Loraine Lawson: Good day and welcome to the Buzz, a Bank Automation News podcast. I’m BAN Editor Loraine Lawson, and recently I spoke with Heang Chan, founder and CEO of Prelim, one of the more recent additions to Bank Automation News’ Emerging Fintech Directory. Prelim automates and digitalizes the customer journey from originations to account management for commercial banking and lending.

So just to start us off, can you tell us a little bit about your background as the founder, and what made you start, prelim?

Heang Chan
Yeah, so on my background: I spent about 13 years in banking, working at Goldman Sachs and Wells Fargo, I started. And also I worked at a FinTech company called BLend previously before founding Prelim. And, you know, my really transition into technology happened about seven years ago, I spent a considerable amount of time as a banker and realized that there were a lot of, I would say, in places where we can improve the customer experience. And you would have customers at the bank have a certain level of expectation, even back when I started in early 2000s. And that expectation has increased exponentially as they are users of new technology that are customer facing, such as Uber, Lyft, and even Amazon. Um, so I think for us, really realizing as bankers, we want it to be I would say myself wanted to be on the right side of technology, right? We can also we can be someone who’s a user, but also we can be shaping the future of technology. And I thought it was really exciting to be a part of building the future out for banking technology.

Loraine Lawson
So your background originally, though, what you’d studied, I guess, was banking.

Heang Chan
Yeah, so I am, that and I had been the banker and worked with customers, and really saw it from the lens of what our customers telling us that they want, and they care about. And that gave me a really good lens as far as building product. So, for example, I was hired on at a FinTech company called blend that was trying to revolutionize the mortgage industry, then my role actually, was to build the product in the way that it would work for federal guidelines, Fannie Mae and Freddie Mac decisioning. But also, it needed to be able to be wrapped in war. And so we’d have to ask the right questions, have to build the right workflows, but also produce the right exports. That way we can actually get those loans insured or even sold in a secondary market. Customer using it?

Loraine Lawson
Yeah, so it sounds like you got a good introduction to fintechs. There. We’re familiar with Blend, of course. But what made you what pain point did you see that made you want to start prelim?

Heang Chan
That’s a good question. We realize that, you know, technologies like blend really needed in the marketplace. And I think that the departure from what was built in the past was really customer facing technology. Much of the technology built has been geared towards the enterprise user completing tasks in software. I think that was the first stage and now it’s really how do you move that to the customer? And make sure there’s transparency but also the customers empowered to buy products online, right. And I think that’s the simplest form. But, and financial products, the difference is you have a qualification step. But you also have regulatory requirements you need to meet, but also internal risk requirements that also need to be met. So there’s higher complexity than, for example, just buy something on Amazon, but the end consumer, they want the same experience, if possible, or a very similar experience. And I, you know, what, what really, we figured out really quickly was in the banking space, much of the offerings out there were really underserving banks, I think, if you really today, think about what are a great examples of customer facing experiences. They’re usually from FinTech companies, not from banks that have bought software from traditional providers.

Loraine Lawson
Okay, so what tell us a little bit about prelim and what you do and what you automate.

Heang Chan
Yep, prelim was founded about five years ago, were Y Combinator, a venture backed company. And what the problem was really solving for is, how do you make it possible for a customer of the bank, to have a great experience when it comes to applying for a product and opening a new account or obtaining a loan. And the problem that we really want to solve for is they should be able to do that using any device, but at the same time, using a single unified customer experience. And the reason why that’s important is we know, the data for customers is of paramount importance for the bank. And the way that we help the banks understand our customers, but also make it easy for customers to work with the bank on a day to day basis, is actually really key.

Loraine Lawson
Okay, so obviously, you started out in the market, but who do you you’re just starting out? When did you go to? When did you go to market with your product?

Heang Chan
Yeah, so we’ve been building the product for about five years, we, we launched a few billion dollar banks about three years ago, that have been on our platform. And today, we support over over 10 banks that are using premium, many of them are billion dollar banks. And we you know, by the end of this year, we’re looking to continue to roll out new products and services to our current customers, but also new customers that are signing up that we haven’t deployed yet.

