Pulling Threads, Pushing Boundaries! The Core Switch Catalyst at Mascoma Bank

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Raphae Reznek -Mascoma Bank: If Apple had to shut their system down while

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I did an upgrade, customers are not going to be happy that they can't watch

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their movies or listen to iTunes or buy a computer, the same with Amazon.

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Their site does not shut down unless there's some catastrophe.

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You can always order and get your.

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You're saying in two to four hours or a day, but that's

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the way technology should be.

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We're talking about people's money.

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So financial services, we shouldn't have to shut down.

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So our goal was to be able to migrate a single account in real time.

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That's what we built with CoreSwitch.

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It's a platform that allows us to migrate an account from one system

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to the other and not impact the customer nor the rest of the team

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members in the bank for that matter.

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Tedd Huff - Fintech Confidential: welcome to Fintech Confidential, bringing

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you the people, tech, and companies that change how you pay and get paid.

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Welcome to Accrued the FinTech confidential series presented by Loan Pro.

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In this series, we're deconstructing the complexity of lending and exploring the

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compliance, optimization, modernization, and personalization through insightful

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conversations with the industry's best.

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I'm Tedd Huff and with my co-host Colton Pond.

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We're guiding you through the intricate lending world.

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Whether you're deep into LendTech or just intrigued by how technology is reshaping

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lending, you're in the right place.

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Colton, welcome back.

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Colton Pond - LoanPro: Thanks, Tedd.

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It's good to see you.

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I, I've got a new background here today, but same background for you as

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always, but it's good to see you, man.

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Tedd Huff - Fintech Confidential: Today we spotlight Mascoma Bank and

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they're a standout in the banking sector with its mutual ownership model

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That places community and environmental sustainability at

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the forefront of its mission.

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This approach diverges sharply from traditional banking emphasizing the

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importance of reinvesting profits for community betterment, Mascoma bank's,

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dedication to modernization, and its B Corp certification highlighted

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its commitment to using technology as a force for good enhancing

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customer experiences and fostering meaningful community engagement.

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We're joined by Raphael Reznek who leads the charge in on technological innovation,

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and Sam Pause, the Chief Innovation and Brand Officer, whose extensive

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career at Mascoma has been pivotal in driving innovation and brand advocacy.

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Together.

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They represent the innovative spirit of Mascoma bank, showcasing how it's

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redefining the essence of community banking in today's digital era.

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Let's explore their insights and the impact of MU's Bank.

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Mascoma

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Bank's unique approach.

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And Colton, why don't you go ahead and share your personal experience

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with this

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Colton Pond - LoanPro: team.

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I know these, these two really well, actually, I've been most looking

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forward to this episode because of this, uh, and, and love and appreciate

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both of them for different reasons.

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Rafael, one of the smartest people I've ever met, uh, especially

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in banking, thinking about how to push banking forward.

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Um, actually grew up in Alaska, so shout out to all our

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folks up in Alaska watching.

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And then Sam, uh, one of the nicest and most brilliant people that I've ever

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met have a huge respect for Sam because she's been at Mascoma Sam 35 years,

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32 years, uh, which is incredible.

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Uh, I'm sorry.

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Uh, fun fact is, uh, Sam's probably the biggest Disney fan

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you've ever met in your life.

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Uh, if you get to know her sometimes she'll tell you about all her

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trips to Disney World and, and running races there, and all of

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the stuff that she does at Disney.

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Tedd Huff - Fintech Confidential: Oh, I've, I've had the opportunity

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to, to go to the, uh, the Food and Wine Festival race.

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Uh, we did a couple others and we did a handful of the, the virtual

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races during, during covid.

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So we've got a string of medals across the wall.

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And my, my all time favorite one is when they did, um, Yzma and Kronk.

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For, for Wooten Food and Wine Festival.

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And that is by far my beloved.

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I, that's the favorite shirt that I have from that race.

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And we had such a great time.

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So I'm glad that I'm in good company, uh, with you on that one, Sam.

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Colton Pond - LoanPro: are and, and

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Sam Pause - Mascoma Bank: then Tedd Next Race, we'll meet and do it together.

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Colton Pond - LoanPro: then you have Raphael and his family on the other

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side of the country up in Alaska wondering what they do with all the cold.

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So.

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Tedd Huff - Fintech Confidential: Well, Colton, I appreciate you giving

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this personal introduction, but I wanna dive into Mascoma Bank as it

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truly stands as a beacon in the world of community banking, and they've

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been illuminating the path where technology and human values converge.

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In today's episode of Accrued, we're cracking open the books on how MoCo Bank

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uses its unique position to redefine what it means to be a bank in the

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LendTech era, we're set to uncover their commitment to community, combined with a

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forward thinking approach to technology.

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This sets them apart in a crowded field from their B Corp certification

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to their innovative strategies.

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In lending, mu Scoma Bank is crafting a new narrative in banking.

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Colton, let's get started and learn what drives Mascoma Bank's

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success in banking and LendTech

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Colton Pond - LoanPro: Let's do it.

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So, uh, Rafael, Sam, we wanna start off on a little bit more

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on your journey into banking.

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You both have very unique different journeys to banking for sure.

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Uh, and what I love about Mascoma is you two is the dynamic duo.

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Combine it together as a superpower, which is awesome.

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So.

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Rafael, give us some insights on your journey into banking and also how you

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apply insights from outside of banking on your day-to-Day life to challenge

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assumptions that are in banking today.

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Rapheal Reznek -Mascoma Bank: My experience as uh, a business

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owner, uh, an entrepreneur and, uh, in the tech industry, uh,

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certainly is applicable to banking.

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Mascoma is my first, uh, role inside a bank, working for a bank.

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Um, prior to that, it's always been in the tech industry where solutioning

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at a rapid pace was definitely top of the list and team building.

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And I think, uh, that has really helped at Mascoma, uh, team building and asking why,

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why are we doing something repeatedly?

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And that is definitely, um, uh, achieved good results.

