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Tal Schwartz: KHello, good
morning, and welcome back to a

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CLA webinar, we have a really
exciting session, for you all

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this morning, we're going to be
doing an assessment of the

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fintech lending industry in
Canada, where it's come from,

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where it's going. You know, it's
been an incredibly exciting

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week, obviously, with the
American elections, looking at

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the public markets, things are
pretty wild. So really excited

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for today's conversation. Also,
big thank you to our sponsor and

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supporter TransUnion. You're
going to hearing a lot from

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TransUnion over the next hour.
And I encourage you to connect

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with with the team or with Matt,
afterwards to discuss some of

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the solutions that they offer.
So with that, I'm going to hand

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things off to your moderator,
Mark.

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Mark Reisler: Thanks. Thanks to
all welcome, everybody. Happy

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early Thursday morning, and
really looking forward today. So

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I'm Mark Rossler. I'm the
managing director of lending

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over at FGS, where we tend to
focus on growth strategies for

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large financial incumbents. And
today, we're going to try and

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separate the conversation into a
bunch of segments. So segment

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one, we're really going to dive
into what's happening with the

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lender and the lead tech
landscape. Segment two, we're

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going to take it from an
empathetic point of view and

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under trying to understand our
borrowers. And then if we have

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time, we'll go through some
quickfire questions and open up

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the q&a a little bit more. So
before we get started, I'd love

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to introduce our panel. Kevin,
why don't you kick us off with

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an introduction. And we'll go
from there.

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Kevin Clark: Great. Thank you,
Mark. And thank you tal and the

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CLA team for putting on the
event. My name is Kevin Clark. I

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am the Chief Revenue Officer for
merchant growth. I have I guess,

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about five and a half years
under my belt in the FinTech

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lending space. Having founded
lender five back in 2015 and

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judy.ai. Shortly thereafter, and
managed through the challenges

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of COVID and have come out on
top with merchant merchant

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remains one of the premier
lenders in the small business

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lending space here in Canada.
And prior to my FinTech years, I

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spent 30 years with the bank of
Nova Scotia in a variety of

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lending positions. And and so
come at this space with a lot of

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different background be
traditional lending, and now in

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the modern world of FinTech
lending, and it's been a

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fascinating ride, and I look
forward to being a part of the

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panel. Thanks, Mark.

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Mark Reisler: That's great.
Matt, do you want to go next?

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Matt Fabian: Sure. Good morning.
I'm Matt Fabian, I'm director of

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research and consulting at
TransUnion. Canada. For those

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that may not know, TransUnion is
a Global Information Services

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data and analytics company. We
provide not only credit

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solutions, but other data fraud
and analytic solutions for the

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lending industry, including
fintech. And part of that I was

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in roles in strategy and
analytics roles at one of the

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big five banks for about 18
years. And part of that was in

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management consulting. So really
excited about this topic, high

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growth area. We've been
monitoring it worldwide.

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Certainly. And, you know, I know
a lot of the folks on this

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panel, I think some of you great
discussion.

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Mark Reisler: Great. Thank you,
Jason.

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Jason Appel: Thanks, MarK. Good
morning. My name is Jason Appel.

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I'm the chief risk officer and
go easy limited. been with the

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organization there for just
under eight years. Go easy as

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one of the larger nonprime
lenders publicly traded non

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prime lenders in Canada. We've
been in the business for about

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15 years give or take, got our
start, if you will, in the

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leasing business, which we
remain active in and across the

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country. Really happy to be part
of today's panel. Lots of good

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dialogue and discussion I'm sure
to be had. It is an interesting

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time to be a lender in the
Canadian market nevermind

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globally. So looking forward to
exchanging thoughts and views

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with my panel colleagues.

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Mark Reisler: Great Love the
balloon in the background, by

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the way.

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Jason Appel: Thank you. That
just reminds me how old I am. So

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thank you for that.

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Mark Reisler: Perfect and
Jeremy.

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Jeremy Kronick: Yeah, thanks
Mark. Good morning everyone. And

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thanks tal for inviting me to be
part of our this panel. So I'm

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I'm Jeremy Kronick Associate
Director of Research, the CD

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Howe Institute. The CD Howe
Institute, for those who don't

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know, we are a nonprofit that
does Economic Research and

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advises on public policy. So I
run the financial services and

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monetary policy research
programs there. I'm an academic

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by training since my background,
I've been at CD Howe for about

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six years, focused very much
there in the research space on

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you know, activity the future of
financial services sector. And

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then on the monetary policy
side, sort of the implications

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of the Bank of Canada actions
for, for for the financial

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services sector and for the
macro economy at large, just

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really looking forward to being
part of this panel a little bit

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outside my wheelhouse and some
of the sort of specifics around

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about lending. But I'll I'll do
my best to provide sort of a

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macro perspective and some of my
views on the overall sector.

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Mark Reisler: Jeremy, I think
you're gonna be just fine. And

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we'll go easy on you. Okay, so
why don't we get into this? Why

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don't we kick things off FGS,
we, we recently just updated our

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database, and we're showing now
that 191 Different lend texts

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inside of the ecosystem in
Canada. And when we were going

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through a lot of the research,
we found that the lender

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landscape is really, really only
making up about 16% of the

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overall market share in the
economy today. And that means

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that the credit unions, the
banks of the world are remain

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are picking up the remaining
share. So I want to kick this

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off. And maybe Jeremy, you could
help set the stage for us a

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little bit around from a macro
level, what's happening in the

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lending in Canada right now.
We've got the increase in

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liquidity because of the
government stimulus. Can you

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just kick us off? Very high
level macro? What's going on in

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lending in Canada?

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Jeremy Kronick: I mean, I'll
just start off with a few

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thoughts. I mean, you look at
the household and business

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credit data. And you look at the
month over month numbers, the

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year over year numbers, I mean,
you certainly see some negative

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growth on aggregate month over
month, you don't really see it

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year over year, which is, which
is interesting. And you really

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haven't seen it through the
crisis, where you do see it when

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you break it down further from
the aggregate level is really in

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the consumer credit side. You
know, I think the real estate

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sector, obviously, residential
mortgages, stayed pretty strong,

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in part because the mortgage
deferral program, you know,

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business credit, certainly month
to month, month over month took

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took a bit of a hit. Really the
consumer credit side to me was

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was the most noticeable spot.
And so I think it shows, you

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know, in terms of where it was a
little bit better than perhaps

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we thought it would have been at
first, I think, to your point

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earlier, I mean, the government
programs have been have been

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huge here and the Bank of
Canada's measures have been, I

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think, equally as important.
They've injected massive amounts

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of liquidity into the sector, I
think he's been, you know,

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responsible for keeping
financial markets in pretty good

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shape, you saw corporate
spreads, spreads spike, and then

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come back down after the bank
really got involved there. I

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think there's some obviously
some questions to worry about,

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you know, what's going to happen
to those programs, when the end,

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we saw some delinquencies, the
in September sort of start to

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creep up, we know that there
were some issues even before

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COVID. So I think there's some
question as to what's going to

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happen, when those programs and
also what's going to happen when

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the term repos roll off the
balance sheets, and those

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balance sheets start to shrink a
little bit, or the bank is going

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to get as involved. And so there
might be some room there for the

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lenders, I could go on. But I'll
just stop there. Since we have

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three other panels,

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Kevin Clark: You know, you know
what they'll mark, what's

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interesting is that, you know,
our industry hasn't really

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traditionally looked at market
share to sort of drive our

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success in the space. I mean,
frankly, is as startups and as,

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you know, new into the financial
services market, financial

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technology lenders, it's really
about how do we compare from the

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previous month? I mean, are we
comparing ourselves to

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ourselves? are we comparing
ourselves to our peer group?

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Certainly, we're not comparing
ourselves to the broader

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financial services stability
that's out there with

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institutions that have been
around for hundreds of years. I

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mean, it's, to me, it's, it's
about it's about meeting the

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needs of cash flow. And yes,
serving the the industry. But

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market share hasn't really
played a role in defining our

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position on the map.

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Mark Reisler: Jason, same same
thoughts and opinions from the

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Go Easy said,

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Jason Appel: Yeah, I would agree
with Kevin. I mean, we I mean,

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you know, as we classify the
market for nonprime, nevermind

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the entire market, I mean,
that's sitting X mortgage at

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over 230 billion, you know, we
have just over a billion dollars

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of that we're not even a speck
on the on the overall map, and

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yet, we're considered to be a
large player in the space. So I

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would agree with Kevin, we don't
tend to define ourselves by how

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much market share because the
nonprime market at least is

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growing at two to 3% annually,
which means you're getting five

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to $6 billion of new growth
entering just into that segment,

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nevermind prime near prime or
above. So I would agree we don't

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define it that way. But as far
as overall lending is concerned,

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I would say it depends on who
you ask. I would say broadly

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speaking, the market is still
coming back. You know, as a

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business. We obviously just
reported our numbers a couple of

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days ago. We're marginally ahead
now where we were last year, but

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that's through a lot of creative
and very tactical engineering

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work. Most of the The market I
would say is still hasn't come

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back year on year. They're
certainly up month by month or

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quarter on quarter. And I think
that's because we all got

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slammed, when COVID hit in
March, April, May, and the

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excess liquidity that came into
the system didn't transform in

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my view into additional debt, it
transformed into a pause on

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additional debt. Insofar as a
lot of lenders, or a lot of

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consumers rather weren't looking
to get more debt, they were

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simply looking to stay alive
with the debt, they had that

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with the different programs that
most of the major banks and some

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lenders put into place. And what
that excess liquidity wound up

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doing was lowering the overall
debt to income ratio, not by

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changing the debt levels by
boosting the income levels. So

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we as lenders, or auto lenders,
as we're so defined, I would say

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our business is still
rebounding. It's certainly

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trending positively, I would say
personally, but I still think

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we've got a little bit ways to
go probably a couple more

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quarters, and there might have
the fact that the economy is

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likely going to enter somewhat
of a marked slowdown in q4, just

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because we've come up from such
a low point in q3, and I'm

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talking physical, kind of fiscal
calendar quarters. I think the

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future looks bright. But you
know, second slash third wave,

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depending on who you ask, still
cast quite a long shadow of

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uncertainty. So I'd say we're,
but we still have some way to go

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to get back to where we were as
a as an overall industry, I

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would say.

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Mark Reisler: And that would
love to hear from your end as

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well around the state of
evaluation of risk evaluation of

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people as well as businesses.
How's TransUnion looking at this

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and yourself looking at the the
current market that we're in?

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Matt Fabian: I think it's
interesting. And I think, you

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know, I the Jason's points
resonate with me a lot, because

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you know, what we've seen, what
we saw coming into this crisis

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was elevated household debt,
right? We heard about it in the

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media, we heard about it in the
news. And you know, the big

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story was always Canadians have
more debt than any other g7

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Country per capita. Right. So
that was already sort of an

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issue and a stress on the
economy coming into this. My

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view had always been, that's
only one side of the balance

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sheet. You know, wealth and
income was also growing at a

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pretty good rate. So, again,
when you look at that ratio, it

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seemed a little bit of line. But
the big question coming into

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COVID was going to be what
happens when sort of this? You

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know, the, the shock hits, right
with with people already in

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debt. And I think Jason was
right on in that what we've seen

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is, folks just wanted to get
through this crisis. Right. So

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our financial hardship survey
that we put out, that was the

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sentiment people were looking at
not looking at taking on more

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debt, people were trying to
figure out, how do I get through

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the next month or the next three
months? And that was really the

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focus. And I think, you know,
obviously, the government

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relief, stimulus packages were
really useful and warranted, I

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think the lending community
really stepped up there were

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about 3.1 million Canadians. But
11% of the credit market took

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some kind of deferral. And we're
starting to see that run off.

