Tedd Huff: 00:00:00

Now, the biggest differentiator with Galileo,

Tedd Huff: 00:00:02

in my opinion, is their people.

Tedd Huff: 00:00:04

And today we have joined, we have Scott Johnson.

Tedd Huff: 00:00:07

The senior vice president of business development at Galileo, he's here to

Tedd Huff: 00:00:11

share with us his unique perspective on evolution of financial technologies and

Tedd Huff: 00:00:16

how Galileo is enabling the future of

Tedd Huff: 00:00:18

Scott Johnson, Galileo Financial Technologies: digital finance.

Tedd Huff: 00:00:19

MasterCard went on a tour of the building and I was the first

Tedd Huff: 00:00:22

guy taking them on the tour.

Tedd Huff: 00:00:24

The company above had had a Blood in their fridge and we had water

Tedd Huff: 00:00:27

coming down into our data center.

Tedd Huff: 00:00:29

You're not going to believe this.

Tedd Huff: 00:00:30

There's water coming in the data center.

Tedd Huff: 00:00:32

Go upstairs and get it fixed.

Tedd Huff: 00:00:33

So they ran upstairs as fast as possible.

Tedd Huff: 00:00:35

Got it fixed upstairs.

Tedd Huff: 00:00:36

Grab some towels and paper towels.

Tedd Huff: 00:00:38

They're cleaning water up.

Tedd Huff: 00:00:39

It's really interesting to see how much things have changed

Tedd Huff: 00:00:42

and how much things have grown.

Tedd Huff: 00:00:43

You know, in the last 20 years and kind of some of the key theme that I think

Tedd Huff: 00:00:46

where Galileo has really fit in the ecosystem, you know, we like to think of

Tedd Huff: 00:00:49

ourselves as the AWS of Fintech 14, 14 years ago, we decided to publish our API.

Tedd Huff: 00:00:54

All of a sudden, we had all sorts of different use cases and constructs

Tedd Huff: 00:00:58

and companies coming to us that we really hadn't even dreamed about that.

Tedd Huff: 00:01:02

We're like, Oh, well, can I get your APIs to do this?

Tedd Huff: 00:01:04

We're like, so far, our parent company.

Tedd Huff: 00:01:06

acquisition of Technicis, which is now part of part of Galileo

Tedd Huff: 00:01:09

with their modern banking core.

Tedd Huff: 00:01:11

And that was a very key decision that was made to do just kind of Ted as

Tedd Huff: 00:01:15

you were talking about, we decided and took a kind of a different approach.

Tedd Huff: 00:01:19

And I think that we're seeing it play out in the marketplace where

Tedd Huff: 00:01:21

a lot of these lines are starting to blur or kind of blend together.

Tedd Huff: 00:01:25

Maybe in the strategic bet.

Tedd Huff: 00:01:26

To, to really focus on a modern banking core technology.

Tedd Huff: 00:01:30

That is one of the areas where I think what's a little bit almost scary.

Tedd Huff: 00:01:34

I was at a conference a couple years ago, I will not name the conference, nor will

Tedd Huff: 00:01:37

I name the bank that I was talking to.

Tedd Huff: 00:01:39

They were talking about how few programmers they really have

Tedd Huff: 00:01:43

that still can write cobalt code.

Tedd Huff: 00:01:45

Now, Coatwall was, you know, from the 50s, 60s, 70s.

Tedd Huff: 00:01:48

Now listen, I love the 60s and 70s.

Tedd Huff: 00:01:50

That guy's born in the 70s.

Tedd Huff: 00:01:51

I love the music from the 70s.

Tedd Huff: 00:01:52

I just don't want an 8 track player.

Tedd Huff: 00:01:54

There's some really cool specific things that we do.

Tedd Huff: 00:01:57

We call it buy now, pay later, post pay.

Tedd Huff: 00:01:59

If you do 10 transactions in a month, and you're like, you know what, that

Tedd Huff: 00:02:02

transaction number three and number seven, I want to make that actually

Tedd Huff: 00:02:05

an installment after the fact.

Tedd Huff: 00:02:07

Some of the ways we partner with Lone Crow, But we've got customers who they

Tedd Huff: 00:02:11

want to be able to say again, like my 16 year old, I want him to be able to

Tedd Huff: 00:02:13

eat at Chipotle that's three or four blocks away from my house, but not

Tedd Huff: 00:02:16

necessarily 30 blocks from my house.

Tedd Huff: 00:02:19

Evolution of my experience at Galileo and really going from like

Tedd Huff: 00:02:23

a true startup now to where we had the acquisition in 2020 by SoFi.

Tedd Huff: 00:02:27

We're now part of a bank holding company.

Tedd Huff: 00:02:30

So one of the things that's so just fascinating to go through

Tedd Huff: 00:02:33

is not only from kind of like.

Tedd Huff: 00:02:35

like, oh my gosh, there's water coming into the data center to now,

Tedd Huff: 00:02:38

like, how do we stay compliant, you know, across everything that we do?

Tedd Huff: 00:02:43

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

Tedd Huff: 00:02:46

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

Tedd Huff: 00:02:53

Welcome to Accrued, the FinTech Confidential series presented by LoanPro.

Tedd Huff: 00:02:58

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

Tedd Huff: 00:03:01

compliance, optimization, modernization, and personalization through the insightful

Tedd Huff: 00:03:07

conversations with the industry's best.

Tedd Huff: 00:03:10

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

Tedd Huff: 00:03:12

We'll be guiding you through this intricate lending world, whether

Tedd Huff: 00:03:15

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

Tedd Huff: 00:03:20

lending, you're in the right place.

