Brian Kaas on Navigating FinTech Partnerships for Community Financial Institutions

Josh DeTar: [00:00:00] Welcome to another episode of the Digital Banking Podcast. My guest today is Brian Koss, President and Managing Director at TruStage Ventures. This is going to be a really fun episode. If you’re listening to this podcast and you work for a community financial institution or a fintech that serves them, you may have wondered what it looks like to see how the sausage is made.

Brian says he gets asked that question a lot when it comes to how to fintechs get born and how do they raise funds to scale. He said he always has a good chuckle. Because he actually worked at a food processing plant in his younger years, making sausage. So he has literally seen how the sausage is made.

Brian is a true Midwesterner. Born and raised in Wisconsin from humble roots, he was the first in his family to go to college. And when he did, he even stayed in Wisconsin. But he didn’t just go to college to checkmark a box. He went big. And he went to law school to become a lawyer. Cool note to the story.

His best friend [00:01:00] in high school and he made a pact to go to law school together and they actually did. Um, I quickly gathered in my first meeting with Brian that he’s a genuine and transparent person and is excited to share some of the behind the scenes of the sausage making of investing in fintechs.

Brian believes in the work that community financial institutions do to bring financial health and freedom to everyday Americans. As TruStage watched the rise of fintechs going direct to consumer, they saw the threat this posed to the relevance and viability of those community FIs and the work they do to support specifically the middle market.

So in 2016, a venture was spun up that Brian has an opportunity to lead in looking for FinTech companies to invest in that provide technology to help community FIs continue doing the amazing things they do. Brian says one of the things he loves so much about his role he plays is being able to see the spirit, passion, and sweat entrepreneurs put in to start something.[00:02:00]

He gets to hear their dreams and help find avenues to bring their great ideas to the community FI space. Linking back to his Midwesterner roots, seeing the sweat equity people put in is invigorating to him. Brian loves to spend the weekends with his family on the lake, chilling, relaxing, grilling, just maybe not sausages.

Uh, we have a whole host of topics to cover today to understand the role of capital and networking in bringing great tech to the industry we believe in so much. So Brian, without further ado, I’m super excited to welcome you to the show. Thanks for being a guest.

Brian Kaas: Thanks, Josh. I’m super excited to be here with you today.

Josh: Um, you know, I mean, kind of going through the intro, I think people get an idea of probably where we’re headed with this thing. But in all seriousness, I am, I’m super excited to talk to you because, um, you know, I, I was at, um, FinTech meetup, not this most recent one, but last year. And I thought it was really fascinating.

I’m sitting there. In the crowd. And I’m sitting next to a [00:03:00] couple of credit union folks. And one of the first speakers is representing a VC firm, investing in FinTechs and goes off on this spiel talking about how they deploy capital and you know, the things that they look at. And to be honest, when he was giving the talk, it was a pretty bleak one.

It was a pretty bad outlook. And I’m just watching the shock and awe on the faces of some of the people around me going. Oh my gosh, like I’ve never seen how the sausage is made and understanding, you know, what this means to some of the companies that we actually rely on for some of the technology that we receive.

And so I, I found that just interaction, very interesting. So I’m really excited to have you on as a guest to kind of peel back some of the layers and just talk to us a little bit about from what you see in your seat and day to day. So, you know, before we get too far in, um, I’d love for you just to kind of expand a little on.

Um, um, on TruStage Ventures and, and kind of what you guys do in the market.

Brian: Yeah, [00:04:00] just, you know, kind of in, uh, in a nutshell, we’re a corporate venture capital fund that focuses on investing in fintech companies that are looking to to partner with and work with community financial institutions. Our parent company is TruStage, which is a large insurance and financial services company that serves Uh, almost all credit unions in the U.

1. market. And, um, recently we acquired a technology company that works with about 1800 community banks. So we really, um, want to leverage sort of the. The, the network and relationships that we’ve built over the 90 years of our parent companies history to help kind of bridge the gap between fintech companies and, uh, credit unions and in community banks and, and we see those worlds, you know, being very different and, uh, a lot of times, you know, I think [00:05:00] you, to your point, your experience at, at fintech meetup, we see that, you know, day in and day out.

And so how do we, you know, kind of bring these two very different worlds together.

Through TruStage Ventures. So it’s much more than just investing, you know, really our mission is to kind of bring those worlds together and drive innovation for the industry.

Josh: Um, you know, that also gives you kind of a, an interesting look at the industry, right? Because you get to see so many different companies that are popping up and I would argue it probably even puts you a little further ahead in the curve of seeing what’s the next big top trends, what’s going to be the next buzzword, right?

Because you’re seeing companies that their infancy a lot of times coming to you looking for capital to scale. And so you’re kind of seeing, Oh, Hey, look at this. All of a sudden we’ve got a bunch of pitch decks with companies that are dot AI. I have a feeling AI is about to become the next hot topic, [00:06:00] right?

So I don’t know what, what has that been like for you to kind of see, uh, the early onset of some of the next trends and where you’re seeing companies try and head to.

Brian: It’s been really interesting. I think if we were to go back 18 months, obviously AI was around 18 months ago, but really hadn’t taken off the way it has now, I would say, you know, because there are, uh, close to 10, 000 FinTech companies in North America, you know, You know, every idea that could possibly be, you know, um, thought of is, is now morphed into a company.

And so seeing fresh ideas became, you know, less frequent, uh, you know, like I said, 18 to 20 months ago, I think with the introduction of AI and all of these new use cases, it really is, is I think, breathing new life into the, the FinTech space. I think there’s going to be a next wave of, of innovation that we see, you know, really [00:07:00] complement a lot of the technology that’s been, um, you know, really kind of rolled out and developed over the last decade. And, you know, I think it’s going to kind of drive this resurgence and, and I think from the lens of community FIs, you know, it will put even greater pressure on those, um, traditional financial institutions to innovate. You know, really kind of, um, drive, um, some of these technologies into their organizations to stay, you know, efficient, relevant, and viable.

Josh: Um, you know, you made a, you made a really interesting comment in there though, that, um, for folks who’ve probably, you know, listened to some past episodes have probably heard me touch on before is, you know, I think AI is a great example of this and probably one of my, like, most obvious examples of this, but I think a lot of times we, um, and I generalize we, but like we look [00:08:00] at, um, Whatever the next big thing is, and we want to apply it, but you have to understand, like, what does it actually mean?

How are you trying to apply it? Um, because a lot of times it’s just a tool and you need a use case for a tool. And I think AI has been a really overused term in that sense. Um, and you know, we hear a lot of people, you know, the example I’ve given on the podcast in the past is. And we want to have an AI strategy at our credit union.

I’m like, Great. That means a lot of things. So what does that mean to you? Right? Like, what are you talking about? What, what is the, what is the use case you’re trying to solve for in that? So I’m just curious, like, how have you seen that on your side? Of, you know, are you seeing a bunch of companies come to you and their pitch deck being like AI?

