Resources > Data Jam Sessions and Podcasts > ON-DEMAND WEBINAR: Separating Fact from Fiction: A Data-Driven Perspective on Small Business Banking

ON-DEMAND WEBINAR: Separating Fact from Fiction: A Data-Driven Perspective on Small Business Banking

November 01, 2021 by Rob Heiser

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00:17:54.750 --> 00:17:59.310
Derik Sutton: All right, well let's get going okay everybody welcome to today's webinar.

00:18:00.600 --> 00:18:08.940
Derik Sutton: we're just going to look at the data, so I know, last time we talked we do a lot of you know, these these types of sessions and we talk a lot about the industry, small business banking.

00:18:09.990 --> 00:18:14.880
Derik Sutton: You know what's happening in the market, what what's going on, but today we're going to focus more on the data.

00:18:15.390 --> 00:18:25.650
Derik Sutton: So um yeah I think with that will kind of just overview the agenda so i'm going to do a little bit of a market update just because there were some really great things we hosted in.

00:18:26.310 --> 00:18:38.070
Derik Sutton: A small business banking of the last month that we had some really, really great speakers and there were a couple of things that were said kind of related today's conversation, and I just wanted to kind of bring those up just as a framing.

00:18:38.490 --> 00:18:46.200
Derik Sutton: Because I thought they are really, really interesting and then rob and I are going to get into the data we're actually going to look at some raw numbers and some some things that we're seeing.

00:18:46.590 --> 00:18:57.060
Derik Sutton: And then, at the end we'll kind of introduce some capabilities that we're building and then rob can talk about what his team offers to kind of like help you make progress on this data.

00:18:57.510 --> 00:19:08.460
Derik Sutton: Which is always good so it's one thing to see it and hear about it it's another thing to actually take action on it as well, so joining me today is Rob Heiser he's the founder of Segmint rob can you say hey and introduce yourself.

00:19:09.060 --> 00:19:10.710
Rob Heiser: i'm rob the founder of Segmint.

00:19:12.330 --> 00:19:12.990
Derik Sutton: What is Segmint?

00:19:14.550 --> 00:19:21.240
Rob Heiser: We work with a lot of either resellers banks credit unions fintech providers.

00:19:21.630 --> 00:19:27.930
Rob Heiser: And really help them make sense and understand of their their their data their consumer gave their customers remember data.

00:19:28.260 --> 00:19:38.610
Rob Heiser: We do that through both of discipline of research, which is a what's called library science and so we research in enormous amount of transaction descriptions.

00:19:39.000 --> 00:19:46.440
Rob Heiser: To to best understand where the money flow is going, and then we build product around that so the Foundation is really understanding the the money movement.

00:19:46.860 --> 00:20:04.050
Rob Heiser: And then here's a here's a slide of our products, and so one of the products is called merchant payment cleansing that's us basically telling you this this particular payment is going to a target walmart or even you know joe's bbq down the street so it's it's both very.

00:20:05.460 --> 00:20:11.010
Rob Heiser: Very descriptive it's it's it's also has categories, we include logos with that.

00:20:11.430 --> 00:20:22.410
Rob Heiser: That goes into our customer insight product which really tells you like exactly what's happening in your customers life, you know, are they sending kids to college or they are they travelers are the pet lovers.

00:20:23.070 --> 00:20:30.000
Rob Heiser: Do they like to play off, you know you know they are avid golfers or not, we also have an Ai modeling platform which we.

00:20:30.600 --> 00:20:40.380
Rob Heiser: do a lot of propensity modeling modeling around you know home equity lines of credit if they're going to open that if they're going to tread if they're going to they need in lending product.

00:20:40.830 --> 00:20:53.490
Rob Heiser: And we have a full automation solution that helps message to customers and that's integrated with a lot of you know, online banking mobile banking providers so that's us in less than 40 seconds.

00:20:53.640 --> 00:20:54.450
Derik Sutton: yeah no.

00:20:54.600 --> 00:20:58.590
Derik Sutton: I love that no, I mean the reason I wanted you on rob obviously we known each other for a while.

00:20:58.890 --> 00:20:59.940
Derik Sutton: Now, but.

00:21:00.480 --> 00:21:09.000
Derik Sutton: You know at all of us we get a lot of data we're starting to get more of it and analyze it, you know we've got our interpretation but I kind of wanted to bring you all in as.

00:21:09.390 --> 00:21:14.910
Derik Sutton: independent entity that works with data all the time, just to see what you're seeing and kind of match things up to see.

00:21:15.180 --> 00:21:16.560
Derik Sutton: And we're going to kind of go into some of the.

00:21:17.010 --> 00:21:27.960
Derik Sutton: Some data that you've analyzed convert related to the topic today just to pressure test, you know, like the things that we're saying and seeing a market, are you seeing them as well, so that's kind of the main reason to bring you in so.

00:21:28.200 --> 00:21:34.650
Rob Heiser: Do you have a female thanks for having me i'm looking at this, I think what's what's interesting and some of the insights we're going to talk about today.

00:21:34.710 --> 00:21:49.560
Rob Heiser: That we we've prepared for this is that there's a lot of opportunity right basically right under the nose of everybody out there they're just not familiar with, where to look or what to look for and I think that this today will be enlightening for me who's on the session.

00:21:49.770 --> 00:21:56.250
Derik Sutton: Absolutely, do you have a favorite use case of a bank or credit union using your data to to do something interesting.

00:21:58.170 --> 00:21:59.280
Rob Heiser: there's so many I mean.

00:21:59.550 --> 00:22:01.260
Derik Sutton: what's your favorite problem and.

00:22:02.190 --> 00:22:03.630
Rob Heiser: I will talk about today.

00:22:03.720 --> 00:22:04.140
I think.

00:22:05.370 --> 00:22:16.890
Rob Heiser: there's a systematic problem in the industry in which you know you think about coven and everybody that that have kind of created this side hustle over the last two to three years, creating businesses, you know etsy.

00:22:17.340 --> 00:22:29.190
Rob Heiser: You know shopify you see the growth of all this stuff and what you don't understand is that most you know people who've never owned a business before they create all these accounts as consumers as retail customers.

00:22:29.820 --> 00:22:36.390
Rob Heiser: And they're growing and they're there they just don't really have a relationship with the institution, other than their their an account holder.

00:22:36.720 --> 00:22:42.270
Rob Heiser: And I think that's a great opportunity for them to it will talk a lot about that the numbers today, but I think that's a great opportunity, just to.

00:22:42.960 --> 00:22:49.080
Rob Heiser: To to seize the opportunity they have, which is right in front of them, they have a lot of small businesses, they don't even know our actual businesses.

00:22:49.080 --> 00:22:58.890
Derik Sutton: yeah cool agreed so for housekeeping if there's something you want to chime in on, as you can see, Robin I just want to have a conversation about these items today.

00:22:59.250 --> 00:23:05.640
Derik Sutton: If we start talking about something or you want to dive in or ask a specific question, use the Q amp a section.

00:23:05.970 --> 00:23:11.190
Derik Sutton: Of zoom if you don't mind, please that just it's a little bit easier for us to organize and see those questions.

00:23:11.490 --> 00:23:19.770
Derik Sutton: And then supply some answers, if you happen to do it in the chat that's fine we'll try to get to it there as well, but please try to use the Q amp a if at all possible, so.

00:23:20.070 --> 00:23:25.650
Derik Sutton: let's give a little bit of a market update that kind of really just really focused on we hosted a small business banking event.

00:23:26.220 --> 00:23:34.230
Derik Sutton: Last month, call it small business banking forward, and it was really an event about the topic of small business banking, not about auto books at all.

00:23:34.710 --> 00:23:42.690
Derik Sutton: We brought in, you know speakers from all over the industry, you can get a SN banking for COM so small business banking forward calm.

00:23:43.170 --> 00:23:53.730
Derik Sutton: And there you can actually if you just if you've already registered you're going to get access to all the sessions, you can download all those presentations and see what it's all about we've had a lot of people requesting those.

00:23:54.000 --> 00:24:00.480
Derik Sutton: Those are live up on the site now you just got to fill out the form, and you can get access to all that, but there were a couple of sessions.

00:24:00.990 --> 00:24:10.080
Derik Sutton: That there were there were parts of sessions, I will say that stood out for me related to today's topic, and so you know most of you all, probably know run shoveling.

00:24:10.800 --> 00:24:14.940
Rob Heiser: You know it doesn't love Raj me, let me know there's a lot of adult love Raj.

00:24:16.440 --> 00:24:26.490
Derik Sutton: Most people know around shovelin half you know, a third of the people, loving Third, the people are kind of indifferent, and then third people right can't stand in which is exactly what RON once i'm sure.

00:24:26.910 --> 00:24:27.660
Derik Sutton: But um.

00:24:27.900 --> 00:24:43.410
Derik Sutton: yeah so he he had a couple of interesting data points, I just wanted to quickly highlight and then you know Robin if you want to comment on any of these feel free, but the payment proliferation is causing small businesses headaches, and so this thing this slide right here, always.

00:24:43.800 --> 00:24:49.170
Derik Sutton: strikes a chord with me, because this came out this comes out in a lot of interviews we do with business owners, quite frankly.