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Colton Pond - LoanPro: I love it.

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If we go back to our first episode on that note, Rafael, uh, we had Rhett

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the, uh, co-founder, CEO of Loan Pro on, and he often says, uh, building

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finance the way it ought to be.

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I feel like you are like the pinnacle of doing so and challenging and say, Hey.

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Why is this?

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And if the answer is oh, it's just 'cause it's the way that we've always done it.

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Probably not a good answer.

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Probably time to rethink and how to drive efficiency.

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Sam, on, on your end, I won't date you 32 years, uh, all 32 years

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of the bank, which is awesome.

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And I, I respect 'cause like the tremendous amount of loyalty you

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have, but all in different roles.

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What's really cool about that is you see it from a different lens

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on, I've sat in all these seats.

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So how do you take that from all these different seats within banking

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and drive innovation as your title says, innovation forward for the bank.

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Sam Pause - Mascoma Bank: That has been probably the best part of my

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career is the fact that I have had a variety of seats throughout the bank.

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I've been in lending, I've been in operations, I've

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worked on the retail side.

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been in marketing for quite a while, and it's given me a really good

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lens on how the bank works and how we can best impact our customers.

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And from that lens, it also gave me a good,

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view into the frustrations.

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That I have had as a banker, um, because of limitations that we may have with

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systems or whatever, uh, it may be.

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So I think my journey and Rafael's are very different, but they have

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come together at a really good time.

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And you said it before, it's kind of our superpower is I can think of this,

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I can look at what we're doing and, and how we should be innovative as a

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banker and he can look at it from a technology side and we can come together

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and really get a good understanding of, of a direction that we need to go in.

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Tedd Huff - Fintech Confidential: Sam, you just hit on something that you know

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a lot of organizations don't really have is that that perspective from an inside

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banker that is open to looking from an outside perspective, from a technologist,

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how do you guys reap the most benefits out of that relationship?

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Sam Pause - Mascoma Bank: It can go both ways.

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So there's a lot of bankers that don't wanna look from the outside

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and are very set in their ways.

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There's a lot of technologists that don't necessarily wanna look at how

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banks do their business and, and think about how to get them more innovative.

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I've been fortunate that I've been in a company that has been open to how we

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should be looking from the outside in.

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How is there a different perspective?

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And Rafael has really brought that to the table.

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And I give Rafael credit.

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I think the way that we can take the most advantage of it is that

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he is very good at listening to what it is we're trying to achieve.

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Rather than just saying, you're doing it wrong and here's what you should do.

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He's really focused on what is it that you're trying to achieve

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from a banking standpoint?

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And then let's think about technology and tie it together.

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Tedd Huff - Fintech Confidential: A couple episodes ago.

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You know, we had John Maxfield on, and we're talking about, you

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know, the importance of looking at the banking history and not trying

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to jump too far into the FinTech and saying, everything's broken.

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Everything's broken.

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We can fix it with technology.

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Raphael, how are you approaching coming in to a banking organization

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from a technology perspective?

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What insights could you give us on, on what you've seen and, and how you've

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been able to move forward successfully?

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Rapheal Reznek -Mascoma Bank: I think iterating has been very beneficial for me.

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Scoma Bank, being able to break the, uh, issue that we're, that we have down into,

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components and not trying to solve all of them at once.

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Tedd Huff - Fintech Confidential: Mm-Hmm.

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Rapheal Reznek -Mascoma Bank: Trying to iterate, you know, towards our

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destination, uh, a piece at a time so that we can, we can measure

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and determine if that was the right thing to do and then adjust.

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The partnership I have with Sam is.

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Really super beneficial because Sam has, you know, 32 years of

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banking experience and I had none.

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So she can basically say, you know, if I come up with an idea, uh, or

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a solution, she can say, you know, that's interesting, or No, that's,

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that's not really a good idea.

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We can't do it that way.

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So we, we have that ability to, uh, problem solve with, uh, a lot of

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banking subject matter expertise and the ability to iterate, which we've,

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you know, built a team that can do that, which is also really important.

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Tedd Huff - Fintech Confidential: I am looking forward to diving into how you

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guys have gotten to that point to be able to do the iteration with the team and,

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and the things that you guys have built.

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Colton Pond - LoanPro: one of my favorite parts on that note

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is you all transforming, uh,

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Rafael, Sam, uh, two and a half, $3 billion bank.

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Yeah.

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Sam Pause - Mascoma Bank: It's just under three.

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Colton Pond - LoanPro: Just under three, $3 billion bank in, in New Hampshire.

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in a meaningful way.

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But before we jump into some of those insights, um, one of the

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things that Tedd brought up is the mission and vision of MAs

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and Sam, I know you're super passionate about this and you do a lot of work,

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and you did a lot of work in helping Mascoma become a B Corp and, and all

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of the things you do around community.

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Help us understand more insights into why you made that decision,

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the impact that it's had from Esco Bank, if you'd recommend.

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I know we've been a lot of, in a lot of settings where.

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Uh, you've recommended to other financial institutions, Hey, you should

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look at B Corp CER certification.

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Help us understand more about that.

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Sam Pause - Mascoma Bank: This bank has been in existence since

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1899 and it's a mutual bank.

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And being a mutual bank, we don't have stockholders, so it really

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allows us to really focus on what's best for our customers and our

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communities over the long term.

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having that type of structure has really allowed the culture of this bank to

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really flourish on what is it we're doing?

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How are we making the best impact we can?

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Um, several years ago, one of the things that we looked about at was should

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we become a certified B corporation?

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And what a certified B corporation allowed us to do.

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for some aspects taking advantage of all the positive things that we were

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already doing in our communities, but it brought a much stronger focus

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to us on let's not just do a lot of really nice things or good things.

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What it does is it holds us accountable.

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So every three years we have to recertify and there's a pretty, um, robust

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examination process you go through.

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And I think that's probably one of the best reasons for becoming a certified B

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corporation because it really allows you to really think about how you're making

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an impact, but then you have to prove it.