Tedd Huff: 00:03:23

Now let's dive into another episode of Accrued.

Colton Pond: 00:03:27

Thanks, Tedd.

Colton Pond: 00:03:27

It's good to see you again.

Colton Pond: 00:03:29

The hair always looks great.

Colton Pond: 00:03:30

The necklaces are great.

Colton Pond: 00:03:31

So I, I'm excited for, uh, we were actually having a conversation before

Colton Pond: 00:03:35

this, the three of us around how we could do a whole podcast episode on your hair.

Colton Pond: 00:03:38

So eventually we'll need more insights

Colton Pond: 00:03:40

there.

Colton Pond: 00:03:41

Uh, Scott and I want to know, but for now excited to dive in with Scott today.

Tedd Huff: 00:03:45

Definitely.

Tedd Huff: 00:03:46

Well, you know, I try to bring the good vibes.

Tedd Huff: 00:03:48

So we'll, we'll start with that one.

Tedd Huff: 00:03:50

And

Tedd Huff: 00:03:50

today talking about good vibes today, we have a company that is known for

Tedd Huff: 00:03:55

many decades as leaders in innovation.

Tedd Huff: 00:03:58

And it's none other than Galileo.

Tedd Huff: 00:04:00

It's a financial technology platform owned and operated

Tedd Huff: 00:04:03

independently by SoFi Technologies.

Tedd Huff: 00:04:06

They're a driving force in FinTech landscape.

Tedd Huff: 00:04:09

And Galileo is one of the few marketplace platforms that not only combines banking

Tedd Huff: 00:04:15

and processing, but it powers some of the FinTech elite like Chime and Monzo

Tedd Huff: 00:04:22

with their most dynamic solutions.

Tedd Huff: 00:04:24

Their robust platform enables FinTech companies to launch, scale and

Tedd Huff: 00:04:28

enhance their offerings efficiently.

Tedd Huff: 00:04:31

From payments and card issuing, lending to their cyber bank platform

Tedd Huff: 00:04:36

and risk solutions help manage this intricate payment system landscape.

Tedd Huff: 00:04:42

Now it's impressive that Galileo's technology not only underpins all

Tedd Huff: 00:04:46

of these seamless transactions.

Tedd Huff: 00:04:48

But it's for over 151 million accounts that rely on them every single day.

Tedd Huff: 00:04:54

Now, the biggest differentiator with Galileo, in my opinion.

Tedd Huff: 00:04:58

Is their people.

Tedd Huff: 00:05:00

And today we have joining us today and Colton kind of snuck

Tedd Huff: 00:05:03

it in a little bit here earlier.

Tedd Huff: 00:05:05

We have Scott Johnson, the senior vice president of business

Tedd Huff: 00:05:08

development at Galileo, and he has a rich background in product

Tedd Huff: 00:05:13

management and strategic innovation.

Tedd Huff: 00:05:16

Scott's been a key player in steering Galileo through its remarkable

Tedd Huff: 00:05:20

growth in the FinTech area.

Tedd Huff: 00:05:22

And his leadership has guided Galileo through its expansion into new

Tedd Huff: 00:05:26

technological frontiers, offering scalable and secure financial solutions

Tedd Huff: 00:05:31

that empower banks, FinTech startups, and enterprises all around the globe.

Tedd Huff: 00:05:36

Today, he's here to share with us his unique perspective on evolution of

Tedd Huff: 00:05:40

financial technologies and how Galileo is enabling the future of digital finance.

Tedd Huff: 00:05:46

Scott, it is a pleasure to have you with us today.

Tedd Huff: 00:05:49

Scott Johnson, Galileo Financial Technologies: Well, Tedd, Colton, I really

Tedd Huff: 00:05:51

appreciate that intro.

Tedd Huff: 00:05:52

I'm super excited to be here today.

Tedd Huff: 00:05:54

Excited to talk a little bit more about some of the things

Tedd Huff: 00:05:56

I'm very passionate about, about FinTech and banking and payments.

Tedd Huff: 00:05:59

So again, thanks for having me on.

Tedd Huff: 00:06:02

Here's a quick message from the Accrued Series sponsor.

Tedd Huff: 00:06:05

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Tedd Huff: 00:06:09

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Tedd Huff: 00:06:15

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Tedd Huff: 00:06:26

Check out LoanPro.

Tedd Huff: 00:06:27

io to learn more about how over 600 financial organizations have modernized

Tedd Huff: 00:06:33

their tech stack with LoanPro.

Tedd Huff: 00:06:35

Now I'm going to switch gears just here real quick.

Tedd Huff: 00:06:38

Colton, you and the folks at LoanPro been working really closely with Galileo.

Tedd Huff: 00:06:43

Can you give us a suspect perspective on Scott and don't

Tedd Huff: 00:06:47

forget how LoanPro and

Colton Pond: 00:06:48

Yeah,

Tedd Huff: 00:06:48

are working together.

Colton Pond: 00:06:49

Well, I have a unique perspective because.

Colton Pond: 00:06:51

we have the blessing of having some rock stars who previously worked

Colton Pond: 00:06:56

at Galileo and now work at LoanPro.

Colton Pond: 00:06:58

So I hear from them about this legend and myth, Scott Johnson

Colton Pond: 00:07:01

and who he is and the impact that he's had over 20 years at Galileo.

Colton Pond: 00:07:06

And like, uh, people like Susan Chafin, who.

Colton Pond: 00:07:08

Uh, is very blunt and very honest with every opinion that she shares.

Colton Pond: 00:07:13

So I know that if she says positive things about Scott, it's incredible.

Colton Pond: 00:07:16

Um, Scott, what I would love to know is you've been at Galileo 20

Colton Pond: 00:07:20

years now, uh, give or take, right?

