Digital Banks, new or growing, all have the same thing in common. They must decide if they want to be proactive to ensure the systems they set up from the start will cover all their needs from the pre-charter phase through all their growth stages. This session will look at how Varo Bank, along with Wolters Kluwer, was able to manage multiple, sizable efforts in parallel to ensure the bank was ready in time for its clients but also to manage their obligations to regulators, address changing regulatory requirements, and other stakeholders of the business.
Transcript:
00:00:15:14 - 00:00:49:16
Will Newcomer
My name is Will Newcomer. I'm the vice president of strategy for Wolters Kluwer’s finance risk and reporting business unit in the Americas. Welcome to our session today with Varo Bank, “Solving for Regulatory Reporting Compliance with Automation, Flexibility and Scalability.”
00:00:50:09 - 00:01:16:19
Will Newcomer
This session will look at how Varo Bank, along with Wolters Kluwer, was able to manage multiple, sizable efforts in parallel to ensure the bank was ready in time for its clients, but also to manage their obligations to regulators addressing the changing regulatory requirements and all the other stakeholders in the business. Joining me today is Thibault Fulconis, chief financial officer of Varo Bank.
00:01:43:13 - 00:01:58:15
Will Newcomer
If you would, would you begin with a little bit about yourself?
00:01:59:08 - 00:02:21:29
Thibault Fulconis
Yeah, absolutely. I spent all my life in banking. I spent about 29 years with BNP Paribas. …
00:02:22:23 - 00:03:06:28
Thibault Fulconis
And I led about 20 acquisitions worldwide. … Three years ago I decided to turn from that very big institution to Varo, which for me was exactly what I wanted to do in the next phase of my career, which was building something which effectively would make a real difference in the
00:03:06:28 - 00:03:29:22
Thibault Fulconis
world. Varo was created about five years ago, five, five, five, one half years ago by Colin Walsh, founder and CEO, with a view that then the U.S. financial market was broken and it was not serving a lot of people well. So you had a lot of people who were effectively left on the side of the banking system. …
00:03:29:22 - 00:03:57:16
Thibault Fulconis
[B]y buying new technologies, by being truly digital, by reducing your costs, you could effectively serve those people very well and offer them real access to the banking system without effectively killing them with fees and overdraft fees, account maintenance fees that they are subject to in a number of institutions.
00:03:57:22 - 00:04:26:05
Thibault Fulconis
So that was really the vision. We were, well, the first startup to try to receive the full banking license from OCC, which we received about two years ago now.
00:04:27:02 - 00:04:46:03
Thibault Fulconis
So we are essentially a full bank. And so we have all the regulatory environments that we have to evolve in. But we are still very, very tech- and startup-oriented.
00:04:46:03 - 00:05:14:10
Will Newcomer
And it's funny you talk about your background, you know, in big traditional banks, that side, too. And my career you know, kind of the same. We've got a lot of historical traditional banking experience and a whole lot of experience with old legacy banking systems. So those are always a challenge on all the problems that presents through decades of mergers and acquisitions.
00:05:14:10 - 00:05:36:24
Will Newcomer
[W]eb-based banking … [is] a little different than building a brick-and-mortar branch and opening up to a local community. And, you know, they've got to walk in between 9 and 5, that kind of thing.
00:05:37:07 - 00:06:04:15
Will Newcomer
So as you and the road team were developing your business plans, what would you say were some of the biggest challenges in that of the thinking of just transitioning from legacy systems and trying to incrementally improve? You know, you're starting something very new, very different.
00:06:05:11 - 00:06:24:27
Thibault Fulconis
The good thing is that we have a good mix of people coming from the tech world. And then people come from a banking world.
00:06:25:06 - 00:06:46:12
Thibault Fulconis
What were the pitfalls? What are the things that you really should pay attention to when you are starting from scratch? The first thing is, because we are digital, we have a lot of data on our customers and that data is very important.
00:06:46:27 - 00:07:10:18
Thibault Fulconis
… So that's what is super important. … That is a real driver of our business. So I think that's one thing. That's what we really focused on.