And you’re like, okay, well, yeah, I mean, I know that’s a buzzword right now. And you probably think we want to hear that in your pitch deck, but like, what is your use case for that? Like, what have you seen? I’m just curious.

Brian: I’d [00:09:00] probably go the opposite direction of I look at what are some of the challenges that the customers of those AI focused, uh, FinTech companies are trying to solve. And is there a market for that? So to find out if there’s a market, you know, you have to really go and listen to the executives of, of credit unions and banks and what’s top of mind for them. And then can AI be used to help sell, solve some of those challenges. So for example, you know, what I’m hearing right now in particular, fraud is a huge issue that’s on the rise, um, within the financial institution space. Profitability is also a huge challenge. Um, that’s driven in part by just much lower return on assets. So I think banks and credit unions will face greater pressures of how do we. Bring more automation into our organizations. How do we drive more [00:10:00] efficiency? Um, I think also, uh, you know, looking at lending performance, for example, and how do we get better at our underwriting to reduce delinquencies? Maybe how do we, you know, uh, try to improve our underwriting to reach and serve a broader group of consumers? To me, those are all good use cases. Of where AI can be a tool to help, um, achieve some of those like key strategic objectives. So that’s kind of how I

kind of back into, you know, where, uh, AI can be powerful and helping to, you know, really kind of accelerate, um, some of these priorities, because I think AI in a vacuum, you know, doesn’t have a market or use case by itself. That when I wear my investor hat creates a viable business that that will survive.

Josh: Yeah. Um, yeah, [00:11:00] we were talking about this before we were recording. It’s like. Everybody wants to throw it on their name in there. What we do now, because you know, everybody’s like, well, exactly that. We have to have a strategy around AI. We have to have AI. We have to implement AI. And I’m like, great. All right.

If I put AI in my company, like I keep joking, I’m like one day we just need to change our company name from Tyfone to Tyfone.ai sales will double overnight, um, but you know, it’s, it’s more than just using chat GPT to write your pitch deck. Right?

Brian: Absolutely. Right. That’s so true. And I think, you know, everyone thinks of AI is, you know, it’s kind of chad GPT and how can we use that? And again, that’s a use case, but I mean, there’s so many other variations of how artificial intelligence is getting incorporated into a lot of these, you know, things. real world practices. And, and, you know, I think even maybe taking a step back from that, it’s again, uh, I think, Puts a very acute, [00:12:00] um, pinpoint on the need for banks and credit unions to, to really kind of embrace the changes in technology.

Um, because the AI is only going to accelerate the pace of change that we’ve seen

over the last decade.

And so if you’re not really keenly focused on what all of these changes are going to have on, on your credit union or, or, um, bank. You know, it’s really going to catch you flat footed. And so I just, to me, that kind of just frightens me more because I just see things. Changing that much faster, which I thought wouldn’t be possible, uh, from what we

saw over the last decade.

Josh: Yeah. Okay. I’m curious. I’d like to pick your brain on that one. So, you know, talk about kind of a change, uh, in pace that you’ve seen over the last decade and like, how has that influenced you? You know, your investor hat and looking at [00:13:00] different organizations that you all are looking to invest in that, that you believe will fundamentally bring obviously both returns to the fund, but also returns to the industry that you’re trying to serve in terms of great technology.

Like how has that changed over the last decade? Yeah. Yeah.

Brian: um, You

know, obviously the word digital has been around for, again, a decade. Everyone’s trying to do more and more digital, but I think with sort of the, the, um, more widespread adoption of, of usage, it’s going to create even greater expectations for consumers to have these, um, you know, frictionless experiences, um, hyper personalized loan offers or, or other offers.

And, and it’s just going to, I think, further drive consumer expectations and make it easier for those consumers to switch to some other financial provider that, that kind of provides, you [00:14:00] know, this. Truly automated, seamless experience. That’s amazing. Um, and, and so if you’re a bank or credit union that has, you know, clunky experiences, um, you’re just going to see, uh, you know, so many of those members, um, you know, move to, uh, to these other companies and, and trying to keep up with the pace of where the change is going, is going to become. More and more difficult. And that’s where I really tell those, um, FIs, you had partnering with Fintechs is really the only way you’re going to have any chance of keeping up with what, um, you know, chase or city or any of the big banks are doing. Um, you know, point out for, you know, the, the tech budget of, of JPMorgan chase is almost. twice the size of the credit union industry combined. And so we’re not going to outbuild what, [00:15:00] you know, the chase that we’re doing. Um, these FinTech partnerships are really the pathway to long term viability and kind of the sooner, you know, credit unions and banks kind of develop that muscle of how do I work with a FinTech company and how do I make this successful and You know, there, there might be some failures along the way, um, where the partnerships don’t work out as intended, but, but, that doesn’t mean you can’t stop innovation often is, is ugly, you know, it is going back to, you know, Seeing that sausage being made.

It’s not like you have perfection out of the gate, but you got to keep trying. You have to keep iterating and, uh, you know, it’s just really going to be critical because, um, yeah, these community banks and credit unions serve a very vital role. In providing financial services, um, to rural areas to, you know, middle and lower [00:16:00] market consumers. And so, you know, I really want to ensure that those, those institutions survive, um, and, and we have a really strong and competitive, um, banking system in the U. S. a decade from now.

Josh: know, you made a comment that, um, that I really want to talk about because I don’t know. I, I, I don’t want to say that this doesn’t necessarily get talked about a ton, but I, but I don’t feel like it does, at least in my circles, right. When I’m talking to folks at community financial institutions and maybe the conversation is happening, just, I, I want to talk about it pretty bluntly.

Like you talked about just the, the ability to, you know, have access to capital to be able to accelerate the pace of technology and Yeah. You look at somebody like JP Morgan Chase. And the amount of money that they spend, but even then that’s just on technology as a whole for JP Morgan chase, right?

That’s, [00:17:00] that probably included in that technology budget was, you know, buying everybody at corporate HQ, new, you know, computers. so, but you look at, um, you know, just go do a Google search every once in a while and look and see how much capital, well, maybe not right now, but we can come back to that, um, is being deployed.

To fintechs like true startup fintechs that are direct to consumer. Right. And if you all of a sudden see ABC fintech just raised 300 million to solve, whatever, let’s just pick a simple use case, right? Digital new account opening. They just raised 300 million to focus on one thing and do it better than anyone else.

So not to be mean. But I’m looking at all of us in our industry. Like what credit union do you know has deployed 300 million to solve one very specific problem? None. Right. And so that is a very [00:18:00] difficult thing to be in a fight up against, right? Like that was a total David and Goliath type of scenario.

So you can’t play the same fight. You have to think differently. And I think that was the point that you were alluding to is, is the way for a, you know, 700 million asset under management credit union to be able to battle a fintech that just raised 300 million to do one thing very, very well is to partner with another fintech that just raised some money from you guys to go do something really, really well.

