Unlocking Value with Financial Health & Wellness

Joe: Hello everyone. I'm Joe Welu. Thanks so much for tuning in to Expert Insights, where we talk with industry leaders across modern financial services to discuss leadership and innovation. Let's get started. Hello everyone, Joe Welu here with another episode of Expert Insights. Super excited today to introduce our guest president and COO of one of my favorite FinTech startups, FinLocker. Please join me in welcoming Mr. Brian View, president and COO of FinLocker. Brian, good to be with you, buddy.

Brian: Yeah, Joe. Thanks for having me. I've been watching this show from afar and glad to finally get to participate. Looking forward to the conversation today.

Joe: Brian, we got some great topics to talk about today. Before we get into the the meat of what we want to talk about today would love for you to give the audience a little bit about your story, your background, and then maybe a little bit about the FinLocker story.

Brian: I love it. Thanks, Joe. I don't know how great of a story it is, but it's a story all the same. So this week I actually celebrated my three year anniversary with FinLocker and these three years followed 28 years in the primary mortgage production space where I predominantly led large production and operations, most recently, the third party business at Flagstar. And why I think that's relevant to my current role and what we're doing at FinLocker is, our primary client, much like your primary client at Total Expert, are lenders and financial institutions. And so I think I bring an experience of sitting in the chair of who we're engaged with as a partner. And I use those couple, almost three decades of experience every day in my current role. So I got to know FinLocker really from its onset. Two of the three founders are friends of mine. We go back to the late nineties. They founded, ran and sold a company called Lenders One to Alta Source. After they did really well with that exit, they became... These guys are serial entrepreneurial guys. And so they created a couple companies. One of them was FinLocker. FinLocker was started as a service in the middle of the loan manufacturing process to help processors and underwriters ingest data, namely bank data, asset data, and make some decisions on that data versus kind of the old school way of I've got four months of bank statements I've got to sift through and look for large deposits, blah, blah, blah, blah, blah. So that was the premise of the company was to kind of help in the middle of the manufacturing process. And frankly, the company was a little bit ahead of its time in that regard. Consumers weren't ready to give up their password and user ID.

Joe: It seemed a little uncomfortable at first, I agree.

Brian: Two other players though, in the equation, also weren't ready to go down: loan officers. They were not ready to ask a customer to do something like give up your credentials. And then processors and underwriters had a little bit of a standoffish engagement because they, to some degree, viewed this technology as a threat to their role in the process. And so FinLocker, this is before I got here, kind of pivoted off that single use case in the middle of the manufacturing process to take what they had built, which was an ability for a consumer to link directly to their financial accounts, and they started to build a holistic consumer financial fitness experience around that piece. And as I watched that happening, I started to get really interested in that kind of journey and where I thought it could go in helping lenders think about a different way to engage consumers. And that's what led me to invest in the company. And then, I guess double down on my investment, by joining as president COO three years ago.

Joe: There's no bigger investment than going all in. So three years goes by fast, doesn't it, in startup work?

Brian: I had a jet black hair and a jet black beard four years ago.

Joe: I was going to say, I thought that you've aged a bit in the last few years. No, I'm just kidding. The stress doesn't show at all. You guys are solving some really big problems and some really great innovation from all of the mutual customers that I talk to. So, hats off to the work you've done in the last few years. Let's get into the initial topic today that I wanted to talk about. And it's really why I love what you guys are doing and why we align so much to kind of your core mission in terms of how we work with lenders, but it's really around financial health and wellness as a core focus, right? A core priority for lenders and banks, to be able to be a leader in sort of the center of the financial life of a consumer and saying, how do we help make our customers, how do we enable them to be more financially fit financially healthier? Do I say that correctly? And give me your take on why financial health and wellness is so critical, coming from both the lender side and the bank side, which you were on, which I think is great, and also the technology side.