00:24:49.470 --> 00:25:04.650
Derik Sutton: It comes in, you know personally my sister in law runs a photography business, I talked about it all the time and she's always you know basically dealing with this problem right here and that's as a small business owner, they are accepting payments from.

00:25:04.680 --> 00:25:07.020
Rob Heiser: From their customers about a lot of different ways today.

00:25:07.680 --> 00:25:20.220
Derik Sutton: More so than ever before and it's causing you know, a cash flow headache in many cases, and so this is the data that that RON Paul but rob what are you seeing in the data, I mean any any any thoughts on this as well.

00:25:20.250 --> 00:25:31.260
Rob Heiser: But I think you've talked a little bit of the p2p stuff is has drastically increased in terms of volume, I mean I I got my haircut just for this Derek so.

00:25:32.160 --> 00:25:33.270
Rob Heiser: You know, good for you, but.

00:25:34.710 --> 00:25:43.830
Rob Heiser: But you know even my even my Barber I mean it's it's they've turned to DEMO right, and so they have had little or they have our dongle and so.

00:25:44.550 --> 00:25:52.590
Rob Heiser: it's really starting to change the ecosystem in terms of these small businesses, because you no longer check out at the front you check out with the.

00:25:53.400 --> 00:26:03.720
Rob Heiser: With the individual proprietor and I think that's I one it's one it's a nightmare from a cash flow perspective also nightmare from an accounting perspective and think.

00:26:03.720 --> 00:26:11.250
Rob Heiser: About you know you know your taxes, and you have to do you have all these income, you know flowing in from everywhere there's a great opportunity, I think, from a.

00:26:11.640 --> 00:26:16.560
Rob Heiser: From a technology perspective to try to aggregate this into the accounting package that makes sense, but.

00:26:16.920 --> 00:26:25.860
Rob Heiser: You know I don't think quickbooks is doing a good job of that at all in terms of how they're how they're how they're trying to manage all this span, but we see the same thing, and this is a.

00:26:27.930 --> 00:26:41.520
Rob Heiser: Digital payments, and it was a lot less cash in terms of you know, the movement of money, I think, where you see caches industries and watch that has to use cash like you know the CBD marijuana medical marijuana type.

00:26:41.940 --> 00:26:50.220
Rob Heiser: In kind of obvious gambling, but the but the enormous growth in terms of digital payments over the last two years has been staggering.

00:26:50.760 --> 00:26:54.540
Derik Sutton: yeah amazing and then okay so.

00:26:55.020 --> 00:26:55.620
Rob Heiser: what's interesting.

00:26:55.890 --> 00:26:58.920
Rob Heiser: Can you go back to that I think are important point is that.

00:26:59.400 --> 00:27:14.070
Rob Heiser: You know, you talked about Venmo and zell and PayPal I think a lot of small businesses have adopted that from a payment perspective it's not just the p2p you see a lot, a lot more of this, you know PDP being you know more SMB which is interesting.

00:27:14.490 --> 00:27:20.820
Derik Sutton: yeah I agree, I, so I mean Venmo did there really is something earlier this year, where they actually asked you what type of transaction is for right.

00:27:21.060 --> 00:27:30.570
Derik Sutton: Now it's for a business or a personal transaction, so I think they're clearly signaling there they're going to apply more effort in the business world for sure.

00:27:31.770 --> 00:27:42.180
Derik Sutton: In addition to that this is interesting, and I think it relates, quite frankly, to the last slide quite a bit the SMEs are looking for new banking relationships.

00:27:42.330 --> 00:27:52.170
Derik Sutton: And not only looking for new banking relationships and I think the the term really kind of like up here, you know, like what is a banking relationship is going to be largely redefine.

00:27:52.560 --> 00:28:02.520
Derik Sutton: And I think that those other providers that you saw on that pie graph are starting to supplant themselves or like kind of become known as the banking relationship.

00:28:02.940 --> 00:28:12.030
Derik Sutton: For the business owner as well, so like basically where their funds are primarily stored access to real time business debit cards lending services things of that nature, I think that.

00:28:12.450 --> 00:28:32.250
Derik Sutton: This is going to be a very interesting, you know displacement of customer relationships that we see over time, because people are struggling with this transition from accepting payments in person to now either in APP or online and that's causing a pretty see shift change in relationships.

00:28:33.270 --> 00:28:39.450
Rob Heiser: Well, I think this is where the fintech provider you're going to start seeing a lot more opportunity, she saw the quickbooks update.

00:28:40.590 --> 00:28:45.960
Rob Heiser: Last, I think, was early this week, and when they've upped their their fees, but there, including a checking account.

00:28:46.140 --> 00:28:53.340
Rob Heiser: Right, you get a free checking account they want to you get interest on that checking account if depending on your positive how much of your positive so.

00:28:53.790 --> 00:29:01.530
Rob Heiser: you're going to really start to see more and more kind of niche players that are focused on specific gaps to fill in for these businesses.

00:29:01.950 --> 00:29:08.940
Rob Heiser: And then they'll start growing their portfolio, to try to win you 100% over I think that's the big that's a big through outlook on the kind of.

00:29:09.540 --> 00:29:11.700
Rob Heiser: The small community banking side is that.

00:29:12.060 --> 00:29:24.060
Rob Heiser: If you can't help you know build that relationship you're going to start to lose them through kind of niche niche things that they can you know either lend against you know if it's if it's your asset for inventory there's there's lots of different areas in which.

00:29:24.270 --> 00:29:27.540
Rob Heiser: Small businesses are thinking is at risk from.

00:29:28.080 --> 00:29:32.310
Derik Sutton: displacing yep and I think the you know the interesting thing here is like.

00:29:32.580 --> 00:29:43.110
Derik Sutton: Especially in this larger category, you know it's starting to jump up pretty big there you know it doesn't surprise me to see that that people down here, you know in these revenue categories are a little bit more transient but.

00:29:43.800 --> 00:29:52.920
Derik Sutton: You know I think this is a clear signal that businesses are there they're struggling a little bit and they're looking for different options out there and they're much more willing to shop and ever before.

00:29:53.430 --> 00:29:54.270
Rob Heiser: yeah that's right.

00:29:54.600 --> 00:30:01.740
Derik Sutton: So then Sean villain I mean that these kind of next slides are like going to tss right into the conversation will look at the data so he's the chief product officer.

00:30:02.070 --> 00:30:09.240
Derik Sutton: For first American by the locks first American is a payment merchant system that was acquired by the locks earlier this year and.

00:30:09.930 --> 00:30:19.830
Derik Sutton: You know, he kind of went through this story, and he said, you know kind of a classic banker conversation that we have is hey my customers aren't using square they're they're out riding on a tractor.

00:30:20.250 --> 00:30:29.670
Derik Sutton: So that's kind of the the bankers comment that's actually a direct thinking comment that he heard from a banker and then he's like you know kind of classic sales guys it's probably taking a shot at me here.

00:30:30.300 --> 00:30:41.580
Derik Sutton: All of your customers are using square so that's what they're saying, and he said, you know, really, you know we just started the pressure test that and we wanted to kind of dive in and look at the details to see which of those things are true.

00:30:42.450 --> 00:30:47.940
Derik Sutton: And this is very interesting, this is what they found so basically animal lives three financial institutions.

00:30:48.450 --> 00:30:54.900
Derik Sutton: A $3 billion asset, making Texas, a $1 billion House had been in Pennsylvania, and a greater than $10 billion House a bank.

00:30:55.260 --> 00:31:07.500
Derik Sutton: In Oklahoma, these are the number of locations for each the number of commercial vda is that they they measured they didn't even get into the consumer DDA is here, these roll commercial deviations analyze.

00:31:08.160 --> 00:31:15.390
Derik Sutton: What they found I think just kind of tells the story, so the banks were servicing this big was servicing less than 2%.

00:31:15.960 --> 00:31:23.700
Derik Sutton: Of the DDA is of their merchant account so of the 10,500 the bank's merchant program was installed in less than 2% of those accounts.

00:31:24.150 --> 00:31:32.550
Derik Sutton: fintech providers, they attach themselves to greater than 30% of those accounts so big into it store square stripe PayPal others.

00:31:33.060 --> 00:31:44.970
Derik Sutton: Greater than 30% of those DDA accounts had you know basically a fintech service attached same thing with that final two and then even more so here with fit number three.

00:31:45.480 --> 00:31:48.540
Rob Heiser: And so, then this, even with the best penetration out of the three.

00:31:48.900 --> 00:31:49.920
Rob Heiser: frank percent.

00:31:51.000 --> 00:31:51.300
Derik Sutton: Right.

00:31:51.540 --> 00:31:53.670
Derik Sutton: that's right yeah yeah yeah it's crazy.

00:31:54.840 --> 00:32:04.680
Derik Sutton: And, but here's the here's the reality, though here's like the brass tacks the bank that makes earned $156,000 that year off of their merchant Program.

00:32:05.190 --> 00:32:15.930
Derik Sutton: Nothing to sneeze at, but at the same time, if you took the attachment of the fintech services and the volume going through those providers and you monetize that, at the same rate.

00:32:16.290 --> 00:32:24.600
Derik Sutton: Which Sean was saying is the bank's revenue upside opportunity for winning those relationships back is $5.9 million a year.