Loraine Lawson
So do you have a mobile solution you set across any, any way the customer wants to get to the mobile part of your solution?

Heang Chan
Is a B. So it’s it’s good to work on mobile, it’s going to work on tablet, it also works on desktop. It’s using a responsive web design. So it’ll work across all devices without having to download an app.

Loraine Lawson
Okay, that’s cool. So, obviously, like I said, you’re getting started. So who do you see as are your closest competitors? Do you see that you have competitors in the space?

Heang Chan
Yeah, I think there are solutions out there that are attempting to solve the problem. But from different emphases from a different perspective like for, for us, who where we see the competition is there are providers out there who say, Hey, we’re going to build you an SBA loan application, or maybe we’re going to build you an account opening solution for consumer accounts. Or maybe we’ve seen providers who are even different who are saying, well, we’re going to give you a tool like Salesforce, and you’re going to try to use Salesforce to try to build this, this customer facing application, which is really never meant to be used in that way. But for them, like our goal is to build a tool that’s so easy to use that you don’t have to write code. So that means you don’t have to have engineers to be building applications all the time, although we do have engineers at our banks building using premium. But also, our goal is to build a product that allows you to build any financial product or service using premium. That means that you don’t have to buy from 20 different vendors who are just selling you one product. And I think the to tie that all together. I think our biggest challenge as well is we want to be able to make sure our technology is backwards compatible with the solutions you use today. So the core systems that you have in existence, but also our CRM systems, your data warehouse or data lakes. And at the same time, we want to support the ability for you to automate tasks such as KYC Kyp, underwriting pricing, using external connections to API’s that are in existence today, but also are going to come online in the next 10 years.

Loraine Lawson
So it sounds like integration. You do a lot of integration work.

Heang Chan
Yes, we do. And it’s it’s I would say those are table stakes of being part of baking technology. I think the where we’re really different is, we have two things that are different. One of them is we built an app store model, where we’ve said, Hey, we’ve integrated with FIS, IBS, for example, you should be able to use the integration we’ve already built without having to pay us and also without having to wait. Right, of course, there’s going to be customizations you’re going to want to do with depending on your setup for your, your, your deployment for your core, but it takes away 70 80% of the waiting time and costs. Whereas other providers may want to build it from scratch every time they deploy a new customer. And I think the second, the difference is, we are really a truly open platform. So that means that you can actually connect to any external API, for example, without having to talk to us, we have a tool that allows you to build your own integration, and much faster efficiently. That is already proven, because our, you know, our bill Nirbhay customers are already using those tools. And they can validate that works.

Loraine Lawson
This is generally the integration handled by API, like they develop their own API or you have API’s toolbox, or,

Heang Chan
yeah, we actually, we have our own API that our customers can use. But we also connect to sometimes the banks actually might develop their own API’s as well. But then, the more confusing is you also have API’s built by vendors. So for example, LexisNexis has their own API. And you know, of course, all the core systems have the actor API, and also are improving upon them each day.

Loraine Lawson
Yeah, I was going to ask you how easy it is to integrate with cores? I mean, has that been a challenge? Or is it pretty simple these days,

Heang Chan
I think the cores are doing a much better job to make the API’s much more user friendly, and more better documentation. So we see that improving over time, I did, but you know, really, to be transparent, it is quite a bit of work, right? So we have invested the resources over the past five years to build these integrations. So that way, in the future, it’s easy for banks to use those integrations we built. But at the same time, we’re constantly adding new integration partners, to our app store, to make it easy for new customers to, as I mentioned earlier, to go to market quickly, and to make sure that resources are used elsewhere. Instead of building integrations

Loraine Lawson
that you call prelim, a platform,

Heang Chan
we you could consider as a platform, I mean, we we like to think of ourselves simply as a tool. And the reason why we say tool is we use it ourselves deploy customers on so we have customers who say, Hey, can you just deploy us, we don’t have resources to build and deploy. But we like to think of ourselves as a tool, because we are seeing a number of banks sign up with us who they already have engineers, right? They may not have expertise as far as building customer facing applications, but they know how to code and they, they can use premium just fine. So I think that’s going forward. We’d love it if customers think about us as a tool and not as necessary, something that they have to wait on us or use only to production services that we build, like we’ve had, for example, one bank, that’s a $40 billion bank, US US and they’ve rolled out 130 different products and services using premium, which is amazing, but we give them all the credit because they use this as a tool. And I think the difference there is also they had really no engineers involved in the product project at all. Because they were able to use everything that was no code. And of course leverage our resources until they build up their team, and future.