00:07:10:28 - 00:07:53:19
Thibault Fulconis
So we have a core banking system, which we did not develop because we didn't think it was bringing any value to our customers to develop a ledger. I mean, it's basically something of a commodity, but we really wanted to push it, to marginalize it as much as we could so that effectively all the customer-facing computations and all that were done on the system … by us. You know, when you look at us against the community banks … we can become a community bank today.
00:07:53:19 - 00:08:16:22
Thibault Fulconis
It's a very different mindset than … I take in a system from the street. I won't mention any names, but you know, those big systems which are there and I buy all the modules and I'm just basically offering exactly the same thing as any other thing because I'm just using that.
00:08:17:03 - 00:08:23:07
Thibault Fulconis
So that is really something that we don't want to do. And that's that was a big, big driver in our decisions.
00:08:23:21 - 00:08:54:02
Will Newcomer
We talked about you’re heavy on the engineering-staff side. I didn't really even realize it was that many. You guys are half bank, half technology development firm in that sense. So one of the comments you just made, though, was the data was first and foremost. If we could dig in a little on that.
00:08:54:02 - 00:09:17:21
Will Newcomer
I know we've been in a lot of banks that are on their second, third, fourth, fifth attempt to … build the be-all, end-all. You guys seem to have been able to do that. Is it something that is kind of built and done, or is this a continuous, really fast-evolving data center that way?
00:09:18:25 - 00:09:41:10
Thibault Fulconis
That's a very, very good question. So that, I think, is a never-ending story. Because you always have more data … that you are consuming and analyzing and using. So you .. put a lot of attention to that .. and utterly start with something simple.
00:09:41:17 - 00:10:23:02
Thibault Fulconis
And then progressively increase the size of the leak in just small data. And for us it was really driven by use cases, so we knew which data we wanted and so on. A lot of that was there was effort focused at the beginning on marketing and getting all the data which we could from our customers, understanding their evolution from a stage where they were just clicking on our app and then downloading the app and then, all the funnel, as we call it, and understanding all the data that whatever the customers were doing … so that we could really analyze that in a lot of detail
00:10:23:02 - 00:10:59:28
Thibault Fulconis
So that's one part. But also, of course, there is a lot of financial data. … We just can't rely on the fake underwriting, for example, to make some credit decisions. So we have to look at the cash flows and …how our customers are spending, where they're spending, and so all those elements we are effectively taking into account. …
00:10:59:28 - 00:11:10:11
Thibault Fulconis
So that's another big aspect of that data lake, which is effectively all of those data events that we can analyze on the shelf transactions that we have.
00:11:12:00 - 00:11:40:12
Will Newcomer
You made the comment about you didn't want to be kind of hostage to your core system. You worked around that; you've deployed a data lake that's … a continuously evolving and growing process. So I know we talked a little bit about,keeping ahead of the challenges and the not- falling-behind part of it.
00:11:40:26 - 00:12:08:27
Will Newcomer
And you've mentioned your management process being agile. Could you add a little color? Because that's really intriguing and … not typical old-fashioned banking.
00:12:09:08 - 00:12:09:21
Thibault Fulconis
You know.
00:12:10:12 - 00:12:17:03
Will Newcomer
Give me a little flavor and our audience here on how you guys have adapted that to the banking world.
00:12:17:16 - 00:12:46:13
Thibault Fulconis
… Now, overall, what we're doing is a lot of testing. So we are trying a lot of things all the time, you know, whether it's on the marketing side, but even on the product side, we modify the products, we modify features, we try to understand how the customers are reacting to that.
00:12:47:19 - 00:13:11:05
Thibault Fulconis
It's also the process, which is really fed by the customers. … And so we have a lot of crowdsourcing.
00:13:12:00 - 00:13:32:09
Thibault Fulconis
And again, we test all that. … So we tweak it and we change it based on all our customers’ feedback. So that's something which is done everywhere in the company. And I think that's a very interesting way to manage, because that's opening up creativity for everybody.