00:32:25.350 --> 00:32:40.290
Derik Sutton: For for financial institution over to 1 million and then for this last 120 $8 million a year in revenue opportunity just on the merchant spend side right monetizing that merchant accept payments through the financial institution.

00:32:41.820 --> 00:32:42.900
Rob Heiser: And that is just commercial.

00:32:44.040 --> 00:32:45.570
Derik Sutton: Commercial vda yeah.

00:32:46.170 --> 00:32:58.290
Derik Sutton: So I don't know if anybody out there, thinks that that's pretty eye opening if you've got a question or a comment, there would love to see it for me when Sean show that slide I about fell out of my chair.

00:32:59.310 --> 00:33:05.400
Derik Sutton: Because we talked about this, quite frankly, you know we, and we see we kind of see the movie playing out with industry news.

00:33:05.970 --> 00:33:10.170
Derik Sutton: But to actually look at the data starts to starts to really kind of bring it into view.

00:33:10.800 --> 00:33:19.320
Derik Sutton: and make it make it very real, so I don't know if anybody has anybody on here analyze their own data to this level would love to.

00:33:19.920 --> 00:33:29.580
Derik Sutton: hear from you and see if you've seen similar things from doing it yourself if you don't mind Okay, so this kind of hits hits to this right, we talked about this a lot.

00:33:30.630 --> 00:33:40.710
Derik Sutton: sell it did a report earlier this year selling with Oliver wyman and they basically just said hey square is the thing like they are the competitor they're coming after banking.

00:33:41.040 --> 00:33:45.510
Derik Sutton: And then you look at what they offer between merchant acquiring software services.

00:33:45.780 --> 00:33:54.720
Derik Sutton: merchant cash advances and card, you know transaction processing what this equates to this, this is kind of how they make their money right 45% off, which are acquiring.

00:33:55.350 --> 00:34:11.550
Derik Sutton: 6% off of providing card services 14% off lending and 35% off their software fees that competes with 80% of the revenue opportunity or potential that you're also looking at targeting for those same customers.

00:34:12.090 --> 00:34:17.730
Derik Sutton: The way you do your split as a financial institution is a bit different you know you're primarily looking at this card spin.

00:34:18.360 --> 00:34:31.920
Derik Sutton: You know, basically interchange created by businesses spiking their card you're checking fees fortune acquisition in credit lines, the other things that you offer kind of squared doesn't compete against yet.

00:34:32.250 --> 00:34:40.800
Derik Sutton: So this is this is how that starts to play out so that's the real threat that's what's going on that's what we're going to kind of dive into the data and look at today.

00:34:42.660 --> 00:34:44.670
Derik Sutton: This was also interesting so Sean got in.

00:34:44.970 --> 00:34:50.250
Derik Sutton: The last thing was he was looking at squares q2 shareholder report and really breaking it down.

00:34:51.090 --> 00:34:55.410
Derik Sutton: So this was you know just some of the data points he pulled out here, I thought this one was very, very interesting.

00:34:56.100 --> 00:35:04.500
Derik Sutton: When surveyed into 2020 survey of 2200 sellers conducted by square they found that for 50% of those users.

00:35:05.190 --> 00:35:11.340
Derik Sutton: Are those customers their debit card was the first business debit card that that individual had.

00:35:11.730 --> 00:35:18.240
Derik Sutton: I think that's interesting because I think all of those individuals had a debit card with a financial institution at some point, probably personal.

00:35:18.570 --> 00:35:30.120
Derik Sutton: When they moved to square and they got into the flywheel from square all of a sudden they're starting to attach and in downloading use the debit card service provided by square so they're really good.

00:35:31.140 --> 00:35:35.340
Derik Sutton: At selling and cross selling products and services, which I think is very, very interesting.

00:35:35.910 --> 00:35:47.640
Derik Sutton: And then, this last piece down here i'm you know really just kind of like sums everything up, if you will, so square provides processing for more merchant outlets so more merchant endpoints then chase.

00:35:47.940 --> 00:36:02.400
Derik Sutton: wells Bank of America Citibank and PNC all combined according to Nielsen and that's in March of 2020 that's not even after the for ramification impacts of coven and people have to rush into.

00:36:03.120 --> 00:36:18.540
Derik Sutton: You know kind of like digital providers to accept payments, so you know they're coming they're not only coming they're here and, and this is a big problem, and when we start to show the data for you all at Community banking level I think you'll you'll you'll see that.

00:36:18.780 --> 00:36:27.060
Rob Heiser: Well, and I think I think this is, I mean this just this particular quote I think is is the risk to the Community banking levels because.

00:36:27.540 --> 00:36:36.840
Rob Heiser: chase wells baker work, a city PNC they're focused kind of mostly up market not not so much down market like square is when the Community banks are focused more you know.

00:36:37.170 --> 00:36:44.850
Rob Heiser: Ms small, medium sized business from the payment perspective and so you're not going to get a Timothy you're not going to get them walmart.

00:36:45.600 --> 00:36:54.720
Rob Heiser: Processing Community bank and so, even though these are the outlets, the volume obviously their volume is going to be much bigger because it's you know it's a.

00:36:54.960 --> 00:37:05.130
Rob Heiser: You know a lot lot lot more throughput on some of these large payment process of St you know chase yeah but the threat is definitely done market.

00:37:05.490 --> 00:37:12.300
Derik Sutton: yeah it's now market, and I would argue that you know I think we're starting to see it two squares making their way up market to.

00:37:13.020 --> 00:37:17.010
Derik Sutton: You know we've done webinars on it like you can see them clearly signaling and moving into that.

00:37:17.160 --> 00:37:23.460
Derik Sutton: kind of medium sized business now so it's only a matter of time before they're going to start to like eat because to your point.

00:37:24.180 --> 00:37:33.270
Derik Sutton: hyper focus on these big large you know kind of national chains and things of that nature, but as square moves up market it's a big threat to the whole banking industry as a whole.

00:37:33.660 --> 00:37:34.230
Derik Sutton: Well, they have a.

00:37:34.410 --> 00:37:38.640
Rob Heiser: starbucks right when they when they had to they had starbucks it wasn't it wasn't losing.

00:37:39.660 --> 00:37:44.670
Rob Heiser: You know, losing merchant because they they want in volume, now that they have gail I think they can.

00:37:45.120 --> 00:37:59.760
Rob Heiser: They can you know they know they can do the scale on ready from a throughput perspective, you know, because the starbucks Now the question is is you know from a cost and pricing perspective will they will they be competitive against some of these other big providers.

00:38:00.060 --> 00:38:13.800
Derik Sutton: Absolutely great point great point okay so let's dive in let's look at some data so we've you know kind of enough banter on that, if you will, so on, so this is a This is like some data, you tell.

00:38:14.100 --> 00:38:16.740
Derik Sutton: rob so like you don't get access to some data, where we're going to talk about.

00:38:16.980 --> 00:38:30.390
Rob Heiser: So we serve you know hundreds of banks and credit uses, we have one institution that allows us to, even though I can't tell you their name allows us to show some of the insights with some other data, so this isn't this is that institution.

00:38:32.010 --> 00:38:38.760
Rob Heiser: it's important to know is that you know, one of the things that we see this you'll see that number 32,000 to 66.

00:38:39.300 --> 00:38:44.400
Rob Heiser: I, we have a software that allows us to look at all the transactions.

00:38:44.880 --> 00:38:58.320
Rob Heiser: And we categorize them based on our taxonomy and so you'll see on the left hand side we call this a KPI equation so it's basically a correlation or something you do connect click and then create your own audience per se.

00:38:58.800 --> 00:39:07.200
Rob Heiser: And just with their audience, I wanted to show an example of that systematic problem systemic problem within the industry, which is.

00:39:07.800 --> 00:39:13.890
Rob Heiser: This is some of that happened, this is an institution they have you know 241,000 consumer products.

00:39:14.430 --> 00:39:26.070
Rob Heiser: At the bottom you'll see business products right, so they have 60,000 business products what i've done here, I said I want to see all consumers, whatever and it has a consumer product that does not have a business product.

00:39:26.610 --> 00:39:43.830
Rob Heiser: And I want to see the category of spend that are business spend that can be payroll merchant services, so they have they have 32,000 customers that are using a consumer account to do business spend enormous enormous opportunity, let me.

00:39:43.860 --> 00:39:44.460
Rob Heiser: Think about.

00:39:45.570 --> 00:39:53.160
Rob Heiser: I mean just just if you're using just the interchange, on the other, credit card versus a debit card and then that's that's a big opportunity there.

00:39:54.630 --> 00:39:58.080
Rob Heiser: You know the servicing fees in terms of the checking account.

00:39:58.560 --> 00:40:10.260
Rob Heiser: And a lot of this, you know this has happened over the last two to three years because people are creating they're going into the Bank to create an account, and they want to connect to their shopify there it's either eBay.

00:40:10.800 --> 00:40:21.420
Rob Heiser: or PayPal and that's what you see, they just create a consumer account and as they start running transactions through those and so it's a big opportunity 30% of their of their retail accounts are actually businesses.

00:40:21.630 --> 00:40:27.540
Derik Sutton: wow do you see that across so this is one particular APP i'd you see that pretty consistently across the board.

