Lykken on Lending

In our Hot Topic this week, we have Chris Zingo, General Manager of the Americas Field Operations @ Finastra, to discuss mortgage lending in 2022, as well as driving growth through ESG and the acceleration of digital technology in the mortgage world!

To read more about this podcast, click here!!

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Mortgage Lending In 2022 With Chris Zingo

It is Monday, March 7th, 2022. It is good to have you with us. This show is created by mortgage professionals. It is for mortgage professionals. We are so grateful to have you as our audience. Our commitment is to bring you timely information that you can read anytime and anywhere. We are broadcasting live from the Lenders One Winter Conference here in Scottsdale, Arizona. We are at the JW Marriott. It’s a glorious facility.

It’s cold here. I was talking to my wife and it was warmer there in Texas than it was here in Phoenix by 15 degrees. It’s cold. It’s good to have you here with us. We are warmed by your many comments. Many of you give us so much feedback about how this show is helping you stay on top of things. Thank you. We are always looking for things we could do better. We would love to hear from you.

Let’s get into it. We have on the Hot Topic segment, Chris Zingo. He is the General Manager of the Americas Field of Operation for Finastra. We are going to be discussing mortgage lending in 2022 as well as the broader picture of what’s going on with technology and how it is being driven through ESG and the acceleration of digital technology in the mortgage world.

We pre-recorded this interview because I knew I was going to be here at the conference. I’m excited to share it with you. Finastra is such a major industry participant technology company. We are so grateful to have them also as a sponsor. Stay tuned to the Hot Topic Segment. Also, I want to say a special thank you to Industry Syndicate. We have a great partnership with them. They do a great job of promoting our show as well as other show. Check out IndustrySyndicate.com. I encourage you to see all the shows there.

In another word, I will be in Las Vegas. Lender Toolkit has invited me to come in. We are going to be doing recordings from there. It’s an exciting event. It will be Monday, March 14th, 2022 at the ICE Experience. We are going out to a racetrack and running around with Ferraris. Can you believe that? This is tough work. Someone’s got to do it, though. We got to get in a Ferrari and drive fast around a track. We could be doing that. I encourage you. If you haven’t already gotten a hold of the folks at Lender Toolkit, it’s not too late. You, too, can participate in this.

I want to encourage anyone there in Las Vegas at the ICE Experience. The InterContinental Exchange is ICE, which bought Ellie Mae. They are doing a great job putting on their annual conference. Check out Lender Toolkit’s booth. I hope you can make it out to the racetrack. I would love to see you there. Lots of us are going to have some fun riding those cars.

I’m excited to have Jack Nunnery joining us again on this episode. He’s cohosting the episode with me. As soon as I get done here, I’m going to go into the main session. My good friend Casey Crawford is going to be speaking, so I will be meeting up with him here. We are going to get through these introductions and then I will toss it to Jack and let him take it from here.

I want to say a special thank you to our sponsors, the Mortgage Bankers Association of America. I’m very thrilled to have them as part of us and their sponsorship as well as Finastra. We are going to have Chris Zingo as a special gift. Also, Lenders One and Mortgage Collaborative. We will be at the TMC Mortgage Collaborative Miami Nights Conference from March 19th through the 22nd, 2022. Be sure to go read the interview with Rich Swerbinsky on February 7th, 2022. Both these co-ops create great competitive advantages for both lenders and vendors.

I encourage you to check out Total Expert. It turns customer insight into actions to increase loyalty and drive growth for banks, lenders, credit unions, and other financial firms. I went through a demo and I was blown away by what Total Expert can do to help lenders and have meaningful relationships. It’s amazing stuff. With Knowledge Coop, we are thrilled to have them here. I saw many of them here at this conference as well as Mobility MMI, which is the Mortgage Market Intelligence. They do a great job of helping recruit top loan officers as does Modex, a mortgage recruiting technology tool that’s very effective.