00:13:32:09 - 00:13:50:12
Thibault Fulconis
People feel more empowered to try things. And of course when you also have to play as fast as those startups and you really have to analyze again whether data is so important. You have to analyze what results of whatever testing you've been doing and then if it doesn't work shift to the next one.
00:13:50:21 - 00:14:09:17
Thibault Fulconis
… That's really in the mentality of what we have been building is about testing: learn all the time. So then of course marketing. Because we are free, digital marketing is clearly a channel where we can test very, very quickly. We test the message, it doesn't work,
00:14:09:17 - 00:14:26:05
Thibault Fulconis
we test another message, we test the color, we test the layout and based on that, we can effectively optimize our messaging and the ads that we are going to keep pushing through digital channels on a daily basis.
00:14:27:18 - 00:15:00:00
Will Newcomer
It's really fascinating. … You've got Varo on one hand. You've got the traditional bank on the other side. And through all of my … years of traditional banking, we would do a focus group and you know, “What do you like on this?” and get, you know, half a dozen people, maybe eight or 10, and ask them questions and record it. And you guys are doing this in real time to them, thousands of thousands of people.
00:15:00:19 - 00:15:29:01
Will Newcomer
So the challenge to adapt, that is something you guys have been very successful at of not only adapting to the challenge of doing it, but making it successful. So one of the questions I've got on there from a regulatory viewpoint is you're not dealing with the identical product and an identical feature set over … months and months and months and years at a time.
00:15:29:10 - 00:15:57:22
Will Newcomer
And then it slowly changes. You guys have undergone some very rapid change. So let's talk a little bit about regulatory requirements. … How is that working?
00:16:04:02 - 00:16:24:20
Thibault Fulconis
We are very close to our regulators and we are telling them, OK, this is what we're doing, this is why we're doing that. … So we are trying to be super transparent.
00:16:49:09 - 00:17:09:08
Thibault Fulconis
What we want to do is refocus our engineers to what is really important for our customers.e afford to develop new things that we want.
00:17:09:15 - 00:17:34:05
Thibault Fulconis
So that's really what we wanted to do with our ultimate team and not have our tech team develop things which have no added value for our customers, which are super important as a bank of course, but which have no added value for our customers. So as the reason why when we are looking at the reporting, where I'm looking at someone who could effectively bring us a solution that would be first cloud-based, we are completely cloud-based.
00:17:35:02 - 00:17:59:04
Thibault Fulconis
So that's one thing which is important. The second thing is that company events could work with or without that knowledge and could absorb those data and effectively create the trigger for pretty much what we wanted.
00:17:59:04 - 00:18:16:19
Thibault Fulconis
Because it's bad for your reporting, as you know, is changing all the time about changing small definitions and small things here and there in every corner. And so we really need to be on top of that.
00:18:16:28 - 00:18:40:28
Thibault Fulconis
And we wanted to leverage a strong solution.
00:19:22:09 - 00:19:50:25
Will Newcomer
You've spoken a lot about automating things. You've spoken about your focus on the outside as the number of engineers compared to a typical bank that's finance and accounting and marketing related. So in that process, I know as a company we focus a lot on automated the reporting side and that data management process.
00:19:50:26 - 00:20:21:01
Will Newcomer
We spend a lot of time there too. To make that work as quickly and efficiently as possible and then keep the updates going that way. So that's something you guys hey, you have a whole lot of engineers and it seems like they're completely focused on the evolution of your product. Offering, is that the other stuff is more purchased software.
00:20:21:02 - 00:20:22:16
Will Newcomer
Is that kind of how, you know.
00:20:22:28 - 00:20:48:20
Thibault Fulconis
We have our own intelligence service about working on solutions to try to automate as much as we can. The answers to our customer questions. So we are using partners … but we are integrating chatbots and those type of things with our own applications.
00:20:48:20 - 00:20:59:14
Thibault Fulconis
We are doing those type of things. So it is effectively a small team which is focused on productivity and efficiency. But again, most of the team is really focused on the customer-facing [side]..