00:40:28.140 --> 00:40:39.990
Rob Heiser: All the time we have we have one one customer set up we don't have a very big business baking at all we did our analysis and we had almost 35% that were business accounts.

00:40:40.050 --> 00:40:45.930
Derik Sutton: holy cow so of their consumer accounts 35% we're we're taking on business activities right.

00:40:46.080 --> 00:41:00.180
Rob Heiser: that's exactly right, so people just you know a lot of what we dug into the problem, the problem was actually inside the institution, because at the institution, the bankers would recommend the retail account because it was free.

00:41:00.630 --> 00:41:01.080
Rob Heiser: Right.

00:41:01.650 --> 00:41:02.580
Rob Heiser: And so.

00:41:02.640 --> 00:41:13.350
Rob Heiser: They did there wasn't there wasn't the education of yeah if you're going to start a business, you should put here's your tax ID let me, let me create the right account for you, they were just opening up a personal a personal checking account.

00:41:13.680 --> 00:41:22.170
Derik Sutton: yeah and I think yeah into the point I think there's also a natural workflows and the in customer that we're uncovering as well, so.

00:41:22.530 --> 00:41:29.850
Derik Sutton: i'm you know talking to other businesses that ended up in this consumer account relationship we asked them okay like why.

00:41:30.630 --> 00:41:38.010
Derik Sutton: Tell me about your business account and they'll kind of like start talking about it well, I was inside digital banking and I needed another account to separate.

00:41:38.370 --> 00:41:41.850
Derik Sutton: My expenses or to get through it, so I just added an account.

00:41:42.210 --> 00:41:50.940
Derik Sutton: They don't think about I need to add a business account they just add account and that account, I did another consumer account inside digital banking and they just started running everything through there so.

00:41:51.570 --> 00:42:06.090
Derik Sutton: You know it's it's just interesting how this it's this this confluence of i'm a you know my personal account relationship versus my business there it's the same person doing both things and they don't think about it necessarily in baked product silos if you will.

00:42:06.390 --> 00:42:12.030
Rob Heiser: know, I think, for if you're from the industry you're like well why would they do that but they're just trying to facilitate a transaction.

00:42:12.210 --> 00:42:12.480

00:42:14.280 --> 00:42:21.630
Rob Heiser: They just want to get paid that's exactly right, and I think there's a huge opportunity to cross the industry and just identified these simple things right, and then.

00:42:21.750 --> 00:42:25.230
Rob Heiser: Really, these small businesses, we go the next slide are growing.

00:42:25.590 --> 00:42:33.990
Rob Heiser: You know you create you create this knowledge about you're going to create a personal account well 1% are running actual payroll.

00:42:34.050 --> 00:42:34.500

00:42:35.520 --> 00:42:43.710
Rob Heiser: yeah you're thinking about you know paychecks into a payroll and adp I mean it's it's pretty staggering in terms.

00:42:43.710 --> 00:42:47.070
Rob Heiser: Of the 2200 accounts are running payroll through personal account.

00:42:49.020 --> 00:43:00.870
Rob Heiser: Again, this is a huge opportunity for the institution, because now you start to think a lot of institutions, you can't run merchant services your own banks merchant services through a personal account, you have to have a business account.

00:43:00.900 --> 00:43:17.640
Derik Sutton: yeah so I find that actually very interesting, you know i've talked to some banks about that, before and I don't know how to quantify the statement but there's something here we get rightfully so bankers, when we say hey let's turn on our invoicing or payment acceptance in consumer accounts.

00:43:17.790 --> 00:43:21.630
Derik Sutton: And yeah they were to ask the questions around okay well what's that mean from a bsa standpoint and.

00:43:21.930 --> 00:43:35.550
Derik Sutton: compliance and underwriting in we kind of have to go through and answer those questions and then i'm sitting there looking at all this data and i'm like well why aren't you asking square like so what's the culpability of a third party fintech that attaches themselves.

00:43:35.760 --> 00:43:36.750
Derik Sutton: To the point of like.

00:43:37.050 --> 00:43:51.870
Derik Sutton: Offering business merchant services business lines of credit payroll in your consumer accounts what's the deal, there does the Bank have any culpability do they have the right to tell individuals you can't do that kick them off like Have you had any conversations like that, with with.

00:43:51.930 --> 00:43:53.700
Rob Heiser: Well that's a good that's a good point I mean.

00:43:54.120 --> 00:43:57.570
Rob Heiser: You know, we do it to try to create a conversation right sure.

00:43:57.930 --> 00:44:00.090
Rob Heiser: To create engagement with the customer, so that.

00:44:00.750 --> 00:44:12.180
Rob Heiser: The institution can educate and help you know get them in the right products i've never thought about from a compliance perspective, where we were going to terminate this account if you keep running you know.

00:44:12.270 --> 00:44:14.220
Rob Heiser: yeah merchant services to there.

00:44:14.370 --> 00:44:23.100
Derik Sutton: yeah and i'm definitely you know i'm not the compliance guru i'm you know i'm kind of like it's like you know where the garlic and the Cross just keep compliance people away from me thank you know.

00:44:24.060 --> 00:44:31.680
Rob Heiser: person of your next next month next month yeah I get invited I get invited to speak at a compliance conference i'm like I don't think that's going to go a little bit like me.

00:44:33.270 --> 00:44:33.720
Derik Sutton: But.

00:44:34.080 --> 00:44:39.870
Derik Sutton: I love compliance people for what they do and it's needed, but I would love it if anybody has any.

00:44:40.140 --> 00:44:51.690
Derik Sutton: thoughts on that I don't know the answer I don't know if banks are going to start to get and get aggressive with that and lean in and kind of push back and say you know you can't use that type of account with this consumer account.

00:44:52.260 --> 00:44:58.110
Derik Sutton: If you want to run square with us that's you know it's fine but you're going to need to upgrade to a business account.

00:44:58.230 --> 00:44:59.310
Rob Heiser: And here's our service, now that.

00:44:59.310 --> 00:45:09.750
Derik Sutton: You so you know there's there's probably some likelihood you're going to run some people off, you know I don't know, but I think there's also the opportunity to say you know, like you're already.

00:45:10.080 --> 00:45:23.070
Derik Sutton: You know, basically, using a third party provider it's just a you know we're not able to really monetize the transaction I think banks are gonna have to start to get a little bit better about kicking the right customers out of the ecosystem, if you will, or.

00:45:23.430 --> 00:45:25.140
Derik Sutton: use that as an opportunity to say.

00:45:25.230 --> 00:45:31.140
Derik Sutton: you either have to move to our business account that does these other things and there's no monthly fee right.

00:45:31.200 --> 00:45:33.600
Derik Sutton: These are merchant services are integrated invoicing.

00:45:33.810 --> 00:45:44.370
Derik Sutton: We can help you with with X, Y amp Z as well, or you need to be in this business account that support Square and it's 10 bucks a month I don't know the answer, but that would be an interesting conversation.

00:45:44.580 --> 00:45:50.670
Rob Heiser: Well, you know you go back to your Stat at least 67% of people in that one to 5 million they're.

00:45:51.780 --> 00:45:52.740
Rob Heiser: Looking to move.

00:45:53.220 --> 00:46:00.720
Rob Heiser: Are they looking to move because of the features that their their account doesn't have fraud protection a ch blocking that.

00:46:01.380 --> 00:46:09.330
Rob Heiser: that's an interesting thing, because if they're if they're in a consumer account no right yeah it's a different it's a different a.

00:46:10.110 --> 00:46:14.370
Rob Heiser: different path of protection, then, if you're in a business account, and I think.

00:46:14.880 --> 00:46:24.930
Rob Heiser: I think my guess is it's probably just education, like you know we have these products that can do these things you just you know you'd have to migrate to him or her move your account to that type of like oh.

00:46:24.990 --> 00:46:30.840
Derik Sutton: yeah I was actually I was doing some data from a federal report, I was looking at recently, but there is a definite.

00:46:31.470 --> 00:46:37.650
Derik Sutton: need from the business owner perceived need, and I think real need for real time payments, both in and out.

00:46:37.980 --> 00:46:43.380
Derik Sutton: And I think businesses are struggling with that right now inside of banking in trying to figure that out where.

00:46:43.590 --> 00:46:51.780
Derik Sutton: You know they're wanting to get paid faster, you know they're wanting to make it easier for their end customers to pay when those customers pay they want those funds settling as quickly as possible.

00:46:51.960 --> 00:47:00.450
Derik Sutton: yeah and then on the outgoing side they want to be able to you know have tighter controls around money going out, especially medium and larger sized businesses on.

00:47:00.600 --> 00:47:12.240
Derik Sutton: The timing of those payments, and so I think payment in money movement cashflow make he makes sense, I think it's gonna be the topic of conversation with businesses in banking and I think that's that's the room to run for all of.

00:47:12.240 --> 00:47:12.540
Rob Heiser: us.

00:47:12.630 --> 00:47:20.040
Rob Heiser: To agree, I think the other thing is, I mean if you think about you know what DC is doing and all the tax changes and.

00:47:20.520 --> 00:47:27.930
Rob Heiser: Starting starting to look at them deposits from you know what what you know the kind of the side hustle if you're running a business account to a personal.

00:47:28.290 --> 00:47:33.180
Rob Heiser: And now all sudden you know every transaction is looking at scrutiny from a tax perspective.