Brian: Yeah, I think you nailed it. I think the concept of empowering consumers with financial fitness is one part of the equation in the context of how FinLocker engages with our clients, the lenders, primarily. We use financial fitness as the hook or the engagement, and then seek to help our lenders create outcomes for those prospective customers. And so one, I think, really good example that I use often is first time home buyers. There's study after study that still shows how the average first time home buyer really doesn't understand not just the process, but what they should be doing and sequentially when they should be doing things to become ready. The younger generations, we know they're digital first. They're looking and they expect to have on demand digital tools at their fingertips. And traditional independent mortgage bankers and a lot of banks, but more banks, have some kind of personal financial management tools. But most lenders in the mortgage context, don't have a set of digital tools that engage a consumer around this concept of preparedness and readiness in financial fitness. And that's what we're addressing.

Joe: Yeah. I think it's amazing. I think the default that we've seen for the many years I've been involved in the industry, the default is always, we're going to pitch you a product. Here's a 30 year fixed, a 15 year fixed, whatever, here's the interest rate and here's the program or here's the product, which might be a special program, whatever it might be. There are of course, many different types of loan products around home purchase and equity. But they pitch the product. They try to close the deal prior to doing what you and I are both passionate about, which is ultimately, how do you invest in the long term for that, with that relationship? How do you go long and say, well, if you create enough value for a customer... I can't think of a better way to create value than improving financial literacy, financial education, which can lead to better financial decisions, which leads to better financial outcomes. That's the magic.

Brian: Yeah. I think what I saw in 28 years in mortgage banking was a trend towards transactional behaviors and point of sale activities. And what I saw the with FinLocker in terms of where this could go, as we continue to develop and enhance the product, was a very intentional mechanism to engage consumers well before point of sale. And sometimes before point of thought.

Joe: Double click on that because engaging before the point of sale, engaging up funnel, I hear a lot of people talk about that, but before thought, before they're actually... That's kind of abstract. Explain that a little bit more.

Brian: So sadly, there's not enough lenders yet that are here, but I think more and more are focused here. And I'm in the Detroit area, there happens to be a pretty large, mortgage institution not too far for me, that's-

Joe: You guys got a few of them out in your neck of the woods.

Brian: Yeah. There's one in particular that... If you watch the Super Bowl, you may have seen them. But their focus is on customer acquisition and their customer acquisition starts sometimes 10 years before there's a transaction to be had. And so they invest in the actual acquisition, but then in the ongoing kind of nurturing of that customer, who's technically not a customer yet. And yeah, if I'm a independent mortgage banker, owner operator, that's a threat to my business every day. If I don't have a strategy or a mechanism or tools to engage customers months, maybe years before they're ready. So when we talk about before the point of thought, we're talking about a set of digital tools, and I'll kind of compare these to other apps that are out there, that a lender could deploy, distribute, market, to build their funnel around. They don't even talk about mortgage. They're talking about improving credit, understanding your credit, budgeting, goal setting, understanding spending. All the things that when you stack them together are part of the mortgage readiness equation, but independent.

Joe: They're all inputs, right?

Brian: That's right. Yeah, exactly. And so what we talk about a lot with our customers and prospective customers is today... Next year's first time home buyer and 2024s first time home buyer, today, they're going out and they're engaging with the mint.coms, the credit karmas, the credit sesames, the nerd wallets, all of these disparate digital tools, these apps, that survey purpose. And what we've tried to do at FinLocker is build a set of tools that bring much of that functionality into kind of a single existence. And then we brand it. It's a white label solution that our client can then go use to market and build next year's customers by engaging them on credit education, financial literacy, fitness, budgeting, goal setting, yada, yada, yada, the list goes on. And so to me, from a lender's perspective, it does serve the purpose of empowering the consumer on financial fitness. But we're also a pretty cool tool in the toolkit to use as a marketing engagement opportunity to really build that early funnel.

Joe: Yeah. So I look at what you guys do as having really two core components. And I think both are awesome, both incredibly valuable. The first core component, which is genuinely leading from a position of saying, Hey, we care about financial education, financial literacy, the financial health and wellness of our customer. We care about that. Here's content, here's information, here are tools to help you advance. Whatever depth or lack of depth you have with your knowledge around financial literacy, you give them tools to enable that progress to happen. And having kind of that growth mindset... We'll just call it not a transactional mindset. I think sets a different tone entirely at the beginning of a relationship or potential relationship. But then there is this whole component, the other component, which is if you're doing all those things really well, you're educating customers, you're providing them tools to improve their financial position in life and understanding of how to make good decisions, then it becomes a customer acquisition strategy. It becomes a customer loyalty strategy.