00:21:00:10 - 00:21:26:28
Will Newcomer
That's another big change. Engineering process is all about nightly processing and, you know, that kind of stuff on there. Whereas you guys have found a way to, to go around all of that side and focus it in a different, different aspect. That's really just such a fascinating evolution and stuff.
00:21:26:28 - 00:21:57:10
Will Newcomer
You've talked about the evolution of your product offerings and the way you do a lot of the analysis. … It seems to be very customer centric.
00:21:58:00 - 00:22:14:21
Will Newcomer
And it's a two-way street right here. Soliciting them to provide information to you that you guys then deploy and analyze and evolve your product, your data, your processes, your reporting, all of that. Is that correct?
00:22:15:04 - 00:22:40:26
Thibault Fulconis
Yeah, absolutely. It's not only information that the customers are giving us, because we ask, and it's also because we analyze all the flows. And so I think that's another important dimension because we are making most of our revenues on flows and not on stock now.
00:22:41:00 - 00:22:58:10
Thibault Fulconis
So we don't have a big loan portfolio. And we do not intend to have a big one. Of course, lending is important for our customers because we need to bridge our cash flows. But it's not the core focus of our fund, but it's really much more of the flow.
00:22:58:10 - 00:23:34:05
Thibault Fulconis
So we are making our money on interchange assets, as you may know, because not only young, we have a number of other over aspect to that, but that flow flows as you point for them for us, and they give us the data that we need to effectively underwrite our customers. So as I was mentioning, we're not underwriting them that we focus is the writing under with cash flow analysis because again, we think that it's much more appropriate for the customers, which we're serving a number of them out of no vehicles or damaged cash cycles on capital or viscose.
00:23:34:15 - 00:23:56:23
Thibault Fulconis
And so we could not borrow anything from anybody, although they would be paying huge rates. .
00:23:57:05 - 00:24:25:12
Thibault Fulconis
Again,we are testing new products all the time. You know, we just launched a secured credit card, but it's a very, very flexible product; do not need to effectively lock a big deposit pronto.
00:24:25:29 - 00:24:39:21
Thibault Fulconis
So that's something which is very customer-friendly. And that's again, when we looked at that product and did some iteration and testing, that's really what came back and how we designed the product.
00:24:41:00 - 00:25:15:27
Will Newcomer
So you're actually helping them grow out of maybe a not-so-good credit score or that kind of thing, too. So one of the things we had talked about is the way you bring customers in and grouped them in cohorts and then analyze all of their behavior and all of that stuff. So part of the financial reporting and analysis, everything that rolls up to you as CFO, the read reporting and being able to have that updated and compliant, all that's a big part.
00:25:16:08 - 00:25:38:09
Will Newcomer
The other part is the data analytics. You started to outline a little bit of that. So could you give a little background? Because your business model is driven by net interest margin as you go. So add a little color on that side, because it's really kind of fascinating.
00:25:38:15 - 00:25:38:22
Will Newcomer
You yeah.
00:25:38:23 - 00:25:55:17
Thibault Fulconis
One thing which is effectively very different from what I used to do in a traditional bank is we are really looking at our customers’ bank cohorts. So we look at the whole acquisition by week or by month, depending on how we want to grow them and understand the value of those customers. Or that cohort.
00:26:20:23 - 00:27:07:04
Thibault Fulconis
It's a different way to look at your performance and what you are trying to always do is improve the activation percentages. … Understanding how you can have what we call nonstop customers who are actually spending a lot of
00:27:07:04 - 00:27:35:12
Thibault Fulconis
money on that card using their choice of their primary accounts. And so we are really looking at signs which are telling us the patterns of utilization of the product. What is the churn between what we see buying by most segments in each cohort and the money to all that.
00:27:35:12 - 00:28:01:07
Thibault Fulconis
So again, it's a very different view. It's really because we are free digital and we can have all of those data and then from really the top of the funnel to the active customers. It's also a way for us to increase the performance of our ongoing events that we have in order to target customers.