00:47:33.600 --> 00:47:40.200
Rob Heiser: That that that could also call some issue in terms of you know how you're running and thinking about your business, you know you should.

00:47:40.590 --> 00:47:50.010
Rob Heiser: You know, are we go back to the accounting part of this mean counting is a is a big challenge when you talk about small business, especially when you have 1718 different ways to collect money.

00:47:50.400 --> 00:47:56.400
Derik Sutton: yeah absolutely yeah yeah the aggregation of that's a pain, you know that's a real problem.

00:47:57.480 --> 00:48:00.390
Derik Sutton: Okay, so now, what do we have your retail accounts with payment processing.

00:48:00.600 --> 00:48:10.920
Rob Heiser: yeah so we just talked about that I said they have you know 4800 these are you know 2% of their their consumer accounts are accepting you know payment processing.

00:48:11.400 --> 00:48:18.870
Rob Heiser: And so obviously it's competitive because they don't allow payment processing for their time against the consumer account so.

00:48:19.500 --> 00:48:34.350
Rob Heiser: You know now you start to quantify what you know what would that look like, I mean look at the numbers you just looked at from the guy from deluxe I mean it's I mean this this can be millions of dollars to the institution just by just by helping them understand.

00:48:34.740 --> 00:48:45.510
Derik Sutton: yeah, and this is, these are consumer accounts and i'm assuming you're taking out like the common been low paid off stuff like these are these are legit business process transactions right.

00:48:45.510 --> 00:48:55.710
Rob Heiser: yeah so that's a whole different category within our system, you know that's kind of mobile payment processing and that ptp this is literally you know competitive payment business, this is, you know.

00:48:56.250 --> 00:49:03.630
Rob Heiser: Payment tack and you know you strive them, you know you see all that within this within this.

00:49:04.500 --> 00:49:13.530
Derik Sutton: yeah this could potentially even bump up if some of those other PayPal type type transactions that you had a like just kept out we're actually included here.

00:49:13.980 --> 00:49:19.050
Rob Heiser: yeah so I added those I mean those are sometimes you know, obviously a consumer count that could also be just a.

00:49:19.110 --> 00:49:19.740
Derik Sutton: Pure heart.

00:49:19.770 --> 00:49:24.180
Rob Heiser: mpg so obviously the number jumps way up I don't want to kind of include all.

00:49:24.180 --> 00:49:24.840

00:49:26.010 --> 00:49:30.900
Rob Heiser: If they if they didn't have a business, I think I ran it if they were if I saw business spend.

00:49:31.200 --> 00:49:31.950
Derik Sutton: And they are.

00:49:32.220 --> 00:49:40.230
Rob Heiser: So pure spam and they didn't have a business product I did that I think was like 7800 it was like it almost double the number.

00:49:40.800 --> 00:49:42.090
Derik Sutton: gotcha interesting.

00:49:43.170 --> 00:49:47.070
Derik Sutton: Okay um so then competitive payment processors.

00:49:47.640 --> 00:49:59.430
Rob Heiser: Yes, so this is just you know people so we've been looking at consumer accounts right so just consumer accounts that have that have the tendency of looking like a business or or probably a business.

00:50:00.030 --> 00:50:15.570
Rob Heiser: This is that same institution that have that up there 60,000 you know we saw this earlier, this is commercial gta 61,000 you know accounts they have 11,000 are using a competitive payment processor not.

00:50:15.600 --> 00:50:21.540
Rob Heiser: Not not mobile not not Zeller or any that this is, you know payment tack and you know.

00:50:21.630 --> 00:50:26.280
Rob Heiser: Those strike those those type of you know, business payment processing from a conscious perspective.

00:50:27.180 --> 00:50:31.350
Derik Sutton: What did this bank do with this data, so you guys ran it all What are they doing with it.

00:50:32.730 --> 00:50:37.680
Rob Heiser: So, in some cases, set on kind of expose this particular bank but.

00:50:38.160 --> 00:50:41.070
Rob Heiser: It depends on what products they want to push I think when you start.

00:50:41.100 --> 00:50:51.630
Rob Heiser: With a strategy it really starts from the top, the top down like what what's the strategy what products are key to us, what are we good at you know what's our core competencies.

00:50:52.020 --> 00:51:01.620
Rob Heiser: It might not be business in this case, it might be more consumer oriented it just depends like they might be wanting to roll out a new credit card that they've decided to launch versus outsource.

00:51:01.950 --> 00:51:04.500
Rob Heiser: yeah there's a lots of different things that.

00:51:04.560 --> 00:51:18.360
Rob Heiser: that our institutions want to do when we do that we have a client success team that needs and works with all our institutions that they understand what their goals are, and then we map and use the data to help achieve their goals.

00:51:18.420 --> 00:51:18.930
Derik Sutton: I mean you can't.

00:51:19.380 --> 00:51:26.490
Rob Heiser: You have to understand there's so much data, and I mean if you think about it, especially over the last three years everything's a digital payment so.

00:51:26.940 --> 00:51:37.440
Rob Heiser: If you understand those digital payments at scale, you can understand almost anything about the institution or anything about those that institutions customers being in business big consumer.

00:51:37.710 --> 00:51:54.000
Rob Heiser: understanding how they behave understanding, you know cash flow payroll like so there's lots of there's a lot, you can understand, but it really has to align with the bank schools and so there's there's cases where just you know, there might be an opportunity I talked to one.

00:51:55.440 --> 00:52:01.200
Rob Heiser: group that's does more under bank and they're like we our goal is to graduate them to a bank.

00:52:02.130 --> 00:52:07.200
Rob Heiser: Once we once we get them to a place, I said well why don't you partner with banks.

00:52:07.560 --> 00:52:10.860
Rob Heiser: You know you create your own meal bacon graduate them into your own bank.

00:52:11.040 --> 00:52:22.620
Rob Heiser: Right and then start to track them further and that's why they run their goal their goal has always been to take the unbanked and make them bank and graduate them to a you know tier one tier two or Community been.

00:52:23.370 --> 00:52:33.840
Derik Sutton: interesting and then you know I think you've i've also heard you say things like you know your partner financial institutions are also using this data to help reshape kind of their their products all.

00:52:34.080 --> 00:52:36.270
Derik Sutton: Right our pricing what's included.

00:52:36.630 --> 00:52:39.150
Derik Sutton: You have any any good stories or any of those so that.

00:52:39.300 --> 00:52:53.790
Rob Heiser: yeah 100% I think you really, I think, the opportunity is always there if you if you just listen to the data right, this is the biggest thing is that, before you know you, you have plenty of market analysis, because you could talk to your customers.

00:52:53.850 --> 00:52:57.330
Rob Heiser: sure now you can't because they're there on this right there.

00:52:57.360 --> 00:53:06.840
Rob Heiser: yeah okay got lots lots of text messages they're all that and there that you don't have that personal engagement that personal interaction.

00:53:07.170 --> 00:53:08.730
Rob Heiser: What you have especially.

00:53:09.330 --> 00:53:17.250
Rob Heiser: Like i'll give you an example of chase chases, at least in my area has converted, a lot of their branches, to be private banking or or wealth type.

00:53:18.600 --> 00:53:28.800
Rob Heiser: tuitions well if you're a small business owner and you create a personal account you go to the bank and what you see as well, and you don't you don't qualify for that when you talk to the top go to the Teller.

00:53:29.220 --> 00:53:32.730
Rob Heiser: yeah right so that I think there's this there's.

00:53:33.360 --> 00:53:42.690
Rob Heiser: This evolving, you know bank ecosystem in terms of who are the niche players, you know you have squares really focused on the small business and not going up market like.

00:53:43.110 --> 00:53:57.960
Rob Heiser: Each institution what's great about our customers is that the customer anybody that owns the DDA has an enormous amount of data money movement moving where is it going where if they don't have the DDA let's say they have a mortgage where's it coming from.

00:53:58.170 --> 00:54:05.910
Rob Heiser: yeah so they can really start to think about if i'm seeing a lot of consumers with you know this one particular institution is the mortgage holder.

00:54:08.160 --> 00:54:14.880
Rob Heiser: That what what Why am I losing like do some research understand the pricing, if you know, three or 4% of my.

00:54:15.450 --> 00:54:19.350
Rob Heiser: loads over the last 30 days came for one institution that's a local institution.

00:54:19.950 --> 00:54:33.690
Rob Heiser: Why like do some research do some do some analysis, you know, in some cases it's pretty easy to to make a small adjustment for you to start winning those customers back or winning at least new new mortgages and so again the.

00:54:34.230 --> 00:54:44.730
Rob Heiser: we're basically TVs we're trying to help understand and identify what the shift is and what the changes, and so you can do more, analysis and then our team can also help augment that with our client success group.

00:54:45.180 --> 00:54:47.220
Derik Sutton: Absolutely cool okay.

00:54:50.850 --> 00:54:53.970
Rob Heiser: This this is, this is my last slide, this is a plug for you.

00:54:57.240 --> 00:55:03.510
Rob Heiser: This This is basically I just said hey anybody that's taking payments from either square into it.

00:55:04.680 --> 00:55:15.720
Rob Heiser: You know what percentage of that across any account most of these are obviously business accounts but it's like 12% of their business customers are taking money just from these two providers that's.