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Right, so we're starting to see
about 63% of the card portfolio,

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the deferrals have started to
run off about 54% and personal

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loans. And I think to Jeremy's
point, we haven't necessarily

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seen a material increase in
delinquencies, we've started to

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see a little bit of a creep up.
But it hasn't been a huge sort

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of cliff that maybe some people
had worried about. And so I

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think, you know, it early
performance remains pretty

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positive. But as you know, a
couple of people have already

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mentioned, there's a long tail
to this. If there's a second

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wave, it could put a lot of
stress on initial shock on

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consumers. And, you know, it's
sort of one of those things, you

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can get punched in the face once
and get up, but maybe not the

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second time. Right. So that
could be and I see that where

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this industry really steps up,
right? What happens typically,

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especially with the larger
players, is they have these sort

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of, not always, but there's sort
of these uniform underwriting

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policies that kick in, right,
and you put these cut offs. And

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there's folks again, they're
trying to get through the next

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couple of months, where they're
trying to get access to credit

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access to liquidity. They might
not get it from some of the

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traditional channels. And I see
this industry really stepping up

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and really playing a big role in
that that happened in the US,

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certainly in the 2008 2019 gave
rise really to the FinTech

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industry in the US. And so I
think I see that here. And I

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think, you know, again, with
performance, Canadians have

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historically been pretty stable
in terms of their credit

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performance. And so I think, you
know, that that bodes well for

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Kevin Clark: You know, Matt, the
elephant in the room on this, of

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the industry.

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course, is that the the
alternate lenders amongst us

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here that have been providing
capital into the small business

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community and the lower end of
the commercial markets for quite

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some time, are exactly the ones
that, you know, got caught with

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the challenge of the COVID
experience and the declining

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economy at the time and the, as
Jason called it, you know, the

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offset All the government funds
going into the marketplace. And

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what was really unfortunate was
to your point, noting that, that

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the US and in Europe, the
distribution of those special

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needed funds came through a
variety of channels, including

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the financial technology
channel. And we got overlooked

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in Canada, notwithstanding the
incredible distribution that we

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provide and the capital that
we've provided into the market.

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And the only real silver lining
on that is that we we got noted

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that we weren't actually a part
of that distribution. And so

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we've sort of gotten the
highlight the wrong way that

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this community does exist and
plays a critical role in

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supplying capital into the low
end of the of the commercial

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markets. Yeah, they couldn't
agree more.

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Matt Fabian: A lot in this
industry is, you know, that

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stigma, it's, it's not maybe
necessarily as prominent as it

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was, but that stigma of FinTech
is, you know, a bunch of lenders

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that lend to subprime. And, and,
you know, they're the, you know,

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the worst of the worst, and
they're kind of in this little,

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that a lot of it is based on the
ability to build technology and

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build platforms and build
customer experience and build

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speed that maybe doesn't exist
elsewhere. Right. And I think

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that I agree that I think, you
know, those are the attributes

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that in a time like this, when
speed and you know, time to

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decision, things like that are
important, could have really

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been something that the the, you
know, the Canadians could have

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leveraged?

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Mark Reisler: Yeah, I think it's
a bit more than that, though, to

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I think it's, I think it's to
Kevin, your point, you know, you

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have access to a certain set of
small medium businesses that are

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getting rejected from the big
banks that are, you know, maybe

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on the near prime spectrum of
prime, and by you having that

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00:16:47.810 --> 00:16:51.350
type of access to that smi or
buy go easy having that type of

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access to that consumer, I mean,
what we're really doing here is

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that we're giving a fighting
chance to be quite honest with

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you to, you know, the plumber
out there, or to the lower

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income family of four that
really needs this. So, I agree

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with you that the distribution
channels, you know, we should

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have thought about this a little
bit more hand a little bit more

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directly. But maybe you could
touch on the type of access that

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you do have. And I know that I'm
going a little off script here,

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but, you know, those, those
means that you're reaching out

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to the small businesses that
you're reaching out to, I'd love

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for you to just kind of, give us
a give us a sense of of what

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that what that looks like in
your domain, how you view them,

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00:17:35.120 --> 00:17:38.750
how you evaluate them, whatever
needs you're solving for them.

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Kevin Clark: Well, all that, of
course, has changed every one of

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us on the panel today, we'll
have a view that's today and the

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view that we had six months ago
or eight months ago, and they're

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they're probably different. You
know, the Reach for capital,

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there is a, like the car
industry 10 years ago, I mean,

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everybody's retooling right to a
lower sized organization and

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operation and trying to
understand how they gain growth

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out of today's economic
environment. But the reach has

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traditionally been broad,
whether it's for Jason, or

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anybody else in the consumer
space and in the commercial

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space, that we have always felt
ourselves fundamentally

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compatible with the larger
institutions, because we play in

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a in a segment that has been
challenged for them. And that we

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have found ways to actually
provide capital at with a value

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proposition that is really well
respected by the small business

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community, because everybody
needs access to capital for

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growth. And if you can't get it
in traditional ways, you get it

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through ours, which is really
quite dynamic. And obviously

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leveraging all the nuances of
data and so forth that we'll

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talk about today. But there's
been no change in terms of in

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terms of broad coverage model
that we have today from where we

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were eight months ago. I think
the difference is there are

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certainly, you know, based on
people's balance sheets, some

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people are trying to refinance
down and are really skeptical of

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borrowing and for those who have
sort of retooled, or, or

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happened to be and, and the
economic space today where

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business is actually okay. You
know, there is growth out there.

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And we're funding that and
underwriting that growth, which

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00:19:19.460 --> 00:19:23.510
is actually quite exciting. We
might be down 50% from pre

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00:19:23.510 --> 00:19:26.360
COVID. But I wouldn't say we
were down in terms of the

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industries that we're trying to
cover. I mean, even in the food

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and beverage space, there is
business being done. And money

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00:19:32.120 --> 00:19:36.320
is going out the door to support
small businesses, but I'll stop

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00:19:36.320 --> 00:19:38.960
there and let maybe Jason's got
comments on the consumer side.

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Jason Appel: Yeah, I mean, we're
probably not different than

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that. Obviously, you know, my
perspective is is and I think I

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said this before, when we Kevin,
I sat on the CLA panel that

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occurred last fall, you know, a
good risk manager nevermind a

348
00:19:52.190 --> 00:19:55.250
good revenue manager or any
business leader is planning and

349
00:19:55.250 --> 00:19:58.970
managing their portfolio to
perform well in bad times, and

350
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the time to take those jobs.
swings and make those

351
00:20:01.160 --> 00:20:04.460
modifications is generally in
good times. Because those bad

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00:20:04.460 --> 00:20:07.490
times when they come, they tend
to, you know, hit you upside the

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head like nobody's business. Now
in this particular recession, we

354
00:20:10.850 --> 00:20:13.310
all got a little bit of a break
in the form of government

355
00:20:13.310 --> 00:20:16.700
stimulus in the form of lender
deferral programs, in our case

356
00:20:16.700 --> 00:20:19.370
in the form of having ancillary
products that provided our a lot

357
00:20:19.370 --> 00:20:21.860
of good portion of our customers
with additional coverage to help

358
00:20:21.860 --> 00:20:25.070
them pay their bills. But that
doesn't mean we we weren't

359
00:20:25.070 --> 00:20:28.130
modifying our underwriting on
our credit along the way, and I

360
00:20:28.130 --> 00:20:31.640
think with this particular
recession has taught us is that

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you can't take those kinds of
things for granted, you've got

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00:20:33.560 --> 00:20:36.770
to be dynamically adjusting your
criteria, because I would tell

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00:20:36.770 --> 00:20:39.890
you the best time to grow share,
not that we play our game by

364
00:20:39.890 --> 00:20:43.130
growing share, I'm like Kevin,
and other lenders, the best time

365
00:20:43.130 --> 00:20:45.170
to actually grow your business
is coming out of a recession.

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Because in this environment,
you're going to pick up

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00:20:47.600 --> 00:20:49.880
disenfranchised individuals
where the banks are going to

368
00:20:49.880 --> 00:20:52.160
choose or the credit unions are
going to choose or even a large

369
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auto lenders are going to choose
not to want not to want to lend.

370
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And that opens up a huge
opportunity for small business

371
00:20:58.670 --> 00:21:02.660
and consumer focused lenders to
say, Hey, give us a try. Here's

372
00:21:02.660 --> 00:21:05.540
our experience. We can
underwrite you, there's a price

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00:21:05.540 --> 00:21:07.430
to for that underwriting,
obviously, because it carries a

374
00:21:07.430 --> 00:21:11.090
certain risk return ratio. But
we're now able to service you in

375
00:21:11.090 --> 00:21:13.370
the past where your bank has
basically said, Yeah, I can lend

376
00:21:13.370 --> 00:21:17.000
you up to here. And after that,
you know, the tail is gone, and

377
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you got to go somewhere else to
find your money. Oh, and by the

378
00:21:18.920 --> 00:21:22.160
way, keep paying me on time, or
else, I think in this type of

379
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environment, it's an opportunity
for the lending space to

380
00:21:24.170 --> 00:21:26.840
actually grow its presence in
the market. And that's going to

381
00:21:26.840 --> 00:21:29.870
take a combination of a little
bit of support from the funding

382
00:21:29.870 --> 00:21:33.080
overseers to keep our businesses
afloat. And our willingness to

383
00:21:33.080 --> 00:21:35.270
be a little bit more dynamic
when it comes to changing our

384
00:21:35.270 --> 00:21:37.610
underwriting approaches. And to
be a little bit more creative,

385
00:21:37.610 --> 00:21:40.550
because that growth is there to
be taken. Notwithstanding

386
00:21:40.550 --> 00:21:43.040
certain industry sectors are
gonna feel it. But there is

387
00:21:43.040 --> 00:21:45.050
plenty of growth out there, you
just got to be willing to take

388
00:21:45.050 --> 00:21:48.200
that risk price for it and
figure out creative ways in how

389
00:21:48.200 --> 00:21:49.940
you want to underwrite it,
that'd be my view.

390
00:21:51.380 --> 00:21:56.180
Mark Reisler: Yeah, and I love
the the comment around, we need

391
00:21:56.180 --> 00:21:59.990
to change our way of evaluating
or enhance the way of our

392
00:21:59.990 --> 00:22:05.000
evaluating, and adjudicating and
overall underwriting. Where does

393
00:22:05.000 --> 00:22:08.960
data come into this play? Where
does the use of alternative data

394
00:22:08.960 --> 00:22:13.430
sources come into play? There's
a lot of fintechs coming into

395
00:22:13.430 --> 00:22:17.690
the market, providing, you know,
connections into hundreds of

396
00:22:17.690 --> 00:22:22.340
different API's vast amount of
ways of connecting the consumer

397
00:22:22.340 --> 00:22:27.080
as well as the SMI into the non
traditional data sources, is

398
00:22:27.080 --> 00:22:31.610
that a tool that we could also
start looking at, evaluate

399
00:22:31.610 --> 00:22:36.140
people, evaluate companies
evaluate organizations

400
00:22:36.140 --> 00:22:36.650
differently.