Loraine Lawson
So a couple of questions, is it difficult to create a no code platform or low code platform? And I wonder what would a CTO or head of it need to know about your product to prepare to run it? Like is it cloud based? What what sort of the underlying technology that they would need to know about?

Heang Chan
Yeah, as far as how difficult or easy I think it depends on what you want the platform to do. I think in early days, as you can think about a Salesforce is kind of a no code, but it’s more low code. So you’d have to actually have technical resources or consultants. And I think that was where the challenge lies. But also, because I mentioned earlier, it’s not meant for customer facing applications. So that’s where the difficulty is using a tool like that is, um, but then with premium. I think our biggest challenge as far as building has always been to integrate with different providers backwards compatibility has always been a challenge. All the features that we control as far as making it easy for you to build workflows, but also integrate with providers. is never more, I would say, more modern API’s, those we make very easy. But at the same time, it’s always a challenge, right? Because if you imagine building what we build, everything we build that customer facing, also have a has a has an enterprise facing component. So we want employees to be able to use Cleveland to be more efficient. And so that means that everything we build has to be thought of as there’s has to be a mirror on the enterprise side. But also, we also have to make sure that it is extensible enough for a bank to say, well, our engineer are going to want to use you versus not because it’s more open. And you don’t restrict us. But also, we they, as a CTO of a bank, the trade off you’re going to have to make is to say, well, 1am, I going to buy this for a vendor that has a fully built product? And am I going to buy it 20 different times? Or do I say, well, maybe I have my own engineering team? Can I have them build this? And if the answer is really, yes, I can have a build it. The other trade off you have to make is, well, how long is it really going to take and can prelim tool, get me there faster and cheaper? Right? I think that’s, I think that’s a big decision that CTOs have to begin. So far, we’ve seen most most of the feedback has been, it’s really an easy decision to use prelim, because it’s going to get me to market faster, but also, it’s at least one the most 1/10 of the cost that it would take me. But I think the other setup that we’ve seen is what makes over time, as that we talked to 90% of them don’t have one engineer. So what we’re seeing is a movement towards people who are entering banking, that have more technical backgrounds, and recruiting more technical talent. So we’re gonna see more engineers and more designers, more product managers go into banking, whereas before, when I started in early 2000s, it was really understanding underwriting guidelines, sales. And so I think that skill ship skill set is going to shift.

Loraine Lawson
What about the the asset, sort of piled on a lot there, but what about in terms of what it needs to run? Is it based in the cloud, or on premise?

Heang Chan
With premium, we, we take care of all that for you. So we run it on at AWS, it’s a multi tenant architecture, our database that we set up is also all done by premium. So with the customer to be able to get started, you know, I can probably deploy a customer same day, right, I think, and we come up with a box with templates that they can use to, for example, open a bank account for a consumer and a business and also have their customers who apply for a commercial loan. So that could be done same day. Right. I think what takes a longer time is to understand well, internally, we have to sell our stakeholders of using premium, but also we have to get the right. Compliance, legal. And also, I would say, business line approval to make sure what we’re deploying meets their current process flow and doesn’t change their risk or compliance requirements.

Loraine Lawson
Sounds like you’ve made it really easy. What’s been the response in the market? Are you finding that you are? And by that? I mean, do you find that you appeal to a certain size beak more than others? Or is it across the spectrum? Where are you finding yourself?