Brian: That can be, you know, uh, more accurate. I mean, that, that really is the point that I make. I think the, the, the days of a smaller FI being able to, to kind of build their own organic technology to serve their numbers, there might be, you know, some examples here and there, but I think. You know, those days are, are, you know, largely behind us.

[00:19:00] Um, because to your point, there is so much money and so much talent going to these FinTech companies, trying to focus on, on very narrow, um, challenges, but to be the best that they can in that space. You know, credit union has to serve, you know, account opening and lending and different loan classes. And yeah, there’s all of these services.

You can’t, you know, have the best technology in any one area. And so the only path to really keep pace again, is partnering with companies that are going to be able to, to not only develop that technology, but you also have to maintain it. It’s like when you look at the costs of maintaining this technology. Um, it’s very expensive. And so I think in some organizations, the, and this is not to, uh, in any way, like, you [00:20:00] know, kind of put a knock on anybody, but yeah, a lot of times CTOs and CIOs are like, Hey, I want to build that, like, Why would we go and kind of outsource something that we could do internally? Um, and you know, they, they have oftentimes a lot of, um, influence on, you know, the organization.

And, and, um, what I see happening is it’s a project that takes, you know, twice as long, three times more expensive, and then, you know, doesn’t maybe deliver the results that we had hoped for. And that, that’s not just, I mean, that’s an any. Um, any industry with large, more mature organizations, um, you know, we’re just not always the best at, you know, innovating and building cutting technology when that’s not kind of the day job of our companies.

Josh: Yeah. I think that’s like overtly true in this industry too, right? I mean, you think back, [00:21:00] um, I mean, If you just put a, you know, stake in the ground at 2000 and really before that, I mean, yeah, we were all starting to dabble in tech, but, um, I mean, it was definitely not as pervasive as it is today. That was only 24 years ago.

Um, you know, I, I’m terrible at math on the fly, but, um, you know, I saw some like Instagram posts recently that was talking about, Like, you know, the year 2300 is actually closer than, you know, the 1980s or something like that. And you’re like, Oh crap. Yeah. Like we’re actually a lot, like we’re not that far away from, um, like where we were a while ago.

Anyway, my, my point is, is that, um, it wasn’t that long ago that our industry did not have to deal with technology as a competitor at all. And it was just in the last couple of decades where we’ve had to [00:22:00] go from like, my only competition was, did chase have a nicer branch in my town than I did? And a bigger billboard, you know, further out in town.

So people saw it before mine, like that was kind of your competitive space. And now all of a sudden you’re having to compete in a totally different arena. And not even just against the traditional players you were used to competing against. Now you’ve got Chime popping up and all of these different direct to consumer fintechs.

And they are, and they’re raising exorbitant amounts of capital to be really good at specific things and to scale aggressively. Because as we know, right, when all of a sudden you get a huge influx of 300 million from VCE, there’s an expectation behind that. You got to scale that sucker. So that is the objective, is to do one thing really well, scale it very quickly, And take over the market.

That is a very different competitor than traditional community financial instance institutions were, were used to having to fight against. So even then, [00:23:00] like it’s, it’s had to be a total cultural shift of, we now have to start thinking like FinTechs, even though our business is a very traditional business and inside of our four walls.

And what we have to focus on is very different than trying to think like an act like a FinTech. Hmm.

Brian: completely agree. I mean, you know, financial services and banking, you know, largely stayed the same for hundreds of years. Yeah, really up until like the last. Uh, 25 years or so where we suddenly saw, you know, the, um, introduction of all of these new technologies, all of these new entrants, I think that the one, um, group that, that you didn’t mention that to me maybe, um, causes the most angst is just the, some of the large retailers, um, in non traditional FIs. starting to, to, to, to move more and more into providing different types of [00:24:00] financial services and, you know, embedded finance and embedded banking. Um, you know,

Walmart has quietly amassed a large fintech team over there and they’re offering checking services to their 2 million employees and, and, Um, you know, have, have at least provided some indications that, that they would, you know, like to roll that out to, to all Walmart customers.

And they’re offering, um, an auto buying program. And, and I just heard, uh, um, that Amazon is, is quietly building out an automotive, uh, Uh, uh, team where they want to sell cars on Amazon. So what does that mean for credit unions that, you know, historically of, have had those local relationships with their dealers and, and auto lending is, you know, kind of the bread and butter of, of how they, they keep those branches open.

And so it’s, I mean, again, like just these radical shifts that are [00:25:00] occurring, uh, in real time, um, you really, you know, requires credit unions and banks to be. more nimble and more open, um, to, to thinking differently. And, you know, I, I, where I live, I mean, I still see a lot of branches growing up everywhere and, you know, but, but those same credit unions and banks are, are not really kind of doing a lot when it comes to technology and, and these FinTech partnerships.

And I just, I question like, is that, is that the right strategy to, to have in this day and age?

Josh: You know, um, I had a, I had a guest on the podcast not too long ago, uh, Danny Payne from Jack Henry, and he, and I talked about the number of financial services apps that a person has on their phone. [00:26:00] Um, and he had done some research, like within just his own, like friend group and outside of work, right. Um, not people in financial services, not people in FinTech.

And then we subsequently did it as a, um, pull on our LinkedIn’s and everything. And the data lined up on both fronts, even when we asked people in our industry, but we asked people like, how many apps do you have on your phone that are financial services apps? And I would say on average, people told us they had between three and five.

And then when we help them understand how many of the apps that were on their phones actually were doing financial services, you know what the true answer was? It was north of 20 for the average person, right? So to your exact point, like I don’t, I don’t think a lot of people actually see just how much is starting to eke into financial services from exactly that, from, from big tech, from big retail.

So [00:27:00] yeah, to your point, I mean, just the swath of competition is significantly larger than it was even just 25 years ago. And that landscape looks totally different. Have

Brian: Have so many options to pick from today, uh, in terms of where they’re going to, um, you know, deposit their funds or invest funds or obtain financing, uh, and, and they make it so easy to, you know, get financing at the point of sale. And, and if the credit union or bank isn’t like embedded in that technology. You know, those are loans or deposits that that credit union will never get an opportunity, uh, to, you know, to, to have, um, uh, on their balance sheet. And, um, you know, one of the things that, that we focus on in our, our fund is investing in companies that are, are like [00:28:00] powering the technology for the embedded finance with, you know, the idea of, of being able to, to have Provide a gateway for credit unions to participate in, in, um, you know, those embedded financing opportunities.

Um, so I mentioned the car buying program from Walmart, you know, one of our companies has the technology that’s powering that, and we want to be able to, you know, how can we harness the power of the industry as a whole? To provide financing for vehicles purchased by Walmart customers through that platform. And is there an opportunity there? And, and, um, that’s where I kind of look at it is sometimes this technology can create some really unique. and powerful, positive opportunities for, for credit unions and banks that, you know, really are willing to kind of think differently, think outside the box, [00:29:00] enter into some of these unique partnerships.