00:55:15.870 --> 00:55:16.500
Rob Heiser: You know, we have.

00:55:16.620 --> 00:55:22.710
Rob Heiser: You know, probably another you've seen the list probably 6070 these different providers that do these types of services.

00:55:23.610 --> 00:55:36.150
Rob Heiser: But 12% just with these two parameters so there's a big opportunity in terms of trying to you know, try to integrate something like audiobooks within within the within an institution to help them drive drive payment.

00:55:36.660 --> 00:55:45.930
Derik Sutton: To an amazing amazing okay so we're going to flip over now some of the day that we analyze would love your thoughts and opinions in like corroboration around what you guys are seeing so.

00:55:46.770 --> 00:55:51.390
Derik Sutton: Recently, through one of our partner relationships we were actually able to get to a quite a bit a.

00:55:51.960 --> 00:56:02.700
Derik Sutton: large amount of data so i've got i've just had kind of three sample banks pull up here and then we'll kind of like you know just kind of talk through these, if you will, so I need to like move some stuff out of my way here.

00:56:04.380 --> 00:56:10.320
Derik Sutton: um, so this is obviously 2021 in the case of this $13 billion bank.

00:56:10.590 --> 00:56:22.320
Derik Sutton: We are able to get access to just like seven months of data month 10 you know which is October the time we ran this about halfway through the month, so this is really just like half of a month here, and then we started to get like a full month here.

00:56:22.980 --> 00:56:34.770
Derik Sutton: into it is a weird I don't know if you guys see this to to rob like into the their transaction description to change it seems like in fluctuate quite a bit I don't know if they're doing that purposely.

00:56:35.130 --> 00:56:37.350
Derik Sutton: But they're the hardest one to actually grab.

00:56:37.530 --> 00:56:47.520
Derik Sutton: You know and keep consistent, which is, which is kind of odd but let's just you know, the main focuses here, so these are all you know kind of transactions, I want to look at just kind of like focus the.

00:56:47.520 --> 00:56:48.690
Derik Sutton: conversation on a bit.

00:56:49.050 --> 00:56:58.530
Derik Sutton: um because remember into it owns quickbooks you know the way those things come through is a bit is a bit difficult so PayPal at this bank.

00:56:58.980 --> 00:57:09.270
Derik Sutton: In about you know basically six and a half months $57 million in total deposits at this organization square 110 million dollars in total deposits.

00:57:09.780 --> 00:57:20.220
Derik Sutton: So that's where you start to get that amount of activity that that Sean talked about earlier like man that's a meaningful amount of activity that's taking place here and.

00:57:20.580 --> 00:57:22.020
Rob Heiser: These are just a positive to right.

00:57:22.320 --> 00:57:26.460
Derik Sutton: Just the incoming deposits, because to us that signals like they're getting paid for that service.

00:57:26.460 --> 00:57:27.150
Rob Heiser: provider right.

00:57:28.350 --> 00:57:35.760
Rob Heiser: yeah I mean it'd be interesting, so what we see not just that, so we see them so square to so anybody who is paying.

00:57:37.440 --> 00:57:45.420
Rob Heiser: Right and pet so that's it that's a great opportunity for institutions to because, as they start to see their own customer base.

00:57:46.530 --> 00:57:48.420
Rob Heiser: Pay other other merchants.

00:57:48.510 --> 00:57:50.250
Rob Heiser: A healthy spread network which is.

00:57:51.000 --> 00:57:53.670
Rob Heiser: Pretty easily identify when his phone running through the rails.

00:57:54.150 --> 00:58:05.880
Rob Heiser: and creates an opportunity to try to win them back and then also get the both sides of the interchange right good yeah they get the get the depository the so that I think there's lots of opportunity when you when you start to dig in this data.

00:58:05.970 --> 00:58:08.190
Derik Sutton: that's amazing and then I mean you know just.

00:58:08.220 --> 00:58:14.250
Derik Sutton: kind of over that time these providers so like 62 or 60 you know million dollars have been coming to Basel.

00:58:14.640 --> 00:58:17.100
Derik Sutton: A tremendous amount of activity, taking place.

00:58:17.160 --> 00:58:23.010
Derik Sutton: From these third party providers Okay, so now let's kind of move it down market a bit to $1.75 billion bank.

00:58:23.790 --> 00:58:37.920
Derik Sutton: 10 months worth of data, once again I just kind of want to focus on PayPal and square here just for the for the time being $5.2 million of incoming transactions from PayPal $31 million i've been coming square activity.

00:58:37.950 --> 00:58:43.380
Rob Heiser: what's amazing is you know, everybody thinks PayPal the behemoth to look at what squares doing.

00:58:43.380 --> 00:58:44.430
Derik Sutton: Where yeah.

00:58:44.460 --> 00:58:50.760
Derik Sutton: I mean they actually are killing it they're crushing it, they are crushing it, they are the 800 pound gorilla Make no mistake.

00:58:51.270 --> 00:58:57.360
Derik Sutton: don't you know these other ones like they're a threat this this group, right here is scary.

00:58:58.020 --> 00:59:02.490
Derik Sutton: scary I think do a really good job you know, like I talk a lot of trash on them.

00:59:02.940 --> 00:59:11.880
Derik Sutton: actually met at money 2020 the former head of product at square and he's now somewhere else, Robert was kind of funny we just got introduced it obviously i'm getting out and talking to this guy.

00:59:12.240 --> 00:59:20.250
Derik Sutton: And he's like oh let's connect on linkedin because he's kind of get into this crypto ra stuff which is fascinating to me and he's like i'd love to hear your thoughts on that.

00:59:21.060 --> 00:59:26.220
Derik Sutton: You know, moving forward, and so we were talking and i'm like hey just know on linkedin i'm i'm just going to be trashing Square.

00:59:27.900 --> 00:59:39.660
Derik Sutton: Full disclosure i'm a big i'm probing guy here, so I was like I love it you guys have built that I think you've done a good job for the businesses because they needed it, but we got it we got to take that step back, so you know no offense here.

00:59:40.740 --> 00:59:41.190
Derik Sutton: and

00:59:41.880 --> 00:59:44.370
Derik Sutton: Not only from this is a this is, this is only a.

00:59:44.370 --> 00:59:46.650
Rob Heiser: $1.75 billion bank.

00:59:46.710 --> 00:59:47.190
Derik Sutton: that's right.

00:59:47.220 --> 00:59:50.370
Rob Heiser: into that activity that's crazy to 2 million.

00:59:50.790 --> 00:59:55.710
Rob Heiser: And this doesn't even count, one of the other side of their their business, which is the the process.

00:59:56.490 --> 00:59:59.610
Rob Heiser: And doesn't count all their crypto stuff they're doing, I mean there's.

00:59:59.790 --> 01:00:01.290
Rob Heiser: A massive massive organization.

01:00:01.320 --> 01:00:16.470
Derik Sutton: No, I think I think when you start to you know when you start to combine cash APP and square business and the overlap of those in the Make no mistake, everybody like they're building an ecosystem I connected ecosystem, where they can do real time settlement.

01:00:16.920 --> 01:00:18.150
Derik Sutton: For you know.

01:00:18.180 --> 01:00:21.360
Derik Sutton: hundred percent they're starting to I believe I saw.

01:00:21.720 --> 01:00:33.690
Derik Sutton: um you know if you work at a square let's say you work at a coffee shop and they employ 10 you know 10 to 12 people, those 10 to 12 people can now download cash APP and get real time payroll deposits.

01:00:33.720 --> 01:00:33.990
Derik Sutton: yeah.

01:00:34.050 --> 01:00:34.650
Rob Heiser: You know, when we see.

01:00:35.340 --> 01:00:37.230
Rob Heiser: We see square payroll putting deposits all the time.

01:00:37.410 --> 01:00:37.890
Derik Sutton: yeah.

01:00:38.130 --> 01:00:42.180
Derik Sutton: Well, I think we're going to start to not see those, quite frankly, because what's going to happen is they're just.

01:00:42.270 --> 01:00:44.340
Rob Heiser: Young they'll build their own network.

01:00:44.490 --> 01:00:45.840
Derik Sutton: they're going to be in their own network right.

01:00:45.870 --> 01:00:47.550
Derik Sutton: So you know more and more.

01:00:47.610 --> 01:00:55.830
Derik Sutton: square is moving you know their business customers to say you know just bank with us keep deposits with us keep the positives with us, you can not only pay your.

01:00:56.010 --> 01:01:08.460
Derik Sutton: You know your people in real time you get access to lending and then those people that get that he goes right on the cash at ecosystem, you know in cash APP has a really nice debit card service and crypto acquisition and stock and everything else, like.

01:01:08.670 --> 01:01:11.640
Derik Sutton: it's going to get pretty scary like that that's that's the right right there.

01:01:12.570 --> 01:01:21.570
Derik Sutton: And then, lastly, you know just a $600 million bank um you know PayPal and square once again, you know PayPal it's pretty consistent, you know, and all these which is, which is pretty good.

01:01:22.440 --> 01:01:28.770
Derik Sutton: And then square you know $9 million in just seven months nearly six and a half months of activity as well, so.