Snapdocs is a sponsor of ours. We appreciate them. They help lenders overcome officers by adopting eMortgage technology. Snapdocs is offering an eMortgage Quick Start Program. Check it out. Check out the interview I did with Vishal Rana on September 13th, 2022. There’s also SuccessKit. I tell you so much about SuccessKit and what they can do for you in drawing in and holding onto customers. They help you tell your story. There’s a proverb that says, “Let another man’s mouth praise you and not out of your own.” That’s what SuccessKit does. They help you as a lender interview previous customers and create a narrative that will be engaging and help you advance your business. Be sure to check them out.

There’s also PennyMac. They’re a TPO or a Third Party Originations platform. Check out the interview with Kim Nichols that we had on November 1st of 2021 as well as FormFree. Christy Moss sponsored the opening session here. She was a great speaker. It is so fun to see the FormFree crew here as well as DW Consulting. Debbie Wemyss does a great job at helping you create an effective LinkedIn profile that will promote you and your business successfully. A Special thank you goes out to Rob, Les, Alice, Allen, Matt, and Jack. I’m so glad to have you here.

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I’m excited to have joining us the general manager of the Americas. Doesn’t that sound incredible? This individual is incredible. I met him in Austin, Texas. His name is Chris Zingo.

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Chris, it’s good to have you join the show. I appreciate you taking the time.

It’s great to be here. Thank you.

Being the general manager of the Americas is pretty impressive. I love that.

It’s block and tackling. It means to serve your customers well and that good things happen.

I want to talk a little bit about mortgage lending in 2022. We are talking about driving growth through ESG and the acceleration of digital technology. I know a lot of independent mortgage bankers, which make up a lot of our audience. We have small community banks, which I had the privilege of speaking or moderating with a number of your executives in San Antonio. Only independent community bankers would be going to the session at 7:00 AM. The place was packed out. I couldn’t believe it. It was great doing that. It’s a real honor to have you as a sponsor as well as a partner in those episodes.

I’m interested in sharing your vision with everyone. I want to start off by talking about ESG. A lot of people do not understand ESG as Environmental, Social, and Governance. You could talk a little bit about that. It’s in a lot of your talking points when you are talking out and speaking to community bankers. I would like to get your perspective. What does Finastra mean by ESG?

Environmental and Social Government has basic themes that wrap into it. At a high level, we look at it in two dynamics. One is purpose-driven. We talk about the changing demographics and the changing demand of the end user in this market. One of the things that is driving their demand is gravitating toward purpose-driven institutions that have an impact on environmental or social governance in some way, whether it’s environmental impact in reducing carbon footprint, etc., or social impact in terms of empowering underserved communities or unlocked in capital into areas of the society not previously unlocked. It’s those types of things.

In high-level, there are two elements. On the purpose-driven, if you look at Finastra, our purpose and mission is to unlock the power of people and potential everywhere using our technology. When you translate that to financial services, that means the democratization of capital. It’s the ability to extend capital in every leaf node or corner of our society. That’s purpose-driven, but it’s also financially smart.

You look at the concept of sustainability in significant and untapped markets associated with serving underserved communities. If you look at the potential of unlocking the ability to distribute capital to certain areas of our communities in the US alone, we are talking about an $800 billion opportunity. If we can break through the barriers in these communities that typically revolve around access to capital, there’s also a massive technology dependence. That’s where we come in.

If you look at the concept of sustainability, the way technology providers like us provide sustainability is by helping our clients offer innovative products and solutions for their markets at a much lower cost structure. That’s where the technology comes in. If you look at the concept of Cloud, scale, and the broader open ecosystem of bringing innovation to banking, that improves the customer experience and lowers the cost. That drives the extension of capital and sustainability.

Technology providers provide sustainability by helping clients offer innovative products and solutions for their markets at a much lower cost structure. Share on X

If you look at the ESG element of launching innovation in the form of a new product, loans linked to social or environmental impact are issued at a lower overall cost. That’s based on the incentives of the impact in terms of where those loans are funded. If banks can prove that, they can bring low-cost products to market very quickly.

On the flip side, if you look at the purpose-driven demand side, if you look at ESG funds, these are equity funds whose underlying components are institutions that have certain ESG standards that are transparent and proven. $18 trillion has gone into those funds in the last couple of years. On the demand side, for institutions behaving this way, trillions of dollars are going in. On the flip side, from the financial institution’s perspective, there’s a high demand and potential opportunity to launch innovative products linked to these outcomes at a much lower cost structure. That drives sustainability.