401
00:22:41.180 --> 00:22:44.360
Jason Appel: I'll start, and I'd
certainly welcome feedback, I

402
00:22:44.360 --> 00:22:46.940
believe the way in which we can
differentiate ourselves as a

403
00:22:46.940 --> 00:22:50.930
group is to be a little bit more
creative. In our particular

404
00:22:50.930 --> 00:22:55.340
instance, it's about old data.
We've been consuming, for

405
00:22:55.340 --> 00:22:59.510
example, banking data now since
about the mid year of 2017. And

406
00:22:59.510 --> 00:23:02.930
as we announced in our press
release, yesterday, in

407
00:23:02.930 --> 00:23:05.510
September, we launched our first
generation of banking models

408
00:23:05.930 --> 00:23:08.570
that now assess and evaluate
customer's credit risk in

409
00:23:08.570 --> 00:23:11.930
combination with credit bureau
data, application related data,

410
00:23:11.930 --> 00:23:14.810
and so forth. And that's giving
us an opportunity to tap into

411
00:23:14.810 --> 00:23:16.790
segments of the market, we would
not have traditionally been

412
00:23:16.790 --> 00:23:19.880
willing to underwrite or
approve, in some cases, were

413
00:23:19.880 --> 00:23:22.130
lending to individuals
exclusively on the basis of

414
00:23:22.130 --> 00:23:25.880
their banking information. And
in not having a credit history,

415
00:23:26.030 --> 00:23:29.480
or a little credit history, ie a
thin file or an imperfect credit

416
00:23:29.480 --> 00:23:32.060
history, and that they've got a
blip or two, either a past

417
00:23:32.060 --> 00:23:35.360
bankruptcy or, or some worst
kind of rating ever, that a

418
00:23:35.360 --> 00:23:38.750
typical bank would instantly shy
away from so for our business,

419
00:23:38.780 --> 00:23:42.260
it's all about the data. And the
one because we can't necessarily

420
00:23:42.260 --> 00:23:44.780
always compete on price, we
can't necessarily always compete

421
00:23:44.780 --> 00:23:47.690
on distribution. The banks and
the credit unions tend to have

422
00:23:47.690 --> 00:23:52.160
that area, well, well in hand.
So you know, one of our

423
00:23:52.160 --> 00:23:56.390
differentiators is we like data
we play in the data. And you've

424
00:23:56.390 --> 00:23:59.030
got to start acquiring
purchasing and investigating and

425
00:23:59.030 --> 00:24:02.690
validating that information
quickly, because it's going to

426
00:24:02.690 --> 00:24:05.060
take a while to figure out how
to go out and use it to get

427
00:24:05.060 --> 00:24:08.150
those customers to come to your
door. So I would say it starts

428
00:24:08.150 --> 00:24:11.180
with data. It starts with being
creative on how you use data,

429
00:24:11.210 --> 00:24:13.730
whether that's reformatting
great data that we get from our

430
00:24:13.730 --> 00:24:16.490
partner TransUnion. And looking
at some of their new algorithms

431
00:24:16.490 --> 00:24:20.000
and formulas, finding other data
like from banking, figuring out

432
00:24:20.000 --> 00:24:22.970
how web based data comes into
play, leveraging stats can base

433
00:24:22.970 --> 00:24:25.220
data, it could go on and take a
whole hour and just talking

434
00:24:25.220 --> 00:24:28.130
about data. But there's, there's
plenty of that opportunity. And

435
00:24:28.130 --> 00:24:31.820
I would say as a as an industry
group, we can lead in that space

436
00:24:31.820 --> 00:24:35.900
because the banks unfortunately,
are not as able or willing to

437
00:24:35.900 --> 00:24:37.730
play in that space in the same
way that we are.

438
00:24:38.870 --> 00:24:41.270
Kevin Clark: And Mark, you know,
it's not without its risk

439
00:24:41.270 --> 00:24:47.960
because the data that we that we
discover and mine and the

440
00:24:47.960 --> 00:24:52.880
hypotheses that we put together
takes time to figure out I mean,

441
00:24:52.880 --> 00:24:55.370
it's not like it's
instantaneous. You have to

442
00:24:55.370 --> 00:24:59.180
actually put it into the
marketplace and underwrite and

443
00:24:59.240 --> 00:25:03.500
and monitor performance and
that's over the life of a of an

444
00:25:03.500 --> 00:25:08.390
existing relationship in its own
and over the life of a portfolio

445
00:25:08.390 --> 00:25:12.110
for proper analysis. And that's
to Jason's point. I mean, you

446
00:25:12.110 --> 00:25:16.130
start in 2017, only now you
start to really know what you've

447
00:25:16.130 --> 00:25:19.730
done right? And what you've done
wrong. And the cost and exposure

448
00:25:19.730 --> 00:25:23.780
and risk to that is significant.
And that's, that's hard for

449
00:25:23.780 --> 00:25:26.630
smaller businesses in this
space. And then that's probably

450
00:25:26.630 --> 00:25:30.140
got a view on this for sure. But
you know, we're all pulling all

451
00:25:30.140 --> 00:25:34.250
kinds of data and exploring it.
But at the end of the day, one

452
00:25:34.250 --> 00:25:38.390
has to wait for the portfolio to
perform, to know whether the

453
00:25:38.420 --> 00:25:43.160
data is applied properly, and
can be used in an underwriting

454
00:25:43.160 --> 00:25:47.840
capacity and win the day over
time on making good decisions.

455
00:25:49.010 --> 00:25:50.960
Matt Fabian: Yeah, I agree. I
think, you know, one of the

456
00:25:50.960 --> 00:25:53.660
things we're seeing is,
obviously, more data is always

457
00:25:53.690 --> 00:25:57.890
better in terms of being able to
make a decision, the type of

458
00:25:57.890 --> 00:26:00.710
data, the quality of that data,
the frequency of that data are

459
00:26:00.710 --> 00:26:04.700
all, you know, obviously things
that would impact your ability

460
00:26:04.700 --> 00:26:08.870
to make better decisions.
Certainly, what we've seen from

461
00:26:08.870 --> 00:26:11.780
this industry is a willingness
to experiment, we've seen a huge

462
00:26:11.780 --> 00:26:14.900
willingness to get into things
like machine learning AI, and

463
00:26:14.900 --> 00:26:18.590
adopt those kinds of
technologies a lot faster than

464
00:26:18.590 --> 00:26:21.560
maybe the traditional banks,
although they're doing it, I

465
00:26:21.560 --> 00:26:24.500
think there's a lot of risk
rules, risk policies and things

466
00:26:24.500 --> 00:26:27.650
like that, that maybe prohibit
how far, you know, they're able

467
00:26:27.650 --> 00:26:32.900
to actually deploy those things.
I think what we're starting to

468
00:26:33.470 --> 00:26:38.870
look at is how you use that data
in the context of, you know, not

469
00:26:38.870 --> 00:26:41.450
only the breadth of it, but I
think just also how you use it

470
00:26:41.450 --> 00:26:44.630
for for other things like
looking at identity management,

471
00:26:44.630 --> 00:26:47.300
fraud, all those kinds of things
that, you know, traditional

472
00:26:47.300 --> 00:26:50.750
credit data or traditional data
that you've seen might, you

473
00:26:50.750 --> 00:26:53.510
might have ingested it and used
it for one thing, but you can

474
00:26:53.510 --> 00:26:55.940
quickly look at it and say, hey,
you know, put a different lens

475
00:26:55.940 --> 00:26:58.280
on it. And it's useful across a
couple of things. And I think

476
00:26:58.280 --> 00:27:02.300
that's what, you know,
companies, certainly, like the

477
00:27:02.300 --> 00:27:04.370
ones on this panel, certainly,
like a lot of folks probably in

478
00:27:04.370 --> 00:27:07.640
the audience are able to do
because they're a lot more agile

479
00:27:07.670 --> 00:27:10.010
in terms of their ability to
pivot and adopt, but I think

480
00:27:10.010 --> 00:27:13.490
Kevin's point is very well taken
that it's a lot of test and

481
00:27:13.490 --> 00:27:17.240
learn. And it's a lot of
experimental design and a lot of

482
00:27:17.240 --> 00:27:20.360
rigor around trying to figure
out as we bring in these new

483
00:27:20.360 --> 00:27:24.440
views, or this new data, you
know, how far do you go before

484
00:27:24.440 --> 00:27:27.980
your, you know, unintentionally
increasing your risk? And how do

485
00:27:27.980 --> 00:27:30.980
you? How do you test those
things? Right? And how do you

486
00:27:30.980 --> 00:27:33.500
build those types of scorecards
and other whatever you're trying

487
00:27:33.500 --> 00:27:36.290
to do? I think the other thing
that's going to happen over the

488
00:27:36.290 --> 00:27:39.410
next couple of years is, you
know, with the continued

489
00:27:39.410 --> 00:27:44.450
evolution of however open
banking looks in Canada, those

490
00:27:44.450 --> 00:27:46.280
data sources are gonna become
more and more and more

491
00:27:46.280 --> 00:27:49.430
prevalent, right, and consumers
are going to drive a lot of

492
00:27:49.430 --> 00:27:55.730
that. And so, you know, again,
the caution would be once these

493
00:27:55.730 --> 00:27:59.330
kind of tabs open up
understanding, you know, how you

494
00:27:59.330 --> 00:28:02.390
use it, and what the relevance
is to your business is going to

495
00:28:02.390 --> 00:28:04.820
become critical, because there's
going to be more and more

496
00:28:05.120 --> 00:28:06.830
opportunities to leverage that.

497
00:28:07.940 --> 00:28:11.300
Jeremy Kronick: So that sort of
story I was gonna jump in with

498
00:28:11.330 --> 00:28:13.640
about open banking, because I
mean, I do think listening to

499
00:28:13.640 --> 00:28:17.360
all of you guys talk about about
data. I mean, it strikes me that

500
00:28:17.360 --> 00:28:20.330
when we think about Paul, this
is my macro had, again, you

501
00:28:20.330 --> 00:28:23.090
know, we think about policies
that governments should be

502
00:28:23.090 --> 00:28:26.150
thinking about in terms of the
recovery. You know, boosting

503
00:28:26.150 --> 00:28:29.960
productivity is really a
critical part of how we're going

504
00:28:29.960 --> 00:28:33.560
to move and close the output
gap. Over the next couple of

505
00:28:33.560 --> 00:28:36.260
years. And, you know, the open
banking thing, from my

506
00:28:36.260 --> 00:28:38.000
perspective has been
frustrating, because it's been

507
00:28:38.000 --> 00:28:40.670
so slow, right. And to your
point, all, you guys made the

508
00:28:40.670 --> 00:28:44.510
same point around speed, and the
time it takes to take all that

509
00:28:44.510 --> 00:28:48.320
data and turn it into, you know,
a portfolio that that benefits

510
00:28:48.320 --> 00:28:52.700
the borrower benefits you and we
really were falling behind way

511
00:28:52.700 --> 00:28:55.760
behind what other jurisdictions
are doing with respect to open

512
00:28:55.760 --> 00:28:59.420
banking, that I think we have to
continue to push. And I know,

513
00:28:59.450 --> 00:29:01.550
the government just came out the
other day with their

514
00:29:01.850 --> 00:29:04.790
announcement about moving to the
second stage. And I put up the

515
00:29:04.790 --> 00:29:07.790
paper a couple of months ago
with a colleague at Queen's

516
00:29:07.790 --> 00:29:10.670
University on on sort of what
how we view the implementation

517
00:29:10.670 --> 00:29:14.150
of open banking, but, you know,
for me, for me, above all else,

518
00:29:14.150 --> 00:29:16.880
just get it going, you know,
like, get it get it pushed

519
00:29:16.880 --> 00:29:20.660
forward. So that there is this
ability to take this data, use

520
00:29:20.660 --> 00:29:24.650
it and really turn, you know, a
slow growth recovery, and

521
00:29:24.650 --> 00:29:26.600
perhaps move it along a little
faster.

522
00:29:27.770 --> 00:29:29.810
Jason Appel: I mean, if you want
to, if you want to tap into, you

523
00:29:29.810 --> 00:29:33.410
know, underserviced or
underbanked, pardon the pun

524
00:29:33.410 --> 00:29:36.620
segments, you've got to be
willing to play in that space.

525
00:29:37.010 --> 00:29:40.730
You know, again, having been in
there now for three years. I

526
00:29:40.730 --> 00:29:43.670
will tell you, there is a
richness and a robustness of the

527
00:29:43.670 --> 00:29:46.820
data there that has multiple
applications, not just for

528
00:29:46.820 --> 00:29:50.900
credit for loyalty for cross
promotion, for partnerships.