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You can't just say a lot of nice things, you actually have to do it.

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And being a mutual bank and being really focused on how we make an impact.

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Tedd Huff - Fintech Confidential: I honestly, I hadn't heard of a B

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Corp until Colton shared it with me.

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I'm familiar with ESG and all that other front stuff, but for some reason B Corp

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just didn't pop into my head.

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So I went to B Lab and I started looking, and I, the, I, I

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probably didn't get all of them,

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I could only find 10 banks globally that have gone through that process.

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That puts you guys in a very unique position and a very unique category.

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Sam Pause - Mascoma Bank: There are other financial institutions,

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but as a traditional bank, I think actually, I think it's 12 now.

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There's not a lot.

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Um, and it is something that I think a lot of banks would really connect to, and

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it's a matter of them taking the time.

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there's not a lot of traditional banks.

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Our goal is to get more on board, and I know in New England,

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we're in northern New England.

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There are, there have been others that have followed suit.

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Um, there's, there's a couple in Maine, there's a couple in Vermont.

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So it's, it's been good to see that that charge spread a little

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bit throughout our industry.

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Tedd Huff - Fintech Confidential: It's a very noble charge and I congratulate you

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on making that happen.

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'cause I know it's not easy.

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So I want to dive into,

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what you're billing at Miss Cooma Bank and how you begun.

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Began, I should say, this journey to completely modernize the bank.

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And if you would just like kind of discuss with us how, how it started,

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what are the things that you're doing to, to really move it forward and keep

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in alignment with that, that, B Corp.

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Rapheal Reznek -Mascoma Bank: Sam asked a question, that's really where it started.

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And the question was, it was a very innocuous question.

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Can we do this thing for our customers with our debit cards?

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And I was like, I, I don't know.

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It sounds intriguing.

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Um, let me start looking at it.

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And I,

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I.

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Started pulling on a thread and I didn't realize that thread was attached

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Colton Pond - LoanPro: Raphael.

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Rapheal Reznek -Mascoma Bank: Yes.

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Tedd Huff - Fintech Confidential: long.

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Rapheal Reznek -Mascoma Bank: Still pulling on it.

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So six years later.

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We started pulling on this thread and it really led to this realization that we

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had a, a monolithic system that you you can't change a small component to it.

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You can, you can bolt things onto it, sort of like Frankenstein, but from a customer

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experience standpoint, there are stops and starts and there's a lot of friction.

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It's not a good customer

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experience, it's not a good team member experience, and it's not great to the, for

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the bank's bottom line either, to be fair.

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So that's really where we started

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what we landed on is we wanted to be able to have that

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choice regardless of the tech.

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We wanted to be able to make a decision that could positively

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impact our customers, our team members, and our communities.

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And that's really what Sam's question started six and a half years ago,

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Tedd Huff - Fintech Confidential: you grab onto that string and

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you're like, I know I shouldn't.

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Pull this very hard, but once I start pulling this string, there's no stopping.

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Rapheal Reznek -Mascoma Bank: correct?

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Yes.

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Tedd Huff - Fintech Confidential: what was the thing that, that, you

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know, what was that moment when, when the organization desired or said

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we're we want to pull the string,

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How did you evaluate whether you were gonna buy it, build

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it, or partner with somebody?

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Rapheal Reznek -Mascoma Bank: We have finite resources here at Mascoma,

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so we can't build everything.

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And what we landed on is

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we would only build what doesn't exist that we cannot buy.

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and of course we didn't know what we could, not, could or

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could not buy in the beginning.

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We had to figure all of that out and at the end of the day, what we figured

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out is that we couldn't buy a system that allowed us to iteratively change

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our customer and team member experience over our own determined amount of time.

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Any change that occurs is a, a boil the ocean scenario.

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You leave on a Friday with one system and you come in on a Monday

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with a completely different system

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that's been migrated over the weekend after 18 months of really hard work

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Colton Pond - LoanPro: Yeah.

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Rapheal Reznek -Mascoma Bank: and hope that it goes well.

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And that is a,

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Tedd Huff - Fintech Confidential: The fingers right.

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Rapheal Reznek -Mascoma Bank: cross the fingers and, and

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we've seen over the years some.

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Pretty bad outcomes.

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So the risk is high,

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Colton Pond - LoanPro: yes.

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Rapheal Reznek -Mascoma Bank: and we didn't want to take that risk.

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And there's there's very little to learn when you boil the ocean.

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So you come in on a Monday and it's, it's really, uh, a, a crisis because

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you're putting out fires and you're not, actually, what you're learning

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is that you shouldn't have done that.

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So we, we really, um, looked at, platforms that would put the decision

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making capability back into our hands.

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And that's how we landed on a few of the platforms we did.

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And we also found out that, that some of the things we

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wanted to do were not available.

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So that's what we decided to build is, is a platform that would

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allow us to iterate a migration.

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And give us access to data in real time.

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So in flight, not, not right after, not near real time, but

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actually as it's occurring.

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So those, that's the platform that we build.

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Colton Pond - LoanPro: So, so Rafael,

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give the audience a listeners some insight into the magnitude of change

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that y'all have gone through at Mascoma and plan to go through, uh,

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are there any vendors in your tech stack.

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When you came on that, um, have not been replaced or

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likely will not be evaluated in the future, right?

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Rapheal Reznek -Mascoma Bank: from a magnitude standpoint, we are

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replacing everything from the ground up, including the core, our teller

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platform, our digital banking platform, all of our and A-M-L-B-S-A platforms.

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we're replacing everything.

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and not all at once.

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We're able to do it a, a component at a time.

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So from a magnitude standpoint, it is, it is tremendous.

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It's taken us six years,

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from the idea to actual implementation, and we are, we are live with

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a portion of the system now.

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Colton Pond - LoanPro: One of the biggest questions as I interact

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with bank and credit union leaders is say I'm in a new role.

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I wanna make a difference.

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I wanna make a change.