The reality is you are talking about a purpose. There are so many people that lack a purpose. A purpose is not just making money. That is the result. I love what you are talking about there. We also want to talk about the acceleration of digital technologies. We are looking more at how lenders must offer customers a one-stop shop that delivers the proper expectation for the customers.

I love the fact that you have an open architecture. You are the first leading technology company. You are the number one FinTech company in the world. You led the way with this which creates an integration. Talk about the customer’s one-stop place. As a vendor, what do banks and mortgage lenders need to think about in that concept?

In general, at Finastra, we believe the future of finance is open. What that means in the pace of technology and innovation where Moore’s Law is on steroids, the technology innovation is allowing us to operate at a certain level of scale. It allows participants to connect with a broader ecosystem or the technology ecosystem that enables rapid innovation, rapid deployment, and much lower cost deployment. The agility required to launch and evolve with those changing customer demographics is critical. Ninety percent of the innovation that we distribute to our customers is going to be developed outside of our walls.

 

We are transforming from the building-deploying, testing-deploying, UAT exit, and all of that life cycle. We are changing to a consumption model where we will connect the broader FinTech ecosystem with our underlying banking service on the Cloud without the need for our customers to intervene. That means we can bring back to them innovation that they can consume and extend to their customers as easily as going to the app store and buying banking capability. That’s the future of the way all technology is going to be distributed.

What that does is it gives a much better end-user experience. It increases the velocity of banking services. It personalizes banking services. It provides a level of transparency to the end user they are not having. All of those things can only be delivered on the Cloud. It can only be through a combination of banks connecting with the broader FinTech ecosystem to provide technologies for their customers that have the right level of user experience but also delivers financial services where their customer is, not where their bank is.

I love what you are talking about with open architecture and the whole broader vision. Some might hear that as that opens up and expose us to more cyber security issues. Talk about that.

Anytime you are distributing capabilities via the Cloud, there’s always a risk. However, when you look at the risks associated with the way technology’s deployed, whether it’s on-premise and the banks own data centers, or via the public Cloud, there’s always some level of risk. We are the 30th largest consumer of Azure on the planet based on the clients that we have running in the public Cloud. What we found is Microsoft spends $1.2 billion a year on cybersecurity.

It’s great to have a partner with that budget.

One individual client has a budget to invest in cyber. We don’t. They have a broader ecosystem that is accessible to us. Being part of the public Cloud, we have access to state-of-the-art cyber capabilities. We have access to state-of-the-art ecosystem providers to protect against things like fraud and other elements. Our security platform is much more in bolster by being on the public Cloud as much as it is potentially a risk.

If you look at the traditional risks of fraud associated with legacy technology, you have to worry about physical data centers. Physically, people break in and steal data. You have to worry about the lack of cyber capability that is compatible with your existing architecture. Patterns are changing every day. Being on the Cloud and being able to maintain cyber protection that picks up all the heuristic patterns of malware and things like that. You can’t do that if you have closed technology that you are updating every quarter, every six months, etc. There are numerous elements that would suggest being on the public Cloud and managing it using state-of-the-art technology with continuous delivery is the only way to go, but it’s not without risks. It’s about educating our clients.

Back to the partnership, you have partnered with a company that spends over $1 billion on cybersecurity, which is Microsoft. Did I hear you say you are 30%?

We are the 30th largest consumer of Cloud consumption on the Azure platform.

That’s amazing in itself. Let’s talk about a lot of disintermediation that can happen. I want to get into why are the changing customer needs impacting disintermediation.

Disintermediation prep the evolution of the next generation of FinTech probably has been underway for the last couple of years. It is launching knowledge innovation in the FinTech space that is more favorable to the end user of traditional banks. If you look at it, changing demographics is a big element of that acceleration of demand. This is the only generation in our history where there are four generations of people in the same workforce, which are Boomers, Gen X, Millennials, and Gen Z. They are all in the same workforce. It has never happened in our history.