Brian: Right. I think about it as each of those independent tools stacked over time just builds trust between the consumer and your brand. And so again, that first time home buyer who may be on an 18 month journey towards readiness, at the end of that journey, they're still probably going to consider a couple options, but one option that they're definitely going to consider is the brand that's been on their phone for the last 18 months, engaging them through this journey.

Joe: Yeah, exactly. And so, the places that our company plays in and the spaces that you guys play in, I would say both of us look at the transaction, or the loan, or the deal, as just one tiny part of a lifelong financial journey. Right?

Brian: Yep.

Joe: But I'm going to throw a question at you and tell me if you agree or disagree. But if you think about a lot of the innovation, a lot of the venture dollars, a lot of the hype over the last couple years, thinking back, for sure 2020, even the first part of 2021, if you look at kind of the IPOs and the heavy funding rounds, a lot of energy around modernizing the transactional experience. Which is just a slice. And if you think about the amount of value as a banker, a lender, the amount of value that comes from having a lifelong customer relationship, the lifetime value, it is massive in comparison to just that little slice,. You agree that most of the innovation is focused on the transaction?

Brian: Yeah. And I think, to be fair, the mortgage industry, the process, all the things that make up manufacturing a mortgage is probably still woefully behind other products and services that are consumer facing. So I think it had to happen. And part of it was out a necessity. We had these unprecedented spikes in and volume where capacity just couldn't keep up. And so you needed technology to really kind of help drive that. But yeah, I agree with that. I think you hit on something around this series of consumer financial events that happen in their lifetime. And so we think about the consumer experience in FinLocker as a series of on and off ramps. And today we happen to focus on mortgage as one of those off ramps, but with the data that is in a consumer's locker... And this is something that we've been talking about a lot is when a consumer is fully enrolled in the locker in FinLocker, they're essentially verified on five dimensions, identity, credit assets, because we see the data in their bank accounts. And then later this summer we will be allowing a consumer to link directly to their payroll. So add employment and income as those fourth and fifth dimensions of this verified borrower. And so we've kind of attacked mortgage first, mainly because a lot of us came out of mortgage. It's what we knew. But arguably, it's also the most complicated consumer financial transaction. And so now in a locker to be able to use that same data set and fire off auto lending, student lending, personal loans, credit cards. There's the whole wheel of the financial life to be served.

Joe: So you really are thinking about the whole financial life cycle. Even though you're not necessarily hammering away on other types of lending products today, the vision for the company is to be able to help enable all of those. Basically, if you think about a comprehensive financial life of a consumer, those are spaces that are all applicable here, right?

Brian: 100%. I talk to our team about, I want to be a verb. I want someone to say, let me share my locker with you in order to get this auto loan, credit card. And then maybe it's a QR code. Maybe it's some other shared item, that behind that is all of that verified data that a lender can ingest and it's already verified. They don't have to do anything else with it. It's verified data, it's direct source. But that's really where we want to be is we want to become a verb in that context.

Joe: Yeah. I think it's a great vision. I love where the direction you guys are going. So for lenders executives... We get a lot of executives that listen to the podcast. And for those that are listening, that maybe don't fully grasp kind of what we're talking about or put the pieces together. I just want to click down on one layer and simplify a little bit. So if I think about taking your platform and you deliver a white label app experience to a bank or lender and allow them to then go out to the marketplace and distribute both to their customers as well as potential customers.

Brian: Absolutely.

Joe: Is that how they should think about it?

Brian: Yeah.

Joe: And then why would a consumer put their stuff in a locker and why would they sign up?