Colton Pond: 00:07:22

What employee number were you at Galileo?

Colton Pond: 00:07:25

Scott Johnson, Galileo Financial Technologies: it's been just about, it'll

Colton Pond: 00:07:27

be 20 years next month.

Colton Pond: 00:07:28

And I'm thinking, and I'm right around that I'm like 20 or 21 or 22, and

Colton Pond: 00:07:32

we've got close to about 2, 200 now.

Colton Pond: 00:07:35

So it's amazing to see how much has grown over the last, uh, over the last 20 years.

Colton Pond: 00:07:39

I'm going to go off the cuff a little bit, as I like to do as

Colton Pond: 00:07:41

Tedd knows, but uh, tell us one of your favorite early day stories at Galileo.

Colton Pond: 00:07:47

20 years is a long time growing the company and eventually

Colton Pond: 00:07:51

being acquired by SoFi.

Colton Pond: 00:07:54

Scott Johnson, Galileo Financial Technologies: Okay.

Colton Pond: 00:07:54

I'm going to tell you a great story.

Colton Pond: 00:07:56

And this is early, early days, um, back in 2004, when I started for

Colton Pond: 00:08:00

Galileo, it'll take just a second.

Colton Pond: 00:08:02

We had just certified to be a MasterCard endpoint.

Colton Pond: 00:08:05

And MasterCard had come out and we had a tiny little office.

Colton Pond: 00:08:09

We had at that point, four server racks is all is what we

Colton Pond: 00:08:12

were running our system with.

Colton Pond: 00:08:13

Okay.

Colton Pond: 00:08:14

And MasterCard went on a tour of the building and I was the first

Colton Pond: 00:08:17

guy taking them on the tour.

Colton Pond: 00:08:19

And I walked by our data center and you're not going to believe this.

Colton Pond: 00:08:23

The company above had had a flood in their fridge, and we had water

Colton Pond: 00:08:26

coming down into our data center as I'm taking MasterCard on the tour,

Colton Pond: 00:08:31

I opened the door and I see that I turn around like, Hey, you know what?

Colton Pond: 00:08:35

Let's save the best for last.

Colton Pond: 00:08:36

Why don't we go and I'm going to take you on a tour of the rest of the

Colton Pond: 00:08:39

building introduce you to some people.

Colton Pond: 00:08:41

I walked by a few folks.

Colton Pond: 00:08:42

I said.

Colton Pond: 00:08:43

You're not going to believe this.

Colton Pond: 00:08:44

There's water coming in the data center, go upstairs and get it fixed.

Colton Pond: 00:08:47

So they ran upstairs as fast ball, got it fixed upstairs, grab some

Colton Pond: 00:08:51

towels and paper towels, they're cleaning water up, we walk around.

Colton Pond: 00:08:55

And then all of a sudden I kind of get the signal like this.

Colton Pond: 00:08:57

I take him back.

Colton Pond: 00:08:58

I'm like, Hey, let's go do this.

Colton Pond: 00:08:59

So I was tap dancing the whole time.

Colton Pond: 00:09:00

showing them, Hey, look at the beautiful view of the

Colton Pond: 00:09:02

mountains, all that good stuff.

Colton Pond: 00:09:03

So just kind of the crazy things that you go through, um, in

Colton Pond: 00:09:06

the early stages of a company.

Colton Pond: 00:09:08

But just a lot of fun in some of those early days.

Colton Pond: 00:09:11

It was really just the wild, wild west of payments and some of the things

Colton Pond: 00:09:15

that were going on, but amazing to see kind of some of the foundations.

Colton Pond: 00:09:18

That were built at that point and how much that's kind of, we've

Colton Pond: 00:09:20

used to grow into the future.

Colton Pond: 00:09:21

It's fun with how scrappy you need to get at the beginning.

Colton Pond: 00:09:23

I love that aspect.

Colton Pond: 00:09:25

And it's also cool to look back and be like, man, we've come a long way.

Colton Pond: 00:09:29

Like we've achieved a lot.

Colton Pond: 00:09:30

So today, especially I'm stoked to dig into your 20 years at Galileo

Colton Pond: 00:09:36

and, and your insights on FinTech, financial services, ecosystem,

Colton Pond: 00:09:40

the future, what that looks like.

Colton Pond: 00:09:42

And the impact of like where we're headed and insights that folks in financial

Colton Pond: 00:09:46

services can draw from your expertise.

Colton Pond: 00:09:47

So Tedd, let's kick it off.

Tedd Huff: 00:09:50

well, Scott, I want, I want us to kind of maybe move forward past

Tedd Huff: 00:09:56

the, uh, the raining server but still reflect that back on, on the last

Tedd Huff: 00:10:01

couple of decades, and and the financial FinTech landscape and how it has changed.

Tedd Huff: 00:10:06

for you to Share your perspective on the role that Galileo has played

Tedd Huff: 00:10:11

in this evolution of FinTech.

Tedd Huff: 00:10:13

Scott Johnson, Galileo Financial Technologies: It's really interesting to see how

Tedd Huff: 00:10:15

much things have changed and how much things have grown, you know, in the

Tedd Huff: 00:10:18

last 20 years and kind of some of the key themes that I think where Galileo

Tedd Huff: 00:10:21

has really fit in the ecosystem.

Tedd Huff: 00:10:23

You know, we like to think of ourselves as the AWS of FinTech, right?

Tedd Huff: 00:10:26

We like to think of us as kind of at the center of, of so much of the activity

Tedd Huff: 00:10:30

that's going on in, in FinTech and the types of companies that we work with.