529
00:29:50.900 --> 00:29:54.440
It's extraordinarily valuable.
And even if I look at markets,

530
00:29:54.950 --> 00:29:57.470
you know, for example, in the
UK, where open banking is

531
00:29:57.470 --> 00:30:00.740
prevalent, it's only to an
extent where that information

532
00:30:00.740 --> 00:30:03.230
has now been started to be
integrated into, let's say

533
00:30:03.230 --> 00:30:06.500
credit bureaus, which adds some
value. But I will tell you

534
00:30:06.500 --> 00:30:09.200
getting getting the customer to
provide the access to their,

535
00:30:09.230 --> 00:30:15.230
their transactional data history
is a wonderful tapestry, if you

536
00:30:15.230 --> 00:30:18.350
will, into how they're managing
their affairs and not so that we

537
00:30:18.350 --> 00:30:20.690
can go in and predatory lending.
That's the summer we're talking

538
00:30:20.690 --> 00:30:22.070
about, we're talking about going
in there and giving these

539
00:30:22.070 --> 00:30:25.010
customers value added services
that aligned to what their

540
00:30:25.010 --> 00:30:27.920
behaviors suggest that they
ought or should be doing. And

541
00:30:27.950 --> 00:30:30.320
you can get a lot of that, as I
said before, from things like

542
00:30:30.320 --> 00:30:33.980
credit bureau or application
data, things like open banking,

543
00:30:33.980 --> 00:30:36.680
or things like banking data, in
general, or other sources of

544
00:30:36.680 --> 00:30:40.490
wealth, well articulated, well
defined data, are extremely

545
00:30:40.490 --> 00:30:43.220
powerful in that they just give
you an insight into the customer

546
00:30:43.220 --> 00:30:46.400
that you know, how they may be
managing their credit in general

547
00:30:46.400 --> 00:30:49.790
just cannot provide because
there is often a dichotomy

548
00:30:49.790 --> 00:30:52.010
between how customers manage
their credit and how they manage

549
00:30:52.010 --> 00:30:53.840
the cash flow, any small
business owner will tell you

550
00:30:53.840 --> 00:30:57.380
that. So it's very interesting
that that source of information,

551
00:30:57.410 --> 00:31:01.460
again, among other types, will
change the landscape. And I

552
00:31:01.460 --> 00:31:04.580
would argue it's a race to the
finish, insofar as who can ever

553
00:31:04.610 --> 00:31:07.100
tap and leverage that
information. First note without

554
00:31:07.100 --> 00:31:09.950
taking some risks, will really
be able to open up new segments

555
00:31:09.950 --> 00:31:11.750
of the market that the
traditional players in this

556
00:31:11.750 --> 00:31:14.000
segment just won't be able to
match right away. And that's

557
00:31:14.000 --> 00:31:16.640
what makes it interesting,
challenging and exciting all at

558
00:31:16.640 --> 00:31:17.120
the same time.

559
00:31:18.230 --> 00:31:21.530
Matt Fabian: Yeah, there's this
riff, it's a tangent, but

560
00:31:21.530 --> 00:31:25.700
there's this myth that there's
this real tight correlation

561
00:31:25.700 --> 00:31:30.470
between credit risk and income
or wealth. And it's, it's, we've

562
00:31:30.470 --> 00:31:33.290
proven in different markets,
that that's not necessarily the

563
00:31:33.290 --> 00:31:36.650
case. You know, there are very
wealthy people that are doctors

564
00:31:36.650 --> 00:31:39.500
that are just, you know,
distracted and bad at managing

565
00:31:39.500 --> 00:31:42.410
their credit, and our credit
scores are okay. And there's

566
00:31:42.410 --> 00:31:45.620
people that are subprime.
There's subprime for a reason.

567
00:31:46.100 --> 00:31:48.530
And there are people that are
low income that are super prime,

568
00:31:48.560 --> 00:31:52.190
because they have to be right,
they, they only have they know,

569
00:31:52.190 --> 00:31:54.080
they have limited access to
credit, given their income

570
00:31:54.080 --> 00:31:56.360
level, or their business is just
emerging, if it's a small

571
00:31:56.360 --> 00:32:00.620
business. And so they have to be
super diligent. And so, you

572
00:32:00.620 --> 00:32:02.900
know, in some cases, it's
inverse. And I think having

573
00:32:02.900 --> 00:32:06.980
those different views, as Jason
said, you know, you can look at

574
00:32:06.980 --> 00:32:09.410
credit data, and it gets you so
far, but if you can get into,

575
00:32:09.590 --> 00:32:11.540
you know, what are they actually
doing under the covers? What are

576
00:32:11.540 --> 00:32:14.090
the transactions look like? And
they actually are, you know,

577
00:32:14.090 --> 00:32:19.190
pretty, pretty reliable, and
pretty good risk, and it opens

578
00:32:19.190 --> 00:32:22.340
up avenues in terms of how we
might approach and have

579
00:32:22.340 --> 00:32:25.040
discussions with both customers
and businesses.

580
00:32:26.030 --> 00:32:28.250
Mark Reisler: Yeah, I've been
spending the last couple of

581
00:32:28.250 --> 00:32:31.580
months diving deep into better
understanding, you know, the

582
00:32:31.580 --> 00:32:34.460
pains and the unmet needs of
this, me and the consumer in

583
00:32:34.460 --> 00:32:38.720
Canada. And really, the top of
the list across the board from

584
00:32:38.750 --> 00:32:42.800
from citizens is around
financial literacy is around,

585
00:32:42.830 --> 00:32:45.350
you know, the additional and
it's good timing, because we are

586
00:32:45.350 --> 00:32:51.350
in financial literacy month in
Canada. And the constant

587
00:32:51.350 --> 00:32:55.430
feedback is I, you know, the
quote that stands out to me is I

588
00:32:55.430 --> 00:32:58.760
wish my lender provided more
support and understanding my

589
00:32:58.760 --> 00:33:03.320
finances my cash flow helping me
rather than just providing the

590
00:33:03.350 --> 00:33:08.390
access and authorization to that
to that loan. So I think you hit

591
00:33:08.390 --> 00:33:12.710
the nail right on it with with
the idea of how can we use this

592
00:33:12.710 --> 00:33:20.810
data not only to lend out to a
potential near prime or subprime

593
00:33:21.200 --> 00:33:24.890
consumer SME, because we're
evaluating them differently. But

594
00:33:24.890 --> 00:33:27.230
what are the additional support
features that we could actually

595
00:33:27.230 --> 00:33:29.990
offer this person to ensure
their success to ensure their

596
00:33:29.990 --> 00:33:33.410
growth from a business
perspective and a consumer

597
00:33:33.410 --> 00:33:39.140
perspective? So I love that I'm
going to pivot us a little bit

598
00:33:39.140 --> 00:33:43.160
towards understanding what's
keeping you up at night, a

599
00:33:43.160 --> 00:33:47.270
little bit. So Jeremy, would
love to know, kind of what's the

600
00:33:47.270 --> 00:33:51.020
one or two things that are
keeping you awake right now?

601
00:33:53.420 --> 00:33:57.170
Jeremy Kronick: Yeah, I mean, so
while the American elections

602
00:33:57.170 --> 00:33:58.850
probably, you know.

603
00:33:59.580 --> 00:34:01.380
Mark Reisler: I should have
guessed that that was the easy

604
00:34:01.380 --> 00:34:01.620
one.

605
00:34:02.640 --> 00:34:04.710
Jeremy Kronick: Well, listen, I
mean, the reason the reason it

606
00:34:04.710 --> 00:34:07.080
is, I mean, there's obviously
the component of just, you know,

607
00:34:07.080 --> 00:34:10.410
watching the, maybe the most
important democracy in the world

608
00:34:10.410 --> 00:34:14.880
kind of blow up in, in smoke
here. But but more importantly,

609
00:34:14.880 --> 00:34:19.560
I mean, from a Canadian economy
perspective. I think, you know,

610
00:34:19.770 --> 00:34:24.780
it would it would benefit us
tremendously. If the gridlock in

611
00:34:24.780 --> 00:34:27.780
the US would end and they pass a
stimulus bill. Right. I mean, I

612
00:34:27.780 --> 00:34:30.360
think that the lack of a
stimulus bill, they're a real

613
00:34:30.360 --> 00:34:34.410
serious one. It's created a
massive hole in that economy.

614
00:34:34.410 --> 00:34:37.770
And and and, you know, it's not
I don't worry too much about the

615
00:34:37.770 --> 00:34:40.650
US going into a bigger deficit
at the moment, I don't think

616
00:34:40.650 --> 00:34:43.050
we're going to be stuck crowding
out private investment and

617
00:34:43.050 --> 00:34:45.360
seeing interest rates and
inflation go up anytime soon. So

618
00:34:45.600 --> 00:34:48.210
we need that spending. And I
think that would benefit the

619
00:34:48.210 --> 00:34:52.740
Canadian economy immensely. If
that happens, so that I mean,

620
00:34:52.740 --> 00:34:57.540
that's one and, you know, we had
a session yesterday at CD Howe

621
00:34:57.540 --> 00:34:59.820
on the end of the mortgage
deferral program and what that's

622
00:34:59.820 --> 00:35:03.930
going look like. And there seem
to be, you know, not necessarily

623
00:35:03.930 --> 00:35:08.010
a ton of worry, per se, but but
as you guys pointed out, I mean,

624
00:35:08.010 --> 00:35:10.620
there's, there's there's
different segments, right, we

625
00:35:10.620 --> 00:35:14.610
don't have tremendous data on
the distribution of, of who's

626
00:35:14.610 --> 00:35:18.180
really at risk in different, you
know, not only parts of the

627
00:35:18.180 --> 00:35:21.480
country, but also, you know,
across different sectors across

628
00:35:21.480 --> 00:35:24.630
different income spectrums. And
so I do worry about how that's

629
00:35:24.630 --> 00:35:27.780
all going to play out when when
these when these programs sort

630
00:35:27.780 --> 00:35:29.820
of start to come to an end, I
think, you know, Liberal

631
00:35:29.820 --> 00:35:33.480
government doesn't seem to be
necessarily too concerned about

632
00:35:33.480 --> 00:35:36.210
spending. So it doesn't it does
seem like they're going to

633
00:35:36.210 --> 00:35:40.470
continue to stimulate how they
do that is a big question, but

634
00:35:41.520 --> 00:35:46.380
but I do worry, I worry about
how you know how it's gonna go

635
00:35:46.590 --> 00:35:48.870
with the American economy, even
once we decide is going to be in

636
00:35:48.870 --> 00:35:51.120
the office, and then I worry
about the end of some of these

637
00:35:51.120 --> 00:35:51.810
programs.

638
00:35:52.590 --> 00:35:54.840
Mark Reisler: Yeah, I read your
article in The Globe and Mail

639
00:35:54.840 --> 00:35:58.500
the other day around the the
impact that it's going to have

640
00:35:58.500 --> 00:36:02.040
in our exporters in our in our
particular our Smee exporters in

641
00:36:02.040 --> 00:36:05.670
Canada, the larger exporters
will figure it out. And they'll

642
00:36:05.700 --> 00:36:10.080
they'll understand a way around
it. But those smaller exporters

643
00:36:10.080 --> 00:36:12.120
that ship technology in
particular software in

644
00:36:12.120 --> 00:36:16.440
particular. That's that it was
fascinating. I encourage

645
00:36:16.440 --> 00:36:18.780
everybody to go read that
article that that you

646
00:36:18.780 --> 00:36:26.370
contributed to Kevin from from
an SME standpoint. And and, you

647
00:36:26.370 --> 00:36:29.640
know, the state of lending right
now what's what's keeping you up

648
00:36:29.640 --> 00:36:31.740
at night? What's what's, what's
the hardship?