Their demands are rapidly evolving. Those individuals that are Gen X and Gen Z are in senior positions in commercial institutions and large corporate investment banks. The demographics are different. They value different things. They value purpose-driven capabilities. They value immediacy or real-time. They value frictionless banking capabilities. They don’t stand for it. They expect it to be served where they are. They don’t expect to have to do unnatural acts like walking into a branch to do a transaction or going into an online portal that’s not connected to any other element of their finance to do a transaction. They won’t tolerate that.

There’s also rapid adjudication. If they are originating a mortgage and they don’t get immediate feedback, and if they have to use documents, use email, or burn cycles on that, they are going to go somewhere else. If you looked at what happened over the last few years in the United States alone, 63% of all mortgages are originated not by banks, but by FinTechs because of the things I said, like rapid adjudication, frictionless experience, and no documentation or minimum required. The average life cycle of that 63% is 10 days less from applications to close than a traditional financial institution in the United States.

Having done as much legal expert witness work as I have, I’m hearing you using adjudication. Break that down a little bit.

It’s a fancy way to say the credit-decisioning process.

There you go. I knew what you meant, but I wanted to expand on that. What kinds of differences should be accounted for when Gen Z or minority first-home buyers are entering the market, especially from your perspective on the technology or from FinTech’s perspective?

If you go back to that credit adjudication, there are legacy credit procedures that banks manage to the team because that’s all that they can do historically that is non-inclusive. They are missing a significant opportunity to underwrite good loans to good counterparties, but in the traditional credit sense, they wouldn’t be considered that.

Connecting and changing your credit adjudication procedures and processes and expanding the data sets that you have access to from which you can personalize the credit decisions rather than genericizing them can open up a significant capital tool to which you can lend. We are seeing opportunities like that happen in the market using tools like social networking, connectivity, AI, and other techniques.

What are you seeing banks doing about this?

Most of the things I’m talking about, banks are doing. There are billions of dollars of capital invested in opening up their architecture and connecting with the financial services ecosystem. Many are accelerating their strategies around banking.

You are so well-entrenched in the banking community. Bringing that language over to many independent mortgage bankers is valuable. I don’t mind you doing that at all. I appreciate that.

In a mortgage, for example, many institutions are thinking about, “Do I sell mortgages or do I sell home buying experiences? Do I want to sell a commoditized product where I might not be able to compete with the level of digitalization as a third party, or do I want to be at the center of my customer’s financial exchanges associated with that entire home buying journey?”

If I can embed financial capabilities into the ecosystem of my customers, whether it’s a Zillow, etc., I want to be present where they are every step of the way. I want to give them a listing of homes. I want to give them the comps. I want to give them immediate mortgage asset options with pre-approval digital. I want to suggest title insurance, and I want to be able to affect the fund transfer to pay for that title insurance and that entire experience.

 

That’s what banking as a service is. It’s embedding. We call it embedded finance. It’s where we can extend financial services outside of the wall to bank digitally and connect it to their customer’s ecosystem to create those journeys. That is so that our clients’ financial institutions can be at the center of every one of those exchanges. The mortgage market’s a big opportunity for that.

We talked about ESG or Environmental, Social, and Governance earlier. We touched on that. I would like to have you go a little bit deeper into it, especially as it relates to banking, technology, and specifically lending.

An example is we onboarded a new purpose-driven bank in the United States, which is Climate First Bank. They have got an environmental mandate in terms of a green bank. The first thing that we launched from the entire core banking and digital stack that we implemented when we onboarded them were solar loans. Those are loans linked to the financing of a solar bank.

It certainly connects with the environmental component of ESG.

Those loans are offered at a lower interest rate because of the incentive for where those funds are going, which is to fund an environmentally dynamic solar panel. They launched it. Using technology, they are not only able to launch those loans digitally with low cost and at a lower interest rate because of the incentive, but a key element of it is they are able to track the impact and the outcome of where those funds are going. They are doing it in our core banking system linked to our digital technology that’s launching the loans. It is exciting.