Heang Chan
We have a number of banks that may we have the smallest bank we have is two branches, they have less than 300 million in deposits, and to a large bank has over 100 billion deposits. And we, what we see the sweet spot is really banks that, I would say, are really executives are bought into the vision that banking is going to change. And most of it, it’s going to be more customer facing experiences that are remote and not always in the branch. So I think it’s really finding the right management team at banks that are forward thinking but also at the same time want to execute. In the next I would say six months to two years.

Loraine Lawson
Okay, I know you have raised $1.7 billion from capital capital so far. Oh, sorry. $3.8 million to how much have you raised? I’ve got my fingers crossed here.

Heang Chan
We raised over $3 million in funding.

Loraine Lawson
Okay. And so I’m sorry $1.7 million recently from EJF. Congratulations how we use those funds in the future?

Heang Chan
Yes, we do. The reason why we went to EJF capital is they are an investor in banks. They actually have ownership in over 1000 banks across the country. So it gives us a Good validation point for an investor that cares about returns and banks to invest in prelim. And also, of course, they’re referring over banks that are in your portfolio to make sure that they’re increasing the return of capital. As far as using the resources that we’re getting from the Capitol, really, it is just a step in our journey. We’re increasing our engineering talent, product, and design talent to build out more integrations. But really, to make it even easier to use greenlam as an engineer, or person who doesn’t write code. At the same time, we are building out more use cases. For premium for example, we just rolled out commercial real estate application that we demoed in the last webinar, we few months prior, we rolled out an SBA loan application as well. So our goal is to make sure that those new products or services are templated, that we can use them out of box. And you can change them as you as you wish. But you don’t have to if you don’t want to. And I think the other side is, we believe that prelims should be used for all customer facing interactions that they make. So that means that not only do you use it for originations, but you’re going to be using it for servicing and account maintenance. So there’s quite a bit of work that we have to do on our site to make that happen, and I would tell you that, you know, the capital will continue to be increased as far as from investors, because we want to make sure that premium is around for the next 10 to 100 years.

Loraine Lawson
Um, so what have you learned? You’ve been in banking, a fin in FinTech? What have you learned that you can share maybe with other other fintechs, or banks, or just either side of the fence?

Heang Chan
Yeah, you know, and to be very transparent, like I, my background was a business major in college. And like, I went back and got my MBA. I’m not an engineer by trade. So it’s just the thing is everything we built was, was me as a guinea pig. So if I can build applications, being someone who’s an MBA, for example, non technical background, really, anyone can do it. And I think that’s where the biggest learning is. But even for me, I think the biggest learning for me in building this company was really, we had to get the right people at the company to be able to build a product, right? I think that’s interesting. Most technology companies that are out there, they like to outsource their talent to other countries, which is not a knock on them. But the reason why that’s always the case is, it’s really not a Silicon Valley, startup company. It’s a company that has maybe different parts of the country that doesn’t have access to engineering talent. So now, we’re recruiting from top schools, because we know how important it is to build it locally, but also how important it is to build a great customer experience. Or else our customers can try to build themselves or they might try to use another vendor. And so those learnings are really key. But also we borrowed it from, you know, our experiences, like my experience working at Goldman Sachs and other previous FinTech, we knew that the level of talent really mattered. And that high bar that we have, I think, shines through in a product, but also over time, we believe that the products should be the best of the marketplace. And I would say we’ve we’re getting that feedback from customers, which is good, right? They’re validating it from buying. And we’re continuing to, to make sure that we are continuing to build on our lead and continue to also grill the company as well.

Loraine Lawson
Sounds like we now onboard clients fairly quickly. Unless they want customization, I suppose.

Heang Chan
Right? Our goal is, you should be able to really onboard and use premium same day. Right. And that’s where the departure from preload and other systems that are out there are tools. And we get that feedback again and again, our customers it are really surprised. And that comes it goes back to really making sure that we’re thoughtful about the product in the beginning.

Loraine Lawson:
You’ve been listening to the Buzz, a Bank Automation News podcast. Thank you for your time, and be sure to visit us at Bank automation news.com for more automation news. You can also follow us on Twitter and LinkedIn. Please don’t hesitate to rate this podcast on your podcast platform of choice.