649
00:36:32.790 --> 00:36:36.960
Kevin Clark: You know, I think
it's about I mean, the election

650
00:36:36.960 --> 00:36:38.610
is one thing, and it's
interesting, you know, the

651
00:36:38.610 --> 00:36:42.810
100,000 Coronavirus cases a day
in the US is another which means

652
00:36:42.810 --> 00:36:46.170
the border is going to stay
shut, which means we need to

653
00:36:46.200 --> 00:36:49.680
continue to be more or less self
contained in so many ways in our

654
00:36:49.680 --> 00:36:53.580
Canadian market. And for me,
it's really about whether or not

655
00:36:53.640 --> 00:36:57.510
we can just continue to edge
forward from an economic growth

656
00:36:57.510 --> 00:37:01.950
perspective. Because our
business relies on, you know,

657
00:37:01.950 --> 00:37:05.100
the need for capital to sustain
and to grow companies. And

658
00:37:05.100 --> 00:37:08.430
that's that's what we do we
provide that capital, and we do

659
00:37:08.430 --> 00:37:12.540
it quite monolithically. I mean,
we are not a broader financial

660
00:37:12.540 --> 00:37:16.080
services organization that can
live off fees on operating

661
00:37:16.080 --> 00:37:19.020
accounts like the banks, can we
have to put money out the door?

662
00:37:19.050 --> 00:37:23.970
And so what's interesting to me
is, where does the ebb and flow

663
00:37:23.970 --> 00:37:27.780
go with economic growth across
Canada? And what markets are

664
00:37:27.780 --> 00:37:31.050
going to be there? The GTA has
always been, you know, the

665
00:37:31.050 --> 00:37:35.070
engine for Canada, what's
happening in Alberta with a $35

666
00:37:35.070 --> 00:37:38.910
oil price? And like, it's all
very, very interesting. And

667
00:37:38.910 --> 00:37:41.730
that's sort of what keeps me
awake at night quite seriously.

668
00:37:41.730 --> 00:37:45.240
It's just where does the volume
come from? You know, we're

669
00:37:45.240 --> 00:37:49.950
running at probably 50% of pre
COVID. And that's not that and

670
00:37:50.070 --> 00:37:53.580
we're inching back day over day
or month over month to sort of

671
00:37:53.580 --> 00:37:57.900
see gains. But that's what we
want to see happen. And we all

672
00:37:57.900 --> 00:38:01.530
want to see business grow and do
all the things we'd like to do

673
00:38:01.530 --> 00:38:05.250
to feel good about a growing
economy. And it's just

674
00:38:05.250 --> 00:38:09.660
concerning that, you know, will
another wave come back? And, you

675
00:38:09.660 --> 00:38:13.080
know, we are proudly Canadian
flag waivers here, we and we

676
00:38:13.080 --> 00:38:15.900
should be globally, right. We've
done all the right things,

677
00:38:16.560 --> 00:38:19.080
generally, and everybody's got
an argument on what we could do

678
00:38:19.080 --> 00:38:21.540
better, perhaps. But at the end
of the day, we look pretty good

679
00:38:21.540 --> 00:38:25.620
globally. We have to keep our
discipline so that we can keep

680
00:38:25.620 --> 00:38:28.560
our businesses going. And that's
what we're trying to do. So

681
00:38:28.620 --> 00:38:30.000
that's sort of what keeps me
awake.

682
00:38:31.920 --> 00:38:33.600
Mark Reisler: Understandably,
Matt, what about you?

683
00:38:34.620 --> 00:38:36.150
Matt Fabian: Yeah, that's a bit
of that. I think, you know,

684
00:38:36.150 --> 00:38:38.100
there's a couple of things that
were I don't know, if it's

685
00:38:38.100 --> 00:38:40.350
keeping me awake at night, but I
think it's really interesting

686
00:38:40.380 --> 00:38:43.350
is, you know, I think both
Jeremy and Kevin already

687
00:38:43.350 --> 00:38:47.580
mentioned, at a macro level, you
know, some of the things we're

688
00:38:47.580 --> 00:38:51.480
interested in is, and this all
ties into, you know, that quote

689
00:38:51.480 --> 00:38:53.610
unquote, new normal, right?
What's that going to look like?

690
00:38:53.610 --> 00:38:57.600
And, you know, from a, from a
macro perspective, how do some

691
00:38:57.600 --> 00:39:00.720
of these sectors make it out of
this? Right, how does tourism

692
00:39:00.780 --> 00:39:05.490
and travel and, you know, some
of those other sectors that have

693
00:39:05.490 --> 00:39:09.720
been, like, incredibly impacted
by this make it out? And from a

694
00:39:09.870 --> 00:39:12.810
small business perspective,
right, we've seen them get hit,

695
00:39:12.900 --> 00:39:15.000
and we hear over and over,
they're just getting hammered.

696
00:39:15.000 --> 00:39:17.310
Right? So how to, how did they
pull out of this? And what does

697
00:39:17.310 --> 00:39:20.850
that mean for long term
employment? How does that look,

698
00:39:20.880 --> 00:39:25.950
you know, affect structurally,
sort of Canadian sectors across

699
00:39:25.950 --> 00:39:29.220
different regions? Again, you
know, if you want to turn it

700
00:39:29.220 --> 00:39:32.700
back to the election, depending
on what happens, you know,

701
00:39:32.700 --> 00:39:35.250
there's pipeline issues and
things like that and green

702
00:39:35.250 --> 00:39:38.670
policies that are all going to
affect potentially, you know,

703
00:39:38.670 --> 00:39:42.000
Alberta and oil prices and
things like that, that, you

704
00:39:42.000 --> 00:39:44.160
know, so there's, there's a lot
of that and then when you think

705
00:39:44.190 --> 00:39:47.190
even just take it down a notch
to the consumer, what do they

706
00:39:47.190 --> 00:39:49.200
look like right, more more and
more people will be working from

707
00:39:49.200 --> 00:39:52.140
home. A lot of branches are
talking about, you know,

708
00:39:52.140 --> 00:39:55.530
shuttering or eliminating
branch, you know, physical

709
00:39:55.530 --> 00:40:00.330
branch, brick and mortar and
kind of reducing that So

710
00:40:00.360 --> 00:40:02.310
everyone, you know, everyone
thinks the lesson learned for a

711
00:40:02.310 --> 00:40:05.250
lot of people was, you know,
digital footprint. And so how

712
00:40:05.250 --> 00:40:08.220
does that change banking and,
and then taking it kind of full

713
00:40:08.220 --> 00:40:11.370
circle back to what I think a
lot of folks from, you know, on

714
00:40:11.370 --> 00:40:13.770
this panel and also in our
audience are interested in from

715
00:40:13.770 --> 00:40:16.860
the lending FinTech world? How
do they take advantage of that?

716
00:40:16.890 --> 00:40:20.490
Right? How do we, you know, they
certainly have the agility and

717
00:40:20.490 --> 00:40:23.520
are probably a lot more
digitally aligned to that new

718
00:40:23.520 --> 00:40:27.240
normal. And how do you get that?
And, you know, you think about

719
00:40:27.240 --> 00:40:29.820
this, this this industry, and I
think we talked about at the

720
00:40:29.820 --> 00:40:32.790
beginning, right, it, you know,
there was an opportunity through

721
00:40:32.790 --> 00:40:36.150
this crisis to really emerge and
really fun this industry and

722
00:40:36.150 --> 00:40:39.870
really support it and get it
moving. You know, again, I take

723
00:40:39.870 --> 00:40:45.270
it back to 2008 2009, right, in
2010. In the US, fintechs made

724
00:40:45.270 --> 00:40:50.580
up about 1%, of total personal
lending in the United States.

725
00:40:51.120 --> 00:40:55.350
Eight years later, they make up
40%. By 2018 2019, they made up

726
00:40:55.350 --> 00:40:59.700
40%. And a lot of that was the
aftermath of their crisis,

727
00:40:59.730 --> 00:41:02.790
right. And here we are in
another one. And I think, you

728
00:41:02.790 --> 00:41:05.070
know, Kevin, and Jason probably
live this day in LA people on

729
00:41:05.070 --> 00:41:08.730
the phone, live this day to day,
but I was just reading a stat

730
00:41:08.730 --> 00:41:13.350
yesterday, the top 25, private
capital firms in the US are

731
00:41:13.350 --> 00:41:18.390
issuing about $800 billion in
debt, or in capital, right? That

732
00:41:18.390 --> 00:41:20.760
number is significantly smaller
in Canada. So how do you how do

733
00:41:20.760 --> 00:41:23.610
you fund how do you how do you
build that wholesale market to

734
00:41:23.610 --> 00:41:27.840
support kind of this growth?
And, you know, and how, you

735
00:41:27.840 --> 00:41:30.540
know, the emerging things like,
you know, the the big guys, like

736
00:41:30.540 --> 00:41:33.540
the big tech companies that, you
know, the the fam guy, guys,

737
00:41:33.540 --> 00:41:38.430
and, you know, we just heard
this week, Apple acquired Moby

738
00:41:38.430 --> 00:41:41.520
wave $400 million. And so those,
you know, those big players are

739
00:41:41.520 --> 00:41:44.520
coming in, right, and in some
cases already here. And so what

740
00:41:44.520 --> 00:41:46.410
does that look like? And so I
think it's really interesting,

741
00:41:46.410 --> 00:41:48.690
we're in a really interesting
time, because I think the

742
00:41:48.690 --> 00:41:53.880
economy's impacted, the consumer
dynamic, and behavior is being

743
00:41:53.880 --> 00:41:57.090
impacted. And that ultimately
affects the market. So I think

744
00:41:57.090 --> 00:42:00.120
the interesting thing here is,
how does this all evolve? And as

745
00:42:00.120 --> 00:42:03.660
we kind of the smoke clears, you
know, what does the world look

746
00:42:03.660 --> 00:42:08.220
like, from a from from a banking
and lending perspective? I think

747
00:42:08.220 --> 00:42:11.010
it's going to be different. I
think it's going to be better.

748
00:42:11.820 --> 00:42:15.780
It's just, you know, I think
there's a lot of right now, just

749
00:42:15.780 --> 00:42:18.960
a lot of sort of circling the
wagons and kind of getting

750
00:42:18.960 --> 00:42:21.420
through it. But, you know, as
Kevin and Jason have both said,

751
00:42:21.420 --> 00:42:25.260
there's, you know, there's an
opportunity to emerge for a lot

752
00:42:25.260 --> 00:42:25.830
of growth.

753
00:42:26.490 --> 00:42:29.340
Mark Reisler: Yeah, it sounds
like you're, I mean, I hear

754
00:42:29.340 --> 00:42:32.400
uncertainty from from what
you're saying, there's a lot of

755
00:42:32.430 --> 00:42:37.890
unknowns that that are gonna
emerge from this, but maybe,

756
00:42:37.920 --> 00:42:40.380
Jason, what you what you could
do is start to talk a little bit

757
00:42:40.380 --> 00:42:43.830
about what's going to be certain
what's going to be sustainable,

758
00:42:43.830 --> 00:42:46.140
it's going to be certain over
the course of the next three to

759
00:42:46.140 --> 00:42:50.100
five years, as we come out of
COVID. And we move into, you

760
00:42:50.100 --> 00:42:53.040
know, I'm not gonna say pre
COVID state, but what can we

761
00:42:53.040 --> 00:42:57.570
depend on? Right, rather than a
lot of the uncertainty talk that

762
00:42:57.570 --> 00:42:59.250
we can't really forecast?