That is exciting stuff. We had Karen Jenkins on. I was so impressed with that interview when she talked about where you are with the design and the whole product drive. It was interesting. I would love to get your perspective on where you think the next innovation is going to be coming from to afford lenders more of a competitive advantage in the marketplace, and how is Finastra specifically?

It is about how they can connect to their customer’s ecosystem in a scalable way to allow their customers to transform the experience of, let’s say, for example, a mortgage application process. Can I bring services to my customers where they are? Can I minimize or eliminate the customer’s need to illustrate documentation?

Innovation is about how businesses can connect to their customer's ecosystem. Share on X

Can I connect to their ecosystem so I already can verify their income, know what their asset bases are, and know what their current credit profiles are? All of those things should be known in real-time. Can I use that to speed up the entire lifecycle of that experience? Can I use that to give them an optimal rate because I’m personalizing their experience? All of those things are opportunities that can help unlock and create sustainable lending. They are market opportunities.

I’m going to talk about your thoughts on rethinking the operating model of our companies. The way we are going about lending, especially in conventional mortgage lending, should we be low to no touch or focus on resources or high-end value products? How should we be approaching it?

It depends on the individual institution and its strategy. What do they want to be when they grow up? That’s the first question they have to answer themselves. In general, I would say implementing a technology architecture and using current capabilities to give you optionality. What we are seeing is we are seeing a new operating model evolve that is segmented out by the customer segments and the products that they distribute.

There are certain types of loans. For maybe conventional Fannie and Freddie, that should be zero touched. There are certain types of loans like jumbos and others that have other mitigating circumstances that are more bilateral and might have an 80/20. Eighty percent of it is templatized and automated. The FT capacity is around adding value to the client, personalizing that loan, and getting to the right structure.

You then have a third pillar that’s fully structured, which always starts with some baseline. We are seeing that the concept of flow business, the concept of moderate touch, and then the concept of high touch are three dynamics that are happening in every institution. It’s the waiting, but there’s no reason if I’m doing a conventional Fannie or Freddie. It gets sold off my balance sheet immediately. There’s no reason that that should be no touch 100% of the time. It’s a very powerful end-user experience.

You are bringing up a great experience, especially for the first-time home buyer. With Millennials, there are all the studies that show they are not necessarily wanting to talk to you until they are ready to talk to you as a lender. They want to gain all the information first, but from that point on, they do want an advisor. That’s one of the things that you are trying to get to when you are talking about adding high value.

We talked about this down in San Antonio at the ICBA conference. It was Peter that brought up a point that we are needing to see ourselves transition from providing a mortgage loan. Who wants a mortgage loan? I’m trying to buy a house. The mortgage loan is a means to the ultimate goal. We are finding more people that are wanting a strong advisor. That’s a high value.

I would say the baseline we tell our people internally as well as our clients is, “If your resources are spending their time talking with their customers and answering how-to questions, it’s a waste of time.” Those people touching the customer should build upon the transaction that’s already digitized to then talk about, “Let’s talk about the implication of the decisions you are making right now. Let’s talk about ways to optimize this.” The base element of facilitating a transaction using bank speech is a very low-value add.

 

As a matter of fact, it’s offensive to the new demographic of clients that they are serving. If you are talking about how-to as it pertains to a transaction in any form, you missed the boat. You automate the base elements of those transactions. When a consultant comes in, they already know the information about you. They already know where you are in this transaction and they come with you with advice. That’s where the white glove treatment should be.

This is enabled so much through technology. All the heavy lifting and the transactional part of it that’s there, that’s done. We are adding what we should add. That’s the service component or the advisory role. I want to talk about re-evaluating the end-to-end life cycle. In other words, if you have a mortgage and you are doing a standard refinance or purchasing, why is there a need for a manual process? From your perspective as a technologist and a leader in the market, talk about that.

The technology architecture of many financial institutions is a byproduct of the way they bought over technology over the last couple of years. It’s also a byproduct of the availability at the time. The availability of technology in the last few years is different than the previous years. It’s also based on the way banks go to market and the traditional concept of a channel.