Brian: Yeah, great question. That's the toughest question, right? And that's part of the struggle of being a B2B to C platform because I don't control the middle B. I think at the end of the day, there's clear... This is where COVID... Maybe the pandemic was our friend to some degree, cause it did advance the general comfort of people to transact digitally from a financial perspective, because for a while you had to, you didn't have a choice. If you couldn't take a picture of a check and deposit it, then you were out of the system. So, I think that the pandemic accelerated the acceptance of linking accounts and doing things digitally. I do still believe though that it's fundamentally up to our client and their brand and the trust that their brand has with either that prospect or customer to ultimately get them to download this app and use it. And this is why we kind of started in the first time home buyer space because there's a need. That segment has a need to get prepared and better understand the process. So because there's a need, there's potentially, and should be, a higher likelihood of engagement and to do some of the things that the app's going to ask them to do, like link to their credit and link to their financial accounts. And then one of the hooks that we've built around that first time home buyer experience is this concept of perpetual readiness. So because we're sitting on a rich set of consumer permission, direct source data, we can run analytics on an ongoing basis around that consumer's readiness across multiple dimensions, including credit, DTI, income, assets for down payment, et cetera, and use those attributes and progress, as engagement opportunities to pull them back in again, under that brand and logo of the lending client. The anchor today, up the funnel, is on that readiness as a need and addressing kind of the need area. And then on the other end of the continuum is, you hit on this, the current customers of a bank or a mortgage company, much of what's valuable to a consumer up the funnel remains valuable after they've got a mortgage. They still want to track their financials and understand their credit and track the value of their home, et cetera. So that's kind of the extension of our app is that it does continue to engage after the mortgage closing as well.

Joe: You had sent me link the other day. I wanted to get back in and check it out. And I was going through the onboarding and signup process again. And one thing I'm impressed with that you guys, I believe, did a really good job on is the way you have the consumer control the permission on their data. Can you talk a little bit about why that's so damn important right now? It's obvious, but I'd like to hear more.

Brian: Yeah. The backbone of our product is this concept of consumer permission, consumer control data. And it runs a little counter sometimes to our business model because my client is a lender and so they're the ones paying for the license, but the way we think about it is that concept of consumer permission, consumer control extends the trust to the brand who's providing the app, which is our client. And so we feel like with the consumer permission, consumer control aspect, consumers are more likely to engage fully with the app, which means they're going to link more of their information, which is going to bring more of the tools available to them from the app, which is going to hopefully pull them deeper down the funnel, ultimately to a place where they're compelled, from the app, to share that direct source data directly with the lender, in this case for a mortgage application, as an example.

Joe: Only once they're ready. So what you're really doing is you're starting from a place of, hey, let's have a high trust relationship, you're in control, we are here to add value along the path. And then being able to go back in. That makes total sense. Also some of the work you guys are doing around closing the home ownership gap, right? This is on a lot of people's minds, underserved communities, giving everybody that wants it the ability to build wealth through home ownership. Talk to me a little bit about how you guys are involved there, how some of the companies you work with can get some benefit there by partnering with you guys. Just any comments you have around that.

Brian: What I'll say first is, just to be super transparent, we didn't, we didn't set out to build this app for purposes to quote unquote, serve the underserved. So there's some elements that we have not fully enhanced for that segment as a targeted segment. But by and large, the financial tools available in the app, which include credit education, kind of DIY, do it yourself, credit improvement. We have some simulator tools, the budgeting, goal setting. Banks and lenders that are focused locally on serving segments of their market that are generally considered underserved, are looking for ways to engage those that segment differently. And, ideally they would love to engage them with products that get them into home ownership. But in a lot of cases, that segment needs a little more time, a little more handholding and some different tools to get them to a place of readiness. So we have several banks and mortgage companies who in addition to kind of the standard first time home buyer segment are using their version of FinLocker in their community as another way to engage that underserved segment, whether they're doing specific workshops in the community and providing the app as a free add- on to the workshop or partnering with non- profits in the market that are serving that consumer segment. We have a couple non- mortgage kind of lending clients who use our product as a on ramp towards home ownership. Both of these clients are what I'd call credit build companies, that are not lenders. They focus on helping consumers, specifically underserved, build credit through different mechanisms. And then they have a version of our product now that extends into that home ownership journey. And then they partner with lenders and match that lender with that consumer who's on that home ownership journey.