763
00:42:59.480 --> 00:43:02.045
Jason Appel: Yeah that's a great
question. Well, the one thing we

764
00:43:02.094 --> 00:43:05.202
depend on is our data. I can't
control what the economy does. I

765
00:43:05.252 --> 00:43:08.310
can't control what Amazon and
Apple do. Even if I wanted to, I

766
00:43:08.360 --> 00:43:11.567
don't think any of us could, you
know, the economy has said table

767
00:43:11.616 --> 00:43:14.773
stakes conversation at the best
of times, nevermind in the worst

768
00:43:14.823 --> 00:43:17.585
of times. So I'd say the one
thing that you know, we can

769
00:43:17.635 --> 00:43:20.447
control as lenders, quite
frankly, is to be very specific

770
00:43:20.496 --> 00:43:23.456
around the segments we want to
play in, and to be just laser

771
00:43:23.506 --> 00:43:26.663
sharp, focused on trying to mind
and understand the behaviors of

772
00:43:26.712 --> 00:43:29.426
what goes on within those
segments, first and foremost,

773
00:43:29.475 --> 00:43:32.287
from the customer's perspective.
So understanding how the

774
00:43:32.337 --> 00:43:35.149
customer's thinking is evolving,
whether that's a race to

775
00:43:35.198 --> 00:43:37.616
digitization, or a
simplification of underwriting

776
00:43:37.665 --> 00:43:40.526
or the elimination of retail
bricks and mortar. Again, I'd

777
00:43:40.576 --> 00:43:43.782
have views on all three, I won't
get into them here. But you have

778
00:43:43.832 --> 00:43:46.841
to understand how you see those
and decide if you're going to

779
00:43:46.891 --> 00:43:49.949
make those bets, and in which
places you're going to play. And

780
00:43:49.999 --> 00:43:52.515
then you have to figure out
well, what insights and

781
00:43:52.564 --> 00:43:55.623
strengths can I pull from the
information I already know about

782
00:43:55.672 --> 00:43:58.632
the customers I've dealt with in
the past? Is that likely to

783
00:43:58.682 --> 00:44:01.691
continue? And then what other
insights do I need to go gather

784
00:44:01.740 --> 00:44:04.947
about those customers to be able
to reach more of them and target

785
00:44:04.997 --> 00:44:07.463
them more effectively,
notwithstanding whether the

786
00:44:07.513 --> 00:44:10.621
government gives them a handout,
whether or not Apple or Amazon

787
00:44:10.670 --> 00:44:13.680
decides that they want to get
into, you know, by now Pele pay

788
00:44:13.729 --> 00:44:16.689
later type lending programs,
you've got to really decide who

789
00:44:16.738 --> 00:44:19.649
you want to lend to for how
long? And what your risk return

790
00:44:19.698 --> 00:44:22.856
trade off is. And I think those
are the certainties that I would

791
00:44:22.905 --> 00:44:25.915
tell you that as a lender or as
a member of a lender, I think

792
00:44:25.964 --> 00:44:28.924
are within our control. And
you've got to decide how you can

793
00:44:28.973 --> 00:44:31.934
laser sharp focus your efforts
on tackling those rather than

794
00:44:31.983 --> 00:44:34.943
necessarily being concerned
about or worried about where the

795
00:44:34.992 --> 00:44:38.150
future lies, I have those themes
concerns that my colleagues do,

796
00:44:38.199 --> 00:44:41.357
probably as much as anyone does,
but I don't control them. But I

797
00:44:41.406 --> 00:44:43.873
do control the risk return
levels that the company

798
00:44:43.922 --> 00:44:47.079
operates, or at least I'm one of
many who sets those boundaries.

799
00:44:47.129 --> 00:44:50.237
I do control the aggregation and
the insights and the analytics

800
00:44:50.286 --> 00:44:53.246
into our data to figure out what
that's telling me about the

801
00:44:53.296 --> 00:44:56.404
company. humor. And I'm using a
lot of third party information,

802
00:44:56.453 --> 00:44:59.265
whether it's coming from people
like TransUnion, or other

803
00:44:59.315 --> 00:45:02.472
lenders or forums like these, to
serve as information hubs as to

804
00:45:02.521 --> 00:45:05.531
what I think the future might
look like. And then I'm placing

805
00:45:05.580 --> 00:45:08.442
a very, very hopefully well
educated and well founded bet,

806
00:45:08.491 --> 00:45:11.402
that that's where the market is
going to go. And, you know,

807
00:45:11.451 --> 00:45:14.608
provided you've got the funding
support, which will be the other

808
00:45:14.658 --> 00:45:17.766
thing that may or may not keep
some lenders up at night to back

809
00:45:17.815 --> 00:45:20.923
you in that strategy, then it's
all about execution. So I would

810
00:45:20.973 --> 00:45:24.130
say, you know, execution risk is
the other thing that you should

811
00:45:24.179 --> 00:45:27.189
really obviously try to control
within your own organization,

812
00:45:27.238 --> 00:45:30.346
whether you're a small lender or
a large lender is, when you're

813
00:45:30.396 --> 00:45:33.356
committed to going up going
after particularly strategy, you

814
00:45:33.405 --> 00:45:36.365
just have to see it through and
be prepared to commit to the

815
00:45:36.415 --> 00:45:39.424
positives or the negatives that
might come with the risk that

816
00:45:39.473 --> 00:45:42.581
goes with it. Because there will
be times where you're going to

817
00:45:42.631 --> 00:45:45.196
scrape your knee, I will tell
you that from personal

818
00:45:45.246 --> 00:45:48.156
experience. And there are going
to be times where that nice

819
00:45:48.206 --> 00:45:51.314
scraping exercise is going to be
the best education you've ever

820
00:45:51.363 --> 00:45:54.274
asked for. And it will inform
you to make a better decision

821
00:45:54.323 --> 00:45:56.938
going forward. So I think those
are things, you know,

822
00:45:56.987 --> 00:46:00.046
somatically, that I think we as
lenders have to think about as

823
00:46:00.095 --> 00:46:03.154
we move forward is to try and
understand the market as best we

824
00:46:03.203 --> 00:46:05.917
can place really well and
understood better use data to

825
00:46:05.966 --> 00:46:08.926
inform our decisions. And going
back to something that Kevin

826
00:46:08.976 --> 00:46:11.788
said, and we support this and
violently agree is test and

827
00:46:11.837 --> 00:46:14.797
learn as often as you can, and
just don't test on it all the

828
00:46:14.847 --> 00:46:17.955
time, that you're putting all of
your money at risk. But you've

829
00:46:18.004 --> 00:46:20.816
got to test around the edges to
figure out where the next

830
00:46:20.865 --> 00:46:22.050
opportunity is gonna be.

831
00:46:22.050 --> 00:46:25.736
Kevin Clark: You know, you know,
what's interesting, Jason, it is

832
00:46:25.807 --> 00:46:30.274
that, you know, to your point,
as long as your customer base is

833
00:46:30.345 --> 00:46:34.386
growing, and you're doing what
what you just articulated.

834
00:46:34.457 --> 00:46:38.853
There's a tremendous future out
there three and five years for

835
00:46:38.924 --> 00:46:42.468
your firm and for ours and
others. I think the the

836
00:46:42.539 --> 00:46:46.722
interesting point that got
caught up that we kind of missed

837
00:46:46.793 --> 00:46:51.118
over a little bit as around the
education piece, because, you

838
00:46:51.189 --> 00:46:55.727
know, we're a 35 person company
serving across Canada, how do we

839
00:46:55.798 --> 00:46:59.697
actually add education to the
process? And where should

840
00:46:59.768 --> 00:47:04.235
education really start because
the small business owner, or the

841
00:47:04.305 --> 00:47:08.205
consumer who is looking for
capital to refinance, or to

842
00:47:08.276 --> 00:47:12.388
grow, or to improve your quality
of life? How do they make

843
00:47:12.459 --> 00:47:16.642
decisions on what the right
product is, and there's so much

844
00:47:16.713 --> 00:47:21.250
out there, and so many different
products are actually trying to

845
00:47:21.321 --> 00:47:25.504
solve for the same need, it's
really quite interesting. And

846
00:47:25.575 --> 00:47:30.042
often, I think, certainly in the
commercial world, the borrower

847
00:47:30.113 --> 00:47:34.438
ends up with the wrong product.
And it may be that they don't

848
00:47:34.509 --> 00:47:38.975
have choice. But also there's an
education factor that or if we

849
00:47:39.046 --> 00:47:43.371
could add education, if the if
the if the masses that use our

850
00:47:43.442 --> 00:47:47.909
products and services knew more,
and those that don't knew more

851
00:47:47.979 --> 00:47:51.808
about us, we'd be even
improving, we'd be so much more

852
00:47:51.879 --> 00:47:56.204
improving our own positions in
our in our market shares or in

853
00:47:56.275 --> 00:48:00.600
our in our space, and our peer
group. And the public would be

854
00:48:00.670 --> 00:48:04.995
better off, but we're still not
as well known as we could be.

855
00:48:05.066 --> 00:48:09.391
And we have so much to offer in
terms of education. It's just

856
00:48:09.462 --> 00:48:13.574
it's a really hard piece to
scale. You know, to try to get

857
00:48:13.645 --> 00:48:18.041
out to everybody, you know, how
do we do that? How do we help?

858
00:48:18.112 --> 00:48:20.310
Because we all want to do that?

859
00:48:21.300 --> 00:48:26.100
Mark Reisler: Yeah. I hear you
loud and clear. And yeah, I did

860
00:48:26.130 --> 00:48:29.490
glance over the financial
literacy and education topic.

861
00:48:30.240 --> 00:48:33.180
But one of one of the key
insights from from the work that

862
00:48:33.180 --> 00:48:36.510
we've been doing is, you know,
you have this small business

863
00:48:36.510 --> 00:48:39.990
coming into into focus for you.
They're going through the

864
00:48:39.990 --> 00:48:43.140
application process, wouldn't it
be great to say to them that

865
00:48:43.170 --> 00:48:45.750
what you actually need is
invoice factoring or account

866
00:48:45.750 --> 00:48:50.640
receivable financing over
working capital loan? Wouldn't

867
00:48:50.640 --> 00:48:54.000
it be great to tell them exactly
what product they that they're

868
00:48:54.000 --> 00:48:58.140
able to best utilize and
circumstances that they have?

869
00:48:58.650 --> 00:49:01.590
And I think that this is where,
you know, a combination of

870
00:49:01.590 --> 00:49:04.590
consumer and open consumer
directed finance, open banking

871
00:49:04.590 --> 00:49:10.020
data coming in fast evaluation
of it, algorithmically looking

872
00:49:10.020 --> 00:49:13.380
at them from a cohort analysis
and saying, You look very

873
00:49:13.380 --> 00:49:17.790
similar to, you know, these
20,000 other people, right? We

874
00:49:17.790 --> 00:49:20.280
know that these 20,000 Other
people can use a product like

875
00:49:20.280 --> 00:49:23.310
this, instead of choosing a
product, like why?

876
00:49:23.520 --> 00:49:26.584
Kevin Clark: Well, so many of
them are compatible. I mean, the

877
00:49:26.646 --> 00:49:30.273
point you make about an invoice
discount I mean, there's a

878
00:49:30.336 --> 00:49:33.838
working capital that helps
produce the product, and then

879
00:49:33.900 --> 00:49:37.590
there's a discounting that helps
get your cash forward from

880
00:49:37.652 --> 00:49:41.342
selling it. I mean, this is
nothing new. It's that I think,

881
00:49:41.404 --> 00:49:44.969
I think there's just a lack of
knowledge generally in the

882
00:49:45.031 --> 00:49:48.471
marketplace. And the reality is
we're actually all more

883
00:49:48.533 --> 00:49:52.285
compatible and and absolutely
could be working more together

884
00:49:52.348 --> 00:49:56.162
as a broader specialty finance
industry than we do today. And

885
00:49:56.225 --> 00:50:00.102
maybe that's maybe that future
is out there that there is some

886
00:50:00.165 --> 00:50:03.917
m&a within our space at some
onpoint as we all mature in our

887
00:50:03.979 --> 00:50:07.481
environment, and Jason could
mean he's the leader in his

888
00:50:07.544 --> 00:50:11.546
field, he could be tackling the
commercial markets at some point

889
00:50:11.608 --> 00:50:15.548
and see how it all goes. And we
could be doing the same in part

890
00:50:15.610 --> 00:50:19.488
in the consumer space. And the
plethora of different financial

891
00:50:19.550 --> 00:50:23.552
tools sort of comes through, you
know, supporting your customer.