And I, when I look at the, you know, kind of the banks and credit unions that are thriving throughout all this change, not surprisingly, they were the credit unions back in 2016 and 17 when, when we launched our fund. That were really kind of on the leading edge of, of, you know, partnering with FinTechs when that was, you know, not a thing that people did. Um, and now, you know, they’re, they’re light years ahead of where many of the other credit unions, um, sit today that, that have kind of sat on the sidelines or, or really kind of dismissed, um, how much change is, is taking place.

Josh: seen a change in just how many more conversations you’re having with credit unions, community banks? Yeah, I kind of teed that one up on the T ball for you, but,

Brian: Yeah. I mean, you know, there’s some survey data that, that was done and, um, and. You [00:30:00] know, I’ve been in this now for eight years. I mean, I can remember in 2017, we, we, we talked to a lot of credit unions. Um, uh, they oftentimes will visit our campus and, you know, we talk about FinTech and the, the number of, you know, credit union CEOs that were completely dismissive. of fintech companies or viewing them as a competitive threat. I mean, I had, I had a CEO literally fall asleep during the middle of my presentation because he was so disinterested and bored. Um, you know, kind of fast forward to 2019. We saw, you know, kind of credit union interest in partnerships where they kind of viewed it as somewhat important or important.

Um, it was still below 50%. Fast forward to today, that number it’s around 90 percent of credit union executives. the fintech partnerships as [00:31:00] important or very important in that survey. So very much, uh, um, I think a shift in attitudes around fintech partnerships and, um, but we’re getting a lot of questions now from crediting, they, they view it as important, but hey, we’ve never done this before.

We don’t even know where to start. How do you evaluate these companies? Um, uh, and so spending a lot of time again, trying to, to kind of educate and find opportunities for those credit unions to, um, to get engaged. So again, it’s encouraging. My, the only concern is like, you know, it’s moving so fast. If you’re just kind of getting in now, you’re already, you know, five to eight years behind the curve.

It’s not too late. I tell credit unions that. So like, don’t lose hope or think there’s, uh. Um, but, you know, I think we need to move faster as an industry to embrace all of these changes. Um, [00:32:00] and, uh, again, I think there’s a huge value proposition, uh, when I talk to FinTech companies. Um, you know, more and more are shifting kind of a, even from a B to B to C model. And so, yeah, they want, um, to partner with, with banks and credit unions now more than ever, even some of those companies that were direct to consumer are now like, Hey, can we offer our product through you? We’ll light white label what we’ve built. You

offer it to your members and we both, you know, come out ahead on this.

And, and so it’s been really interesting just to kind of see, you know, even, uh, the FinTech market evolve here.

Josh: Um, you know, I want to touch back on just kind of the evolution of the fintech market and kind of how from your seat you’ve seen the interactions between community FIs and the fintechs. But before I do, you know, you were talking about a minute ago, um, just the embedded finance element and [00:33:00] how consumers have so many different choices.

I really hope I, I apologize in advance. I might miscredit this. I swear it was a LinkedIn post the other day from, I want to say either Ron Shevlin or Sam Kilmer or one of the cornerstone folks. Um, and I, the reason I’m pretty sure it was Ron Shevlin is because I remember it being a very like in your face statement, which is totally wrong.

And it was something to the effect of like, If you think, if you think you’re still trying to cling on to, um, you know, PFI and being the primary financial institution, you’re an idiot. And like that, that is dead and gone. Just, you gotta like accept it, move on. There’s no such thing as you’re going to control every single element of finance for this person and you’re going to be their one and only home.

Like you gotta let that go and you gotta focus on what you’re really good at and And then find ways to bring what you’re really good at into the other areas that consumers are interacting with finance. [00:34:00] Um, and got kind of calls back to, you know, being a part of embedded finance, right. Or, um, just open banking as a whole.

So how have you seen kind of that shift happen and any mindset shifts you’ve seen in, you know, the companies that you work with or in your talks with the credit unions and community banks?

Brian: I think it really depends. I mean, I think we certainly have seen, you know, um, some credit unions take that, that approach of like, Hey, we’re going to be really good and focus in on, on these 2 or 3 areas and have these be, you know, kind of drivers of growth. And we’re going to be the best at what we do in that space. You know, I even talked to smaller, um, banks and credit unions because I will talk to A CEO running a $200 million credit union, for example. And, um, she has done some really innovative [00:35:00] things, kind as laser focused on a couple of areas and. She’s seeing, you know, growth that’s kind of outpacing, um, uh, certainly all of her peers, many of whom are kind of in decline.

And, and so, um, you know, I do think that’s, that’s really important. Um, again, I could be wrong, but I thought I remember seeing, uh, something that Ron put out maybe a month before that talking about kind of Sort of the FinTech partnerships are, are dead or, or a dying breed. And I couldn’t disagree more with that.

I mean, , again, what I see is the, you know, kind of the, the interest in these partnerships, um, being stronger than they’ve ever been. Um, we’re actually seeing more and more interest, even in credit unions, making direct investments into some of these FinTech companies, which that’s a whole different conversation, um, you know, in terms of. Uh, you have credit unions [00:36:00] or banks that that want to invest in some of these companies. I mean, that that, uh, requires a very different skill set to evaluate, um, you know, fintech companies. But, uh, you know, um, again, I think just the pandemic probably just accelerated. Uh, a timeline that we were on before, you know, the, the pandemic hits and, uh, in terms of driving more urgency and, um, you know, again, I, I, I’m excited about what the next five years hold, um, because I do see a lot of opportunity here.

Josh: Um, that, that totally brings me right back to what I wanted to come back to, which is, you know, from your seat, like, what have you seen in the interactions between, you know, credit unions and fintechs? Because, you know, you mentioned something to me before we started recording, just. How your brain thinks and, and you notice, you know, there is a difference and I’ve even seen some of this and [00:37:00] I’ll talk about some specific examples here in a second.

But, um, you know, you look at how a CFO at a community financial institution runs their balance sheet versus how a FinTech does. and it’s very different. Um, know, the community financial institution is really focused on, um, you know, longterm viability, stability. We don’t need to be, you know, the next SBB type of thing.

And FinTechs are over here like we’re burning cash. Like it’s going out of style. We’re like, that is our goal. And that is a terrifying disconnect. If you get the financials from a FinTech and you’re like, yeah, so you lost a hundred thousand dollars last month and you lost a hundred thousand dollars a month before that.

And you guys are actually negative in revenue right now. Like I can’t do business with you. Like you’re not going to be around in two years. And then they’re the next unicorn. Right? So what is kind of your, uh, from your seat, like, what have you seen in terms of just kind of how community financial institutions [00:38:00] look at and evaluate, even just on the financial and evaluation side, uh, the Fintechs.

Brian: that hasn’t been in this space, you know, and they look at evaluation of, uh, a FinTech company that has. You know, never had a month of profit in its existence, you know, is, is projected to, you know, be cashflow negative for the next four years and they’re valued at 500 million.