Tedd Huff: 00:10:35

And really is, is I go back and kind of reflect on a kind of

Tedd Huff: 00:10:38

how we got to this, this place.

Tedd Huff: 00:10:40

I think kind of one of the major things that is, that has been such a change for

Tedd Huff: 00:10:43

everyone, as we know, are these, are these great devices here and what happened with

Tedd Huff: 00:10:47

us, just like anyone is, is, you know, we get smartphones and mobile technology.

Tedd Huff: 00:10:52

Well, where we really kind of made this strategic decision was, you know, 13, 14

Tedd Huff: 00:10:56

years ago, we decided to publish our APIs.

Tedd Huff: 00:10:59

And that was the probably kind of one of those key turning points is I go

Tedd Huff: 00:11:04

back and look and I mean, now it's like, oh, well, published API is no big deal.

Tedd Huff: 00:11:07

Well, 12, 13, 14 years ago, that was pretty novel stuff.

Tedd Huff: 00:11:11

And what was so fascinating as I go back and kind of look at the journey of where

Tedd Huff: 00:11:15

we've been is once we made that decision to do that, all of a sudden we had.

Tedd Huff: 00:11:20

All sorts of different use cases and constructs and companies coming

Tedd Huff: 00:11:24

to us that we really hadn't even dreamed about that were like, Oh,

Tedd Huff: 00:11:27

well, can I use your APIs to do this?

Tedd Huff: 00:11:29

And we're like, That that'll work.

Tedd Huff: 00:11:31

And then this and that, and all of a sudden, what was so fun is to see like

Tedd Huff: 00:11:36

all of these different types of companies and now looking at against a lot of the

Tedd Huff: 00:11:40

world class, you know, FinTechs that we work with that run on our platform.

Tedd Huff: 00:11:45

And that's why we kind of look at this and, and kind of see where we played

Tedd Huff: 00:11:49

in this space is really enabling these companies, you know, like, like one, you

Tedd Huff: 00:11:53

know, one of our partners chime, it's amazing to see when they came to us.

Tedd Huff: 00:11:57

They didn't have any customers.

Tedd Huff: 00:11:58

And now they've disclosed they've got tens of millions of customers and,

Tedd Huff: 00:12:02

do an incredible amount of volume.

Tedd Huff: 00:12:04

And so it's been really, really fun to just kind of help them through that

Tedd Huff: 00:12:08

journey as we've grown and they've grown and seeing now, you know, again,

Tedd Huff: 00:12:11

some of these, these incredible names that we work with in the marketplace.

Colton Pond: 00:12:13

13 years ago, Scott, y'all were probably one of the first

Colton Pond: 00:12:16

companies to publicly post your API documentation, That wasn't a thing,

Colton Pond: 00:12:21

And now, as you mentioned, every tech company that has an API first solution,

Colton Pond: 00:12:26

or even dreams about having an API first solution, has some level of API

Colton Pond: 00:12:30

docs publicly available on readme or other resources, which is awesome.

Colton Pond: 00:12:34

Scott Johnson, Galileo Financial Technologies: Yeah, it's really interesting, Colton,

Colton Pond: 00:12:35

because, you know, again, I know it sounds like so natural and normal now.

Colton Pond: 00:12:39

That was a huge kind of risk and a kind of a big leap of faith because it was

Colton Pond: 00:12:43

like, well, You know, we're basically standing out for the whole industry

Colton Pond: 00:12:47

now, like, here's exactly how we do it.

Colton Pond: 00:12:49

Here's everything.

Colton Pond: 00:12:50

this is, you know, everything that we've built from these APIs, but it was amazing.

Colton Pond: 00:12:54

It was at the time kind of a big leap of faith, but it was a key

Colton Pond: 00:12:58

strategic decision that we made.

Colton Pond: 00:13:00

That I think really enabled a lot of the growth that we had across the

Colton Pond: 00:13:04

business was that decision to do that.

Colton Pond: 00:13:06

And then just continuing to enhance and, add to those APIs

Colton Pond: 00:13:09

and just keep that documentation.

Colton Pond: 00:13:11

that's one of our core competencies we feel as having just the

Colton Pond: 00:13:14

easiest user experience possible within that documentation.

Colton Pond: 00:13:18

Listen, I'm a marketing and sales guy.

Colton Pond: 00:13:20

I think even I might be able to kind of plug in some of that code,

Colton Pond: 00:13:22

given how easy it is, I can do

Colton Pond: 00:13:24

it, then pretty much anybody can do it.

Colton Pond: 00:13:26

so along those lines, Scott, what I like to do often, especially with

Colton Pond: 00:13:30

folks that have been FinTech, you've been, you're probably one of the longest

Colton Pond: 00:13:33

people in what we consider FinTech today,

Colton Pond: 00:13:36

what are some of the challenges that you faced in the early days of Galileo?

Colton Pond: 00:13:40

And what are some of those challenges you face today?

Colton Pond: 00:13:44

And how are they different?

Colton Pond: 00:13:45

And how has the industry evolved over the past 20 years?

Colton Pond: 00:13:49

Scott Johnson, Galileo Financial Technologies: it's interesting.

Colton Pond: 00:13:50

So I go back and look at, I can't believe, like you said, that I've

Colton Pond: 00:13:52

been at the same company for 20 years.

Colton Pond: 00:13:54

I will say this, I can't believe how fast it goes when you're

Colton Pond: 00:13:58

doing what you enjoy doing.

Colton Pond: 00:13:59

And so that's one of those things that it's like, I hear it and people are

Colton Pond: 00:14:01

like, wow, 20 years with one company.