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However, I've got other peers of mine who are stuck in their ways, or maybe

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I've got a board who's stuck in their ways, or, or I've got a team or a

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department who like doesn't want the change and wants to be more risk adverse.

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How did you get, uh, the broader team aligned with this modernization vision?

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And then how do you get the board members rest of the executive team?

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What did that alignment process look like?

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Sam Pause - Mascoma Bank: We're a mutual bank, traditional bank, and we have

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the same challenges as a lot of other banks, and it's a lot of traditional

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thinking and a way of doing business.

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The thing that I think really helped us.

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As a company from the board on down to understand that we needed to do

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something different was really what we're experiencing in our day-to-Day lives

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with technology, and some of this relates back to being a certified B corporation.

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We interact very differently in our expectations are very different today than

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they were five years ago, 10 years ago.

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And as a bank, if we truly wanna make an impact on our customers

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and our communities, where can we make the biggest impact?

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It's on their financial wellbeing and their fin financial health.

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The systems and the platforms that we had been using do not

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allow us to truly understand.

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Our customers do not allow us to pull data together.

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They don't allow us to be proactive and support them in the

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moment when they have a problem.

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and we need to change that because as a consumer, we're starting to get used to.

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That's how we interact with all businesses.

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If you think of.

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Tedd Huff - Fintech Confidential: Heck, I get Amazon within two hours at my house,

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Sam Pause - Mascoma Bank: right?

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So, A, and they're also, Amazon's also telling you, Hey, by the way,

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your order, do you wanna reorder that?

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It's time to reorder and it might be a good time.

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You might be outta coffee right now.

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That's what we're getting accustomed to and

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we should

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Tedd Huff - Fintech Confidential: always dog food over here.

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Sam Pause - Mascoma Bank: Exactly.

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we should doing the exact same thing with financial services.

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And we are so far away from that, the financial, in the services industry.

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if you think about how did we get our folks on board, our and the board of

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directors and our senior team, it's really with that true understanding of we are

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gonna be left behind here very quickly.

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If we don't start doing business in a different way, and we've gotta be so much

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more proactive than we've ever been able to before, and I think being a certified

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B corporation helped to drive that because we truly wanna make an impact.

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And how can we best do it?

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We're a bank.

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It's all about finances.

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Tedd Huff - Fintech Confidential: I'm seeing more often, especially when you

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start to get down to the community bank level, whereas you don't get that feeling

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when you're working with one of the top five, right, one of the top five.

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They're like, yeah, it is what it is.

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Um, we'll get to it eventually.

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And I think that's really where the community banks, and especially

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banks like yourself, that are really going into, how do I be proactive?

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How do I manage this?

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How do I give that level of customer service that is beyond is,

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is why we're seeing such a shift

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away from the big banks, especially for your small businesses and

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your individual consumers.

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Colton Pond - LoanPro: especially when you can marry that as you all at at mascoma

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have with best in class technology,

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you can marry the community element with best in class technology.

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You got a superpower there.

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There's something

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really that community banks can leverage and take advantage of.

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Tedd Huff - Fintech Confidential: So in our last episode, we had Brent Beardall

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on, uh, the CEO and President of WaFd, and we spent a lot of time talking about

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how to decide where the focus goes,

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how to do prioritization.

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We tried to touch on the, how to be efficient about it, but

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as you well know, the priorities change, importance levels change.

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help us all understand really what you've done as far as the team and

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unique structure and how you're influencing that prioritization of the

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technology within the bank's four walls.

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Rapheal Reznek -Mascoma Bank: Wow.

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That is a, that is really hitting the nail on the head right there to that.

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That's a tough one.

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And it, it changes daily, right?

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Because of the things you, you've mentioned, we've got outside

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influences that are driving some of those decisions, internal influences.

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Uh, contracts, uh, changes in technology, changes in customer preference.

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One of the first things we did is we worked on our team refactoring

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the team, bringing in some new team members, taking people from different

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positions in the bank with a lot of subject matter expertise and creating

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a team that, could use, uh, situational awareness and, uh, the ability to,

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dig into the information so that they could make an informed decision, and then

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being able to pivot when they needed to.

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How we're trying to prioritize is taking all of the information we have

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and trying to understand how does it impact us if we do X or Y or Z,

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in a time box effort, in the next two weeks we want to do these

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things and do these things, meet the criteria that we've laid out.

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So that's, that's one of the ways we try and prioritize.

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But it is a very difficult task and

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there

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is no like perfect thing.

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Colton Pond - LoanPro: yeah, I, I love

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Tedd Huff - Fintech Confidential: it's never easy.

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Colton Pond - LoanPro: It's never easy and it's difficult.

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And what I love about what you said, Rafael, is it changes on a daily basis.

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And I think that feedback loop, that iterative innovation and also the ability

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that Mascoma has been able to do, and

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you've developed technology called, uh, core Switch, but it really unlocks the

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handcuffs, provides a path to freedom and allows, uh, a real sustainable

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path to make a core conversion.

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Um, help us understand that, that thought process, that development process,

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um, how you went through that journey and how it's worked for Mascoma Bank.

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Rapheal Reznek -Mascoma Bank: coming into the, the banking industry.

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From a, from a tech background looking at, how systems are implemented in the, age of

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the technology that we were dealing with.

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it didn't make sense.

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It didn't make sense that your migration, you know, took 18 months to plan out and

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test and, cleanse the data, et cetera.

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And then you just did it over a weekend and you hoped, I mean,

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obviously you've done a lot of work and so it's a little more than

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hope, but it's not a good strategy.

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Right.

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So

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it just, it

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didn't

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Tedd Huff, Fintech Confidential - Host (Detached audio): a bit of prayer in there too.

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Rapheal Reznek -Mascoma Bank: Yeah, exactly.

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Uh, but, but there's, you know, it, and it also impacts your customers.

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So for a period of time, you have to shut the system down.

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If Apple had to shut their system down while I did an upgrade, customers are

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not gonna be happy that they can't watch their movies or listen to iTunes or.

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You know, buy a computer.