892
00:50:23.615 --> 00:50:27.367
That's really traditionally how
it how it grows. And so it's

893
00:50:27.429 --> 00:50:31.119
it's hard to say, but I think, I
think leaders that will be

894
00:50:31.182 --> 00:50:35.059
around like Go Easy in in five
years, we'll see some expansion

895
00:50:35.121 --> 00:50:38.873
to their products and services,
we will continue to see some

896
00:50:38.936 --> 00:50:42.313
decentralization from the
monolithic growth of the big

897
00:50:42.375 --> 00:50:45.940
banks that will always be there.
But there is going to be

898
00:50:46.002 --> 00:50:49.191
increasing, increasing
opportunity for the likes of

899
00:50:49.254 --> 00:50:52.943
specialty finance to grow,
especially with open banking, as

900
00:50:53.006 --> 00:50:56.695
it does come it will take time.
And I think that's actually

901
00:50:56.758 --> 00:51:00.573
exciting of sort of decoupling
some of the financial services

902
00:51:00.635 --> 00:51:04.450
activities, without losing the
regulatory pool that we always

903
00:51:04.512 --> 00:51:08.640
have in the Canadian market. I
think it's actually quite exciting.

904
00:51:08.760 --> 00:51:10.950
Jason Appel: Yeah, it's one of
the it's one of the trends, I

905
00:51:10.950 --> 00:51:14.040
recently read a great report, I
can't say the name because I

906
00:51:14.040 --> 00:51:16.020
can't remember the name of it
too many reports. But it talks

907
00:51:16.020 --> 00:51:18.210
about this concept that that
Kevin has mentioned called added

908
00:51:18.210 --> 00:51:22.110
what they call added value
lending, which is we basically

909
00:51:22.110 --> 00:51:24.300
are in the business of lending
money. That's why we make our

910
00:51:24.300 --> 00:51:27.900
spreads. That's how we justify
our coming into being. But there

911
00:51:27.900 --> 00:51:30.450
is quite an emergence of a trend
in other markets, the US in

912
00:51:30.450 --> 00:51:33.390
particular, whether that lending
relationship is not defined

913
00:51:33.390 --> 00:51:36.810
exclusively by the lending
transaction itself. It's more

914
00:51:36.810 --> 00:51:39.960
defined by everything that goes
on around that transaction, one

915
00:51:39.960 --> 00:51:43.620
of which could be this notion of
helping customers along a

916
00:51:43.620 --> 00:51:47.130
spectrum, if you will, which
includes having a diversified

917
00:51:47.130 --> 00:51:49.320
set of products that maybe you
as a lender don't have, but you

918
00:51:49.320 --> 00:51:51.750
can connect them too. So
partnership takes on a different

919
00:51:51.750 --> 00:51:55.050
role. So companies like Sofi,
and other organizations in the

920
00:51:55.050 --> 00:51:58.200
United States have gone away
just from being these once in a

921
00:51:58.200 --> 00:52:02.100
blue moon transactional lenders
to wrapping these other bells

922
00:52:02.100 --> 00:52:05.850
and whistles around the services
they offer. And I think I think

923
00:52:06.030 --> 00:52:08.880
that's one of the things that we
as a as an industry group can

924
00:52:08.880 --> 00:52:12.960
think about, because it is an
emerging trend. And as consumers

925
00:52:12.960 --> 00:52:16.860
become more sophisticated into
and demand more of us as lenders

926
00:52:16.860 --> 00:52:20.580
and just simply access to
capital, I think that's a space,

927
00:52:20.580 --> 00:52:24.660
we could think about how we play
more aggressively, because it is

928
00:52:24.660 --> 00:52:27.840
a point of differentiation. And
I would argue in some way

929
00:52:27.840 --> 00:52:30.630
shapes, the organization of
organizations that figure that

930
00:52:30.630 --> 00:52:34.320
out, have a leg up on those that
don't, because you can't always

931
00:52:34.320 --> 00:52:37.470
keep on on scale, you can always
compete on access or cost of

932
00:52:37.470 --> 00:52:39.840
capital, you've got to
differentiate yourself in some

933
00:52:39.840 --> 00:52:42.240
other way and giving a different
perspective to that consumer

934
00:52:42.390 --> 00:52:45.060
might just be that way. And it's
something that we as a group

935
00:52:45.060 --> 00:52:45.990
might want to think about more?

936
00:52:47.010 --> 00:52:49.524
Jeremy Kronick: Mark can I just
jump in just just a few things

937
00:52:49.579 --> 00:52:52.968
popped into my head because the
conversation has gone in a few

938
00:52:53.023 --> 00:52:56.029
different places, since you
asked the original question

939
00:52:56.084 --> 00:52:59.145
about certainty, you know, I
think, you know, my view is

940
00:52:59.200 --> 00:53:02.535
going to be certain that the the
traditional risk metrics for

941
00:53:02.589 --> 00:53:06.143
financial institutions are going
to make it difficult for them to

942
00:53:06.197 --> 00:53:09.696
lend, you know, even once we get
this recovery going. So I mean,

943
00:53:09.751 --> 00:53:12.703
to me, there's a huge
opportunity for you guys to, you

944
00:53:12.757 --> 00:53:16.092
know, to tailor your products in
different ways. Like, I just

945
00:53:16.147 --> 00:53:19.481
really think there's going to be
a lot of space, and a lot of

946
00:53:19.536 --> 00:53:23.034
working capital was wiped out as
a result of this. And so to me,

947
00:53:23.089 --> 00:53:26.533
there's just a huge opportunity
on that end, you know, all this

948
00:53:26.588 --> 00:53:30.032
data conversation that was also
made me thinking this my second

949
00:53:30.086 --> 00:53:32.984
point around around issues
around HIPAA, and, and the

950
00:53:33.038 --> 00:53:36.318
digital charter and all these,
you know, all these policies,

951
00:53:36.373 --> 00:53:39.544
and that have sort of started
but aren't quite complete. I

952
00:53:39.598 --> 00:53:42.550
think there's some missing
pieces around these privacy

953
00:53:42.605 --> 00:53:45.885
issues. That I think, you know,
perhaps it just needs a push

954
00:53:45.940 --> 00:53:49.274
from from organizations like
yours that are really, you know,

955
00:53:49.329 --> 00:53:52.827
that, that use that data in such
a productive fashion, you know,

956
00:53:52.882 --> 00:53:56.217
for the economy. And then the
third thing is Kevin mentioned,

957
00:53:56.271 --> 00:53:59.387
it was, you know, regulation.
And and, you know, the open

958
00:53:59.442 --> 00:54:02.339
banking story is going to be
super interesting from a

959
00:54:02.394 --> 00:54:05.838
regulatory perspective, because
in other jurisdictions have one

960
00:54:05.893 --> 00:54:09.282
or maybe two regulators don't
have that here, right? You have,

961
00:54:09.337 --> 00:54:12.671
you know, not only do you have
fragmentation, geographically,

962
00:54:12.726 --> 00:54:15.569
you have fragmentation
functionally in the financial

963
00:54:15.623 --> 00:54:18.848
services sector. And so what
does regulation look like, for

964
00:54:18.903 --> 00:54:22.183
the digital space? That is a
huge question that that I think

965
00:54:22.238 --> 00:54:25.627
needs to be spent, there needs
to be a lot of time spent on by

966
00:54:25.682 --> 00:54:29.235
everybody who thinks about these
things. Because without it, it's

967
00:54:29.290 --> 00:54:32.406
not clear to me that you're
going to get all the benefits

968
00:54:32.460 --> 00:54:35.795
from an open banking, right,
because it's in other countries,

969
00:54:35.850 --> 00:54:39.020
it's really open financial
services. Right. But here, it's

970
00:54:39.075 --> 00:54:41.863
not. It's not it can't be
because of the regulatory

971
00:54:41.918 --> 00:54:45.690
structure. And so I think a lot
of thought needs to be put into that.

972
00:54:46.500 --> 00:54:48.420
Matt Fabian: Yeah, I think we're
seeing that right. We're seeing

973
00:54:48.660 --> 00:54:50.760
in the discussions that are
already happening at a federal

974
00:54:50.760 --> 00:54:54.000
level. I think you know, the
we're getting to the idea that

975
00:54:54.000 --> 00:54:57.090
one size doesn't fit all right,
government needs to modernize

976
00:54:57.090 --> 00:55:00.840
financial regulations to better
encourage innovation. In the

977
00:55:00.840 --> 00:55:04.590
Canadian marketplace for sure.
And I think there's, you know, a

978
00:55:04.590 --> 00:55:07.110
lot of belief that there's
considerable room for for

979
00:55:07.140 --> 00:55:09.960
innovative policy reforms,
especially around fintech.

980
00:55:09.960 --> 00:55:13.920
Right? So, opportunity zones,
regulatory exemptions for p2p

981
00:55:13.920 --> 00:55:16.260
lending, including small
businesses, things like that.

982
00:55:16.260 --> 00:55:19.200
And I think those are things
that are starting, like those

983
00:55:19.200 --> 00:55:23.220
conversations are starting to
happen. And they're necessary,

984
00:55:23.250 --> 00:55:27.750
right, they're necessary to
support the industry and kind of

985
00:55:27.750 --> 00:55:29.130
create that that structure.

986
00:55:30.360 --> 00:55:33.770
Mark Reisler: I just want to
pause there before I open it up

987
00:55:33.844 --> 00:55:38.515
to the panel. So the Q&A box has
not been filled. Great time to

988
00:55:38.589 --> 00:55:43.259
start asking some questions in
here, from the participants from

989
00:55:43.334 --> 00:55:47.708
the audience. And then as they
come in, I'll just I'll just

990
00:55:47.782 --> 00:55:52.378
throw them out there. But as as
the audience is writing those,

991
00:55:52.452 --> 00:55:56.752
those Q&A questions, if there
are any, maybe maybe what we

992
00:55:56.827 --> 00:56:01.275
could do is just start thinking
about a parting thought. 111

993
00:56:01.349 --> 00:56:05.871
thought one opinion, one look,
one forecast, about how we see

994
00:56:05.945 --> 00:56:10.468
the lending space for the all
lenders for the lead techs that

995
00:56:10.542 --> 00:56:15.213
are listening on this going into
the next five years. Matt, you

996
00:56:15.287 --> 00:56:16.770
want to kick us off?

997
00:56:17.430 --> 00:56:21.180
Matt Fabian: Sure. I think,
obviously, the one word, I'd use

998
00:56:21.180 --> 00:56:24.180
this change, right? So I've
already said it, there's,

999
00:56:24.210 --> 00:56:28.440
there's going to be a change in
the consumer dynamic. We know

1000
00:56:28.440 --> 00:56:30.930
just from, you know, the new
generations entering the

1001
00:56:30.930 --> 00:56:33.090
consumer market, they bank
differently, they think about

1002
00:56:33.090 --> 00:56:38.070
finance differently. And so I
think there's going to be and

1003
00:56:38.070 --> 00:56:40.440
you know, there's, that's what's
driving things like open

1004
00:56:40.440 --> 00:56:43.950
banking, right, that kind of
that kind of thinking, that kind

1005
00:56:43.950 --> 00:56:48.960
of consumer demand. So I think
that's going to shape how this

1006
00:56:48.960 --> 00:56:53.730
industry emerges. I think this
industry is very well positioned

1007
00:56:53.730 --> 00:56:57.780
to excel in that space. And so,
you know, I feel very confident

1008
00:56:57.780 --> 00:57:00.690
that this kind of lending
FinTech, whatever you want to

1009
00:57:00.690 --> 00:57:05.100
call is, is going to be a high
growth industry, I think it's

1010
00:57:05.100 --> 00:57:09.600
just, you know, we need to we
need to be able to support it in

1011
00:57:09.600 --> 00:57:14.340
terms of capital regulatory,
and, you know, Jason's note

1012
00:57:14.340 --> 00:57:17.400
about, you know, organic and
inorganic expansion, right. And

1013
00:57:17.400 --> 00:57:20.430
I think, I think that's gonna
happen. And I think that over

1014
00:57:20.430 --> 00:57:23.160
the next couple of years,
there's gonna be more and more

1015
00:57:23.160 --> 00:57:25.800
prominence, because, you know,
those younger generations that

1016
00:57:25.800 --> 00:57:27.660
are on their mobile phones, or
those businesses that are

1017
00:57:27.660 --> 00:57:30.060
starting up, they're looking for
solutions that maybe the

1018
00:57:30.060 --> 00:57:34.500
traditional avenues don't allow,
you know, they're actively

1019
00:57:34.500 --> 00:57:37.680
seeking that. And I think that's
going to drive the appetite.