Colton Pond: 00:14:04

And I'm like, yeah, but it's amazing when you enjoy what you're doing, how

Colton Pond: 00:14:06

fast this goes, but it's interesting as I go back and kind of look at some of

Colton Pond: 00:14:10

the challenges and always didn't think about what that means for the future.

Colton Pond: 00:14:13

listen, it was no fun in 2008.

Colton Pond: 00:14:16

During the financial crisis.

Colton Pond: 00:14:17

I mean, there were days when we were like, okay, which companies are the banks that

Colton Pond: 00:14:22

we're working with are going to be around?

Colton Pond: 00:14:24

those were some scary days.

Colton Pond: 00:14:25

And we've had times knowing that in that timeframe that we look at, and

Colton Pond: 00:14:28

I go back and I'm like, wow, that was a little bit, a little bit scary.

Colton Pond: 00:14:33

But I, I then go, go look at that now.

Colton Pond: 00:14:36

And I kind of think about what does that mean for the future?

Colton Pond: 00:14:38

even right now, I mean, there's some challenges in the marketplace,

Colton Pond: 00:14:42

I mean, interest rates, I mean, Colton and Tedd, we know with LoanPro, I mean,

Colton Pond: 00:14:45

what, you know, being in the, in the, in the lending credit, you know, servicing

Colton Pond: 00:14:48

space, so to speak, a higher interest rate environment can be challenging.

Colton Pond: 00:14:52

And so it's interesting to go

Colton Pond: 00:14:53

back and look at some of the playbook that we did back then, and some of those

Colton Pond: 00:14:57

challenges that we've seen and kind of some of the ways that that I think helps

Colton Pond: 00:15:00

with the roadmap as we look to the future.

Colton Pond: 00:15:02

I think one of the things that we really focused on during some of

Colton Pond: 00:15:04

those challenges is we tried to make a bet on companies that we really

Colton Pond: 00:15:08

felt had a great product offering.

Colton Pond: 00:15:11

We felt we're going to be long term partners.

Colton Pond: 00:15:13

So listen, I'll be honest.

Colton Pond: 00:15:14

Back in 2008, we had to, we had to delay some invoicing and some billing.

Colton Pond: 00:15:18

Like it got pretty scary for a while.

Colton Pond: 00:15:20

We were like, Oh boy.

Colton Pond: 00:15:21

But we looked at the companies that we really wanted to bet on.

Colton Pond: 00:15:24

And we said, listen, we're going to be a good partner.

Colton Pond: 00:15:26

We're going to stand with them through some of those challenges and it

Colton Pond: 00:15:30

made all the difference, you know, as far as us continuing to grow.

Colton Pond: 00:15:32

And I think that's one of the things you can look at, some of

Colton Pond: 00:15:34

the challenges or potential future headwinds in the marketplace to

Colton Pond: 00:15:37

say, listen, let's look at this.

Colton Pond: 00:15:39

Let's take a long term perspective on our customers.

Colton Pond: 00:15:42

Let's not just like, look at that short term perspective.

Colton Pond: 00:15:44

Let's take that long term approach.

Colton Pond: 00:15:45

And I think it's really kind of the way we think about our business now as well.

Colton Pond: 00:16:08

couldn't agree more.

Colton Pond: 00:16:09

Um, I think a lot of FinTech companies today are forced, unfortunately, to take

Colton Pond: 00:16:16

a short term perspective because they're venture funded and they're burning capital

Colton Pond: 00:16:21

what I love about what you said is like, Hey, true growth, a company like Galileo

Colton Pond: 00:16:25

that has had true growth and a successful asset and is continuing to grow today,

Colton Pond: 00:16:29

aligns with how to help support your customers and partners and not take

Colton Pond: 00:16:34

strategic bets on everyone in the industry, but understanding their

Colton Pond: 00:16:37

business model and understanding the ones that actually have

Colton Pond: 00:16:40

a line of sight to impact and differentiation and product market fit.

Colton Pond: 00:16:44

Scott Johnson, Galileo Financial Technologies: Colton, you're, you're spot on one

Colton Pond: 00:16:45

thing that I think you've touched on.

Colton Pond: 00:16:47

That's exactly the way that we think about it.

Colton Pond: 00:16:49

So being there as a partner and kind of where the, where

Colton Pond: 00:16:52

we can lend our experience,

Colton Pond: 00:16:54

with our program management partners that are trying to grow their business.

Colton Pond: 00:16:58

You know, we've been fortunate to work with some of the leading FinTech

Colton Pond: 00:17:01

companies in the world and being able to take some of the experience.

Colton Pond: 00:17:05

Now again, not disclosing anything that you can't through an NDA.

Colton Pond: 00:17:08

So let's be really clear about like take from one and like put it over But really

Colton Pond: 00:17:12

looking at some of the best practices.

Colton Pond: 00:17:15

That we found with some of these companies, because, yes,

Colton Pond: 00:17:17

I think you're exactly right.

Colton Pond: 00:17:18

And so often, some of these are looking at, well, what's my cash burn rate?

Colton Pond: 00:17:22

what am I doing as far as my revenue?

Colton Pond: 00:17:24

Critically important, We really think of ourselves as like FinTech

Colton Pond: 00:17:27

consultants is really helping companies through this journey to

Colton Pond: 00:17:30

say, yes, we under, we can help you.

Colton Pond: 00:17:33

Maybe you shouldn't do this.

Colton Pond: 00:17:34

Maybe you should try this.

Colton Pond: 00:17:35

Some of the things that we look at again, so you can truly say this

Colton Pond: 00:17:38

is an idea that's adding value and not just in the short term, but

Colton Pond: 00:17:41

really is something that, you know, kind of the mid to long term value.