01:01:29.070 --> 01:01:41.280
Derik Sutton: it's not just the reason I wanted to kind of bring these three samples he thought just big banks, you know, like this happens everywhere happens in smaller communities rural communities medium size larger metro areas, obviously.

01:01:41.940 --> 01:01:48.030
Derik Sutton: But but that's what we see, we see it happening everywhere, do you guys see the same, I mean you guys work with with sobriety banks as well right rob.

01:01:48.450 --> 01:01:59.940
Rob Heiser: yeah we see like I said, this is, this is exactly what we're seeing also I mean I think it's a it's a great opportunity, I mean when you ran this was it wasn't just business accounts.

01:02:00.600 --> 01:02:02.940
Derik Sutton: It is these are business accounts.

01:02:03.240 --> 01:02:04.770
Rob Heiser: Think about what we just talked about.

01:02:04.890 --> 01:02:07.110
Rob Heiser: I mean I this number doubles or triples.

01:02:07.170 --> 01:02:08.040
Rob Heiser: Right, I mean that's.

01:02:09.360 --> 01:02:20.430
Rob Heiser: You know I think it's again I think they're there he myth, I think the the small institutions have to understand that and, and you know the square makes it easy, but I think I think their prices expensive, I mean.

01:02:21.030 --> 01:02:21.630
Rob Heiser: Think about.

01:02:21.660 --> 01:02:30.390
Rob Heiser: You know, small businesses, and you know they're they're them in stripe they're both expensive from a pricing perspective, especially if you're talking about just pure debit card processing.

01:02:31.590 --> 01:02:33.120
Rob Heiser: way more expensive and so.

01:02:34.710 --> 01:02:44.730
Rob Heiser: A lot of it is just because you know, again, this goes back to what's happened over the last three years is a lot of just pure education about products in this space is that.

01:02:45.120 --> 01:02:52.920
Rob Heiser: they're easy already integrated you know you know shopify is run by you know their payment processors basically stripe.

01:02:54.180 --> 01:03:02.580
Rob Heiser: And the charge on top of that, if you want to use your own, and you know you're right I think they're trying to create their own ecosystem their own payment network.

01:03:03.420 --> 01:03:12.120
Rob Heiser: and be able to sell them and everything it's it's we we can the small banks can win here I mean they have way they have way more data.

01:03:13.620 --> 01:03:29.220
Rob Heiser: Both on consumer and business, especially for the DDA account and I haven't seen you know I would be really concerned when square starts to if they if they really start to become a full service kind of business bank that's what i'd be concerned.

01:03:29.310 --> 01:03:33.660
Derik Sutton: yeah well, I mean they are now they get their banking Charter and so that's the thing.

01:03:33.990 --> 01:03:37.620
Rob Heiser: I got out though right yeah lily was the product of.

01:03:37.740 --> 01:03:43.530
Derik Sutton: They do I think what's interesting for me is I should have brought this up earlier, so this has been both in business.

01:03:43.830 --> 01:03:57.660
Derik Sutton: You know 1.3 and 2.9 even for the financial institutions, you when these two things right there's no reason, like these are just very basic when it comes to when it comes to the service offering there, and those are just basic money movement capabilities inside.

01:03:57.720 --> 01:04:09.030
Derik Sutton: You know, most of these simple business standpoint right they don't necessarily have the complex nature that stripe has when it comes to invoicing and merchant portal managing your people inventory management.

01:04:09.780 --> 01:04:13.320
Derik Sutton: You know some of those kinds of things, but these these amounts are getting meaningful.

01:04:13.680 --> 01:04:22.020
Derik Sutton: The signals, you know there's just basically people that need basic hey I just need to get paid very simply help me accept payments for our customers let's actually go back and look at.

01:04:22.320 --> 01:04:26.700
Derik Sutton: yeah you know I mean like even in this, you know $1.75 billion bank.

01:04:27.420 --> 01:04:34.980
Derik Sutton: You know you start to get into seven $8 million dollars in in seven months of you're acquiring like a time really great start that's a really good down payment.

01:04:35.430 --> 01:04:43.650
Derik Sutton: On competing plus whatever else you have with your merchant provider oh my gosh yeah look at this, you know, been with this organization.

01:04:43.980 --> 01:04:44.970
Rob Heiser: that's meaningful.

01:04:46.380 --> 01:04:49.560
Derik Sutton: yeah that's meaningful so, as you said, look at this one month.

01:04:50.640 --> 01:04:57.120
Derik Sutton: $10 million have been mo activity in business accounts of this organization so.

01:04:58.080 --> 01:05:04.710
Derik Sutton: This is where it's going make it simple for people to accept payments that's what they're, this is clearly signaling, this is what they need wow.

01:05:04.980 --> 01:05:09.240
Rob Heiser: I mean is that the cash right, I mean if you're starting to see these volumes.

01:05:09.840 --> 01:05:16.170
Derik Sutton: I mean you know we've done stuff in the past and 2020 just accelerated that whole movement, you know moving away from.

01:05:16.620 --> 01:05:22.410
Derik Sutton: You know the phrase, I gave is like businesses are transitioning from accepting cash and check in person.

01:05:22.830 --> 01:05:32.940
Derik Sutton: To in APP or online payments, you know that that's that's just taken off it is what it is and the problem here's the Court ecosystem problem for banks.

01:05:33.720 --> 01:05:43.650
Derik Sutton: Before that, if I if I accepted cash or check I basically there was only one place to get access to that working capital by local financial institution had to go to positive air.

01:05:44.040 --> 01:05:52.350
Derik Sutton: So that created this kind of PSI our primary financial institution relationship between the businesses and the financial institution, because you were the first lie that deposit.

01:05:52.920 --> 01:06:01.200
Derik Sutton: um whenever that changes but that's just a digital whoever facilitate the payment is now what I would say is the PSI.

01:06:01.590 --> 01:06:10.200
Derik Sutton: Right, because they have first crack at the relationship their first crack of the deposit they've got the ability to signal and data in the do you know product recommendations.

01:06:10.500 --> 01:06:17.730
Derik Sutton: it's the way you can, if you control how business gets paid it's like locking in direct deposit into consumer relationship.

01:06:17.820 --> 01:06:18.420
Rob Heiser: that's right.

01:06:18.840 --> 01:06:22.440
Derik Sutton: And so that's where everything kind of flows out of okay so.

01:06:24.180 --> 01:06:35.940
Derik Sutton: This is kind of just total accounts that we also analyze just notice on some of these banks, we didn't even have the full amount of you know, seven or 10 months and some of these things really are like three months of.

01:06:36.270 --> 01:06:45.990
Derik Sutton: Data or two months of data, but these are just the total number of accounts at each of these organizations using these third party providers as well, so you can see, you know it's it's a meaningful share.

01:06:46.170 --> 01:07:00.870
Derik Sutton: Of the of the total account volume that these organizations are attaching themselves, in many cases, you see a combination of like using you know, maybe PayPal plus traditional merchant services inside of that organization because they're they're meeting that digital side as well.

01:07:02.190 --> 01:07:02.790
Rob Heiser: So.

01:07:03.210 --> 01:07:04.530
Rob Heiser: that's just this is bacon.

01:07:04.890 --> 01:07:05.880
Derik Sutton: Just business baking.

01:07:06.660 --> 01:07:13.620
Derik Sutton: yeah yeah I mean we we don't have this thing kind of library stuff do you guys have and we do a pretty good job about it that's why wouldn't you to kind of speak into that.

01:07:13.830 --> 01:07:20.550
Derik Sutton: But for us it's it's a bit harder to do the full signaling so I just wanted to stay raw in the business just to show the volume.

01:07:21.960 --> 01:07:27.090
Derik Sutton: Okay, so making progress so here's a couple of interesting things that we've got coming up coming online.

01:07:27.360 --> 01:07:36.660
Derik Sutton: To help with this, and I want rob to kind of talk about what they do so this is a bit raw, so this is in development, for us, I kind of chopped off up here normally you'd have like your bank name and your logo.

01:07:36.960 --> 01:07:45.780
Derik Sutton: Your branches would be here, your customer names would be here so here's what we're doing we're building a back office portal for you all to see.

01:07:46.080 --> 01:07:58.440
Derik Sutton: Basically, all of this activity we saw coming through so now, just imagine the accounts and the transactions that are coming through we're building a tool for you all to basically see this activity come through.

01:07:59.610 --> 01:08:00.480
Derik Sutton: In a dashboard.

01:08:00.840 --> 01:08:11.130
Derik Sutton: So you can see this, they just opened up a new account and they attached square PayPal you want to email call or refer them to one of your frontline staff to take action on that.

01:08:11.940 --> 01:08:19.590
Derik Sutton: We just saw signal transaction signal transaction means that they just attached like a like a low micro deposit transaction.

01:08:20.220 --> 01:08:30.450
Derik Sutton: You want to email color for them so we're actually trying to create this proactive way for you all at the financial institution to see this thing taking place in real time and take action on it.

01:08:31.080 --> 01:08:37.890
Derik Sutton: You know by your branch, these are going to be your leads your adopted your activated you know numbers to like actually start to help you all.

01:08:38.130 --> 01:08:47.250
Derik Sutton: kind of see you know hey here's the opportunity to click on that you see all those customers, this is the list and then, what do you want to do, how are you going to take action on each of those customers.