00:28:01:19 - 00:28:25:21
Thibault Fulconis
Because if we know the characteristics of the customers who are effectively becoming nonstop customers or the most active customers, then if actually we can and we can try to target that for our marketing and our messaging and then through those channels and try using so that we improve the percentage by cohort of our customers, which is driving profitability at the end of the day.
00:28:27:01 - 00:29:03:05
Will Newcomer
So I have got to go in. You don't have to answer it. You can answer, you know, somewhat directionally. But the old adage of the 80/20 rule, you know, that side to it, I would have I'm guessing that with your better analytics in the way you guys are approaching the stuff that 80/20 rule is not so much applicable the you're able to to understand behaviors and price things accordingly to where there's profit across the spectrum versus a heavily skewed to small group and the rest of them are either breaking even or actually losing money is that.
00:29:04:25 - 00:29:24:17
Thibault Fulconis
You know the lure of big numbers. We don't always apply so effectively and you will always have those type, whichever comes from a business to your end. Those type of nodes will apply with some variation. So the question is how do you change that and how we have the data that you have with the online expense.
00:30:09:00 - 00:30:44:16
Will Newcomer
OK. So, just kind of bigger picture. A lot of our audience are traditional banks, commercial consumer, both sides. What about the commercial side? You know, starting small commercial LLC to, you know, SBA, growing into small to medium, those kind of things. Do you guys perceive that as an avenue to expand your balance sheet?
00:30:45:02 - 00:31:10:19
Thibault Fulconis
At this point where we need to be truly consumer we feel there is such a big opportunity, just fair for all of those customers, which, again, are not well served by it. … We would probably go into small business, not in big corporates. We already have a number of customers who have their own business in sole ownership.
We want to remain focused on what we can do.
00:31:33:04 - 00:31:55:15
Thibault Fulconis
Then if you start diversifying your business model too fast and then you lose your focus and at the end of the day, you're not able to deliver what truly makes a difference to your customers.
00:31:56:08 - 00:32:24:24
Will Newcomer
That makes sense. So shift gears a little bit and away from the customer focus [to] …some of the technical aspects, the cloud deployments.
00:32:24:24 - 00:32:49:23
Will Newcomer
So the hardware part. But I'm curious in this, from a vendor management side. The old model was I want to buy best of breed for every little function and I'll take all the inefficiencies of data.
00:32:50:07 - 00:33:12:28
Will Newcomer
What's the balance at Varo Bank? Do you look for vendors that have the ability to start today and be a very long-term, very broad coverage? Or is it, “I'm just buying, you know, slices of technology that I don't want to build from whatever”? What's a little bit of the thought in theory there?
00:33:13:08 - 00:33:42:23
Thibault Fulconis
I think it depends on the area. Where you focus on the customer-facing activities, we are buying solutions. And there we really are looking for the reinvestment task and what would be the best solution for our customers. And always this mindset of we want to to build something, which is a very, very differentiated experience and a very easy expense for our customers.
00:33:42:23 - 00:34:01:28
Thibault Fulconis
So that's a big, big element. When you look at more of the finance operation and so on, it's probably slightly different.
00:34:01:29 - 00:34:22:27
Thibault Fulconis
… I just thought time to market is really important. So we want to be very, very fast and very quick. So that's another element of the ease of integration, which is something that we are looking at very carefully.
00:34:22:27 - 00:35:06:05
Thibault Fulconis
I mean, we really need our families to be attentive at the top level. In that respect. There we are dealing with trust with our customers. So we want to really protect that as much as we can. And everybody knows that it's their own operations in bedrooms on that front. So after that, it's I think to you what I'm trying to do is because we have no the luxury of of starting a new bank and choosing what we want, we are trying to find solutions which are if you can be feeding larger needs so for example, you know, when you when you look at, you know, case management and so you can have five different system, one
00:35:06:05 - 00:35:50:19
Thibault Fulconis
in legal, one in compliance. So we are trying to find solutions which are fitting one need only. So one solution feeding only needs rather than having five solutions and having to manage five vendors and having integration issues between those. And … if we are able to choose solutions which are already pre-integrated, it's easier.
