Stephen Baker on Evolving the Branch: Digital Meets Physical Banking

“The dream is all the way to the right but the more of these tools and things you put in place, the more I think you’re going to get that type of interaction […] You’ve got to change things physically and you’ve got to change the tools that are in their hands.”



with guest:

Stephen Baker
CEO, Kinective

Episode Summary

In a thought-provoking episode of the Digital Banking Podcast, host Josh DeTar welcomed Stephen Baker, CEO at Kinective, for an in-depth conversation on the evolution of digital and physical banking. DeTar and Baker explored the significant impact community financial institutions (FIs) have on their localities and the fear that these critical entities might vanish without technological adaptation and innovation.

Baker shared his journey from the tech sector to the banking industry, emphasizing his commitment to leading a company that not only drives industry innovation but also cultivates a work environment people love. His narrative underscored the importance of creating a legacy his children could be proud of, linking personal values to professional aspirations. This introduction set the stage for a deeper dive into the nuances of banking technology versus financial technology and the pivotal role community FIs play in sustaining vibrant communities.

The conversation shifted towards the future of banking, highlighting the blend of digital and physical interactions, or “fidgetal,” as essential for the survival and relevance of community FIs. Baker and DeTar discussed how innovations in banking technology, particularly those enhancing the customer experience in branches, could serve as a differentiator in a competitive landscape. They concluded that the path forward for community banks and credit unions lies in leveraging technology to maintain personal connections and trust, which are their unique strengths.

Key Insights

Community FIs: The Lifeblood of Local Economies

Stephen Baker underscored the vital role community financial institutions (FIs) play in nurturing local communities and economies, especially in areas like the south side of Chicago. He articulated a deep concern for the potential disappearance of these institutions, emphasizing their unique ability to offer nuanced lending solutions critical for local businesses and housing developments. This insight shed light on the necessity for community FIs to innovate and adapt in the face of digital disruption, ensuring their indispensable support for local economies continues unabated.

Embracing ‘Fidgetal’: A Hybrid Banking Model

The episode delved into the concept of ‘fidgetal’—a blend of digital and physical banking experiences. Stephen Baker and Josh DeTar discussed how this model is imperative for community FIs to stay relevant. By adopting ‘fidgetal’ approaches, banks can enhance customer experiences, combining the convenience of digital transactions with the trust and personal touch of in-branch interactions. This insight highlighted the evolving customer expectations and the need for banks to offer seamless, integrated experiences that leverage the best of both digital and physical worlds.

Innovation and Culture: Keys to Banking Success

Stephen Baker expressed a vision for leading by example, fostering a company culture that both drives industry innovation and creates an environment where people love to work. This dual focus on innovation and positive workplace culture was presented as essential for moving the banking industry forward. Baker’s perspective illuminated the idea that the foundation of a successful banking institution lies not just in its technological advancements but also in its ability to cultivate a workplace where employees are engaged, motivated, and committed to excellence.

Guest At A Glance

Stephen Baker


Find Baker On:

From tech sector to passionate community banking innovator.

Josh DeTar: [00:00:00] Welcome to another episode of the Digital Banking Podcast. My guest today is Stephen Baker, CEO at Kinective. I absolutely love this kind of guest on the show. I’ve never met or talked to Stephen before today, and in five minutes, quickly learned we were going to have an amazing conversation. I always love to ask my guests what they would want people to know about them.

When I asked Stephen, he gave me his professional answer and an amazing one, by the way, and we’ll come back to that, but when I pried a little deeper, he responded with, if you ask my wife about me, I would hope she would say I’m a great dad and husband. Now you see how people answer these questions tells you a lot about them.

Going back to his quote, more corporate answer. Stephen said he wants to be known as someone who leads by example, a company that drives innovation and moves the industry forward and that people love working for and love working with. When I asked him why that was so important to him, he [00:01:00] said, well, simply it’s not fun to not have fun.

Uh, you know, no one organization is perfect and no person is perfect, but companies, no matter what they sell, are made up of people. Moving people up and to the right is the most rewarding thing, and it ultimately moves the company up and to the right at the same time. Now, it’s the coupling of these two answers that leads Stephen to say what he wants is to leave a legacy for his kids that they’re proud of.

So what does this have to do with tech for community financial institutions, you may ask? I would argue it does. Stephen didn’t come from the banking world. Funny enough, though, I recognized his last company as who processes my monthly HOA dues. So there’s that. Even though he’s newer to the banking industry, he’s deeply passionate about community FIs.

Spending considerable time in the south side of Chicago, Stephen’s witnessed community FIs being a life bud of people and communities, and he really and truly fears what happens if those [00:02:00] institutions cease to exist. So in a world of disruption to the status quo, what things can community financial institutions keep doing and what do they need to change to stay relevant and continue doing the amazing work that they do?

Spoiler alert, we’re going to talk about the silly phrase fidgetal and what are the larger implications of what that word is trying to encapsulate. Well, Stephen was on a competitive sailing team in college. He said the yelling was a bit much, so no worries on us getting yelled out on today’s episode, but rather expect a super informed and fun conversation about the insights from someone who’s passionate and has some unique perspectives from both inside and outside of our industry.

So without further ado, Stephen, welcome to the podcast.

Stephen Baker: Thanks, Josh. Happy to be here.

Josh: Um, you know, I really want to kind of start by picking up with what you were mentioning about. You know, you didn’t really come from as, as you call it, kind of the bank tech world. Right. And I, and I definitely want to come back to [00:03:00] that as well and just talk about You know, how you see the difference in FinTech versus bank tech and what that means to you, but you know, you didn’t really necessarily quote unquote come from this industry.

Um, but you’d already had some really unique exposure to the impacts that community financial institutions have on their communities and in your own words, like that has a big driving impact on why you wanted to join this industry. So maybe if you want to talk me through just a little bit of that example and kind of what you’ve witnessed and why that means

Stephen: Yeah, absolutely. So, you know, I’ve lived in Chicago. I didn’t grow up there, but I’ve lived in Chicago essentially my entire adult life, like since undergrad. Um, and, you know, I tried various things. I started my career at Motorola, but struck out to do a startup in the real estate space and got involved with, um, you know, some projects on the south shore of Chicago. And I think I would say like that more than anything kind of opened my [00:04:00] eyes to the impact and the importance of community financial institutions to the communities they serve, especially, you know, communities like we have in some of the urban areas, like in the U. S., where lending, I think, takes a little bit more nuance.

And there has to be a dedicated focus and a will and a desire to kind of lend to the institutions that are local there. Otherwise, You know, quite frankly, I think it would struggle to get the funding, you know, from let’s call them like the mega banks, because it’s not a color by numbers type of a, of an application.

So. You know, I, I definitely saw, you know, you know, number one, you’ve got folks that, you know, don’t necessarily have easy access to transportation all the time. And so they, they kind of need, uh, physical access to a location. You know, that’s kind of one layer of how I think some of these folks, um, serve the, the, the communities that they, that they work in. And then even kind of like maybe more importantly than [00:05:00] that, you’ve got all these businesses that, that are existing down there and thriving down there. Um, And and people that are working to renovate the neighborhoods, you know, renovate housing in the neighborhoods that, you know, simply, I think, would really struggle to get funding if it weren’t from these community financial organizations.

So. Um, you know, when I think about, you know, you see, you see data out there about, uh, the contraction of the market, like there’s fewer institutions. Um, one thing that gives me heart though, is even though I forget the exact statistic, I think, uh, financial institutions at the community level have contracted, you know, something like 40 or 50 percent over the last 10 years.


you look at the number of branches, they’re still kind of hanging in there. So I think that means you’ve got a lot of combinations and you’ve still got folks that are in that, in this industry, but. You know, it’s, it’s not going to continue. Uh, like we, those folks, those smaller institutions have got to have some advocates on their side, giving them tools to be competitive in order to keep, you [00:06:00] know, driving and thriving in those communities.

Um, that’s kind of my, you know, my two cents.

Josh: Yeah. You know, we were talking about, um, the whole, uh, FIAL thing, right? And a again, I want to kind of maybe come back to get your, your definition of that. But, you know, you look at, you were saying even some of the big banks right now, right? Cha Chase and Wells, and B of A. They’re actually opening branches, which is interesting and almost feels contradictory to the statements we keep making that everything is going digital.

And so they’re kind of demonstrating for us that there’s still value in ROI and opening physical branches. But even then, like these mega banks opening, um, you know, branches, You’re still kind of a number, even at that branch. And even at that branch level, a lot of times, and you said even yourself had a really big realization, like banking with a credit [00:07:00] union locally versus, you know, a big mega bank.

And it’s like, wow, where have you been my whole life? And they’ve been here. Like they, they are here. They are a part of the community, but not in the same way necessarily as an actual community financial institution is right.

Stephen: yeah, a hundred percent. I had, you know, I’ll kind of just be, I’ll be very, uh, vulnerable here in terms of my banking history, uh, just given the audience, but I, early on, I actually banked with a credit union, um, because I worked at Motorola and there was a Motorola credit union, which is now true West, um, based out West, uh, great, great organization.