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The same with Amazon.

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Amazon does not, their site does not shut down unless there's some catastrophe.

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But, uh, you can always order and get your, your thing in

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two to four hours or a day.

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but that's the way technology should be.

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That's the way, you know, we're talking about people's money.

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So financial services, we, we shouldn't have to shut down.

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So our goal was to be able to migrate a single account in real time.

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That was our goal.

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We said if we can build the technology to migrate an account from system A

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to system B while the customer's in their digital banking platform, and

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they're not impacted at all, and the system continues to operate and it

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migrates successfully, then we will,

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so that's what we built with Core Switch.

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The platform that allows us to migrate an account from one system to the other.

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and Not impact the customer nor the rest of the team members

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in the bank for that matter.

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So we, we've built out as part of Core Switch a real, real-time repository

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for that data so that we have control over where that data goes and we

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can route it appropriately to the proper core or transaction engine.

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Uh, we can have multiple cores running in parallel.

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And all of the rest of the systems in our tech stack believe that

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they're deal dealing with one core.

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We've essentially, uh, disintermediated or abstracted the, a portion of the tech

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stack away from the cores so that we can use the cores for what they're good

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for and use best in breed technology in other areas in the institution.

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Tedd Huff - Fintech Confidential: Sam, all I can think of is, you know, how is this

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decision to create course switch and to be able to do these changes so qu fast and

Speaker: 00:28:49

quickly, and do this in inter iterative process, how is that impacting your, your

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customers, the, the, the bank customers as, as they're working through this?

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What, what does that do for, for their perception of the bank?

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Sam Pause - Mascoma Bank: Overall, it, it, I don't think there, it

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changes their perception of the bank at all, except that we are providing

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them with better information at their fingertips when they need it.

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And we can help, um, I guess and enhance our relationship with them.

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I think from a customer perspective, that's what they're going to see.

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It doesn't matter to our customers, oh, we've got this cool core switch

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thing and we're thinking technology Customers don't care anything about that.

Speaker: 00:29:37

wanna make sure that their relationship with their bank is

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providing them with what they need.

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So if you look at it from a customer standpoint, that's what they're gonna

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see without even really understanding that, that it's happening to them.

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Some aspect, they do have to go through some change.

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As with any migration, there's gonna be some change for the customer experience.

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That's always difficult for customers.

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Some customers will embrace it, some don't.

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So there's those little pain points along the way, but throughout the entire

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journey, the fact that we can better serve their needs in a way that they don't

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even understand that's even happening behind, behind the scenes is gonna be

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where the, where the difference is.

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Colton Pond - LoanPro: One, one of my big, uh, favorite aspects

Speaker: 00:30:15

about Mascoma and what you all are doing is focus on the customer.

Speaker: 00:30:18

Rafael, Sam as you evaluated what Mascoma does on the lending side today.

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Um, and a lot of the modernization y'all focused on or have and will focus

Speaker: 00:30:29

on has been improving aspects there.

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help us understand the biggest pain points that, that you feel like are

Speaker: 00:30:35

experienced today with lending in lending and can be potentially solvable

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and addressed by technology, especially for community banks of Mascoma assets.

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Sam Pause - Mascoma Bank: Colton, the complexity.

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Lending itself is complex, but the platforms that we

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have make it even more complex

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so I think the biggest pain point is just how super complex it is and

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we just, as a banker, we just can't, we, we know it runs and that's,

Speaker: 00:31:02

that's the best we can get with it.

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Rapheal Reznek -Mascoma Bank: And the, the rigidity of the, the platforms, right?

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They're not, they're not mutable.

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You can't really change them or do plug and play.

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And that's, that was really important for us.

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Uh, the ability to have a platform that gave, again, gave us choice and

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allowed us to implement iteratively.

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Our Legacy loan platform handled all of our loans and, and loan servicing.

Speaker: 00:31:34

in its fashion, in the fashion that that vendor chose.

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And, you know, a platform like Loan Pro gives that choice back to us as

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an institution so we can implement it.

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How we best see it serving the customer.

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Giving us the choice back that we didn't have before.

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The ability to make a decision whether to do something or not to do it.

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Colton Pond - LoanPro: and once again, to your earlier point, you made the change.

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'cause we want the power ourselves.

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We want to take control ourselves to be able to tailor and customize and

Speaker: 00:32:05

personalize things for your audience.

Speaker: 00:32:07

Rapheal Reznek -Mascoma Bank: If you were, if able to communicate with your customer

Speaker: 00:32:12

as a transaction is occurring at a point of sale where they're buying something

Speaker: 00:32:17

of, you know, relative significance and you're able to offer them some, you know,

Speaker: 00:32:22

a service, like let's say they have,

Speaker: 00:32:25

in their bill payment system, they're paying a bill in two days and they're

Speaker: 00:32:29

about to spend enough money so that it won't happen, that bill pay won't happen

Speaker: 00:32:33

because they won't have enough money.

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You can, you can help them.

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You can say, here are three ways that you can do this and still

Speaker: 00:32:41

make that bill payment in two days.

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We are able to communicate, in flight with the customer as

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the transaction's occurring.

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There are, uh, fis and providers that are able to communicate with the

Speaker: 00:32:54

customer, uh, from a fraud standpoint when you're doing a transaction.

Speaker: 00:32:58

But they don't have all that data.

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They don't have all of the data around when the, uh, around the customer's

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cash flow around when they're, they are paying their bills and we do so we

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can help them in a way that, uh, other institutions and issuers cannot help them.

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Tedd Huff - Fintech Confidential: A lot of financial institutions do not have the

Speaker: 00:33:21

intestinal fortitude to move forward with building their own technology platform.

Speaker: 00:33:28

But one of the things that, that I've heard you say is that this has

Speaker: 00:33:32

opened up new opportunities for you to enhance all of your services.

Speaker: 00:33:37

And of course I wanna talk more about lending, but what has it done to help you?

Speaker: 00:33:42

On the

Speaker: 00:33:43

data analysis and customer service customizations.

