Rick Morgan, news editor at Bank Innovation

Hello everyone and welcome to this week’s episode of the Weekly Wrap part of our FinTech Unfiltered brand, hosted by Bank Innovation. I am Rick Morgan, a news editor at Bank Innovation and I’m joined today by Jeff Tower, VP of marketing and business development at ChargeAfter. Before we get started recapping the news of the week, I like to thank our sponsors LQD Finance, Infogroup and Mambu. Thank you for your support. Jeff, it’s been a very busy week in the financial technology space. As always, I want to get into the news. Maybe you can talk a little bit about ChargeAfter just so people have some context and then we can talk about some of the major developments this week.

Jeffrey Tower, VP of marketing and business development at ChargeAfter

Sure. Thank you for having me, Rick. I’m the vice president of marketing and business development here at ChargeAfter charge after what we do, we are actually a technology platform or FinTech technology platform. What we do is we connect merchants and lenders To provide consumers with personalized point of sale consumer financing that has been approved to from multiple lenders across the entire FIFO band. And we really help merchants go ahead and close more sales by approving upwards of 80 to 85% of all applications. So in short, what we are is a point of sale financing technology platform. And we have the leading lenders and banks already plugged into our platform. And we bring the power of the masses to merchants. So instead of merchants having to only have one single financing partner, we have multiple partners, anything from Prime near prime and subprime are able to approve more.

Rick Morgan

Interesting, so I think you might be able to provide some context on one of the big news developments this week. I’ll touch on it for a little bit and then I’d like to hear your thoughts. So, Bloomberg reported that AmEx was interested in buying Kabbage the SMB FinTech lender. We spoke to some analysts, I spoke to some analysts for a story that I posted on bank innovation that basically talked about what Amex is gonna get out of Kabbage. They basically looked at their the analysts that we spoke with said that they could probably get some updated technology from Kabbage, they could, you know, get access to their loan portfolio. They could expand Amex’s own cardholder portfolio. They could use Kabbage as like a testbed for new products that they want to take to market and maybe get into some cash insights and analysis, spending, analysis, etc. And they also talk a little bit about how Kabbage really did show during the paycheck protection program here in the states that they can pivot quickly going from being you know, a normal SMB FinTech lender to pretty much facilitating PPP loans exclusively. And they did that in a matter of days. Pretty much So I was wondering, Jeff, if you had any thoughts on, you know, not so much this news specifically, but what are you seeing in terms of card companies, you know, trying to get into different forms of lending beyond their traditional credit card models?

Jeffrey Tower

Sure. So as you may know, Rick, ChargeAfter’s investors include companies such as Visa, BBVA, Mitsubishi Bank, Synchrony Financial, we have the largest banks in the world that are standing behind charge after what we are doing getting into what we’re doing the world of buy now pay later point of sale financing. Since this whole corona craziness began, we have seen traditional banks looking to get into the digital world more and more. So. It’s very simple. People aren’t as aren’t outside as much. People are, you know, working from the comfort of their home, and they’re looking to interact with their banks in a digital matter many of the banks that we’re seeing getting into the spaces of either buy now pay later or more financing or traditional, or what we call new FinTech financing. And if that’s fine now pay later that’s b2b loans or PPP or anything else like that. You’ll see many of them are traditional banks have always had one type of business, which is dealing with a consumer using a plastic credit card. And now these banks are finding themselves in a position where they have to innovate fast, just like you said right now, and to be able to stay relevant for the businesses and their customers and consumers going forward. Obviously, another really important part of the business is really going digital and being able to provide those b2b loans and or these direct consumer loans is customer acquisition. So you don’t have people just walking into Chase anymore. Americans are saying, hey, I want to open up a checking account or savings account. We’re actually seeing many companies that are starting to offer savings accounts and checking accounts directly from the mobile phone entrepreneur in a non traditional method. So what we’re seeing are these traditional banks going into adapting, going from their old school ways of business into what is becoming relevant for now and most probably the future.

Rick Morgan  

That leads us nicely to one of our other big stories of the week are my colleagues Bianca Chan and Vaidik Trivedi wrote a story that kind of focused on banks seeing an increased spike in mobile volume during the pandemic, which is not terribly surprising, and how banks are sort of reacting to that whether, you know, there’s there’s a variety of different ways that banks are kind of reacting and whether that be buying more server space or increasing the limit for the number of you know, mobile check deposits you can do online or what have you. And it seems to be that, you know, this is a trend that’s gonna it’s been very Strong and you know, with a pandemic going on, who knows how much longer it’s gonna last? And if, you know, people are migrating to mobile channels, and they like it, you know, this could end up being a long term, you know, a long lasting effect at the end of the day. So I was wondering if you had any thoughts on with all these customers are migrating to digital channels? I mean, what does that mean for banks? Is there anything that they need to get better at? Is there anything that they need to improve? Or, you know, what’s sort of the new reality for banks, given all this increased adoption of mobile channels?