But, um, I became a member because they literally had a branch right there, like next to the office I worked at. And it was, it was great. Like they really were tuned into the membership. Yep. Uh, I think they were really committed to, like, the things that the membership needed to be successful, or, you know, like, just to cater to the things that, you know, the membership needed, um, in their lives. And, uh, and then I got away from that, right? Like, I, I, I started traveling around the world [00:08:00] for work, and, um, you know, I, I moved on, I got, got a different job, and I ended up banking with, uh, You know, large financial institution, um, which has benefits, right? Just from size and scale. And I, until I, uh, I made my way into what I’m calling the bank tech industry, uh, where I’ve been recently, aside from my fintech foray, which is kind of prop tech fintech, which I shared, um, until I sort of got in here and, you know, I’m working at a company that all, all the clients are community and regional financial institutions.

And I said, well, geez, I’ve really, I mean. I would be embarrassed to say that I don’t, you know, bank with one of them. So I said, I better get in there. And so I went and opened up an account at the local credit union and man, it is such a difference, like it is fantastic. Like the services they’re offering, the rates they’re offering.

I think there’s a conception out there too, that those institutions don’t have the same level of like digital capabilities. And I mean, that simply isn’t true, right?

I, in many [00:09:00] cases, it’s, I actually, I had, um, I recruited a sales guy from a past life. He used to lead sales for a company I worked for and he was based in the Middle East and he led sales in the Middle East. Because his wife, uh, got a new job, they moved to Texas and, um, you know, I actually saw him recently came to our sales kickoff and he was talking to me, he was trying to open an account. He’s got family there and family here. He’s trying to do a lot of things with like moving money. He actually found that the credit union, his local credit union, had more capabilities to do this easier than the large banks he had gone and visited with, which blew my mind.

I mean, it just doesn’t make sense. But I just think it’s like, you know, there’s some, There’s, there’s conceptions out there and let’s face it. There’s just like massive marketing dollars, right. That are always at play that pull these deposits and these customers, these big institutions. And, you know, I frankly think it’s, uh, I don’t know, not a disservice, but maybe a mismatch in terms of like, at least for me personally, where, where [00:10:00] I’m getting a better, a better deal, you know, a better service, a better relationship. Um, One of the litmus tests I use is like, if something’s going on weird in my account, and somebody notices that, wouldn’t it be cool if they picked up the phone and called? Like, when’s the last time you got that from a megabank? I think you get that from community institutions, because people like, they know Josh, they know Stephen, right?

Like, you walk in the branch, and, and like, they’re not moving their people around, like, many times a year, right? There’s not a revolving door. So, um, Um, I’ve certainly kind of seen the light, um, or maybe re, reconnected with the light of, of community institutions and, uh, you know, um, I, I I just think it’s a, it’s a, it’s a better way to bank,

Josh: You know, before we started recording, you were telling me too, we were just talking about some of your history and some of the different things that you’ve done, different companies you’ve worked at, and, um, kind of the difference between being with like a startup versus a fortune 500 company, right? And you were like, at the startup, it’s super cool because you can make decisions in an instant and you’re like, okay, well, the [00:11:00] three of us are going to get in a room.

We’re going to make the decision and we’re done. The decision was made. We are on our way. But you have no resources. And so there’s that. And then on the flip side, you’ve got, you know, these mega organizations that have resources for days, but can’t make a decision in a year by committee. Right. And I think you kind of are alluding to, there’s some of that almost same sense of feeling in kind of the community financial institution spaces is there may be this perception that the large financial institutions

have a lot more resources, have a lot more, you know, scale and ability to do things, but ultimately they’re hampered by their ability to make decisions, to move quickly, to see the nuance in the relationship with, you know, a consumer that’s banking with them versus, you know, a small and local community financial institution.

And then even Community financial institutions actually have the lower, like, you know, hurdle to get over, which is just [00:12:00] adopting and leveraging better tech. But if you’re able to make decisions faster, you can even alleviate that. So, I mean, it’s kind win win on their side.

Stephen: No, I think you’re right. It’s interesting. There’s definitely parallels there. Like I, when we were talking about it, it was kind of in the context of the different companies I’ve worked with. And, Like there’s almost like in my mind, it’s like, I don’t know if it’s mama bear, baby bear, but they’re that sweet spot of like a midsize company that’s got resources, but still you can get everybody in a room and make a decision.

You know? Um, I think you’re right. I do think that’s part of the reason that smaller institutions, um, Are, I don’t know, have an edge in some way, let’s say, right. And like, I think it’s both on the. Um, on the, you know, decisions for credit or decisions for investment, like they’ve got, I believe, more aggregated kind of decision making where they can, you know, take into factors, they can take into consideration factors that are beyond, you know, what I would call like the standardized test factors, right?

That you typically would see, whereas underwriting for a [00:13:00] large institution, it’s got to be so standardized, right? You’ve got to be able to kind of fit everything in. Right. Um, in that square hole or whatever it is, uh, and there’s not a lot of room for, for nuance. Why? Because like those, those standards, those practices are passed down from on high.

You got to maintain like those standards to have, you know, for the bank to kind of, you know, continue to, uh, kind of, you know, basically run the program it’s running. Um, I think you got more flexibility, more agility at a smaller institution. Same holds true, I think, for tech, right? You’ve got a much smaller group of people to kind of make decisions.

Like those big institutions have an army of it, people, an army of engineers to build whatever they want, but the, the hurdles they’ve got to go through to do anything. Right. I mean, I, I I haven’t worked in one. I’m just imagining like there are very arduous procurement practices, very arduous kind of quality. And controls in place, which probably have benefits, but there’s certainly one of those benefits [00:14:00] is certainly not coming out with the most, you know, the coolest tech, the most advanced tech, the most customer friendly, uh, best user user interface. Um, so that’s one reason it’s exciting to work with small institutions.

Like I was in there opening that account not long ago and I was just chatting with the folks, you know, in the front office and they were telling me like the tech they’ve got and like, It was like kind of showing off new toys, right? They had a cool ITM machine in the front. They had a cool like hip to hip, uh, you know, not the old standard teller counter they had, like the hip to hip double teller thing where you can kind of go up next to you and they can kind of show you the monitor and they were, it was like kids with toys, right?

Like they were really into it. Um, which, I mean, how different is that than walking into a mega bank XYZ chain? Right. And it’s like, I don’t, I don’t, I’m not here to disparage anybody. Right. That’s not what we’re here for, but, um, but I do think it’s exciting, you know, to have these folks that are willing to kind of lean in, do try new things, um, you know, [00:15:00] be not experimental, but like have a little more agility in their thinking about what might work and what might serve their members and their customers best.

You know what I mean?

Josh: Yeah. Well, that kind of comes, Oh, go ahead. Sorry. Yeah. 

Stephen: think that’s true. And we, you mentioned the word fidget and we all chuckle a little bit when we hear that, right? Like, I always want to say, let’s get fit. I mean, I’m sure if that’s not a podcast, it should be. Um, but like, I, I think that’s, you know, I mean, that’s where we are, right?

Like there’s, there is a bridge between the two. We kind of mentioned, uh, there’s investment going into branches, like who thought, like in the midst of COVID and everybody’s trying to go digital. Um, who thought we’d be having this conversation about, like, branch investment, like, beyond, I mean, I think Chase, they’ve built hundreds of branches over the last several years, I think they’re building several more, and I think that’s great, in their plan for the next, I don’t know, five years or something, they’re going to build hundreds more, that’s really a good thing, and I think, um, you know, you’ve got other folks, I think B of A also announced they’re building [00:16:00] branches, so clearly, like, the branch is there to stay, that said, you know, Everything was trending digital before COVID.

Obviously COVID like projected us there. I can tell you my experience at Zego, we saw massive adoption of digital payment. I hope you’re paying digitally. Um, on Zego, a great company. I’ll just put a plug in for my old, uh, my old peeps, but, um, that whole, that company’s mission in life was to digitize rental payments and HOA payments. You’d be shocked at how many of these payments still come over by a, by a check. It’s like so inefficient, right? It’s, it’s a piece of paper. There’s the fraud. For check paper checks is going kind of through the roof. It’s really, you know, a trend it’s challenging. Um, but, you know, digital is critical, right?

And so we’re all going to invest in digital. You got to provide digital end end experiences. But I think more and more people are recognizing also. The importance of the, of the, of the physical, like, in order to foster relationships in order to. You know, um, gain, uh, the foundation to build a business relationship [00:17:00] on that physical presence is so key. And, you know, I think what we’re seeing, and this is the term, the way we throw it around in the office, you’ve got, I don’t know, transactions, interactions that originate in the digital space and then kind of take over in the physical and vice versa. Right. So, um, that’s kind of exciting. Like one, one use case that I think is super cool is like you could have an app. You’re going to tee up. Uh, a bank check, right? You come in, scan a QR code, machine spits it out. That’s pretty cool. I mean, you gotta have that thing in your hand, right? That’s just like the nature of how that works. Um, and then, you know, maybe you’re in a branch talking to somebody, maybe they, they, uh, you know, maybe even you’re interfacing with a machine, an ITM. And by the way, I think, it’s probably another topic, but I think ITMs have a lot of benefit. Uh, you know, there’s so much you can do in these new automated machines, but, You know, the people are in the branch and you’re not interacting with them. So is that a lost opportunity? I think there’s a chance of that.