Speaker: 00:33:48

And I really love the fact that you pointed out that you are giving positive

Speaker: 00:33:53

notifications, just not the negative ones,

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Rapheal Reznek -Mascoma Bank: One of the things that we were able to build out

Speaker: 00:33:58

notifications for our customers through, through the realtime transaction platform,

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through Salesforce Marketing Cloud.

Speaker: 00:34:05

So now Sam's team

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is responsible and in control of the notifications going to our customers

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and is able to see them and analyze what's happening as it's occurring.

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That's just one small piece of what we're doing.

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Tedd Huff - Fintech Confidential: Sam, I mean, I'm, I'm listening to, to Raphael

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and all I can think of is how this is improving not only the operational

Speaker: 00:34:30

efficiency for all the people within the bank, but also the customer experience.

Speaker: 00:34:36

How is this helping you maintain alignment with that B Corp certification?

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Sam Pause - Mascoma Bank: It goes back to supporting our customers in

Speaker: 00:34:43

the best way possible and having the ability to, in the moment, reach out

Speaker: 00:34:49

to our customers when there is activity happening where we can best support them

Speaker: 00:34:54

with, Hey, it's, you're not, not gonna be able to make that bill payment that

Speaker: 00:34:58

you have scheduled two days from now.

Speaker: 00:34:59

So here's some options for you.

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Or, Hey, we can see that you're getting notified.

Speaker: 00:35:04

On a regular basis about a low balance amount, how can

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we support you through that?

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Here's some other options that we can help you with.

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So it's really about impacting our customer in the best way possible to

Speaker: 00:35:15

help them with their financial wellness.

Speaker: 00:35:17

And you tie that back to B Corp are really about what is the impact on your making

Speaker: 00:35:22

your customers and your communities.

Speaker: 00:35:24

This is the best way we can do that.

Speaker: 00:35:25

Colton Pond - LoanPro: So along those lines, when we talk about metrics

Speaker: 00:35:28

and success, you all, uh, Rafael, Samantha have been six years on this

Speaker: 00:35:32

journey and six years and still going,

Speaker: 00:35:35

what are the metrics that you are evaluating that will determine success

Speaker: 00:35:39

and what will success actually look like?

Speaker: 00:35:41

Rapheal Reznek -Mascoma Bank: do we have, uh, some say in our technology destiny,

Speaker: 00:35:48

can we, can we, uh, create new products?

Speaker: 00:35:51

Can we differentiate ourselves through products and customer experience?

Speaker: 00:35:57

Can we automate all of these manual and semi-manual processes in the bank?

Speaker: 00:36:06

Can we,

Speaker: 00:36:06

Implement, first contact resolution.

Speaker: 00:36:09

Because our systems are automated, can we bring forward the capability so

Speaker: 00:36:13

the, the person who's working with the customer can solve the problem 95% of

Speaker: 00:36:19

the time instead of transferring them?

Speaker: 00:36:20

Are we able to reduce our cost and provide a better product?

Speaker: 00:36:25

That's also one of the metrics, but more importantly, it's the customer

Speaker: 00:36:29

experience and the team member experience.

Speaker: 00:36:32

Are we providing a better service?

Speaker: 00:36:34

Can we provide a better service?

Speaker: 00:36:36

Colton Pond - LoanPro: What I love in there is, is themes around, we have

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things on this, uh, series around optimization and personalization.

Speaker: 00:36:43

Those are two key components of what you talked about, Raphael, on how do we

Speaker: 00:36:47

optimize, how do we drive efficiency, how do we automate, but how do we

Speaker: 00:36:50

differentiate, how do we personalize?

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Every community bank that's of your size is thinking about that.

Speaker: 00:36:55

How do I differentiate relative to chase B of a, um, the big guys, but

Speaker: 00:37:00

also other community banks that are coming in or super regional banks.

Speaker: 00:37:03

Sam Pause - Mascoma Bank: One more that, that Rafael didn't, didn't

Speaker: 00:37:05

mention is really the ability to pull data from various systems into

Speaker: 00:37:10

one holistic view of our customer to truly understand our customer.

Speaker: 00:37:12

Rapheal Reznek -Mascoma Bank: That's a good point, Sam.

Speaker: 00:37:14

That is, that is definitely.

Speaker: 00:37:17

Implicit in what we're doing is, is creating a, a single pane of glass

Speaker: 00:37:22

where all of our phone conversations, we have a system that actually

Speaker: 00:37:29

turns speech into text, so, and then attaches that transcription to the

Speaker: 00:37:34

customer record all of our emails,

Speaker: 00:37:36

all of the customers financial transactions, all in one place that

Speaker: 00:37:42

the person, the team member that's working with the customer can see

Speaker: 00:37:46

and they don't have to go to separate systems to see that information.

Speaker: 00:37:49

And then from a reporting and analytics standpoint, Sam is going to be, Sam

Speaker: 00:37:54

is gonna have access to not just a piece of data or a type of data.

Speaker: 00:38:00

She'll have access to all of the data about a customer.

Speaker: 00:38:04

Colton Pond - LoanPro: So, you're

Speaker: 00:38:04

telling me that when I call in and if I have a mortgage and a personal loan,

Speaker: 00:38:07

you'll be able to help me and actually see it in one system, which is awesome.

Speaker: 00:38:11

Those types of things, those little things matter so much for the customer

Speaker: 00:38:14

experience and driving customer delight.

Speaker: 00:38:18

Rapheal Reznek -Mascoma Bank: Absolutely.

Speaker: 00:38:19

Tedd Huff - Fintech Confidential: By bringing all that data together.

Speaker: 00:38:23

That opens up a whole different can of worms when it comes to compliance

Speaker: 00:38:29

and risk and data integrity.

Speaker: 00:38:32

How are you guys balancing that while you're driving this fast innovation?

Speaker: 00:38:39

Rapheal Reznek -Mascoma Bank: that's a really

Speaker: 00:38:40

Raphae Reznek -Mascoma Bank: good point, Tedd.