It’s like, like, how does that math work? Um, so, so that’s why I mean, some of the traditional valuation methods of. Maybe how they’ve come across, like, okay, we’re going to value, you know, um, you know, a mature business there. They’re just apples and oranges. Um, I think what we’ve seen, you know, certainly, you know, kind of on the investor side is there’s been a huge bell tightening. Um, with fintech companies and, you know, that’s really a [00:39:00] reflection of, you know, kind of the, the, uh, hey, days of 2020 and 21 are now in the rear view mirror. Um, I think investor investors are pushing harder than ever for companies to get to a position of profitability and reduce. The cash burn. So I think for the CFOs in the audience, um, yeah, that, that there’s probably more alignment now than there might’ve been, uh,

two years ago, but you know,

Josh: the break room.

Brian: yeah, um, but when, you know, you have credit unions and banks evaluating. FinTech companies, you know, as part of the diligence, um, a lot of times they will want to see a copy of the financial statements for that partner as part of their diligence. And, you know, in many cases, the FinTech resists that, um, because they don’t want to disclose maybe the amount of, of, of [00:40:00] money that they’re losing, or, you know, the fact that they’re, you know, down to 12 months of, of runway of cash.

And, you know, Um, and so, you know, what I tell credit unions in part, you know, look to who their investors are and are. Do they have a stable pool of investors, uh, even talk to those investors from time to time of, you know, are they going to be there to provide capital for the next round of funding? Because most of these companies are going to require multiple rounds of funding, um, to get to a point of profitability. And that’s normal in, uh, in the tech world, but that’s not a reason why. A credit union or bank shouldn’t partner with somebody by itself. The fact that they are, you know, maybe down to, you know, uh, less than 12 months of, of runway, because that’s normal in the cycle.

That probably [00:41:00] means, Hey, they’re going out looking to raise another round. And if they have a good, you know, dedicated base of investors, you know, they’re going to be able to raise that capital and they’re going to be around, you know, in month 13 and beyond. Um, so that’s, you know, an area where again, we try to both sides kind of communicate and understand, um, from the lens of the fintech company, why that information is important and relevant and why it’s, you know, it’s okay again, again, I think in some cases to be, you know, transparent of, Hey, here’s the situation we want to be partners. And, you know, investors that are excited and believe in a company are going to be there to, to ensure that that company gets funding.

Josh: You know, I want to come highlight a point that you made, um, and again, I’ll set the ball on the, on the tee for you for this one. Um, but you know, it sounds like you guys actually have a lot of [00:42:00] conversations even with the community financial institutions that are looking to purchase from companies in your portfolio.

To say, Hey, look, I know that you, you know, drag their financials out of them. You’re looking at them and you’re terrified, but this is all we do. This is what we eat, sleep, and breathe is evaluate these companies and decide how much capital we want to deploy to them. We a hundred percent believe in them.

We support them. If they need more capital, they have access to us and we will deploy more capital to see them grow because we believe in, you know, their product, their mission, their people, et cetera. Have you had those conversations? Have you seen that alleviate the concerns of the financial institutions?

Like, what does that look like for you?

Brian: Yeah, I think it certainly does. I mean, I think, um, our parent company TruStage has built, uh, you know, certainly a lot of trust, uh, among the financial institutions that we serve. And I’ve heard it many, many times, um, from. Uh, [00:43:00] banking executives of, Oh, I saw that TruStage was an investor and that, you know, provided them with comfort.

Um, uh, you know, that, um, yeah, at least, you know, the ventures team there looked at this company evaluated and. Had enough, you know, kind of, um, belief in the company to, to put money into it. So I think, you know, that, that certainly helps. Um, and, uh, you know, for, for, I look at, you know, our, our mission or mandate for our fund.

I mean, one, obviously we have to have, um, in one good financial returns, but you know, the other part of our mandate really is, you know, we’re a strategic venture capital fund. That wants to invest in companies, again, that we think will help, um, get, uh, or bring the banks and credit unions, um, you know, into the future so that they’re strong and competitive and relevant.

And, and so, [00:44:00] yeah, we’ll, we’ll continue to back companies that we think will help, uh, achieve that mission. Even if the financial returns might be lower than what a peer financial VC would be willing to accept. Yeah. Yeah,

Josh: This part of the conversation. So, I mean, I go out on a limb and say, I think that’s actually a really important thing. You know, you look at for credit unions and community banks to evaluate as they’re looking at technology partners, right? Is where is their capital from?

And I think that I would argue that’s actually more important than what is the current financials look like, right? Because you kind of have a couple of different. Flavors of company, right? Maybe you’ve got somebody that’s totally bootstrapped, hasn’t taken large investment. Maybe it was self funded early stage.

Then you’ve got folks who’ve taken investment and then you’ve got folks who are some of the very large players who are probably [00:45:00] publicly traded. And each one of those groups is beholden to a different master, right? And if you look at a large publicly traded company, yeah, maybe they look really good on paper.

Their financials look solid and they’ve been around for a long time. They’re a big company in the industry, so therefore they’re safe. But at the end of the day, you have to remember who their investors are and A publicly traded company’s investor cares about really just one thing. How much money am I going to make off of this?

The impact side of that, probably a little bit less. I’m be totally honest. The places I put my money in my stocks, all I care about is how much money am I going to make out of those, right? Then you’ve got the, you know, the folks who haven’t really taken any capital. And yeah, I’m not gonna lie. That one’s hella risky, right?

Like they’re, they’re running on a shoestring. And if you’re betting on them, I’m like, you’re betting on a prayer and, uh, and a song and I hope you believe in something really special. And then that middle is kind of that, you know, interesting [00:46:00] sweet spot. But even in there, right? You look at a FinTech company in our industry who has been invested in by Uh, you know, traditional Silicon Valley VC that understands nothing about our market, cares nothing about our market, and they’re much more similar to that publicly traded company where that VC firm cares about one thing and one thing alone.

I want to see you grow at 300 percent year over year for a couple of years so that I can take you public. Um, And then you’ve got that other kind of special class, right? Which is somebody who has taken money from a very strategic partner who is focused on actually providing value in terms of the impact that they have.

And is there for kind of the long haul of that company. And I would absolutely argue that that’s a very important conversation to have within the four walls of your institution of looking at the types of companies you’re doing business with and who is their master.[00:47:00]

Brian: Yeah, I couldn’t agree more. Um, yeah, that that is important to evaluate. And, and again, that’s where, you know, we’ll have conversations because even if you’re. You know, uh, a credit union and you ask, okay, who are your investors? Like that might not mean a whole lot. Like if you’re not in the space, like they’re not, you know, um, but to, to have a conversation with the investor of like, because you’re gonna have a company that has, um, you know, 30 million of cash on their balance sheet, but they’re burning 3 million a month and have no plan for, you know, kind of reversing that versus another company that has. Two million of cash on the balance sheet, they’re nearing breakeven. And, and the, you know, kind of the investors in board see the company becoming profitable. So on paper, again, two companies that look very different potentially. Um, if you’re looking at just kind of cash, um, uh, on the table [00:48:00] and, and, you know, so this is a part of the, you know, the, the diligence that is very unique, um, versus looking at, you know, kind of a lot of the traditional technology. Providers that have served the industry.