Right. But, um, some of the new tech that that’s [00:18:00] making, uh, branch staff more mobile, they can kind of, you know, sashay around the branch, maybe walk up with a tablet, have a conversation, get some customer information on the tablet and, and, you know, maybe suggest something, uh, for that person. Right. Or. Maybe they’ve got time and they can, instead of that customer who came into the branch and is now going to interact with the machine, if you’ve got a free associate, wouldn’t it be great if they kind of just short circuited it and then had a face to face conversation if that person wants it. So I think that’s where you’ve got, you know, this kind of crossover, um, between the physical and digital. And I think the possibilities we’re just starting to kind of uncover what’s, what’s available there. But, um, but missing out on that chance to interact with people. I think that’s. That’s a real loss.

And I think that’s the value of building the branches, right? I mean, I think that’s where the ROI comes from. Like, um, you’re going to have somewhere for somebody to walk in, uh, to engage with, with, you know, with a person, create a human interaction. And maybe the [00:19:00] vast majority of the touch points are going to be digital. Um, but without, like, we, we talk about this with, uh, with office culture too, right? Like, I’m sure you guys did. Um, when I was with Zico, we all went full remote, full digital during, during COVID. Not everyone did that. Um, uh, you know, in fact, part, part of our business at Kinective, you know, did not do that at all.

Um, but you, we had this concept where it’s like, you’re out of the office. Being in the office has got value, right? Cause it’s the human connection, the human foundation, and maybe you don’t need it full time, but like, you’re sort of like, In that face to face moment you’re making we kind of funny We were obviously not in the banking space, but we talked about it as like making deposits into the account Like you’re you’re interacting you’re collaborating you’re making deposits Um, you’re back in your digital you’re sort of like making withdrawals, you know And I think the same is true with business interactions, especially when people are trusting an institution with their money, you know

Josh: Um, man, you gave me a lot of [00:20:00] good stuff.

Stephen: Sorry, yeah,

Josh: No, I love it. See, this is what I mean when I say these are kind of podcast guests. I love, um, you know, I’m glad you used the example of Zico too. I actually want to go back to that real quick. So, you know, um, For whatever dumb reason I got myself elected as our HOA president, so I get to deal that fun.

Yeah, I know. There’s, yeah, there’s a whole podcast in just that, let’s be 

Stephen: There’s very few, like, jobs that are less thankless than that, or that are

Josh: Yeah, totally. But it’s amazing how many people think that I’m paid like a handsome salary to do this. And it’s 100 percent volunteer, by the way. I don’t make a penny for doing this. FYI. Um, but, so, you know, um, so we were talking about Zico, right? So I have my HOA payments for my actual personal, you know, us set up through Zego and, you know, we offer tons of different collection methods for people to submit, including you can mail, [00:21:00] um, you know, our property management firm, a paper check and every single time this happens, we go through this cycle and what happens is we have to increase HOA dues, right?

So we actually just had to recently, um, so we just had an HOA board meeting last week. Um, the previous quarter we raised HOA dues going into this year. And every time that happens, The next meeting. So the one, well, you know, it’s fine. I actually don’t get very much of that. Um, surprisingly, I don’t know.

Maybe, maybe we do a good job of communication, maybe not. Um, but, but what happens is, you know, we raise it. And even this last time, I think it was like 8, right? I mean, it’s some small trivial amount, but there’s over 200 homes in our HOA. And what happens is we raise it that eight bucks and this meeting that just happened the quarter after the raise, we [00:22:00] always have to discuss delinquencies because there’s all of a sudden a bunch of delinquencies and it’s because we’re just gonna use simple math here.

Last month my HOA dues were a hundred dollars. This month they’re 108. And I still send a hundred bucks cause I didn’t get the notification cause I didn’t pay attention cause I didn’t attend the board meeting or I have it set up through say bill pay through digital banking to send a hundred bucks every month or, um, you know, whatever my other payment method is, but because I have it set up through Zico, Zico is automatically connected to our HOA.

So as soon as the increase goes in, Zico just pulls 108 bucks instead of a hundred bucks. So I am never a part of our delinquencies report, not because I’m paying attention, but just because I have an automated tool that’s helping me to stay on top of it. Right. And so literally every single board meeting, I make sure it’s a part of the minutes.

Hey, [00:23:00] sign up through Zego because then you’ll never have this problem. Right. And so where I’m going with all of this is, I think that’s a great example of how You know, some of these digital tools can actually really help to support people. And, and I think that that is actually, you know, funny enough, we’re getting to use this as an example, but I do think it is a real world example that’s kind of like tangentially a part of our industry is, you know, what sucks is as the HOA president, when somebody hasn’t realized, hasn’t paid attention to communication for six months, And now I’m having to tell them like, I’m really sorry, but you’re finally hearing from us because we’ve sent you to collections over 64.

Like that’s annoying. And now you have a bunch of fees and now you have a bunch of penalties and now you have a bunch of attorney fees and now it’s 300 bucks and 300 bucks could be a big deal to somebody, right? And so if they just use the tool that’s available to them, Um, they’re actually saving money because they’re never having an [00:24:00] issue with their payments processing, right?

So just, I think those are good examples of how, you know, technology is really helping to augment the kind of transactional side of banking. But to your point, this is why, you know, we joke about fidgetal, but it’s why it’s so important is that physical element. That’s that next. stage in kind of the depth of relationship, right?

That’s the far less transactional. And yes, there’s a lot of transactional things that still happen in the physical space. And I think there’s a lot of push towards helping to educate consumers of how they can use digital to solve for those. So it’s a lower cost of servicing and things like that. But to your point, like you’ve got somebody physically in the branch, like that’s great.

That’s an opportunity. And not even just an opportunity to maybe sell them something, but just an opportunity to be like, Hey, I just, I’d love to get to know Stephen a little bit better. And then, I do notice like those anomalies happening in his finances and I’m able to have a conversation with him.

[00:25:00] Yeah. 

Stephen: and I write and working for companies They’re trying to get a message across with with nuance and detail like how hard is that to do over like? Email or whatever like whatever it is like whatever the medium is there is like no substitute to getting somebody Face to face for just a couple minutes right that interaction because I think that’s how we’re programmed as humans Like I don’t I don’t care how good the marketing is.

Right. I read it. I watch it like whatever. I mean, a video is bad. I didn’t get someone to engage with a video. It’s better than, you know, probably just like reading something, but a market texture diagram, whatever it is, it pales in comparison with a short conversation face to face, the amount of like, matter of fact, like I was actually talking to, uh, one of our sales leaders earlier today about something.

And we just have like, the digital thing came up and, um, you know, I said something and I was like, this is how I think about it. Blah, blah, blah. And, uh, he was like, you know what? He’s like, this has been bouncing around the office. And until you just said what you said, I didn’t [00:26:00] really, and by the way, I’m not taking credit for being any kind of savant on this stuff as I shared with you.

I’m like relatively new and still learning myself. But the way I said what I said, like that communication, it was 30 seconds or whatever, it landed in a way for him that like a number of other interactions had not, right. So I just think it’s an opportunity. It’s like an example of an opportunity. Um, where you can really make an impact and a difference.

I, I think a lot of these institutions, you see, you hear about like the center of the financial universe in many cases moving away from the FI and into like embedded banking, like third party digital channels. I think a lot of it is because folks may not be aware that their institutions offer the things, right, that these other people are. They’re presenting to, um, At the moment they need it or in a way that they’re engaging with it. And I just think walking into the branch once in a while, and if you, and probably, you know, training, it’s not, it’s not easy or free, right? Cause like in person interactions, like [00:27:00] you gotta have the right people and you gotta train them well to really leverage it and be effective.

It’s a whole other ball of wax, probably another podcast. But if you do that well, and you invest in a branch that makes sense. Man, like what a powerful combination. I think I’d love to see some data on this. Um, I think folks that are doing that well are probably getting a much happier customers and be a lot more business from those customers.

That seems to be like a virtuous cycle, right? Um, then, then folks that are not, that are not doing that well, or they’re just kind of like doing it all by numbers. Um, and it’s interesting, you know, you mentioned like the automated kind of like payment interface that, that Zico has, like, when I think about technology, I think about like you and I, everybody. How many, I mean, there’s so many distractions, so many things you’re thinking about. I mean, as we were doing our pre conversation chat, like, you know, we were doing like, you know, just kind of, just general, like, what am I up to? How do I think about the world? And, like, obviously we got our corporate [00:28:00] discussion about what we’re up to and stuff, but You know, at the end of the day, you and I are both dads and like, that’s pretty important.

That’s a high, high on the list. And, you know, you got that amongst all the other things you’re thinking about. Who’s got time to think about, Oh, 8 for the HOA. I gotta go, I gotta go like up my payment. I gotta log in and do all that. Like that just shouldn’t be something we got to worry about. Tech should just handle that stuff.