1020
00:57:39.570 --> 00:57:42.930
Mark Reisler: Oh, we got we got
one question that came in in the

1021
00:57:42.930 --> 00:57:46.350
last two minutes here. So I'm
going to read that before I turn

1022
00:57:46.350 --> 00:57:52.920
it over. So there has been a lot
of discussion on old data, how

1023
00:57:52.920 --> 00:57:56.460
this is central to the FinTech
lenders sector, can you give

1024
00:57:56.460 --> 00:57:59.910
some examples of innovation
sources of old data in the

1025
00:57:59.910 --> 00:58:05.490
market now and what data we need
moving forward? So Jason, Kevin,

1026
00:58:05.520 --> 00:58:09.690
I'll turn to you guys, because
you're more in this space right

1027
00:58:09.690 --> 00:58:12.270
now. And then Matt, would love
your opinion afterwards.

1028
00:58:12.450 --> 00:58:15.000
Kevin Clark: Sure, I'll kick it
off. I mean, Jason's the,

1029
00:58:15.060 --> 00:58:18.540
Jason's got a lot more under his
belt in terms of risk than I do.

1030
00:58:18.540 --> 00:58:21.720
But I will tell you that the
best data comes out of the

1031
00:58:21.720 --> 00:58:26.100
historical performance of our
own book. And that is hugely

1032
00:58:26.100 --> 00:58:29.160
important. And that's the
hardest piece is, in fact, the

1033
00:58:29.160 --> 00:58:33.510
barrier to entry into our
business is really not capital

1034
00:58:33.540 --> 00:58:36.780
and innovation, it's actually
getting a hold of data to build

1035
00:58:36.780 --> 00:58:41.220
a proprietary credit box. That's
really the challenge. And so,

1036
00:58:41.250 --> 00:58:46.530
you know, data data, the use of
data is hugely important. How we

1037
00:58:46.530 --> 00:58:50.190
deal with that is driving
hypotheses on that data, through

1038
00:58:50.190 --> 00:58:55.350
historical review of performance
on our own book, that's that is

1039
00:58:55.350 --> 00:58:59.640
effectively how we have
leveraged data in the early days

1040
00:59:00.090 --> 00:59:05.160
of my of my business. We bought
that data, we bought it from the

1041
00:59:05.160 --> 00:59:10.050
Bureau's to help us try to
establish some protocols on what

1042
00:59:10.050 --> 00:59:13.080
we will look for and how we will
manage and then as the business

1043
00:59:13.080 --> 00:59:17.790
grew, we used our own data to
provide for the software that we

1044
00:59:17.790 --> 00:59:22.890
use through judy.ai. Frankly,
Jason, your thoughts?

1045
00:59:26.970 --> 00:59:29.105
Jason Appel: I just came off
mute, sorry. Yeah. So I loved

1046
00:59:29.153 --> 00:59:32.190
your summary. I would say having
the ability to access and mined

1047
00:59:32.238 --> 00:59:35.038
data, statistically evaluate
using good techniques, testing

1048
00:59:35.086 --> 00:59:37.554
and learning writing good
hypotheses, and rigorously

1049
00:59:37.601 --> 00:59:40.544
following them, and not letting
them fall to the wayside is by

1050
00:59:40.591 --> 00:59:43.439
far and away. One of the most
important approaches as far as

1051
00:59:43.487 --> 00:59:46.097
data itself, you know, we've
talked about banking data,

1052
00:59:46.145 --> 00:59:48.803
that's a no brainer. I think
there are there are several

1053
00:59:48.850 --> 00:59:51.698
other sources of, of consumer
related data that people would

1054
00:59:51.745 --> 00:59:54.735
love to put their hands on. It's
just it's somewhat problematic

1055
00:59:54.783 --> 00:59:57.773
to figure out how to do that in
a way where Customer experience

1056
00:59:57.821 --> 01:00:00.621
can be seamless. What I mean by
that is, is when a customer

1057
01:00:00.668 --> 01:00:03.374
approaches your doorstep and
wants to borrow money, or at

1058
01:00:03.421 --> 01:00:06.222
least talk about borrowing
money, you would ideally love to

1059
01:00:06.269 --> 01:00:09.259
get that full range picture of
that customer. And you'd love to

1060
01:00:09.307 --> 01:00:11.870
be able to get that once. And
once only by getting the

1061
01:00:11.917 --> 01:00:15.002
customer's consent to ingest all
that information. Well, there is

1062
01:00:15.050 --> 01:00:17.992
as yet no one simple location
where you can do that you got to

1063
01:00:18.040 --> 01:00:20.983
call a credit bureau, maybe you
got to call a banking partner,

1064
01:00:21.030 --> 01:00:24.068
like a plant or a flame stipple
in their banking data, maybe you

1065
01:00:24.115 --> 01:00:26.631
got a partner with a utility
company like or activity

1066
01:00:26.678 --> 01:00:29.431
aggregator, like an urgent and
to get the utility data in,

1067
01:00:29.478 --> 01:00:32.374
you've got to figure out a way
to get all that information in

1068
01:00:32.421 --> 01:00:34.604
in one experiential loop.
Because if you do it

1069
01:00:34.652 --> 01:00:37.642
sequentially, it's not that you
can't get that information, but

1070
01:00:37.690 --> 01:00:40.585
the customer experience is going
to absolutely stink, and the

1071
01:00:40.632 --> 01:00:43.243
customer won't have the
patience. And more importantly,

1072
01:00:43.290 --> 01:00:46.185
they're going to be concerned
about why do I need to give you

1073
01:00:46.233 --> 01:00:49.081
all this stuff just to figure
out if you can lend any money.

1074
01:00:49.128 --> 01:00:51.976
So I would say the other really
interesting source for me of

1075
01:00:52.023 --> 01:00:54.871
data is web data. And by web
data, I don't mean social media

1076
01:00:54.919 --> 01:00:57.482
data. That's interesting. I'll
be at fraught with some

1077
01:00:57.529 --> 01:00:59.997
interesting loopholes and
conundrums. I won't bother

1078
01:01:00.045 --> 01:01:02.750
getting into here. But just the
simple notion of how your

1079
01:01:02.798 --> 01:01:05.598
customer interacts with you
digitally, if we're all talking

1080
01:01:05.645 --> 01:01:08.398
about building these grand
digital ecosystems, I would say

1081
01:01:08.446 --> 01:01:11.436
there isn't for an organization
yet that I've seen, at least in

1082
01:01:11.483 --> 01:01:14.236
the Canadian market, that's
figured out how to capture all

1083
01:01:14.284 --> 01:01:17.131
of those data points, and then
mine them for the purposes of

1084
01:01:17.179 --> 01:01:20.074
determining their predictive
power, whether it be for credit,

1085
01:01:20.122 --> 01:01:22.874
whether it be for loyalty, or
any other matter. And to me,

1086
01:01:22.922 --> 01:01:25.770
that's the next great frontier
that I'm looking at is how do

1087
01:01:25.817 --> 01:01:28.665
you be able to grab that web
data by the, you know, wherever

1088
01:01:28.712 --> 01:01:31.608
you want to call it, ingest it,
and then assess its value and

1089
01:01:31.655 --> 01:01:34.645
worth. So that would be another
example. I think that's, that's

1090
01:01:34.693 --> 01:01:37.446
waiting for us lenders, those of
us who have built digital

1091
01:01:37.493 --> 01:01:40.483
ecosystems, and even for those
of us who have, I will submit to

1092
01:01:40.531 --> 01:01:43.426
you, we can do a much better job
of doing it. Because lending

1093
01:01:43.473 --> 01:01:46.464
itself as a discipline involves
pricing, and most risk involves

1094
01:01:46.511 --> 01:01:49.311
a whole bunch of things. But
this whole notion of capturing

1095
01:01:49.359 --> 01:01:52.302
information properly about how
you interact with the consumer,

1096
01:01:52.349 --> 01:01:55.244
that's a whole other data set
that you don't necessarily have

1097
01:01:55.292 --> 01:01:58.282
to be the world's greatest risk
manager to do. But you're gonna

1098
01:01:58.329 --> 01:02:01.082
need a lot of smart people to
figure out how to track that

1099
01:02:01.130 --> 01:02:03.883
information, and then put it
into your ecosystem. So those

1100
01:02:03.930 --> 01:02:06.351
would be a couple of
opportunities, I would outline

1101
01:02:06.398 --> 01:02:09.436
for the, for the people who are
looking to make a difference, go

1102
01:02:09.483 --> 01:02:12.189
after your web data and figure
out how to mine it because

1103
01:02:12.236 --> 01:02:15.274
there's a there's a treasure, a
treasure trove there. And here's

1104
01:02:15.321 --> 01:02:17.979
the other thing that's not
governed by regulation, those

1105
01:02:18.027 --> 01:02:20.542
are customers direct
interactions with you. So we all

1106
01:02:20.590 --> 01:02:23.627
talk about open banking and what
it might mean, customers fairly

1107
01:02:23.675 --> 01:02:26.665
transact with you over the web.
That's your data. Right? That's

1108
01:02:26.712 --> 01:02:29.703
something that you can mind and
you can own. It's just figuring

1109
01:02:29.750 --> 01:02:32.550
out what it looks like and how
you can leverage it. I think

1110
01:02:32.598 --> 01:02:33.690
that's the opportunity.

1111
01:02:36.900 --> 01:02:40.368
Mark Reisler: Tal's Tal's giving
me the the shoulder saying wrap

1112
01:02:40.437 --> 01:02:44.668
it up, Mark. I just wanted I
just want to thank the panelists

1113
01:02:44.738 --> 01:02:48.691
for for great conversation
today. Very insightful. I want

1114
01:02:48.761 --> 01:02:52.507
to thank CLA, for hosting and
TransUnion for being the

1115
01:02:52.576 --> 01:02:56.460
sponsor. I was I learned a lot
today, and it was a great

1116
01:02:56.530 --> 01:03:00.969
conversation. So thank you. I'll
tell I'll let you kind of close

1117
01:03:01.038 --> 01:03:02.010
this off here.

1118
01:03:02.640 --> 01:03:05.624
Tal Schwartz: Well, those those
are some great concluding

1119
01:03:05.694 --> 01:03:09.512
remarks, Mark. So I'll just say
thank you, everyone for

1120
01:03:09.581 --> 01:03:14.024
attending and other CLI session.
We'd love to obviously have you

1121
01:03:14.093 --> 01:03:17.911
back at the next one. And thank
you to our esteemed and

1122
01:03:17.980 --> 01:03:22.007
incredibly thoughtful panelists
for a great discussion and

1123
01:03:22.076 --> 01:03:25.616
again, to TransUnion for
supporting FinTech lending

1124
01:03:25.686 --> 01:03:29.504
innovation, and the CLA. So
thank you very much. Have a

1125
01:03:29.573 --> 01:03:31.170
great rest of your day.