Josh: You know, as I’ve gotten older in life and especially becoming a parent, I think one of the things that I’ve taken a lot more seriously than I have in the past in my own personal space, um, is calculated risk, right? I’ve always been a kind of an adrenaline junkie, daredevil, um, like I’m the guy who wants to bomb a mountain bike down a hill.

I like to race cars and, um, you know, those things are inherently risky. And I can tell you, uh, I’ve absolutely slowed down the pace at which I ski when I became a parent, right? I’m like, ah, you know what, let’s be a little bit more responsible with my calculated risk. But at the end of the day, I have a lot of fun skiing.

I have a lot of fun skiing fast down a mountain. Um, so I still like to take that risk, but I’m a lot [00:49:00] more calculated with it. And I think that that’s a good analogy of, you know, I have to laugh. I feel like I’ve probably referenced her in almost. Every one of my last podcasts for whatever reason, because, um, the topic keeps coming up, but she’s just such a phenomenal example of that is, um, Tracy Miller, who’s been a podcast guest before, um, from pioneer credit union in Idaho.

And I was even literally texting with her the other night and I will save the, uh, the, like the real depth of the conversation and expletives, but Tracy made the cut. She’s like, I’m not freaking scared. She’s like, I’m not scared. Like, we have got to be smart to jump in and try new things with new fintechs.

And they may look scary on paper and they may have just come to market and they may have just taken investment and they may be burning cash. But that’s one of the ways that her credit union has really propelled themselves. And you know, I [00:50:00] say it all the time, like they totally box out of their weight class.

Um, and it’s because she’s been willing to take risks, but she’s calculated with it, right? Like she’s not being stupid with her credit union or her members money and, and putting them at risk. But she’s like, Hey, you know what? Like that’s something, and I can get on the ground floor of that. And probably by the time that takes off, I can’t afford it.

But I can today because I can take, A little bit of risk. I can work with them. I could be kind of a first pilot customer for them. I could do a customer testimonial for them, and she’s doing things that are just absolutely phenomenally innovative because of that strategy. So I think there’s some really cool opportunity for credit unions and community banks to take calculated risks and to step outside the box that maybe they’ve traditionally played in 25 years ago.

And be like Tracy, there’s a slogan for you. Um, and, and really say, Hey, you know what? Like I’m, I’m not scared. Like I’m, I’m going to at least [00:51:00] look at it. I’m going to have a very clearly defined use case that I’m trying to solve for. And then I’m going to look for ways to solve that. They’re creative. And I’m going to be open to the idea that that may be a fairly scary looking on paper FinTech.

Hmm.

Brian: I think that’s so true. I mean, I think the industry is, you know, historically very risk averse, which again, you want your banker or credit union to, to, you know, not take on a unmeasured risk to your point. But I think the flip side of that is if, um, you know, if. The credit union or community bank just kind of operates, you know, status quo. You know, there is a high probability that, that, um, uh, FI will have, you know, 50 percent of the customers they have today, they will, you know, have shrunk in size or relevance, or they will have been forced to, [00:52:00] you know, to merge out of existence. Um, and. You know, to me, that is a much, much greater risk than taking some, you know, some calculated risks on some partnerships, you know, innovating, taking bite size, um, uh, or baby steps to, you know, kind of learning into some of these things. And I think accepting that again, there will be some failures along the way. It’s inevitable. Like we’re all going through change. Nobody has. Uh, sort of the road map that is tried and tested of navigating through, um, everything and, and, you know, I think the boards of, uh, credit unions and banks, you know, need to provide, um, you know, some, uh, latitude and flexibility. I think, you know, the, the boards, you know, should be pressing, um, to ensure that, that their, uh, credit union or bank [00:53:00] is taking, you know, measured steps to, to navigate through this. And, you know, it’s, it’s interesting, like

spend a lot of time with the, uh, NCOA, for example,

and, you know, many know Rodney Good, who, um, recently stepped off the board, you know, really kind of viewed as like, he wouldn’t Brian, I really support, you know, um, credit unions partnering with FinTechs because he kind of believed that, that they were really necessary.

He’s like, I want to have an industry to regulate in 10 years. And, you know, if credit unions aren’t adapting and innovating, he’s like, I’m not going to have an industry. We’re not going to have a credit union industry. Um, so when you have a regulator kind of like out there, like, um, you know, viewing the lack of innovation as one of the greatest risks to the industry and, and, you know, ultimately to the solvency of,

[00:54:00] of, you know, many of these financial institutions.

I mean, it, it, um, you know, really is, is kind of telling just how big this, this, you know, kind of potential threat is to the market.

Josh: Rodney with the mic drop, man. Um, no, you know, um, I, I’m glad you made that comment actually, uh, again, you know, some, some dangerous territory here, but let’s talk about boards. Um, cause they’re super interesting and they play a very interesting role in this at well, uh, as well. I think, um, we’ve probably all experienced, you know, super innovative people at the credit union, trying to do new things.

And it gets killed at the board. Right. And, you know, you look at credit union boards, a lot of them, we’ve been around as long as technology has. So our original Genesis of being on the board of the credit union is when we didn’t have to do [00:55:00] technology or compete on technology or be a part of this landscape.

Um, and, and I think what’s, You know, interesting as you see again, kind of, you know, different flavors of that. Um, you know, I’m really proud to say that I get to sit on the board of a credit union and the CEO of the credit union asked me personally to sit on the board for that exact reason is he’s like, Hey, I look, I want technologists on the board.

I want people who are in tech that are willing to stand up with me. And when I say my team has done a bunch of research and we want to do this and it’s a little edgy. Somebody that’s like, yeah, no, you know what? I believe in furthering our mission and we have to do that through being, you know, a little bit risky and taking some chances and being okay with a few failures.

Um, again, calculated risks, being thoughtful, but really looking at how can we maintain relevancy of the credit union? Um, but at the same time, right? Like the board can absolutely be the reason why. Um, [00:56:00] you know, some innovation gets squashed and, and I think I probably speak for a lot of smaller stage companies who have gotten down to the final two and evaluation for a credit union or community bank, only to get the call to say, we went with the big provider because our board just didn’t feel comfortable taking a risk on you.

Brian: I hear that, you know, time and time again. And, and again, I think, you know, uh, you know, innovation needs to be something that, that is embraced and, um, uh, pushed for from the board and, and C suite of a, of a bank or credit union. I mean, and if it’s not being driven from the highest levels of the organization, it’s never going to get prioritized and, um, Um, uh, you know, there’ll be no support for, for that type of innovation.