00:35:51:04 - 00:36:08:10
Thibault Fulconis
… For us, it's easier to have one single point of integration as long as the performance of the systems are not the same level of knowledge as of a solution as we can find in the market.
00:36:41:10 - 00:37:11:07
Will Newcomer
On the FPGA side, when you guys are looking at budgeting, there's, again, traditional banks, the the primary number is net interest margin, and if I can price it right with my SDP, then, you know, then I can start paying for my overhead you guys, I'm assuming, have a different kind of model ride because it's really not the the margin, it's the the spending patterns, the velocity of transactions, the dollar amount of each transaction, that kind of thing.
00:37:11:07 - 00:37:11:18
Will Newcomer
Right.
00:37:11:27 - 00:37:38:11
Thibault Fulconis
Absolutely. We have some lending activities which are analyzing the same rules as anybody. For us, what is important is the balance sheet and the flows in and out and how I'm disclosing … which categories our customers are spending into and the interchange attached to that and also the ATM aspect of that.
00:37:38:11 - 00:38:16:00
Thibault Fulconis
And there are also all the referral programs which we have developed with our partners. … We have a different way to look at our business than traditional banks just because our revenues aren't coming from the same sources.
00:38:22:19 - 00:38:54:04
Will Newcomer
So I know we have clients both on the bank charter side and the credit union side. And a lot of the credit unions I've dealt with do a lot of what they call driver-based budgeting or formula-based or activity, you know, behavior-based, whatever you want to call it. And it differs from typically saying we want to grow loan portfolio X dollars deposits, you know, noninterest, … whatever it may be to help with liquidity management or something.
00:38:54:20 - 00:39:16:09
Will Newcomer
They look at it as behavior-based and put formulas in and like our planning system does this kind of stuff and then it like populates the income statement, the balance sheet that’s assigned to it and the ability to create a lot … very fast: What if we did this? What if we did this?
00:39:16:09 - 00:39:26:10
Will Newcomer
What if we did that? Do you guys budget more on that type of a process on the drivers or something that way?
00:39:26:26 - 00:40:07:11
Thibault Fulconis
It really starts with acquisition and customer acquisition, and again, we can monetize that by channel, by even how many customers we capture for Facebook, which we pay Facebook, Google, whatever channel we are using. We can have a very, very clear understanding and we can track them from the date of acquisition down to when they are effectively becoming active.
00:40:07:19 - 00:40:30:04
Thibault Fulconis
So we are ready to spend more on the channel that would bring us customers which are more active and so that's what we are refining all the time, you know, really from the productivity of the customers going back up to say, “OK, how should we target those customers in the best way possible so that we optimize the end results?”
00:40:30:19 - 00:41:12:11
Thibault Fulconis
So that's something that's super important for us and again, we're spending a lot of time and a lot of algorithm on that and machine learning on that just to optimize because that's that's really crucial for us. So that's, you know, from acquisition down to effectively all the aspects of all their activities within Baral, you know, when using the P2P payment on the I to be sitting on the offer, we have a cashback to the merchant reward to some of the cashback which we're also offering to our customers salivating to be taking on those officers.
00:41:12:15 - 00:41:45:09
Thibault Fulconis
The beauty of being fully digital is that everything that our customer and your customer is doing with your app, when it is going, where is clicking, what are the pain points … you solve for that all the time and again you test and learn every day. … So it's really an optimization problem from the very beginning to end and for finance it starts with acquisition and customer acquisition cost and then activation cards.
00:42:11:00 - 00:42:29:13
Thibault Fulconis
And again, we try to understand how we can maximize the most profitable segments. We try to be generating the most flows.
00:42:30:13 - 00:42:56:14
Thibault Fulconis
… So the activation is the acquisition cost of acquisition and then all of the activation curves and even how they are now evolving over time. And then within that different segments of customers and cohorts and that's the old notion of cross-sell.
00:42:56:14 - 00:43:20:02
Thibault Fulconis
And so that's really all those triggers that we have in our models and of course varies with cost to speak to us. So that's driving all the revenue. But there's also a cost aspect to that because we have those on network fees and all the expenses that we have, which are what is driven by most of them and driven by the activity of our customers.