Colton Pond: 00:17:44

And we've seen that time and time again with companies in our space, like

Colton Pond: 00:17:47

great companies, like another one, like company, like Greenlight, they kind

Colton Pond: 00:17:49

of pioneered this parent teen space.

Colton Pond: 00:17:51

When I met with them, they had five or six employees.

Colton Pond: 00:17:55

Like we drew out the texts on technology shaky whiteboard in their offices in

Colton Pond: 00:18:00

the Georgia FinTech campus in Atlanta.

Colton Pond: 00:18:02

And, you know, they barely raised over a million dollars.

Colton Pond: 00:18:05

And now you look at them and they're one of the leading kind of FinTechs here

Colton Pond: 00:18:09

in the United States, as far as, you know, offering that type of construct.

Colton Pond: 00:18:12

And that's, I think, just a great story of how we were able to kind of work with that

Colton Pond: 00:18:15

company and take them along this journey.

Tedd Huff: 00:18:18

as I, as I, I, hear you talk about all of these different

Tedd Huff: 00:18:21

approaches being very consultative and it, play the marketplace today.

Tedd Huff: 00:18:26

It seems like there's a there's a sea of sameness going on but

Tedd Huff: 00:18:31

at the same time, there there are differentiators within those spaces

Tedd Huff: 00:18:35

when when you look at at Galileo and and how you're coming to market.

Tedd Huff: 00:18:41

we've got.

Tedd Huff: 00:18:42

you've got.

Tedd Huff: 00:18:42

The banking functionality, you've got the card issuing side of the house.

Tedd Huff: 00:18:48

You've got the lending piece of it.

Tedd Huff: 00:18:50

You've got the risk tools, which are second to none in the industry.

Tedd Huff: 00:18:56

How are you guys delivering to the market?

Tedd Huff: 00:19:01

A message and the tools to really differentiate yourselves from all of

Tedd Huff: 00:19:07

these, uh, Extremely niche areas and each one of those specific areas,

Tedd Huff: 00:19:13

because there's not really, from my perspective, one company that directly

Tedd Huff: 00:19:17

competes across the board with you guys.

Tedd Huff: 00:19:19

It's, it's a bunch of

Tedd Huff: 00:19:20

individual companies.

Tedd Huff: 00:19:21

So I would love to understand the differentiation that you guys

Tedd Huff: 00:19:24

are, are communicating of, of the benefit of having that all

Tedd Huff: 00:19:27

under one

Tedd Huff: 00:19:27

Scott Johnson, Galileo Financial Technologies: Yeah, you're, you're spot on Tedd.

Tedd Huff: 00:19:29

You know, it's been very interesting to look at again, Galileo's journey.

Tedd Huff: 00:19:33

And then as you think about SoFi, our parent company acquisition of Technicist,

Tedd Huff: 00:19:37

which is now part of part of Galileo.

Tedd Huff: 00:19:40

With their modern banking core.

Tedd Huff: 00:19:41

And that was a very key decision that was made to do just kind of

Tedd Huff: 00:19:45

Tedd, as you were talking about.

Tedd Huff: 00:19:46

It's very interesting to see FinTech is for right or for wrong.

Tedd Huff: 00:19:50

I think kind of littered with very niche types of players and companies.

Tedd Huff: 00:19:54

And we've decided and took a kind of a different approach.

Tedd Huff: 00:19:58

And I think that we're seeing it play out in the marketplace where

Tedd Huff: 00:20:00

a lot of these lines are starting to blur or kind of blend together.

Tedd Huff: 00:20:04

And it's why we decided to say, listen, let's look not only

Tedd Huff: 00:20:07

from a payment perspective.

Tedd Huff: 00:20:09

Listen, I can talk all day long on why Galileo Galileo's payment

Tedd Huff: 00:20:12

processing is the best company around.

Tedd Huff: 00:20:14

You can tell I'm passionate about it.

Tedd Huff: 00:20:15

I've been there for 20 years.

Tedd Huff: 00:20:16

Love, love the company, but also then kind of looking at, as we think about

Tedd Huff: 00:20:20

the other side of this, now let's talk about the FIs because again,

Tedd Huff: 00:20:24

banking and payments don't happen

Tedd Huff: 00:20:26

without great financial institutions and the technology that needs to power that.

Tedd Huff: 00:20:31

And so one of the things that we, we did is we made, again, the

Tedd Huff: 00:20:33

strategic bet to, to really focus on a modern banking core technology.

Tedd Huff: 00:20:38

that is one of the areas where I think what's a little bit almost scary is it is,

Tedd Huff: 00:20:44

I'll tell you another story here quickly.

Tedd Huff: 00:20:45

I love telling these stories,

Tedd Huff: 00:20:46

right?

Tedd Huff: 00:20:47

We were, we, we were at, I was at a conference a couple of years ago.

Tedd Huff: 00:20:50

I will not name the conference, nor will I name the bank that I was talking to.

Tedd Huff: 00:20:54

they were talking about how few programmers they really have

Tedd Huff: 00:20:59

that still can write Cobalt

Tedd Huff: 00:21:01

code.

Tedd Huff: 00:21:01

Now, Cobalt was, you know, from the 50s, 60s, 70s.

Tedd Huff: 00:21:05

Now listen, I love the 60s and 70s.

Tedd Huff: 00:21:06

That guy was born in the 70s.

Tedd Huff: 00:21:07

I love the music from the 70s.

Tedd Huff: 00:21:09

I just don't want an 8 track player,

Tedd Huff: 00:21:11

that's where a lot of this technology was built, was in that era.

Tedd Huff: 00:21:15

And they said, We only have about five or six employees still at our company

Tedd Huff: 00:21:20

that know how to write Cobalt code, and they're all in their late 60s or 70s.