Speaker: 00:38:41

Um, there

Speaker: 00:38:42

Rapheal Reznek -Mascoma Bank: are, you know, we have technical means of.

Speaker: 00:38:46

of.

Speaker: 00:38:47

handling some of that and that, and that is that we, you know, our, our systems,

Speaker: 00:38:53

uh, our, our core, our new core system does not store any customer data at all.

Speaker: 00:38:59

So it is, you don't have financial transaction data and customer

Speaker: 00:39:03

data in a single repository.

Speaker: 00:39:05

There are actual multiple repositories, and this is all cloud-based.

Speaker: 00:39:09

So we have multiple repositories that there's, there are

Speaker: 00:39:12

separate, uh, encryption keys for each of those repositories.

Speaker: 00:39:16

They don't share an encryption key.

Speaker: 00:39:18

Uh, and so getting access to one doesn't mean you have access to another.

Speaker: 00:39:24

So from a technology standpoint, we're able to secure the data.

Speaker: 00:39:28

It's encrypted at rust and in transit.

Speaker: 00:39:31

Uh, from A-A-P-C-I standpoint, we don't pass the primary account number around.

Speaker: 00:39:39

We tokenize that.

Speaker: 00:39:41

So from a PCI standpoint, we're not moving that data, uh, in,

Speaker: 00:39:46

in any type of visible fashion.

Speaker: 00:39:49

And then from a a compliance and risk standpoint, we, we bring our risk

Speaker: 00:39:55

and compliance team in early into our efforts and early for one person

Speaker: 00:40:01

is, is not early for another person.

Speaker: 00:40:03

So this is always a practice, right?

Speaker: 00:40:06

You know, when to bring someone or some department into an effort.

Speaker: 00:40:10

And, and what we've learned over those six years is that you bring them in right at

Speaker: 00:40:17

the beginning and you let them make the decision whether that's the right time.

Speaker: 00:40:22

And that's from a team member standpoint or a people standpoint that we, we have

Speaker: 00:40:26

found that that works best is let let that department, um, make that decision.

Speaker: 00:40:32

Tedd Huff - Fintech Confidential: Sam, I'd love to hear your perspective on

Speaker: 00:40:34

Sam Pause - Mascoma Bank: Yeah, I just want, I just.

Speaker: 00:40:35

I wanna add onto this because at the very beginning, Colton, you, you made

Speaker: 00:40:39

a comment about kind of Rafael and my working together and kind of that

Speaker: 00:40:44

was the, the secret special sauce.

Speaker: 00:40:47

It's really the entire team and what Rafael is pointing out here is

Speaker: 00:40:51

we, we decided this early on, and you're, and he's absolutely right.

Speaker: 00:40:54

It's a practice.

Speaker: 00:40:55

We're always trying to tweak it, but the teams that we have

Speaker: 00:40:58

made up that are working on this project is there's representation

Speaker: 00:41:02

from everyone around the bank.

Speaker: 00:41:03

It's not just technology, taking some information from the bankers, putting

Speaker: 00:41:07

something together and delivering it.

Speaker: 00:41:09

We have bankers embedded in these teams and risk is embedded

Speaker: 00:41:12

in the team and compliance.

Speaker: 00:41:14

So it's really that holistic view from technology and

Speaker: 00:41:18

banking all the way through.

Speaker: 00:41:20

Colton Pond - LoanPro: what's, awesome about what you all have been able to

Speaker: 00:41:22

do is infuse technologists in there.

Speaker: 00:41:24

Because that's the missing piece that a lot of folks don't have,

Speaker: 00:41:27

is how do you marry compliance and innovation and technology?

Speaker: 00:41:33

They don't need to be separated, and I love that insight actually.

Speaker: 00:41:36

They can be together and work hand in hand and be early in the

Speaker: 00:41:40

conversations together around what we do to drive innovation, uh, forward.

Speaker: 00:41:44

Tedd Huff - Fintech Confidential: So I'm, I'm gonna ask

Speaker: 00:41:46

Sam, pull it out of the, the closet or Rafael outta your bottom drawer in your

Speaker: 00:41:51

office there, I want you to pull out your, your, crystal ball because I'm gonna ask

Speaker: 00:41:57

you, what do you see as future trends in lending and banking technologies?

Speaker: 00:42:05

It could be everything from the potential upside and risk of artificial

Speaker: 00:42:10

intelligence, how you're going to be able to deliver a better human experience

Speaker: 00:42:17

and many, many other different things.

Speaker: 00:42:19

Sam Pause - Mascoma Bank: I need the crystal ball 'cause I'm sitting here in

Speaker: 00:42:21

the dark and a little light would be nice.

Speaker: 00:42:23

Um, from my view, it's, it's gonna be completely around data and artificial

Speaker: 00:42:28

intelligence and how that's gonna drive, how we work differently into the future.

Speaker: 00:42:33

So I think that is gonna be the game changer going forward.

Speaker: 00:42:37

but building a very strong data governance model around that.

Speaker: 00:42:41

Tedd Huff - Fintech Confidential: I have to ask the question, does that

Speaker: 00:42:42

mean less people or does that mean different roles for those people?

Speaker: 00:42:47

Sam Pause - Mascoma Bank: It means different roles for those people.

Speaker: 00:42:49

we're gonna need people.

Speaker: 00:42:51

Without a doubt.

Speaker: 00:42:53

The roles are gonna, are gonna change and the expertise is gonna change,

Speaker: 00:42:56

and what we're delivering to our customers is gonna change as well.

Speaker: 00:43:01

Tedd Huff - Fintech Confidential: How do you see that transforming?

Speaker: 00:43:04

Rapheal Reznek -Mascoma Bank: We have team members that work in the back

Speaker: 00:43:05

office and customers don't talk to them.

Speaker: 00:43:09

Uh, and automation will certainly change their roles, but with artificial

Speaker: 00:43:14

intelligence and data analytics, you're gonna need people that are supervising.