Channel is an opportunity to monetize every exchange an end user has with the bank. Their technology infrastructure aligns around channels. That’s the way the business has bought and implemented technology. The reality of it is there is a need for a manual process because when you go for a refi, the person that is facilitating your refi has no idea you already have a mortgage, most likely. They have to ask you for the same information again. They don’t have the horizontal 360 histories of you as a client of the bank. If you are a small business of that same bank and you had a retail account, they wouldn’t know you had a retail account or they wouldn’t know you were a small business client. That’s changing. Many institutions are accounting for that.

I’m making a generic statement. The reality of it is it is inertia and the fact that the systems topology and architecture don’t support a true horizontal 360 banking experience. That’s where Cloud technology and open innovation come in. It is so that our banks can transform from that stove-type end-to-end channel to an omnichannel shifting from products to advice shifting from a product to a client. Revolving their entire organization around a client is where they are going.

Part of the journey is the manual process is being adjusted because of how much technology can do. We do need to go back and look at the manual process from a workflow standpoint. I love how you initiate and help your partners do that.

For us to be successful, we cannot sell software in isolation. We have to sell an operating model wrapped around a business model. We then baseline their current state with the future state operating model and collaboratively identify the changes we are going to make over a horizon and what we are going to implement to get them to an end state. When we do that, that’s the collaborative success we see. It’s the best outcome. If we simply fulfill our customer’s requests for a LOS or POS system, we are not going to be in the best position at a lot of value. We have changed the way we go to market. We force the operating model discussion and business model, then we back into the software.

As we wrap up this interview, I want to talk about the purpose-driven. That resonated. I want to leave our audience with some thought leadership. As the number one FinTech company in the world and having the privilege of being the general manager of the Americas, and I’m assuming that’s everything from North America down to South America and everything in between, you have that responsibility.

Talk about purpose and give us some examples. You already gave us an example of one bank, which is the green bank, that started up doing solar lending. Give us some other examples of what difference it can make when you identify and clearly articulate your purpose and how it works with your strategy, especially when it comes to technology.

If you go back to our mission of unlocking the power of people and businesses everywhere with respect to lending, that’s extending capital to every area of our society. There’s nothing more purpose-driven than empowering people with money or enabling the empowerment of money because that gives optionality. When more people have access to capital, the overall pie gets infinitely bigger. Most people think the pie is finite and it’s a zero-sum game. It’s not. Technology innovation is making that pie scale even more exponentially than it is.

There's nothing more purpose-driven than empowering people with money or enabling the empowerment of money. Share on X

The untapped potential of the environment is massive, whether your purpose is empowering underserved institutions. For example, a Minority Banking Institution or MBI is one of the areas that we tilted into a few years ago. This was during COVID when the PPP program was launched. We supported 575 SBA lenders. We already had connectivity to eTran and the SBA platform. Prior to the PPP, we created an eTran capability to automate the application input, approval, document chain, and execution using our pro sign. We empowered a lot of small institutions with PPP because many institutions had to do everything manually with a bottleneck.

We sat in the middle of that. What that gave us is we started to look at where these PPP loans were going. In the first round of the payroll protection funding, $349 billion of capital went in less than a week. It’s a grant that was issued through financial institutions for the first time. What we saw is that most of the capital was first come, first served. It went to mature financial institutions serving mature commercial clients that had some level of connectivity and scale. They were able to serve at scale.

The owner of Vista Equity Partners, Robert Smith, is African-American. He’s heavily involved in empowering underserved communities. He huddled us and started analyzing where this was going. We identified this gap. We partnered with the broader ecosystem. We had a series of key stakeholders representing the CDFI community, like Donna Gambrell, the CEO of the Alliance of African-American CDFI investors. Kenneth Kelly, at the time, was the CEO of the National Bankers Association, which represents the nineteen Black-owned banks in the United States. We got together.

In the second round, we onboarded thirteen beta clients for this lending in a box. It’s the same PPP solution, but we launched it on the Cloud and we gave it to them at a very low cost. We gave it to them for nothing so that they can participate in the second round. We found that they were able to sustainably support many of their clients and issue these PPP loans with the same headcount because they are very small in headcount. We used that to say, “We are going to invest heavily in this market.” We invested post that with Microsoft to scale our technology and offer it out at a very low cost, if not no cost, to certain institutions serving underserved communities.