Tedd Huff: 00:21:24

That's a little scary.

Tedd Huff: 00:21:25

So that was kind of just one example that's kind of core to this thesis of why

Tedd Huff: 00:21:29

we think FinTech and banking are going to kind of blend together and why we're

Tedd Huff: 00:21:33

so focused on using our modern banking core, our Gen 3 core to try and enable

Tedd Huff: 00:21:39

banks to, you know, really modernize.

Tedd Huff: 00:21:42

their core infrastructure.

Tedd Huff: 00:21:43

And it was kind of key to this kind of our thesis that a lot of these worlds

Tedd Huff: 00:21:46

are just going to blend together.

Tedd Huff: 00:21:47

And we needed to have that core modernization on the banking side.

Colton Pond: 00:21:50

So I couldn't agree more.

Colton Pond: 00:21:52

when you think about FinTech innovation over the past 20 years,

Colton Pond: 00:21:55

a lot of it has been appendages to a legacy core infrastructure,

Colton Pond: 00:22:00

PFM, agri banking aggregation, online banking, mobile banking.

Colton Pond: 00:22:05

They're all just like bolting on to this legacy technology.

Colton Pond: 00:22:09

But in the end, I believe we're at a time to where.

Colton Pond: 00:22:11

The next wave of innovation that we haven't even thought about

Colton Pond: 00:22:14

as possible is ushered in as you modernize that tech stack.

Colton Pond: 00:22:19

So, uh, trivia point people, I, I always bring this up and I'm curious,

Colton Pond: 00:22:23

I want both of you to answer actually, um, going off the cuff here, uh,

Colton Pond: 00:22:27

because people are often shocked.

Colton Pond: 00:22:29

So FiServ DNA, really popular core out there within.

Colton Pond: 00:22:34

banks and credit unions.

Colton Pond: 00:22:36

What year do you think FiServ went to market with DNA?

Tedd Huff: 00:22:39

Oh.

Tedd Huff: 00:22:41

Scott Johnson, Galileo Financial Technologies: I honestly think it might

Tedd Huff: 00:22:42

be like late seventies.

Tedd Huff: 00:22:43

I might be totally off on that.

Tedd Huff: 00:22:44

I'm going to go 78.

Tedd Huff: 00:22:45

Like some of those have been around for a long, long time.

Tedd Huff: 00:22:48

I don't know, Tedd, what's your guess

Tedd Huff: 00:22:50

Oh, see, I was even going to go further back like in, I was,

Tedd Huff: 00:22:54

I was going to go a decade before you like 68 is the number in my

Tedd Huff: 00:22:58

head

Colton Pond: 00:22:58

y'all are further back than most people.

Colton Pond: 00:23:00

Most people actually say like 2011, 2010, 2005.

Tedd Huff: 00:23:05

Yeah, but, but, but Colton, it's like Scott and I have been around

Tedd Huff: 00:23:10

this for what, two decades, two and a

Colton Pond: 00:23:12

some fun facts.

Colton Pond: 00:23:13

So

Colton Pond: 00:23:13

FiServ DNA is actually 1992.

Colton Pond: 00:23:16

but other popular cores, F I S I B S is 1980.

Colton Pond: 00:23:20

FiServ premier 1976, and then FiServ signature in 1983,

Colton Pond: 00:23:27

that runs like,

Colton Pond: 00:23:29

I don't know the numbers, but somewhere probably closer to

Colton Pond: 00:23:32

40, 45 percent of financial institutions on core infrastructure.

Colton Pond: 00:23:36

To your point, Scott, are relying on this legacy technology or legacy infrastructure

Colton Pond: 00:23:43

that has challenges innately within

Colton Pond: 00:23:45

Scott Johnson, Galileo Financial Technologies: and it's even just the well,

Colton Pond: 00:23:46

I think I hear Clash playing

Colton Pond: 00:23:47

in the background somewhere right now.

Colton Pond: 00:23:49

I've got, you know, like all these great great music in that era, but,

Colton Pond: 00:23:52

but, you know, it's interesting Colton really quick again, I think Rhett is

Colton Pond: 00:23:55

spot on in the way that you think about this, this kind of bolt on approach,

Colton Pond: 00:23:59

here's PFM, Here's maybe a buy now pay later, like these little bolt ons.

Colton Pond: 00:24:03

But at the end of the day, um, and the way that we think about kind of modern

Colton Pond: 00:24:07

banking course, we're not suggesting.

Colton Pond: 00:24:10

that someone does like a full rip and replace, as we like to say,

Colton Pond: 00:24:13

that's like taking out like every organ in the body and throwing it to

Colton Pond: 00:24:16

the side and put something new in.

Colton Pond: 00:24:17

Like, we're not suggesting that.

Colton Pond: 00:24:18

But we, what we do suggest is to say, listen, as you look at all these

Colton Pond: 00:24:22

different bolt ons, well, why don't you start by using what we like to think of

Colton Pond: 00:24:26

as a side car, start with running this on the side in a modern banking core.

Colton Pond: 00:24:32

So now we're not saying like you're driving a hundred miles down the

Colton Pond: 00:24:35

road and trying to change the tires.

Colton Pond: 00:24:36

That doesn't work, but let's try and start.

Colton Pond: 00:24:39

thinking about it that way.

Colton Pond: 00:24:40

So we can start, you know, adding features and functionalities and then

Colton Pond: 00:24:44

slowly coming in and changing the quirks.

Colton Pond: 00:24:46

but at the end of the day, you know, you look at those pictures where it's like

Colton Pond: 00:24:49

the house or like the garage is like on the roof and then you got this and

Colton Pond: 00:24:53

that at the end of the day, you're like.