00:43:20:02 - 00:43:45:20
Thibault Fulconis
And so based on that, we can have models which are pretty significant.
00:43:45:25 - 00:44:12:08
Thibault Fulconis
… We had no clue at the beginning and progressively we have been refining that. So we are doing probably five or six iterations of our budget … which is also very different from a normal institution because we are fine-tuning all those levers … as we continue to progress and gain more insight.
00:44:12:09 - 00:44:36:08
Thibault Fulconis
So we are introducing new products. So we have a hypothesis on this proposal, introductions. And that may be true or not. And so we have to again, change, change all that and understand the profitability of each feature, each product. … And so that's again a total iteration of all of those elements.
00:44:38:08 - 00:44:59:19
Will Newcomer
Yeah, it's fascinating. I just think back on my old budgeting and planning, you know, life cycles and getting that annual plan and it's fixed and it triggers bonus payments and less of that. And how do that game and who's sandbagging and all those kind of things you guys seem to have. Yeah, it's such a different process.
00:44:59:19 - 00:45:34:17
Will Newcomer
So … you started and you were the first charter in a digital or challenger-type bank. You … were not beholden to older-style systems. So you deploy things, everything's in the cloud. It's a different type of core system. You've got everything automated that's not part of your value creation.
00:45:34:17 - 00:46:02:21
Will Newcomer
Process, I'll put it that way. You know, where you're looking at your engineers and developing products and crowdsourcing improvements, automating reporting with us, you know, those kind of things, the fees you talk about and generating your revenue that way.
00:46:02:21 - 00:46:32:06
Will Newcomer
I'm assuming you're getting into like another type of breaking the glass, so to speak, from the regulators’ side. So is the automated process that you guys are running and crowdsourcing, obviously, that's private. But just from a regulator's viewpoint, What is their take on this?
00:46:55:20 - 00:47:19:05
Thibault Fulconis
I think the regulators have one concern is protecting the safety and soundness of the system overall. So they are playing their role here. And so we have a very transparent relationship with them. .
00:47:20:07 - 00:47:41:19
Thibault Fulconis
Of course, we had to adapt to that new business model. You know, they are more used to when they give a license to a bank that will effectively be opening branches, gathering deposits by lending money and invest with the traditional business model and growing progressively. When we opened the bank we had 1.5 million customers already. So it's a very different game.
00:47:41:19 - 00:48:00:25
Thibault Fulconis
It's a scary game of stock because that's not a business that you can effectively bring to profitability if you don't have the scale. It was a lot of discussions with our regulars to explain and also I think they understand the fact that it's new.
00:48:01:08 - 00:48:27:00
Thibault Fulconis
So yes, the business is evolving every day and now we're making hypotheses and we may be wrong. So it's you know, the fact is that we also have very strong backers … [including] Visa.
00:48:49:10 - 00:49:15:07
Thibault Fulconis
… So it's … a permanent discussion. And then we have to explain this. And of course, we have to accept, to respect, exactly the same rules as any other bank and know your customers and so forth. So there is no difference in that respect.
00:49:15:16 - 00:49:30:05
Thibault Fulconis
But again, we have, I think, a very, very good relationship with our regulators. And we're trying to be, again, as transparent as possible to explain to them how our group is evolving.
00:49:30:11 - 00:50:02:04
Will Newcomer
Well, it's a journey that I know will be involved with you guys for quite some time and look forward to all of our interactions. This pretty much comes up the end of our session. So thank you first and foremost. Very, very interesting subject in general and very, very intriguing insights in the way the finance and financial product and reaching customers in and supplying their needs.
00:50:02:18 - 00:50:17:27
Will Newcomer
Very, very intriguing way that this is evolving. So thank you. Thank you, American Banker. And thank you everybody that has attended. We truly appreciate it and have a great rest of the afternoon and weekend. Thank you all.
Case study: Solving for regulatory reporting compliance with automation, flexibility, and scalability
March 30, 2022 7:24 PM
51:02