What we found on the back of that is institutions that we work with during PPP, many of them developed a sustainable commercial client base off of that PPP program. Many of their clients came to them because they couldn’t get access to PPP in their existing bank because of the bottleneck. Many of those institutions, because they implemented technology and built relationships for tier-one capital, have built sustainable commercial businesses like Carver State Bank or Harvard Bank in DC where they have powerful commercial businesses off the back of that.

They are able to reinvest in their communities and innovative loans because they are successful. They have a sustainable lending program, for example. That becomes exponential. When you see the impact of that, it empowers us to invest more in this area. If we do it right, we are untapping a segment of our markets that we never were able to address. It’s a win-win. We call it doing well by doing good. We will do well if our clients do well. Aligning that purpose is critical.

Where do you see lending specifically here 2 to 5 years out? You have a unique perspective. There are more technologies enabling. We are seeing more of the advisor role and less of the transactional role as it relates to the FTEs, the Full-Time Employees. What’s your vision? What’s Finastra’s vision?

We want to bring financial services to the end user where they are and empower our clients to do that. If we do that, then we can create a frictionless banking experience at a much lower cost and much more optionality for our clients and their end users. That drives sustainability because you are unlocking capital and opportunity. What do we see in the next three years? Those types of services come to the end user where they are. I’m talking about whether they are in a native application that they use every day or their social network. YouTube is the number one source of financial literacy for Gen Zs.

I did not know that, but I’m not surprised by that. I spend more time on YouTube than I do on television.

It’s the number one source of their knowledge about banking. What are the opportunities there in terms of embedding certain financial capabilities? The other thing is optionality. You are seeing the innovation that’s linked to POS. When they go to POS, which is buy now, pay later, that’s a microloan immediately adjudicated at the point of transaction. That’s providing optionality. That’s also giving certain financial institutions access to an SME market with a low-risk profile and at more scale.

This concept of micro-lending is in place. There’s no reason for certain transactions why the end user ever needs to touch any element of their financial institution. What they do expect is advice on the back. As soon as they touch that POS, there should be a call to them. As soon as they submit that mortgage application and facilitate a few steps in microseconds, there should be a call to them. We are changing the way our clients interact with their clients and adding value. We want to make the transaction like a light bulb. People expect it to be on and expect it to work. What you do with it above and beyond is your secret sauce as a bank.

We are out of time. I will say this. I’m going to play on that word adjudication. You have adjudicated this interview well. I love this interview. It’s so much fun to talk with someone who has the vision and can articulate it as well as you do. It’s great to have you as a guest. I look forward to having you back soon. I mean that. I want to have you back soon. We got to hear more of this global perspective of what’s going on. You being the biggest of all the FinTechs out there has a unique perspective we can all learn from. Thanks so much for being here with us.

This was great. Thanks for having me. Anytime. Your energy is infectious. Thank you.

It’s an honor to be with you. Energy feeds off of energy, so I’m getting it from you as well.

Thank you.

I will say a special thank you to all of our sponsors, Finastra, Lenders One Mobility MMI, Modex, the MBA, Knowledge Coop, the Mortgage Cooperative, Snapdocs, SuccessKit, Lender Toolkit, PennyMac, Total Expert, and FormFree. Have a great week, everybody. I look forward to seeing you back here in the next episode.

 

Important Links

• Chris Zingo
• Finastra
• IndustrySyndicate.com
• Lender Toolkit
• Mortgage Bankers Association of America
• Lenders One
• Mortgage Collaborative
• Rich Swerbinsky – Hot Topic: The Current State of the Mortgage Industry
• Total Expert
• Knowledge Coop
• Mobility MMI
• Modex
• Snapdocs
• eMortgage Quick Start Program
• Vishal Rana – Past Episode – Why Digital Transformation Needs Great Customer Success Teams
• SuccessKit
• PennyMac
• FormFree
• DW Consulting
• Karen Jenkins – Past Episode – Hot Topic: Transforming the User Experience for Borrowers