pond:

brian, thanks for coming.

Colton Pond:

The future is exciting.

Colton Pond:

Tedd, like, buckle up, giddy up.

Colton Pond:

Let's go.

Colton Pond:

Uh, big things are coming.

Colton Pond:

I, I'm excited in the role.

Colton Pond:

I sit in looking at what's, what's upcoming, especially

Colton Pond:

in the sponsor making space.

Tedd Huff:

You know, the big, the big things that I took away

Tedd Huff:

from from today's conversation really are data is a gold mine.

Tedd Huff:

Compliance is.

Tedd Huff:

Not an option.

Tedd Huff:

And the last, but not least, the way that banking has always been done

Tedd Huff:

can't continue to be done that way.

Tedd Huff:

And those are the three things that I took away from today's discussion.

Colton Pond:

Agreed.

Brian Fishbein:

Yeah.

Tedd Huff:

well, what I wanna do is.

Tedd Huff:

Thank you everybody that has made it this far into the episode.

Tedd Huff:

will continue to invite more industry leaders to have discussions like this to

Tedd Huff:

really dive in to what the world of Lin Tech is throughout this entire series.

Tedd Huff:

And if you haven't already, go ahead and subscribe.

Tedd Huff:

To FinTech confidential.com/access to get email notifications of

Tedd Huff:

every episode that we release.

Tedd Huff:

you haven't already, also subscribed to us on YouTube and

Tedd Huff:

on your favorite podcast player.

Tedd Huff:

And last but not least, share with your friends and colleagues so they can

Tedd Huff:

keep up with what's going on as well.

Tedd Huff:

As we wrap up today's episode, I've got one last thing for you.

Tedd Huff:

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Tedd Huff:

know it's a complex battlefield.

Tedd Huff:

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Tedd Huff:

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Tedd Huff:

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Tedd Huff:

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Tedd Huff:

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Tedd Huff:

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Tedd Huff:

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Tedd Huff:

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Tedd Huff:

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