Right. I think that’s like the promise of technology. They can take those little things out of, and then, you know, you mentioned the fees and it’s like, man, that kind of, that’s like, that’s tough because for a lot of people, like, yeah, I mean, and I, by the way, I saw like a 60 minutes on this as you were talking, it kind of like brought it back to me, um, where in some cases, and by the way, like, I think you’re a very benevolent HOA leader.

I’m, I’m assuming, but there are some pretty nefarious folks out there that like they penalize and they find and like, they all stack up so people can take advantage of those things too. But. Um, when you’ve got technology in place that kind of streamlines it, you just, you know, I think you’ve got less risk and you’ve got less opportunity to make a mistake or miss something.

But if you

do, [00:29:00] and you’re walking into a branch once in a while, I think there’s a lot less chance just from a human perspective, that’s going to happen as well. So, um, maybe that’s the new definition of fidgetal, right?

Josh: Hmm. Uh, well, I do want to clarify one thing before we move off of it. I run our HOA with an iron fist of dictatorship. no, I’m just kidding. Um,

Stephen: Nice.

Kindness is not weakness, right? 

Josh: Yeah, exactly. Um, you know, that is actually really funny is, you know, yeah, take myself out of the equation. Right. But, um, just yet another example of like people really and truly do need the people helping people mission of credit unions.

Like just that, that global mindset is such a beautiful thing. Um, because yeah, in all seriousness, like I sit on a board with two other amazing human beings, um, and it’s never a question when the three of us get involved about like, Hey, well, was this an honest mistake of [00:30:00] somebody? And can we, do we need a fee out of this?

Or can we, you know, pass some grace? And it’s like, those kinds of decisions come from, you know, people who care, um, people who have. I guess, you know, for me, it comes from working in this industry and just seeing the impacts of people’s finances and what a community financial institution cares about somebody like that’s my lens.

And, know, Dorothy is an accountant and does taxes. And so, you know, she’s constantly a part of people’s money and seeing. Hey, like, you know, every couple of bucks adds up for this family to be able to put groceries on the table and Nick’s, uh, um, uh, in real estate. And like, so it’s just, I think, you getting people to like, look out for the collective good.

And that is what community financial institutions are. It’s such a larger and more impressive scale. Um, and I don’t know, I kind of like have some fun with this podcast in being. Um, really focused on, you know, trying to shine the light on that [00:31:00] because to your point, I think a lot of times people don’t realize just how awesome community financial institutions are and just how much they have people’s best interests at heart and like the actual impacts that has.

And yeah, it sounds kind of silly about eight bucks here, eight bucks there, but you start to add that up and you look at like somebody’s whole. Um, financial position, like all of those things do add up. And, um, what is it? I think that recent stat I saw something like 60 percent of Americans live paycheck to paycheck, right?

So if people are living paycheck to paycheck, eight bucks matters. And so eight bucks matters to 60 percent of us. Like that’s a really big deal. Um, but anyway, I know how I got off sidetrack, 

Stephen: I mean, I’ll just, I’ll add one thing just because of the parallel hit me pretty hard. Like, you know, you’re running a small HOA with 200 members and you guys are making the decisions. Many HOAs in this country are run by big management companies. And I can tell you, they’re not sitting down thinking about, uh, does person X, Y, Z, like, is this an honest mistake or whatever? They like, they simply don’t care. Like it’s, [00:32:00] it’s color by numbers for them. Cause they’re managing thousands and thousands of units.

So there may be a parallel that you can draw. Look, I mean, it’s not like, I’m not saying anybody’s wrong. It’s just the nature of a big, massive organization managing. And you know, uh, virtually kind of like, I mean, whatever, massive numbers versus a smaller one managing kind of on a, on a more, just frankly, a more just realistically personal level.

Like that’s just natural and it’s human nature. You’re, you’re, you’re kind of. You’re removing that component at a certain size and scale. It’s almost like, I don’t know, maybe it’s like the Walmart versus the local shop, right? You walk into ACE hardware in your local neighborhood and you know, they may know who you are.

They may know like where the thing that you need is. And, you know, let’s face it. It’s kind of a different experience. If you walk into, into a Walmart, it’s just not the same.

So anyway, 

Josh: no, I’m glad you brought it up because there are interesting parallels and it’s, um, you know, we use the Amazon example all the time, right? Like, I love people who like, Oh, I hate big [00:33:00] companies and blah, blah, blah. They’re all out for profit and they don’t care about the little guy and they’re squashing small business.

I’m like, how many Amazon packages are sitting on your porch right now? And they’re like seven. I’m like, yeah, you’re so full of Like, at some point, like a lot of us default to convenience economies of scale. Cost of certain things and especially if we’re talking about more transactional things, right?

And I’ve used this example on the podcast before to like absolutely, there’s some things that I’m just like if I’m working on a project around the house And I know I’m gonna need these six things and they’re kind of like I need a roll of tape or whatever Like yeah, I’m probably just gonna place an Amazon order cuz I’m busy and it’s gonna show up at the door. But, you know, if I really want to go talk to somebody about like, Hey, I really want to stain, you know, a pergola in my backyard and I live in the Pacific Northwest.

And so it’s going to see heavy, heavy rain for eight months out of the year. And then in the summer, it’s going to get a ton of sunshine. It’s like, what would be the best stain for me? Amazon’s not going to have that answer for me, but Ace Hardware is. I’m [00:34:00] going to go down to the local Ace. I’m going to talk to the guy and he’s going to tell me like, Hey, here’s what I think you should use and make a recommendation.

So. I think, you know, in, in so many instances of our lives, there’s a benefit to having both. And to your point, I don’t, neither is necessarily bad or evil, right? They just have their places. And I think this is something you and I align on is, is that I want to make sure that one of those options for consumers in the U S when it comes to, you know, their financial institution of choice, I want credit unions and community banks to be a super, super viable option.

As a part of that whole plethora of service providers.

Stephen: Yeah, yeah. I mean, a hundred percent I think, and it’s interesting, um, you know, I’ve spent year, I spent a lot long, a good part of my career in PropTech, um, which is an interesting market. And then most recently I worked for a FinTech PropTech, and then now I’m kind of fully in FinTech, FinTech, although, as I, as I like to [00:35:00] think about it, just ’cause I, I gotta draw a distinction in my own mind between. This and what I was doing before. I kind of think about our, our little piece of the world is bank tech. Excuse me. So I don’t know, maybe I can get that to catch on, but, uh, you know, there’s so many parallels, right? Like, one thing I think is really exciting and compelling about this industry is how many folks are out there driving innovation and they’re driving innovation again, not for like massive institutions because they do their own thing, they’re driving it, uh, for. To into market to these smaller institutions to be competitive and, uh, and to do something more clever. And I think, you know, there’s many examples, um, in, in industry and through history of that’s where innovation comes. It comes from small folks focused on a single thing, um, that they want to be the best at.

And then, you know, uh, they build a better mousetrap than the big, slow moving company that’s got to worry about many, many things. And I, I think these small [00:36:00] institutions, like. We already talked about how they are, it’s easier for them to kind of get to set together and make a decision and be agile. And I think, I don’t know if it’s a chicken or an egg thing, but you marry that up with like this market that’s bringing cool innovation right to the table, um, whether that be a better mousetrap for opening a loan or making a, just a credit decision or, you know. Um, or, or, you know, managing, uh, money, whatever, like wealth management, whatever it is, right? Like there’s, there’s many, many examples. Um, there’s, there’s cool new innovations available to these small institutions and they’re, they’re like leaning into it. And I think it’s like pretty, pretty exciting that they can, that they can leverage that stuff.

Um, and, uh, like they need it, they need it to be competitive. And so, you know, all of us working in this industry, um, maybe not all of us, but I think a lot of us, You know, at least I see our mission. I think you guys see it the same way I talked to our employees about this like we’re really out to support those small institutions to be competitive So they can [00:37:00] keep doing what they’re doing right, but they can’t do it Like there’s no free lunch.

Nobody’s gonna come to you because you got like gonna give you like you talk about Amazon It’s convenience at the end of the day. The service has got to measure up. It’s got to be convenient It’s got to be competitive, right?

And so that there’s a bar that these folks have to meet. And I think there’s enough people working diligently to kind of make that happen that like they are there.

You know, when, when SVB failed and, and, you know, there were a couple of dominoes behind that. You saw big movement of deposits and depositors away from small institutions, but it’s been coming back. And, um, you know, I, I think the ability to kind of offer these things is, is helping drive that. And frankly, you know, that, that local interaction and, you know, people miss that.

They go maybe try something else and, you know, maybe they move an account, maybe they move deposits, but you know, the dust settles and they’re coming back to where they’re getting a better, a better service, you know, and a personal service to your point.[00:38:00] 

Josh: You know, you’ll like this. I, uh, had a conversation this morning that got me all fired up. So it was good timing before recording a podcast. Um, but shout out to Scott Pryor, um, CEO of connection credit union up in near Seattle, Washington. This is a super small credit union. And, um, and basically the, the gist of the conversation was, um, I’m not screwing around.

I’m not laying down. Uh, like I’m plowing forward full steam ahead because I believe in, know, the impact that our little credit union has on its members and its community. And I’m not just going to say like, well, I’m a little credit union, so I guess I can’t have access to big tech, or I guess I’ve got to roll over and merge into somebody bigger.