Um, I had a board member, I won’t [00:57:00] mention the credit union. Uh, I just had finished giving a, a presentation at a large national conference, um, in one of the topics was, you know, how is our credit unions going to attract, you know, younger generation? You look at the average age of a credit union member, you know, continues to creep up.

I think their average age is now over 50 years of age. Um, and I, you know, kind of talked about how, you know, technology can be a new way to attract the next generation of credit union members. And, um, the board member came up to me, he’s like, you know, I hear, hear you, you know, kind of pounding the drum of. You know, needing to bring in younger people. And he’s like, why should we go after and serve millennials? Like, I don’t think millennials are a good credit risk. And I don’t think our credit union should, you know, spend any time or energy focusing in on that market. I’m like, okay, this, [00:58:00] now I understand, you know, somebody that, that, you know, had, uh, had previously been in the industry, but, you know, it was retired, you know, probably 10, 15 years before, but, and so. It’s just like that then made me realize what a lot of the executives are kind of going up against of, you know, how, how do you, if you’re fighting your own board on what we need to do, um, it creates a real challenge, but it’s great, you know, Josh, you’re on, on, on a board, I’m seeing more of them seeing more and more credit unions getting, um, you know, much younger board members and, um, you know, And so again, I’m, I’m encouraged by the direction and kind of where the industry’s headed.

Josh: Yeah. You know, I, I, I know you didn’t mean this. I’m not picking on you, but I also want to say like, it’s not an age thing either. Right? Like, it’s not that I’m, I’m going to be more innovative just because I may be younger than some of my peers on the board. It’s, [00:59:00] it is a culture thing, right? Um, I was just on a flight coming back from GAC and I was sitting next to the, a board member of a large credit union on the flight and we got to talking and.

She was my senior. We’ll just leave it at that. Brilliant. Absolutely brilliant person. Super, super innovative thought process. Like the types of questions she was asking me and we were talking about, I was like, that is the kind of board member you want. Like that is a woman that is going to help propel her credit union to take calculated risks and do cool things.

Um, but it is to your point, it’s like when, when you get folks that maybe have just kind of stagnated in the industry and are on the board, That I think is the detriment, right?

Brian: Yeah. And I think, yeah, probably the point I was trying to make is I think diversity on the board is so critical.

And, [01:00:00] um, you know, getting people with different thoughts, different experiences, um, that, that are on that board versus it being an echo chamber of, of, you know, maybe board members that, that are kind of living in, in the past, um, or or don’t have any experience in, in kind of seeing where this industry is, is going. All the change taking place, you know, that, yeah, I think getting, you know, these different viewpoints is, is really critical. And, uh, again, I think we’re seeing, you know, much more awareness around getting a diverse board, uh, um, at, at credit unions.

Josh: I, I love that statement. You know, we’ve, we’ve had a few guests on recently talking about, you know, just the huge DEI movement specifically in the credit union and community bank space over the last few years. And, and I love what that actually means and what that actually looks like. [01:01:00] Um, because what it means is that we’re being a lot more thoughtful and intentional about bringing people that think uniquely different from each other and bring challenging.

Opposing opinions, but facilitated around a culture of respect and openness. And that is how we’re going to grow as an industry. If you put a bunch of people on the board that all look like you talk like you act like you think like you make decisions like you, then you’re going to do the same thing over and over again.

And I will like put my personal stake in the ground. You will be irrelevant. Like you need

Brian: Yeah, it’s, it’s so important. Yeah, it’s so important. Um, in 2021, you know, just really, uh, you know, kind of on this point, we actually launched. A second fund, um, called the discovery fund. And, um, all of the founders in the discovery fund are led by founders who historically have been [01:02:00] very underrepresented in venture capital.

So women founders, founders of color, uh, LGBTQ founders. Um, and you know, when we kind of looked across our portfolio, you know, it, it what You know, kind of a lot of those founders all, you know, kind of look the same, came from many of the same backgrounds and, and, you know, we have now 17 companies in our discovery fund. Many of these companies, you know, are really, um, focused on serving the consumers, um, you know, that, that often are overlooked or underserved. And, and, you know, now our, our mission is let’s bring those. FinTech companies together with credit unions that want to again, like think outside the box or, or pilot or partner with, you know, an early stage company that might be able to, you know, Enable that, that credit union or bank to, to reach a totally new demographic.

Um, [01:03:00] and so, uh, there’s just, again, so many opportunities that exist today for, uh, you know, banks and credit unions to really, um, leverage these partnerships to grow in, in, in very unique, uh, in impactful ways.

Josh: That’s super exciting. I love hearing stuff like that because, um, this is a really, really exciting industry to be a part of. And, and there are so many people with some really great ideas out there and giving people the opportunity to create companies, to, uh, you know, make leadership decisions at the financial institutions, buying from these companies.

Like this is what’s going to further this industry. And you know, as you and I kind of started with, and anybody who’s listened to even half of a podcast I’ve ever done, hopefully he knows this about me. Like this is an industry we care about, right? Because we see the impacts that it has. We see the impacts that it has on actual real people and their lives.

And money is such a huge part of our lives. Having someone [01:04:00] that’s in financial services, that’s kind of in your corner is a total difference maker. I mean, that makes the difference in people’s lives. That’s crazy to think, but it’s true. Um,

Brian: The thing that motivates me the most when I get out of bed in the morning, you know, coming from, you know, very modest background, uh, uh, family modest means, you know, working with with community financial institutions and, um, you know, our FinTechs often are very mission aligned with credit unions.

Okay. Um, we like to invest in companies that, uh, have a culture and mission that aligns with our purpose. And, um, you know, I just see the opportunity to help so many consumers that are struggling to make ends meet. Um, struggling to try to build, you know, credit, um, struggling to kind of get out of the, the cycle of payday lenders [01:05:00] and, and, uh, you know, stripping out the technology and getting, getting to the underlying, you know, mission of, of helping people achieve financial, um, securities is really, uh, something that I’m, I’m, you know, proud to, to hopefully help, uh, move the needle on.

Josh: yeah, I love that. You know, um, I’d be remiss if I let you go though, without talking about, um, just the state of capital deployment, right? I’m sure everybody listening has heard some of the news stories and seen, you know, uh, Capital’s drying up. People aren’t getting investment. And so what, what have you seen?

And specifically, you know, from the community FI space, the companies that serve them and funding available to them and like, and what does that mean for that industry? And what does that mean for a credit union? That’s a looking at, um, you know, partnering with different fintechs.