Speaker: 00:43:18

So there's, there'll be supervisor roles and, uh, training roles because

Speaker: 00:43:24

you have to train those models.

Speaker: 00:43:25

from a compliance standpoint, you have to make sure that, uh, any,

Speaker: 00:43:30

any models or any modeling that you're doing, uh, is actually making

Speaker: 00:43:36

a decision that is not biased.

Speaker: 00:43:39

So we have to have people reviewing that.

Speaker: 00:43:42

As always, we can prognosticate and try and guess and hypothesize,

Speaker: 00:43:48

and we're going to be wrong.

Speaker: 00:43:49

A lot of the time things are going to, and things will, things

Speaker: 00:43:54

will appear out of nowhere.

Speaker: 00:43:56

We just had no idea that this would be a role and, and here we are.

Speaker: 00:44:01

I would build on what Sam is saying around data and ai and say that, um,

Speaker: 00:44:07

delivery of the service, consumption of the service by, uh, customers

Speaker: 00:44:12

is going to completely change.

Speaker: 00:44:15

I think that, uh, what is, I think implicit interaction

Speaker: 00:44:22

with financial services.

Speaker: 00:44:24

Loans or banking or whatever it is, will become the norm.

Speaker: 00:44:28

So as you are driving your car down the road, you're talking to whomever

Speaker: 00:44:35

it is, Alex, Lex, or Siri, and, um, you're, you're having a conversation

Speaker: 00:44:42

about the loan you want to, or the, not, not even really about the loan.

Speaker: 00:44:47

You're talking about, I need X amount of dollars at, at this time,

Speaker: 00:44:51

Tedd Huff - Fintech Confidential: For a certain thing.

Speaker: 00:44:52

Yeah.

Speaker: 00:44:52

So you're, you're talking more the, uh, conversational commerce, I think

Speaker: 00:44:56

is what it's been called in the past.

Speaker: 00:44:57

Rapheal Reznek -Mascoma Bank: Yes, and it's, it's more

Speaker: 00:44:59

around implicit interaction.

Speaker: 00:45:01

So you're not explicitly going somewhere to apply for a loan, whether it be your

Speaker: 00:45:05

phone or your computer or the branch.

Speaker: 00:45:08

You're doing it as, as you're watching TV and you're, you are doing it.

Speaker: 00:45:14

It's, it's not a thing where you have to go gather paper and, and, and do

Speaker: 00:45:18

something in an explicit fashion.

Speaker: 00:45:19

You're doing it as part of what you do on a normal basis.

Speaker: 00:45:22

Daily

Speaker: 00:45:23

Colton Pond - LoanPro: what's awesome about that is it turns financial

Speaker: 00:45:26

services into taking data, understanding consumers, and personalizing based

Speaker: 00:45:31

on their needs and based on how to

Speaker: 00:45:33

help them.

Speaker: 00:45:33

And tying back to

Speaker: 00:45:34

the, the first thing we talked about with Mascoma being mission driven and

Speaker: 00:45:38

B Corp and how to help the communities you serve, that's how you do so.

Speaker: 00:45:42

Right?

Speaker: 00:45:42

And I love this

Speaker: 00:45:43

answer on the future.

Speaker: 00:45:45

It's a really good note to, to finish up this episode

Speaker: 00:45:47

thank you both

Speaker: 00:45:48

for hopping on with us.

Speaker: 00:45:49

For sure.

Speaker: 00:45:50

Tedd Huff - Fintech Confidential: it's been great to have you guys.

Speaker: 00:45:51

Rapheal Reznek -Mascoma Bank: you.

Speaker: 00:45:52

Thanks.

Speaker: 00:45:53

Thanks, Colton.

Speaker: 00:45:54

Tedd Huff - Fintech Confidential: So today we had the, the great conversations

Speaker: 00:45:59

around how, how Mascoma Bank is doing their personalization, how they're

Speaker: 00:46:05

doing, their modernization, their optimization, and all the ations.

Speaker: 00:46:10

They're really hitting it really hard, especially by

Speaker: 00:46:13

building their own technology.

Speaker: 00:46:16

And I'm excited to see them continue on this modernization project going forward.

Speaker: 00:46:22

And one of the things that I kind of subtext heard you guys say when

Speaker: 00:46:26

we were talking about AI is that it's gonna go less about the actions

Speaker: 00:46:31

and more about the relationships.

Speaker: 00:46:33

So I'm really looking forward to seeing how you guys attack that.

Speaker: 00:46:40

Colton Pond - LoanPro: I, I couldn't agree more.

Speaker: 00:46:41

Thanks for the time, Rafael.

Speaker: 00:46:42

Samantha, once again, turning data into insights and relationships, but the

Speaker: 00:46:48

key starts on, as a community bank, how do you modernize your infrastructure?

Speaker: 00:46:52

How do you do so in a reliable way that isn't going to.

Speaker: 00:46:55

To blow up things on the the banking side, right?

Speaker: 00:46:59

You all have found a way to do so.

Speaker: 00:47:01

I would recommend anyone to go find Rafael and Samantha and ask them

Speaker: 00:47:04

about their journey, and there's a lot of insights that I know both of

Speaker: 00:47:07

you have taken from that journey to share with the entire banking industry.

Speaker: 00:47:11

So thank you.

Speaker: 00:47:12

Rapheal Reznek -Mascoma Bank: Thank you.

Speaker: 00:47:13

Tedd Huff - Fintech Confidential: So if you've enjoyed the conversation, if you've

Speaker: 00:47:16

found this insightful and very helpful, be sure to go ahead and subscribe to

Speaker: 00:47:21

our newsletter as well as the YouTube channel and our podcast, so you can be

Speaker: 00:47:26

alerted when the next episode drops.

Speaker: 00:47:28

You'll never guess who's next.

Speaker: 00:47:30

So until then.

Speaker: 00:47:32

Have fun exploring the world of LendTech.

Tedd Huff: 00:47:36

As we wrap up today's episode, I've got one last thing for you.

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