I’ve got to, you know, um, just accept that I can’t get access to the newest and latest and greatest. And I can’t evolve and innovate. And he’s like, hell no, like that is not in my DNA. That is not in my member’s DNA. That’s not in my credit union’s DNA. And, you know, it’s just really cool talking to him about, you know, what things [00:39:00] he gets excited about, what he’s working on.

And, and I think there’s a lot of examples of folks out there that are like that. And, and to your point, like, um, you know, there is some really cool opportunity to leverage tech. to actually move faster than some of the big institutions because you can partner with some of these small, quick moving, nimble tech companies.

Um, you know, kind of talking about that though, I would love to get you to pick your brain a little bit more on this whole, like why you call it bank tech versus FinTech, like, so as we start to talk about like working with technology providers, what’s that in your mind and 

Stephen: Well, I’d be, yeah, I’d be curious like, you know, your thoughts on this and, and, uh, you know, but, but if you go to like a money 2020 conference, it’s all FinTech, but it’s like, it, it ra it’s like such a wide range of technologies, right? And so one thing, you know, at least, that, at least that we’re not here to do is [00:40:00] to like empower embedded banking in some. Some third party thing, right? We’re maybe this is unique to us, uh, but we’re here to power financial institutions. And so that when I kind of talk about bank tech, I think that’s the circle I’m drawing. Cause there’s a lot of cool, innovative technology that is doing other things and providing other services.

I mean, Zico would be a good example, right? Like, um, it’s a great financial services company, but it, it doesn’t. It’s not really kind of support. It’s not a banker banking technology. It’s not

for a credit union or a, or, or, or a community bank. Um, so I think that to me is kind of like the distinction that, that I draw. Um, just, you know, maybe if nothing else than to just get clear about, Hey, who are we trying to partner with? Cause like we partner with tons of finance of, of FinTechs and, um, You know, we’ve got people kind of pounding the pavement on who those should be. So it’s like, I don’t really want to spend time and energy on somebody who’s not focused on the market that I’m [00:41:00] focused on supporting, because that’s, that’s where we want to drive our energy.

So, um, I won’t take anything away from the FinTech outside of that universe. I think it’s compelling. I think it’s important. Um, but just for kind of purposes, how we define our market. Uh, that’s how we think about it. Is that just curious? Is

Josh: yeah, no, that makes a lot of sense. I mean, I, I think about it really similarly, right? Because to your point, if you, if you just call it FinTech, right, that’s such a high level umbrella that so many things fall under that, right? Like you could technically call us a FinTech and you could call chime a FinTech and we could not be more different, right?

And from the standpoint that, What’s interesting for us is you look at just even how like, uh, the market perceives us, right? And a lot of times because we get classified as a FinTech, there’s kind of this expectation that you’re, you know, you’re a digital banking provider for community financial institutions.

Therefore, you’re a FinTech. Yes, we work in financial technology. We’re a tech [00:42:00] company, but then they expect us to scale at the pace of, um, John, you know, you guys got to grow to 300 percent year over year. You sell a niche service. That’s a digital only direct to consumer with a massive marketing budget.

And we expect be like, and act like that. And I’m like, no, that’s, that’s actually nothing like our business model. That’s not what we’re trying to accomplish. So I do think that that is too broad of an umbrella. And I think it both. Helps and penalizes people at the same time with that broad categorization.

Um, I definitely agree. I think like bank tech narrows it down, right? Like it’s, Hey, within that FinTech umbrella, but

Stephen: you just said something that I think may be a bright line, which is like, we don’t serve consumers, right? And so if somebody is serving consumers, they’re probably not, excuse me, somebody that we would work with. If they’re serving consumers on behalf of an FI, we would work with them. So it’s like, you know what I mean?

That’s kind of a, that might be the bright line distinction, right? Cause

we’re not to go, you know, we’re not trying to go out like, yeah, to your point, consumer direct tech business. [00:43:00] It’s like totally different animal, right? You get unicorn status because you get that 300, 400 percent growth rate.

But like, that’s nothing, that’s not what we’re trying to do.

Josh: yeah, no. And, but I think that’s also a good distinction, like for our listeners, if you’re, you know, a community financial institution looking at technology partners, like that is a good distinction, right? Um, of a true FinTech. By the, you know, urban dictionary definition, I guess, versus what you’re kind of classifying as bank tech is really, Hey, we have no desire to have notoriety to your consumers.

Um, sit in the background happily. I just want to empower you to do what you do really well through our technology. So it’s, you know, it’s tech in terms of service of the bank, as opposed to, to broader market, I guess.

Stephen: Yeah. I mean, like I, we actually say that internally, like nobody really knows we’re there and that’s like not a bad thing, right? If somebody knows we’re there, then like something’s probably going wrong,

Josh: Yeah, yeah,

Stephen: no consumer would know Kinective. They would just benefit by [00:44:00] the stuff that we’re doing and enabling, right?

Right. So, you know, and if, if, if somebody is coming up with like, we should rebuild this thing. I’m like, does it touch a consumer? Actually this, I probably shouldn’t say this, but I’m like, does it touch a consumer? Is it sexy? Does it have UI? Like, that’s probably not for us. Like sexy is not for us.

Josh: that’s funny. No, I, 

Stephen: depends how you define it. Right. Cause like the tech guys, the architects, like to them, the elegant architecture is sexy. Right. So I don’t want to take anything away from that, but like how the lay person would think about it. We’re not, that’s not us.

Josh: sorry, 

Stephen: You got to know who you are. 

Josh: and that’s what’s funny. It’s like even within that, right? I think we’re both talking about being, even our organizations are much more similar in terms of kind of how we’re structured and set up. But even our stuff is actually B to B to C, but our B is never seen. Right. And so it creates a whole another layer of really dependency on hyper collaboration between the tech provider and the FinTech because the consumer will actually see [00:45:00] that.

And even then, like with your guys’s stuff, it’s not that they maybe see it, but they are still experiencing it. They are still interacting with it, whether they realize it or not. But it is funny. 

Stephen: totally. But you, you’re actually, yeah, to your point, like you’re kind of like, you’re becoming that face to the customer on behalf, you’re like a

proxy, right. For the brand of the FI. yeah, And that’s, I mean, that’s like a responsibility too, right? that’s, know, you got to do,

um, we, have not taken. 

Josh: Oh, what’s that?

Stephen: No, I’m saying we, we have not, we have, we actually have UX UI designers, but everything we do is internal. So,

I mean, I want to make our stuff easy to use, but you know, I don’t have to worry about. Like whatever, hundreds of thousands, millions of consumers. I’m worried about making life easy and easy to learn for a new bank associate.

That’s who we’re dealing with,

Josh: Yeah. 

Stephen: which by the way, like, I mean, that’s one of the trends too, right? The turnover of bank staff. So that’s no small thing. I mean, we gotta, we gotta be easy to use. That’s an expectation,

Josh: [00:46:00] That’s important. I want to come back to that. Um, so when you were talking about earlier, you know, one of the things that you see is a really big, you know, Bonus in the kind of, um, differentiator for community FIs is the low turnover rate, right? Like you, you go in and you talk to Susan who’s been at the branch for 20 years and just, it’s, it’s virtually impossible to replicate her knowledge, right?

Now, yeah, we’re getting pretty interesting where, uh, you know, AI can start to learn somebody better than even a person does. Right. But how well does it actually understand the empathy side of it and actually interact with that person and then have conversations that person like a real human would?

That’s where like Susan is going to shine, right? But if you’re constantly turning over staff at the credit union every six months, you just, that’s going to be really difficult to build. And that’s what you see at the mega banks, right? Um, know, even, uh, you know, you [00:47:00] look at a local mega bank and their branch, I’d be really curious to see the turnover of their staff versus the credit union down the street from them.

I bet you it’s worlds apart.

Stephen: I, you know, just my experience in Chicago, like working with local branches of a mega bank, like I swear every time I walked in there was different people and then I actually did develop a relationship with somebody and and she was great like she really was she actually was doing the thing paying attention to my accounts and like and then they moved her to another branch so that like I don’t I don’t know if that was like deliberate like you know they’re gonna keep people moving around so you can’t form that relationship like that would seem really weird but there definitely didn’t seem to be I will say this there’s like there’s no discernible effort to make that

like drive that relationship and that’s a total no Head scratcher for me.

I cannot figure out why you wouldn’t have like, like, I mean, I’m traveling this week. This is not my home, by the way. I’m staying at a place in the woods in North Carolina, but you know, we’ve been at hotels and [00:48:00] you know, it’s all about hospitality. Like the whole point of it is to come make, you know, somebody come in and feel welcome. And, um, man, I, I think that’s a missed opportunity for a lot of institutions. Um, at least at the larger end of the scale.

Josh: Yeah, but that’s exactly what you’re saying Tuesday is as. You look at even just kind of what we started some of this conversation with of, you know, you want to build a company that people, um, like love to work at and love to work with. And I feel like I can go up on a limb and say, I don’t know if that’s Jamie Diamond’s like North star.