Jeffrey Tower

I think it all comes down to the least amount of clicks and being as clear as clear as you can. And I wouldn’t be surprised if we’re going to see an increase in AI and artificial, or AI. Artificial Intelligence along with NLP technologies are naturally technologies, where if a consumer is interacting with your bank, or with a chat bot, you’re actually able to do that via voice. Just like today. If I have an account, let’s just say with Capital One, and I call them up, I’m able to do everything over voice. I do see banks starting to continue to invest heavily in that in order to provide better consumer better, better, better service to their consumers wherever they may be. That said, I do question the need to go full mobile. And I’ll just explain why. In the past two years, we’ve seen a lot of mobile first technologies, a lot of mobile first offers and really companies trying to go what’s called mobile first. But now when and that was true for when you’re leaving your apartment. You’re getting into subway going to work. We’re on the way back from work. But we got to take that part out right now. You and I were both working from home right now. We’re working with you know, a laptop and probably two screens. We’re not we’re probably gonna To go on to our bank now right over here on our computer versus going on to our phone. So I actually think that what financial institutions should be doing is just working wholesomely on providing a better user experience that stays true to both mobile and to desktop. So wherever and however, the consumers interacting with the bank or financial institution, they will get a very easy, non intrusive, but open experience that allows them to do whatever they want to do with the least amount of clicks possible.

Rick Morgan 

Interesting. Yeah. So do you think that there might be given that people are working from home you mentioned two screens sitting here, kind of, you know, purveying our, our digital world in front of us. Do you think that maybe desktop is going to have a long lasting I mean, that that’s going to be that’s how we’re interacting right now. Is that going to be another place banks are going to continue to innovate?

Jeffrey Tower

I think that they have to Just given the we know right now that companies like Facebook and Intel and many other are having their employees continue to work from home, probably for the next year. So that’s that’s a lot of people working from home that summer. Yeah. Next summer, right. And they’re working on their, their work on their desktops, right? They’re writing code and they’re, you know, doing everything else on their desktops and not necessarily on their phones. So they will continue to interact or go on to their bank account directly on their desktop. What I’m saying is, yes, banks and financial institutions must continue to create your technologies and create the services and products for tomorrow. What tomorrow is at this point, I don’t know what to say. Nobody knows. Right? But I would, but what I am saying is, I see that the desktop experience is super relevant. And I while I believe that we should be focused on mobile Because hopefully within, you know, the next few months, we’ll be able to get back to our normal lives. But what I am saying, I think that the world has changed a little bit, for sure. And we’re in a new norm. And now it’s not just mobile first or desktop. First, it’s experience first. And that experience has to be no omni directional cross device, just providing the best user experience possible for consumers to interact with your financial institutions. And I’m sure we’ve all seen many financial institutions over the past year, updating their UI is providing better user experiences. And that’s where they need to continue to focus.

Rick Morgan

Fantastic. So, you know, looking ahead, I know that Bank Innovation, we’re going to be taking a look at the state of open banking in the US, obviously very different than overseas and the EU and the UK and sort of examining what that means for financial institutions and US consumers. Jeff, what is ChargeAfter have coming up on the docket? Anything that we should be keeping an eye out for?

Jeffrey Tower

Sure. So what we’re doing is we’re creating what’s called the next wave of credit. We believe, and really the market has shown that consumers are relying more on buy now pay later technologies on consumer financing. consumers want to be able to divide up their payments anywhere from 6 to 60 months. They want to be able to, to not pay any type of interest. They want to be able to decide how to pay and on their terms. Some of the things as I mentioned before our investors but in the past half a year we’ve received investments from both Mitsubishi Bank and from Visa. Visa has just put out a new product of theirs called visa installments. ChargeAfter is the first technology company FinTech technology company to actually launch visa installments in the United States. And soon we’ll be doing that globally as well. So that will allow any company any Visa card holder that is eligible to go ahead and make a purchase either through a swipe or through e commerce and to receive right away the option to divide up their payment into installments directly through visa going through charge after that said we’re also seeing visa now going and starting to distribute charge after two all of their merchant acquires their issuing banks and to their gateways and some of their strategic merchants globally. Because all of us understand that we are now in a world where consumer financing and providing are really giving the consumers the reins and the control over their finances now. That’s where we’re at right now. So some really exciting things coming up with ChargeAfter in the very near future.

Rick Morgan 

Right. Well, we’re excited to keep an eye on it. Jeff, thank you for joining us today. Of course, yeah, and thank you to everyone for tuning in. Please feel free to visit us on finainews.com. We will post this on our website as well as on to Transistor, Spotify, iTunes, so check it out as a podcast as well. Let us know how we did feel free to check in on one of our social channels, either Twitter or LinkedIn, and let us know what you think of the product. Thanks again for joining us and we will see you on finainews.com. Bye Jeff.