Brian: Yeah, I would say the last two years. So [01:06:00] 2022 and 2023. I mean, you look at the numbers. Uh, the, the amount of funding going into these companies is down significantly from the two years prior to that. But I think those were two outlier years that probably will never be replicated. And it was really driven. Um, by, you know, I think kind of the pandemic frenzy where all tech companies, you know, could raise unlimited amounts of money at, um, insane valuations. So we, we probably have like normalized somewhat, I think, um, and I’m seeing that now what we’re seeing, uh, we’re seeing a lot more companies. going out and, um, looking to raise capital. I think more, more, um, rounds getting funded and closed. Um, so I think the industry on the investor side, we see stabilization in the market that we didn’t see the last two years. [01:07:00] Um, and so I think a lot of, uh, the investors I’m talking to feel the same way, feel a little bit more confident about. deploying funds, I think valuations have come down, um, to a point where again, it’s, there’s probably still some downward adjustment on, on some companies. Um, but yeah, when the valuations normalized, then investors be willing to, to again, start deploying more capital. So I, I feel like kind of the, the worst is, is behind us.

Um, and again, I think going back to the beginning of the conversation around You know, new cases around a, I think that’s going to drive, um, a fresh round of capital into, you know, a number of companies.

Josh: Yeah. That’s a good point. And that kind of goes back to what we were talking about earlier, right? Of if you look at, um, you know, FinTechs that are successfully raising funds right now, it’s pretty good sign that they’re, they’re, they’re onto something and they’re doing [01:08:00] something right. Um, if, if folks like you guys, you know, see, see the value in investing in an organization like that, or continuing to invest in an organization like that.

Brian: Yeah. Um, yeah. Can completely agree with that. And there’s also still, uh, a lot of capital that hasn’t been deployed. So a lot of the, the different, you know, venture funds, um, that maybe took a break from heavy investing, you know, still have, Capital that’s available to deploy and, you know, good solid companies are going to continue to get funded. And so, you know, if I’m a banker or credit union leader, reading the headlines around, you know, the funding for, uh, fintech companies drying up, um, you know, one, I wouldn’t agree with that statement and, and, you know, To again, I think, you know, it certainly heightens the importance of the diligence on that front, [01:09:00] but, um, you know, again, I, I, I, I think the industry is going to do, uh, fair quite well over the next several years.

Josh: Yeah, yeah, I think that’s, that’s a good point to highlight is, you know, like anything else, like the, the news likes to get us with clickbait and, um, you know, the, the sexy headline to click on is, you know, funding has dried up for fintechs and they’re all going to die off and, but to your point, right?

Like the, um, Hey, uh, if you come in with a pitch deck that just says we do AI, Uh, we’ll give you, you know, 400 million at a 50 X valuation. Like those days are probably over and they probably should be because you’re, you know, smoking something funny. If you’re thinking that that’s going to be a viable company at that valuation with that kind of capital deployment at that stage, like, yeah, maybe that’s dead and that’s probably a good thing.

But you

Brian: It is a good thing. Yeah, have disciplined back in these businesses, which, uh, definitely is a positive for everyone.[01:10:00]

Josh: Uh, well, Brian, seriously, I, I’ve really enjoyed this conversation with you. I, I really hope this was valuable for some folks to hear a little bit of, yeah, the, how the sausage is made of, you know, just looking at, um, the role of, of, you know, capital deployment in supporting the credit union mission through FinTechs, um, so this has been a really, really cool conversation.

I appreciate the opportunity to chat with you.

Brian: Yeah, thanks a lot, Josh. I’ve had a lot of fun spending time here today, uh, chatting on something that I’m very passionate about. And, uh, so I, uh, really appreciate it.

Josh: Yeah. Well, before I let you go, uh, two final questions for you, sir. So, uh, first of which just, where do you go to get information to stay up to date on what’s happening in the industry? I think this is especially an interesting question for you. So yeah. Where, where are you getting your information? How are you finding some of these cool new FinTechs?

Um, what do you, what do you stay, uh, up at night reading?

Brian: Yeah. So it’s [01:11:00] really, you know, um, I get the benefit again of, of having a lot of exposure to credit union leaders and also, um, kind of the fintechs and investors. So I hear a lot of my information I’m getting just kind of firsthand. Uh, spent a lot of time on zoom calls or at conferences in the hallways. I find that to be very insightful. The other benefit I have is, uh, being part of a large organization. We have a phenomenal business intelligence team that puts together, uh, a daily internal newsletter. Um, that’s covering kind of all topics, FinTech that, that really kind of are relevant to banks and credit unions. And so a shout out to, uh, to Steve Husick and that team of, you know, really kind of scouring all of these different resources.

Um, uh, yeah, I mean, CB Insights and PitchBook are, are valuable tools we use, uh, as [01:12:00] well to, to look at market trends. Um, uh, so, you know, I just, sometimes it can be information overload because there is so much So having, you know, some of these resources is just, uh, very invaluable. And, uh, digital banking podcast, another great source, uh,

Josh: Oh, wow.

Brian: the audience members.

Josh: Thank you. Um, you know, it’s funny you make that comment. I, um, about just the volume at which you probably see a lot of these FinTechs popping up. Um, I don’t know how relevant this data is now, but it was kind of in the height of the pandemic. Uh, a friend of mine in the industry used to make a joke like there’s a FinTech born every minute.

And, and then he was like, you know, I’m actually curious. Like how, how often is a FinTech born? And, um, and so he did a little bit of research and he was like, okay, I was wrong, it’s, it’s only one every, you know, five days or something, whatever the number was, it was like mind boggling. You were like, [01:13:00] Oh, his joke actually wasn’t that far off.

Like it’s ridiculous. The number of FinTechs that are born. Um, so yeah, there’s a lot to keep up on. That’s for sure. Um, okay. Uh,

Brian: live and breathe in this and I’m always amazed at, uh, Get through the end of the week and I look at all the companies that have reached in, um, to try to connect with us. Like how many of like, okay, I’ve never heard of this company before. I’ve been in this space eight years and, and I recognize 50 percent of the companies that, you know, I’ve reached in.

And, uh, so if I’m a credit union leader, I don’t know how you try to keep up, um, with all of these companies and, and, uh, do your day job. So that’s where we can help. Um, you know, kind of just do some of the, uh, um, kind of sorting and sifting for those banks and credit units.

Josh: Um, well, great segue to my last question then. So if people want to connect with you or if they want to learn more about, um, your guys fun, [01:14:00] like how can they do that?

Brian: Uh, yeah, a couple of, a couple of ways. I mean, obviously, you know, feel free to reach out through LinkedIn. Um, we have a platform we call the FinTech Forum. Uh, we have almost 3000 Uh, credit union and bank leaders and fintechs again to create, uh, uh, basically an online community, which provides a lot of information and content on, uh, fintech collaboration, um, and that could be, uh, access through TruStageVentures.com and can sign up for that. Uh, and, uh, yeah, otherwise, uh, just, you know, my contact information will be out there as well. So I love to hear from, uh, you know, people in the industry and hear what’s top of mind for them, because that really guides where we spend our time and resources.

Josh: That’s awesome. Well, again, Brian, thank you so much for being a guest on the Digital Banking [01:15:00] Podcast.

Brian: Great. Thank you so much, Josh.