Right? So

Stephen: right?

Josh: he’s got shareholders. That’s exactly it. Right? I mean, you’re, you’re beholden to a different master and you just, you look at a community financial institution, you look at a credit union that’s member owned or, you know, a local community bank that’s been in family for [00:49:00] generations or something like that.

And, and they’re just, there is a very different mindset behind that. And that creates a different culture. And so creates a culture of people wanting to stay, but absolutely. I mean, could you imagine working at a community financial institution where you’re like, I really love the culture, but as the, you know, credit union has evolved and we have to do all these new things, I have all these systems and they all suck and my job just sucks and it’s just in the ass to get anything done and this is no fun and I’m out, right?

So yeah, you still 

Stephen: Yeah. I mean, 

Josh: that people align to, but they still have to have a place that they like. can get their work done in a way that they want to stick around.

Stephen: yeah. I mean, look, I don’t think it’s an easy task, right? Like Jamie Diamond, like the, the size of that and scale that organization. He individually, I mean, he’s a pretty warm, engaging guy. Um, And he actually, you know, he talks about this, he does like these, uh, these bus tours around the branches. Like, so I think he [00:50:00] feels like it’s important to show up. Um, I have a feeling though that he takes a jet to each of them and the bus is kind of going. But whatever, I mean, probably what he should be doing. But like, I think it’s almost, it’s nearly impossible for one guy like that at the top of an organization like that. To have his personal warmth, like percolate down.

It’s gotta

be systemic. It’s gotta be part of the organization’s DNA. I will say like, I travel a lot, like too much. Probably I have experienced different airlines. I will say one success story to me has been United Airlines and how they have brought. A real warmth and hospitality into the cabin. Like truly I’ve like noticed it, right.

As contrast to some other like major flag carriers, it’s really, really hard to do. I think it’s gotta be a point of focus and it simply isn’t a point of focus for these large financial institutions. And you compound that with like tech that may not be easy to use or, um, you know, user friendly and like, I don’t know, what’s the culture people are kind of buying into and sticking around for. I don’t think there is one, you know, it’s, it’s, it’s a [00:51:00] challenge versus small, small, um, credit union. You and I were talking like most of these folks have, uh, a nonprofit that they’re all in on. Like people talk about it, like it’s a, it’s a, it’s a real point of focus for them that gets people’s hearts and minds, right?

Like it certainly gets me warmed up to, to an institution that’s doing something like that. And, uh, it’s just, I don’t know, it’s a lot easier to do that at the scale that a lot of our, our mutual clients are

working on. Yeah,

Josh: talking about with digital too, right in that The whole booking process and everything. If it’s a total nightmare, like I’m out, um, I, I, especially for somebody like us who travels a ton, right? Like I need operational efficiency and booking my travel.

Cause I just don’t have the time and patience to deal with shenanigans when I’m going from city to city and hotel to hotel. So I need operational efficiency and the technology I use, but when is the number one time that you judge them? It’s usually when [00:52:00] something goes wrong. What happens when a flight’s delayed?

What happens when your bags are lost? What happens when you go to check into your room and they accidentally gave it to somebody else? Like how did those organizations stand behind those events and what is the culture that they’ve generated there and how have they kind of empowered people to handle those scenarios?


Stephen: that Seinfeld episode, right? I don’t know if you know the one where he shows up to the rental car counter and she’s like, well, we don’t have cars. And he’s like, well, I have a reservation. She’s like, Oh, yeah, I have the reservation. Um, I just don’t have the car.

And he’s like, uh, Maybe you don’t understand what a reservation is, right? That whole bit. It’s pretty awesome. Anyways, you YouTube it. If, if, uh, if anybody’s not familiar, it’s worth a chuckle, but you’re right. Look, things happen, like shit happens, right? Things break. Um, think people make mistakes. We do our best. And I think some of these best in class companies do the same. They, they do their best to put processes in place, [00:53:00] procedures, technology, to make sure none of that happens. It will happen, right?

How you recover. Makes all the difference. I have a colleague who’s fond of saying, you know, when a broke when you’re broken nose heals It heals back stronger. And I think that’s true. And how do you generate like real evangelists for a company or a technology or whatever it is It’s like, you know, you go to the hotel They screw something up and they they’re like all over they own it They put you in a nicer room, whatever like same thing for a tech company Problem happens.

People jump in. They’re like, they’re rowing hard with the client, showing them how important they are, you know, back to what we talked about initially about how do we define success? To me, that’s how you develop clients that love you and love working with you as a business. And by the way, it all comes down to people, right?


people that are reacting and recovering. And um, and, and that’s how you generate, like you’re in the trenches together. Something goes wrong and like you are owning that problem with them. Man, does that make a difference, right? And when they’re thinking about the [00:54:00] next thing that they need or advice they want, like, it’s also not self serving all the time.

They want advice about, you know, The next thing they should do or what have you. Um, really important, uh, you know, so having clients that love you is huge. You know, how do you get clients that love you? You need employees that love working at the company and, uh, you know, a culture that, that that drives to that and measures that develops people.

That’s why I’m, I’m such a big fan. I assume some of these companies we talk about that do a great job measure internal, like net promoter. Um, but I just think that’s critical. You gotta measure internal happiness. You then got to measure external happiness. Those things are, I will tell, like, I haven’t seen data on this.

Those things are highly correlated, right?

One really impacts the other. Um, and then, you know, a great culture with visibility where everybody knows what the North Star is and where you’re headed. Wow. What a coin, like, what a, what a magical coincidence. Those companies tend to do really well, right? Cause people want to buy from them.

They want to do business with them. People that work there, they put their back into driving innovation because they think it’s [00:55:00] important. And, um, it’s just, it’s like a magical flywheel. And that’s like, to me, you know, the upper right quadrant of business in a nutshell.

Josh: You know, um, uh, that makes me think of a real example from recently. So those that know me well know, um, for better or worse, I had been a Hilton loyalist for a long time and lately 

Stephen: Even through the Weston Marriott merger.

Josh: man, it’s just Hilton has been absolutely terrible. Sorry if you work at Hilton and you’re listening like it’s not good.

And recently they have a new TV commercial out that’s talking about like the Hilton commitment and all of this. I’m like, Hey, I hate to break it to you, but corporate may be spitting that, but it ain’t getting disseminated down below. And, and that’s exactly what you were just saying is, is like, it’s really obvious that they have not cultivated a culture at Hilton that has empowered people to be passionate and to [00:56:00] care.

And because when I have an issue, they’re like, okay, so what? Couldn’t care less. Like, as as I don’t get fired over this, I don’t really care. Like I’m not loyal to Hilton. Like if I get fired from Hilton tomorrow, I’ll go work at McDonald’s or I’ll go work at wherever. 

Stephen: can feel that coming through the

Josh: can feel Right.

And conversely, um, I’m a loyalist to Alaska airlines and had an issue with Alaska the other day. Made a phone call, get a person. They’re like, Oh my gosh, I’m, I’m so sorry. Like I would hate that if that was me. Hang tight. Let me grab a manager. Two minutes later comes back like issue resolved. Thank you so much for being a loyal Alaska flyer.

Right? I’m like those kinds of instances. They do. They develop brand loyalty, right? But it’s because those employees have been empowered by a culture that says, like, this is something that is, you know, foundationally important to us. And if it’s not to you, then this isn’t the place for you. But if it [00:57:00] is, then we’re going to encourage that.

We’re going to incentivize that, you know, we’re going to highlight and showcase that behavior and attitude as a model of what we want within our organization. And you do like as a consumer, you feel that. And so back to your example from, you know, a mega bank or a, you know, true fintech digital only, um, you know, neobank or something versus a small community financial institution.

You feel that you feel that when you interact with somebody and they’re like, no, no. Like I’ve been here for 15 years. I’m committed to this place. I’m committed to this community. Like I care about you as a person. You feel that. And so I, you know, I think that’s what’s really interesting for this industry is as we start to get more digital, One of those people that like, you know, if I was totally self serving, I would say that digital banking is going to replace all branches.

You should close your branches. Give me all your money that you are going to give your branches. It’s all digital, but I don’t believe that a [00:58:00] hundred percent. Don’t believe that, right? I want digital to be able to augment and support a lot of the self service transactional type of activities. I want digital to help us be able to understand our consumers significantly better so that we can then empower employee interactions to be more valuable.

And that’s where those physical, whether it’s physical, physical, or whether it’s just, you know, conversation over a phone or something like that becomes a lot more powerful and actually has greater impacts. But it is like, it’s, it’s the culmination of all of these things all has to work. And any one, you know, break in that car causes an issue.

Stephen: Yeah. And I think, you know, the technology is working when it’s almost invisible, but I think in the context of the branch too, when it’s enabling the interaction, right. When it’s enabling more information. Or an easy, seamless transition into something that, frankly, I don’t want to sit down and fill out five pages of forms at the desk in the branch.

I’d rather get on the [00:59:00] phone. That’s my, I shouldn’t do this. Probably my browser has like all my address stuff stored. It’s just a lot easier. Right. But you know what? Doing that in the branch, like, and again, I just had a recent experience with this. It’s a better experience than it used to be. And that is digital plus plus physical.