01:08:48.960 --> 01:08:51.300
Rob Heiser: That you thinking yeah that'd be going on.

01:08:51.420 --> 01:08:59.730
Derik Sutton: So this is our this is kind of like that performance dashboard from a campaign perspective so as we're starting to build out.

01:09:00.210 --> 01:09:08.160
Derik Sutton: You know your bank name goes up here you got kind of your total activity going on you're going to see kind of like who's working with you all at auto books.

01:09:08.760 --> 01:09:15.660
Derik Sutton: You know kind of your fdic before did asset to your digital tech stack is, but then these campaigns that we're offering.

01:09:15.960 --> 01:09:20.790
Derik Sutton: You can kind of go in and view the details and see what's going on with those campaigns so maybe you pushed out an email campaign.

01:09:21.150 --> 01:09:26.580
Derik Sutton: And you want to measure the results of that remember our stuff is all going to be geared towards just what we do.

01:09:26.940 --> 01:09:37.740
Derik Sutton: And so that's why I wanted to bring in Robin team, because when they do the utilization they do their marketing services it's much more broad you know so like we've got this really kind of like laser focus fine tune thing.

01:09:38.040 --> 01:09:48.660
Derik Sutton: we're going to look at this activity we're going to give you a prescriptive program to like go at you know these these customers and send the right message at the right time, which basically.

01:09:49.860 --> 01:09:54.870
Derik Sutton: Actually it's here should have put this in a better way, so we have this signal transaction workflow guide.

01:09:55.140 --> 01:10:04.080
Derik Sutton: That kind of document tight and send the right message to the right time to your customers here's an example of basically you know we see one of those activities coming through.

01:10:04.320 --> 01:10:07.440
Derik Sutton: And then we're going to self segment those customers and give them an email.

01:10:07.860 --> 01:10:18.600
Derik Sutton: That email is going to say hey invoicing or payment form these are kinda like the different variants and things that we would send out and then you're going to get this report of like what's the performance look like like this is the email.

01:10:18.840 --> 01:10:27.390
Derik Sutton: that's the subject line that we send out this is the offer within that these are the open rates that we're seeing on our emails click through rates unsubscribe rates.

01:10:27.870 --> 01:10:31.320
Derik Sutton: But it's really this prescriptive triggered way to say.

01:10:31.560 --> 01:10:41.670
Derik Sutton: At the time of a data, you know, a data signal and data conversation so earlier rob talked about like we're not talking to view anymore and i'm sitting there thinking you have your data is talking.

01:10:41.940 --> 01:10:50.100
Derik Sutton: So when the data gives you the right conversation, how do you digitally initiate that conversation in the right way with the customer, this is what this program is all about.

01:10:50.340 --> 01:10:54.240
Derik Sutton: So um yeah Robin Dana talking is.

01:10:54.330 --> 01:10:55.290
Derik Sutton: The data is talking.

01:10:55.560 --> 01:10:59.250
Rob Heiser: it's it's it's screaming a lot of times it's screaming.

01:10:59.550 --> 01:11:09.270
Rob Heiser: Like you know and and, by the way, the consumer expectation and the business expectation is very high in terms of them, you should know my data at this point right and you should.

01:11:09.780 --> 01:11:25.320
Rob Heiser: You know that's that's happened because of just pure technology companies that have have mastered personalization so that there's there's a very high level of the of the bar is set very high and institutions have to kind of come up to that bar just to serve their customers.

01:11:25.650 --> 01:11:31.080
Derik Sutton: Absolutely, we also have a you all going to get this in the presentation this This guide to Roi.

01:11:31.500 --> 01:11:35.730
Derik Sutton: Where we break down and show you like what's it worth you know, to go activate.

01:11:36.030 --> 01:11:46.800
Derik Sutton: A business customer getting paid to audiobooks as an example, and so we just kind of show like a sample number of customers, we calculate you know, basically, how much you can get and kind of show you hey you know after year one.

01:11:47.460 --> 01:11:53.010
Derik Sutton: If you go activate a certain number of customers, you know you can start to earn $2,000 a month in on interest fee income.

01:11:53.280 --> 01:12:01.200
Derik Sutton: Just by activating a segment of that population and, like our estimates are Conservative, I mean we showed you some huge numbers.

01:12:01.530 --> 01:12:07.650
Derik Sutton: This is the opportunity, though you guys start to win some of those customers away from PayPal away from Ben know, maybe even away from square.

01:12:07.920 --> 01:12:14.670
Derik Sutton: get them into your portfolio just on the interchange revenue there's real opportunity to go earn income off of those so.

01:12:14.910 --> 01:12:21.090
Derik Sutton: rob from from segments perspective and your product line that we discussed earlier your you know your targeted marketing.

01:12:21.480 --> 01:12:33.030
Derik Sutton: How are you helping banks take that data conversation and kind of go go generate the similar type of income, you know, whether it be true nine interest income or new product adoption deposit growth, etc, etc.

01:12:33.360 --> 01:12:41.250
Rob Heiser: I think the thing that's great about our platform is that we talked a lot about you know our client success team and align that with the goals of the institution.

01:12:41.850 --> 01:12:48.180
Rob Heiser: But what once we understand what the institution wants to do, and we can build in the messaging.

01:12:48.450 --> 01:12:57.300
Rob Heiser: we're already pre integrated a lots of channels, we actually have a full integration to real time bidding network, so we can actually place media right out on the Internet, one to one.

01:12:57.480 --> 01:13:04.710
Rob Heiser: Oh wow yeah which is really awesome especially think about I mean if if they're logging online baking and you want to place a message.

01:13:05.190 --> 01:13:14.550
Rob Heiser: Then now you're seeing multiple channels email online, you know that message gets out there and it doesn't cost you a fortune in terms of kind of brand awareness.

01:13:14.760 --> 01:13:25.950
Rob Heiser: yeah but the tracking of that you know we we see all the transactions it's closed loop, you know, so we see transactions at least daily and we measure to the goal, so if the goal is to.

01:13:26.040 --> 01:13:43.890
Rob Heiser: open up a new mortgage or the goal is to draw down and draw against your home equity line we actually show them the return and, if you look at all of our customers across every campaign that we're running our average return return on investment is 15 times.

01:13:44.160 --> 01:13:59.040
Rob Heiser: yeah all campaigns all aggregated, and so I think that's the important aspect is that one you have to show the CFO these days and taking them every initiative makes sense for you to spend time and or money from from from the institutions.

01:13:59.520 --> 01:14:01.920
Rob Heiser: Especially most of our institutions are publicly traded.

01:14:03.600 --> 01:14:13.230
Rob Heiser: But that's that's an important it's an important aspect that you really want to drive value and you want to drive value that makes sense, the institution and you want to measure it.

01:14:13.590 --> 01:14:15.600
Rob Heiser: To make sure it makes sense and so.

01:14:16.470 --> 01:14:23.730
Rob Heiser: that's that's the that's the critical part and it's all driven through data right message right, you talked about Derek right message right time right place.

01:14:23.940 --> 01:14:30.270
Rob Heiser: yeah but also has to do with education and what products, you have because a lot of them don't understand the some of the products that you have.

01:14:30.720 --> 01:14:41.010
Rob Heiser: And like we just said, consumer a lot of businesses are using consumer consumer dds it's that that's an that's an easy use case to win, win customers back over to the business side of things.

01:14:41.460 --> 01:14:49.740
Derik Sutton: And I think the key there is, you know we kind of, say, like don't spam your customers with on one information, you know, right now, you know build like this marketing.

01:14:50.070 --> 01:14:59.940
Derik Sutton: program that's going to run for the year and you've got your Sunday re you know, like it it's just quarterly program we want to be very targeted not saying you shouldn't do those things, but like.

01:15:00.060 --> 01:15:08.010
Derik Sutton: yeah then a contextual message to somebody that needs some at the right place right time it's the replacement of them walking in the branch.

01:15:08.100 --> 01:15:11.610
Derik Sutton: You know when asking you a question, let their data asked a question of you.

01:15:11.910 --> 01:15:15.600
Derik Sutton: And then lightning supply them the answer that's the modern convenient model.

01:15:16.440 --> 01:15:26.640
Derik Sutton: of banking, I believe, and so, if you're interested, so I know we're kind of log on time here right at it if you're interested if you have questions if you want to do.

01:15:27.120 --> 01:15:32.070
Derik Sutton: You know, learn more about segment, if you want to learn if you're not a books client you want to learn more about those.

01:15:32.430 --> 01:15:45.420
Derik Sutton: signal transaction workflows Roi guides and the thing that we're working on there, if you want to be kind of on the early adopting side of that, let us know let's talk it out of books co we can get you in conversation with rob rob what's your email or.

01:15:45.450 --> 01:15:47.040
Rob Heiser: I dropped it in the chat everybody.

01:15:47.640 --> 01:15:53.070
Rob Heiser: wants to send me a message and continue the conversation, they can email me at rob at segment Tom.

01:15:53.400 --> 01:16:00.000
Derik Sutton: cool alright thanks everybody for attending you'll get the recording you'll get this guide and thanks to rob for for helping me out man.

01:16:00.120 --> 01:16:02.010
Rob Heiser: yeah thanks to talk to you soon.

01:16:02.430 --> 01:16:03.090
Derik Sutton: See you guys.