Joe: That's awesome. And I see it's a huge opportunity if you think about, number one, to do the right thing, which is, we definitely need to make progress as a country on the home ownership gap. But it's also great for business of you can help those people get into that. Doesn't matter if you're a bank that offers a full suite of products, or you're a lender that just does mortgage and maybe HELOCS, ultimately getting those customers to a point where they can achieve the American dream is really powerful. And you guys are a huge piece of that, as you think about how you're going to market and in working with these customers. So I really appreciate that context. So as you guys look forward to what's possible with FinLocker and the forward thinking organizations, some of the banks and lenders that I know of, I would constitute very much forward thinking, that partner with you, and won't mention any names for confidentiality, but as you think about what's possible, what are the things that most excite you in terms of things that you guys aim to tackle and potentially enable?

Brian: I think we've got a lot of work still to do in mortgage, so I'm not going to get on your show today and say, we're pivoting down this next great path. We're still squarely focused in real estate finance and supporting kind of that ecosystem. But when we can step back and sometimes think about 3, 4, 5 years down the road... Again, I go back to, we want to be a verb. We want to have consumers empowered with their own data to be in control and empowered with their own data, to use it to their advantage, versus in most cases or many cases or a lot of cases, however you want to word, it's used against the consumer. And so we think that those forward leaning lenders today, who are partnered with FinLocker, many of which partner with Total Expert as well, are of the mindset that they're looking to build tomorrow's business by engaging consumers years, sometimes, maybe even five years, before they're realistically ready to transact. We've got one customer who's doing an initiative to launch a campaign at recent college grads around early journey, financial fitness. There's not a mortgage to be had there anytime soon.

Joe: No, but play the long game. And I think the last point I want to make here, and I think it's a really powerful one, and you hit on it: So many consumers that sign up for these different tools, online credit monitoring, or shopping for your rates, or whatever it is, just to get information... So many of those services actually monetize the customer's data.

Brian: That's right.

Joe: And you guys don't. I just want to be clear on this. Your business modelists say no. So effectively what you're doing, if a lender is going to market with your platform in a white label version, they have the opportunity to then go, hey, this service is not going to steal your data, monetize your data. It's all about privacy. It's all about trust. There's no fancy sales thing happening on the back end. That's legitimately the angle, right?

Brian: Yeah, that's There's a wall for every one of our launches, if you will. Every client that we launch, the data in those lockers is solely the consumer's data extended to the lender to some degree. Never does it cross over. FinLocker doesn't do anything. We don't sell other ad space. We don't market any other products and services. We essentially built a piece of technology that our customers can then use for their business purposes. And our play here is not a customer acquisition play to then monetize that consumer down the road. We are truly a software as a service provider for the lending industry today. And, soon we'll touch into these other non- mortgage lending spaces.

Joe: Yeah, man. Super exciting what you guys are working on, Brian, and really appreciate the opportunity to sit down and chat with you as always, and look forward to seeing what's what's going to come from FinLocker this year and beyond.

Brian: Yeah. Just one thing to add. We've got a great partnership with Total Experts. So it's one thing to build great tools, digital tools, for consumers in an app, but the reality of it is most of us spend most of our time outside the app. And so, as we thought about how to best engage users in FinLocker, we did our own kind of analysis in roadmap. Let's build our own engagement strategy layer, if you will. And we ended up talking with your team two years ago and kind of stumbled across this art of the possible kind of conversation. Super excited. We launched about two months ago with the first set of Total Expert power journeys through FinLocker. And we don't consider this a Total Expert product, you're now part of our product. You are the engagement layer of our product. And it's super exciting to just kind of watch how that's going to evolve here going forward.

Joe: Well, thank you for the comments and obviously we both align on how important the communication and engagement with consumers is. And so we're thankful for the opportunity to be a part of it in a small way. So thank you, buddy. All right, man. Where can people reach out to you guys at? Obviously your website?

Brian: Yep. FinLocker. com. I'm Brian. View, I think you see my name on there, @ finlocker. com. I'm on LinkedIn. You probably see me at a conference or two as well.

Joe: All right. Well I'm sure I'll see you on the road soon, buddy. Thanks.

Brian: Thanks, Joe.

Joe: Thanks so much for joining us today. Be sure to subscribe wherever you get your podcasts.