So, um, no, I, I, I, I think that’s a hundred percent. Um, that’s a hundred percent accurate. Um, and look, I mean, just by the way, like for what it’s worth, I think, you know, your Alaska Airlines example, I mean, to me, that’s so admirable cause that’s a big company and somebody was successful. Not just, like, enrolling that frontline employee and, hey, there’s something bigger here that’s worth, like, being empathetic for and, like, you know what I mean?

There’s a personalized, there’s a personalized nature to it that I think, you know, some of these, some of these companies give, some of them don’t,

they’re just not successful with it.

Josh: But yeah, like you were saying, it’s, it’s then trying to figure out how to actually get that in principle and then setting up even to the processes and the systems to actually make that [01:00:00] possible. You know, I’ll, uh, I’ll give another shout out, huge shout out to the team at credit union of Colorado.

Um, I was just at their, um, brand new headquarters there in Denver a couple of weeks ago. And, um, and just looking at kind of the model they have for the branch there. And, um, you know, I don’t even want to say it’s Apple esque because I think it’s even better. Um, but you know, it was a combination of here’s the different ways in which we can interact with you based on your personal preference.

So do you want to interact with us totally digitally? Do you want to interact with us partially digitally? Do you want to interact with us hip to hip or do you want to interact with us where there’s a little bit of barrier? If you just need a little bit of comfort and stability, do you want to interact with us in a way where you need to get really personal and you actually want to be in a little bit more protected private space and all of that.

Well, it empowers the employees to seamlessly transition with their tech to any one of those [01:01:00] mediums that the member wants to interact with them in. And then they have this wickedly empowered staff. That’s like super high energy, incredibly well trained and tenure of just the frontline staff right there was phenomenal, right?

So these people, I’m just, I’m standing there talking to some of my contacts, watching members come in and interact with the staff. And it’s super cool to actually witness that fidgetal interaction happen. And see people who have maybe started something digital and moved in branch or started in branch and moved physical.

And then even just watching the physical and digital interaction and movement within the physical location. Like, I think that’s where you’re starting to see some magic really happen. And consumers are responding well to that.

Stephen: yeah, I think you’re, you know, you make a good point. Like you, you, you got to change the structure or the tools to really change the interaction by the dynamic. And like, you know, in a perfect world, everybody would build like the branch you’re describing, right? It’s got these different. Kind of phases of [01:02:00] like physical intimacy or whatever, my word. Um, you know, the kind of give this multiple choice and, uh, that, that’s like first prize, that’s great. Like, I, I think not everybody’s got that budget and that, I mean, that if you change that physical space, people interact with it differently. I think it probably energizes people. You get, you get a different selection of people that want to work there.

Cause it’s like, Hey, this is like, I’m, I’m drawn in by this. All those things are additive. And then I think you put the right tech in their hands. And they’re off to the races because you give them the tools they need to be, to, to like live the dream, right? Um, maybe that’s, maybe that’s a little hyperbolic, but you know, um, but you know, I think not everybody’s got all that money for that.

But some of those tech tools are still available, right? Like even if you’ve got a teller counter, if you’ve got a tablet that can go interact with a customer, get around that thing, right? And I think, you know, you’re seeing some of that too. Like there’s, it’s, it’s a gradium of modernizing the branch experience and like maybe like humanizing it.

And like, Like providing better engagement and, and you can bring some of these tools in there that don’t require a full demo. Right. You can kind of [01:03:00] get a no, a no demo reno going. Um, but, uh, you know, I think the dream is all the way to the, to the right, but like the more of these tools and the things you put in place, the more I think you’re going to get that type of interaction. And man, I mean, like, I don’t even know what the right example is, the contrast to the, to the Apple store, you know, like what’s, what’s the opposite of that it’s probably like. The electronics repair place with the counter and like the guy with the visor on, who doesn’t even acknowledge you when you walk in the store.

Like nobody wants that, that space, that format, that physical kind of definition dictates, like, I think humans are kind of pre wired. Like we respond to the space we’re in or in the tools we were given. So just changing, you can’t, it’s not enough to just train and you, you know, getting people kind of enrolled in the idea. You’ve like, got to change things physically and you’ve got to change the tools that are in their hands. And you probably got to do the training, but those two together, that’s where you, I think you get some harmony and like back to the airline example, you’re seeing that to like you go to, [01:04:00] um, I fly out of Chicago a lot because I’m there United headquarters.

They’ve done some really, really cool things like the way that they’re changing their, their kind of physical space, the way that they’re changing their tools. I don’t know if you noticed, well, you put, you know, flying, but. They’re now doing the boarding scan pass on a, on a mobile device, as opposed to like doing it on the kiosk. Oh, it’s little things like that. Right. Um, but it gives me hope that, you know, that evolution of kind of interaction is going to a more human place, a better place and a more engaging place. And it’s engaged by the, by the it’s sorry. It’s enabled by the, by the technology, by the digital.

Josh: You know, it’s so funny to me how many times I have, you know, technology people on the podcast and, you know, even I think you and I made the joke before we started recording. Like, I think in hindsight, I probably would have named this podcast something different if I’d really had the vision for where this thing was going to end up, um, as it has today.

But. You know, I talked to so many [01:05:00] technologists and, you know, people from tech companies and then obviously on the actual FI side and it’s always interesting to me that a lot of times it’s the technologists that are the ones that are preaching like how physical is not dead, you know, it’s like if we were being self serving would be the other way around.

But I think, I think a lot of us see the technology to your point. Like the best tech for community financial institutions is the tech. Nobody even knows is there, um, is the tech. That’s just streamlining stuff because where we want the, where we want the notice to be is on those real deep connecting levels and that’s what tech is enabling.

And I think that’s what, um, you know, I think we’ve kind of touched on it a little bit throughout this, um, you know, talk. But. You had mentioned to me as just something you’re really passionate about is kind of like this, you know, the tech stack and kind of the tech stack of [01:06:00] the future for community financial institutions.

And I think, you know, that’s what you’re talking about is, is really the tech stack of the future is making sure these community financial institutions have the ability to innovate really quickly and stay on top of the things that allow them to fundamentally stay true to their core, which is that community service oriented Um, you know, culture and the relationship that it builds with their consumers and then how that, you know, causes them to do business differently than their competition.

Stephen: Yeah. Yeah. I. I think that’s right. And that tech stack, that concept of like, I’m not going to get everything from one vendor, right? Um, by the way, in prop tech, it’s a bit of a different mindset. Like the, the, and here’s where I’ve been impressed with, with FinTech, even the, even the large core providers. I came into this, uh, industry a little bit skeptical thinking, geez, you know, there’s not going to be a lot of openness to this kind of open and connected idea. That’s not the case. Like I’ve been really happy and impressed. I’ve met with. You know, senior leadership from just about [01:07:00] every core and some of the, you know, or it’s not every core cause there’s like 40, but, uh, the major cores and many of the, of the kind of, you know, uh, of the others. And I’ve been really impressed at the mindset of being open, being connected, investing in, in, in connectivity, in, in, in, in being supportive of, you know, companies like ours that, you know, have a mission to kind of provide that, that connectivity and make it easy to leverage different components to make the tech stack. Of your choosing, right? And to have control over your, over your technology destiny, you know, what happens when you get everything from one provider, like it’s kind of inevitable again, back to like human nature. Like, I think there’s less of an incentive for that provider to be cutting edge, to be strong, to be, um, vigilant on every aspect of everything they’re providing you.

And so having that environment and like, yeah. It may be that you’re getting many things from the same provider, but that dynamic, that market space of like a competitor for every point solution, it keeps everybody honest. It [01:08:00] keeps everybody moving forward. And I think it benefits the entire industry and you’ve got to have connectivity to support it all. So I, I really, I’ve actually been very, uh, pleased, you know, with the way that dynamic has shown up. I did not think it would be as open as, as, as it’s proven to

Josh: Huh?

Stephen: proven to have been.

Josh: That’s awesome. I mean, that’s really good to hear. I mean, I think again, just speaking personally here. Um, I think a closed mindset is. Like the absolute death, um, especially in this industry. Um, I mean, we’ve gotten to the point where, um, you know, I, I think I shouted this out even in a recent podcast too, but I, I’ll probably get it wrong a second time now, but, um, I want to say it was Ron Chevlin or Sam Kilmer or one of the Cornerstone folks made a comment about how.

You know, if you, if you still are clinging onto this idea of the primary financial institution, like you’re smoking something funny, um, it’s just not the case anymore. You know, [01:09:00] like that cat’s out of the bag. It’s not coming back. Consumers are going to do all sorts of different things. You know, you look at your personal life, my personal life.

I’m sure we have plenty of different examples of reasons why we have, you know, money in different places, right? So this idea that you’re going to get everything from one person, That’s pretty dead. But so how do we think about even if consumers are looking at that, that way, how do we all work together as an industry to make sure that everybody is being supported and that ultimately the end goal is being met, which is, you know, we’re making, um, stronger, healthier, um, more financially stable communities and futures for the people that live in them.

Right. And I think that’s only going to come through openness and connectivity.

Stephen: Yeah, I totally agree. I do think though, the pendulum has been swinging and I could be wrong about this, but I think there’s an opportunity for it to swing back. And when I say the pendulum, I’m thinking about [01:10:00] the financial center of your universe. Yours, mine, everybody’s, you know, um, and you know, you got Gen Z folks coming out, they’re like digital first and all that. And I think they’re driving a lot of that pendulum swing out. Um, But when you think about developing a financial plan and a future, and as that cohort kind of matures, I do wonder if the pendulum’s, I think those guys are right, it’s not coming all the way back to where it’s like, I have a bank and I do everything with them, but I do think there’s room and an opportunity to kind of swing that back through the right technology and the right kind of outreach and engagement.

So I think that’s what’s honestly, I think that’s what success looks like to some degree for the efforts that. Um, many of us are kind of undertaking in the industry, so

Josh: I, I would actually agree with you really solid, solidly on that point, um, because again, you know, I kind of think about myself as a personal example. So I’m a sample size of one. So maybe I’m just crazy. But, um, you know, I think about kind of [01:11:00] the major areas that I have money, right. And it’s going to be in my kind of daily use, quote unquote, you know, Banking accounts.

And then I have, you know, my retirement stuff, which is managed through a financial advisor. And then I just like to dabble. So I like to have some of my own investing that I do for, you know, companies I follow or different things. So I have that, you know, those are all three separate relationships. Um, but you look at like, uh, I had the, uh, CEO of, uh, Atomic Invest for a David Dindy on the podcast a while ago.

And you know, they’re working to bring micro investing and traditional investing into community financial institutions to kind bridge the gap between, Hey, I don’t maybe necessarily want or have the financial means to use a professional wealth planner, but I do want to start investing and start actually starting to create some generational wealth and some, you know, Some later [01:12:00] stage, um, security funds and things like that.

How can I do that through my financial institution? So I think there are a lot of opportunities that again, you know, technology even can be a big supporter of pulling in some of those elements to say, Hey, we may recognize we’re not going to own a hundred percent of your relationship, but in terms of holistically supporting your financial health and success in future, we’re a pretty good one stop shop.

And if you look at our ethos, it’s because of You know, the, the care that we have for the people that bank here.

Stephen: Yeah. I mean, as you were talking, I was thinking about, again, going back to this cohort, this youngest cohort, like entering the job market and the income market, like so many of them went in with Robinhood as their first foray into like investing and you know, it was like a democratizer and everything else.

And I actually just. There’s a movie, um, I’m not going to say it’s worth like a Saturday night, but next time you’re on a long haul flight, it’s called Dumb Money, and it’s about like, [01:13:00] the, um, the uh, the movie chain. The whole kind of stock bubble around, um, no, GameStop, it was GameStop, right?

Anyway. And in how, you know, like it doesn’t, it doesn’t say explicitly that like Robinhood kind of stopped trading.

Cause they got pushed down by a big institution, but it implies it. And when that happened, I think that undermined a lot of credibility. Right. And I think a lot of people said, well, wait a minute, like an app may not be like fair to me. Right. Like there’s no basis of trust or relationship there. And so

I think there’s like an opportunity, right?

Like why shouldn’t a young person who’s going to start investing Why shouldn’t that conversation start like at a credit union or a community bank? You know what I mean? I don’t know like i’m talking a little out of turn because it’s not my expertise in space but just one example, right like I think There was a big movement that way And um, you know financial fluency financial literacy Like, you know, I think there’s an opportunity for a lot of that to come locally.

[01:14:00] And then the foundation of trust to be like, Hey, here’s maybe what you should do as a first investment. Let people, you know, let people get educated and take off from there. But, um, anyway, maybe, you know, an opportunity, an opportunity of nothing else.

Josh: yeah. I think, you know, this, this feels like the number one way that a lot of our podcasts and is like, there’s so much opportunity and I think it’s cool to see how many people are out there trying to. Seize that and I say capitalize on it, but not from just up monetizing, but like capitalize on that opportunity for the good that it’s going to create out of doing those things.

So I think that’s what gets me so excited about this podcast is getting to talk to folks like you who are like, Hey, look, there’s a huge opportunity and we can bring some solutions to create that opportunity. And here’s the actual tangible impacts. This has the real people when we, when we act on this opportunity.

So I think it’s pretty cool.

Stephen: Yeah, I love it. It’s a game worth playing, right?[01:15:00] 

Josh: Agreed. Yeah, I think I like that. I might steal that. Uh, well, Stephen, before I let you go, um, I have two final questions for you, sir. So first is just, you know, where do you go to get information to stay up to date on what’s happening in the industry? Especially as somebody who’s kind of newer to the industry, quote unquote, like, what are you, uh, what are you checking out?

What are you following? Yeah.

Stephen: I, I spend, as you point out, I’m like, I don’t know, I used to count the months. I’m 10 or 11 months. I’m less than a year in, in, in this industry. And I’ve learned so much and I’ve got such a debt for so many people that have taken time to educate me. But, you know, some of the things I read, in fact, I was just reading this weekend, um, um, the fintech biz weekly, uh, really interesting newsletter. Um, but I, I would say I have learned a lot And I’m just coming off because it was just last week, um, with the AFT conference, the Association for Financial Technology. Um, for those listening to this that happen to be a vendor in the FinTech space, like what a great organization, you know, really dedicated to kind of, [01:16:00] you know, building, um, good content for the members and also, you know, relationships.

And, you know, I just have learned so much from people that I’ve met there and conversations I’ve had there. And, and follow on, um, you know, dialogue, uh, it’s been the most impactful to me in terms of like building my knowledge base. So big debt of gratitude to those guys. And I will certainly be a participant, uh, going forward.

Josh: Yeah, that’s awesome. Yeah, I’ve mentioned this. I think maybe once before, but it’s worth mentioning, you know, um, yeah, as Stephen says, like, if you’re a vendor, absolutely look into AFT. And if you’re not like, if you work at a credit union or a community bank, um, like I feel like you should sleep soundly at night, knowing that this exists.

Cause it’s actually pretty cool. Um, you’re not allowed. 

Stephen: you can’t come, 

Josh: vendors. Bye. Bye. And it’s an opportunity for even direct competitors to, you know, put away their short swords and shields, sit down at the table, break bread, and really talk about how can we collectively work together to build a better [01:17:00] industry to serve you.

So I think it’s a really, really cool program. And, uh, and yeah, it’s, it’s definitely a good one to be a part 

Stephen: I would say there’s nothing like it in any other industry I’ve worked with. And I think it is a real benefit. I wasn’t sure where you were going initially there, but like, I do think. I think it accrues to the benefit of the market that we serve collectively, because there are really great partnerships, discussions, and alignment and, you know, just, just a lot of work that goes on in discussions that end up with positive results for what’s being offered to the market.

And so I really, I mean, it really is, it’s a, it’s a great, it’s a great organization to help kind of move this market forward.

Josh: Yeah, I agree. Well, last but not least, if people want to learn more about, um, You or connect with you, or if they want to learn a little bit more about Kinective, how can they do that?

Stephen: Yeah. So we have, um, we have a [01:18:00] website, uh, as you

might imagine. Um, yeah, Kinective. io. And that’s, uh, you know, the name, by the way, Kinective, it comes from the idea of being Kinective tissue in this market. And so that’s the mission that we’re out to serve. And, um, it might, you know, it’s probably not shocking the word Kinective tissue. With it spelled like the normal way it was taken like probably 10 years ago So what we have is a mashup of the word kinetic and the word Kinective and so it’s K I N E C T I V E and it’s dot IO so Kinective dot IO you can get there You can go there and learn all about the company You can find some information on me and my other colleagues that help lead the business And then me personally, I’m on LinkedIn Stephen with a ph Actually, I don’t even know what my address is, but that’s my name.

So if you search Stephen Baker Kinective, you will certainly find me there. I’ve been a longtime member, um, which, you know, another great organization, by the way, LinkedIn, I think it’s a, a real resource for every professional in this, in this, probably in the world. Um, a great thing, but you know, Josh, I’ve really enjoyed the conversation.

Really appreciate your [01:19:00] energy for the space and your passion. It’s, it’s fun to work in an industry. That’s got people doing this kind of thing. Appreciate the invite.

Josh: Yeah, absolutely. No, thanks for being a guest. Um, like I said, it, it, it really is cool to me to see, you know, people looking at the opportunity that’s available to community financial institutions, the impact that it has. And then. You know, how do we just have smarter conversations about how technology can enable that to happen?

So it’s exciting to, I think, um, you know, to have some kind of quote unquote fresh blood as well. And some folks that are bringing some outside ideas and perspectives and even just listening to you talk in the way that you think about some of the, uh, you know, examples outside of this industry and how those are being leveraged to think about.

Connecting this industry. Um, this is the, this is the stuff that’s exciting. So like I said, this is a game worth playing. It’s a lot of fun.

Stephen: Yeah, for sure.

Josh: Yeah. Well, thanks for coming and being a guest on the digital banking podcast.

Stephen: Yeah, really, really enjoyed it. Appreciate it, Josh. [01:20:00] Thanks.

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