Colton Pond: 00:24:54

We just need to bulldoze this thing.

Colton Pond: 00:24:55

Like this is not what it was built to do.

Colton Pond: 00:24:57

That's really why we think we can solve this problem by saying, here's

Colton Pond: 00:25:00

this modern banking core on the side.

Colton Pond: 00:25:02

you don't have to do it all at once.

Colton Pond: 00:25:04

We can slowly start doing it.

Colton Pond: 00:25:05

And then you can migrate and use that as the core infrastructure that you can

Colton Pond: 00:25:08

then use to have a modern tech stack.

Tedd Huff: 00:25:10

the idea of moving to the modern core has really gained a lot

Tedd Huff: 00:25:16

of traction just in the last, I'm going to say probably 24, 36 months.

Tedd Huff: 00:25:23

where where we've seen a lot of failures, um, failure to deliver failure to launch,

Tedd Huff: 00:25:29

probably a better way to describe it with some of these legacy platforms.

Tedd Huff: 00:25:32

and the pace at which the modern cores, like what LoanPro is, is coming

Tedd Huff: 00:25:37

out has come out with, with the loan side of it, what Galileo is doing

Tedd Huff: 00:25:41

with, with the acquisition from SoFi.

Tedd Huff: 00:25:44

And like all of these types of things that are happening are really accelerating it.

Tedd Huff: 00:25:49

And you're seeing it.

Tedd Huff: 00:25:51

In every aspect of financial and the financial technology spaces.

Tedd Huff: 00:25:56

So I think we're getting ready to head into a new era of what is truly possible.

Tedd Huff: 00:26:03

And what we used to see as limitations are now going to be

Tedd Huff: 00:26:09

our opportunities to deliver on something brand new to people that

Tedd Huff: 00:26:13

never thought that they could get access to these types of services.

Tedd Huff: 00:26:17

Scott Johnson, Galileo Financial Technologies: Tedd one thing is a couple

Tedd Huff: 00:26:19

things to think about.

Tedd Huff: 00:26:19

I think you're spot on.

Tedd Huff: 00:26:21

I'll share one stat that I found is fascinating.

Tedd Huff: 00:26:24

I read an article earlier this week that McKinsey put out about about

Tedd Huff: 00:26:28

adoption in Latin and South America of banking technology products.

Tedd Huff: 00:26:34

In 2019.

Tedd Huff: 00:26:36

The stat is they said they estimated between 30 to 50 percent of people

Tedd Huff: 00:26:40

in Latin America had access to, to some type of bank account post

Tedd Huff: 00:26:44

COVID they had it as high as 73%.

Tedd Huff: 00:26:48

and I think of that stat and I'm just like, Oh my gosh, I look at this.

Tedd Huff: 00:26:52

And I think that, one of the things that's driving so much of this, I think getting

Tedd Huff: 00:26:55

back to why banks need to modernize these core systems is because I think of how

Tedd Huff: 00:27:01

FinTechs haven't made it so easy to get

Tedd Huff: 00:27:05

these type of products,

Tedd Huff: 00:27:07

when my 16 year old's like, dad, I need to get a bank account.

Tedd Huff: 00:27:09

I kind of was talking to him about options.

Tedd Huff: 00:27:11

I'm like, well, you can walk into a branch.

Tedd Huff: 00:27:12

He's like, what?

Tedd Huff: 00:27:14

Like walk in.

Tedd Huff: 00:27:15

Like, what do you like?

Tedd Huff: 00:27:16

It just blew his mind.

Tedd Huff: 00:27:17

He's like, can't just do this on my phone.

Tedd Huff: 00:27:19

And I think that that's why, you know, so many of these FinTechs

Tedd Huff: 00:27:22

have driven some of these changes.

Tedd Huff: 00:27:23

And I think that's why banks are now saying, listen,

Tedd Huff: 00:27:26

if I'm going to compete in the future.

Tedd Huff: 00:27:28

I need to modernize my technology stack.

Tedd Huff: 00:27:30

I need to do these things because I know that I don't have that core

Tedd Huff: 00:27:34

infrastructure to really offer the types of products and services and

Tedd Huff: 00:27:38

customize those products and services in the timeframes that I need to do it.

Tedd Huff: 00:27:41

And that's why I think we're seeing again, this kind of move to, for banks

Tedd Huff: 00:27:44

again, to deteriorate point kind of last 24 to 36 months, starting to get

Tedd Huff: 00:27:48

a lot more momentum with banks looking to modernize their technology stacks.

Tedd Huff: 00:27:53

it's interesting.

Tedd Huff: 00:27:54

You bring up Latin America,

Tedd Huff: 00:27:56

There's a lot of new things that have come out of Latin America and

Tedd Huff: 00:27:59

I shouldn't say come out of, but really they've embraced, right?

Tedd Huff: 00:28:03

So Brazil, after finding that they've seen so much of unbanked becoming banked,

Tedd Huff: 00:28:10

now the delivery of PIX, their real time payments infrastructure has just exploded.

Tedd Huff: 00:28:16

And then you've got, you know, other central and, and Mexico, North America,

Tedd Huff: 00:28:22

but even Mexico has seen a huge influx of banking participants because now they

Tedd Huff: 00:28:28

have access to, to better ways for loans.

Tedd Huff: 00:28:32

They have better ways to actually transfer the money.

Tedd Huff: 00:28:35

They have better ways to spend the money.

Tedd Huff: 00:28:37

and now you're, they're starting to see a transition from the cash

Tedd Huff: 00:28:43

receipt over to more electronic methods to really move that forward,

Tedd Huff: 00:28:49

which changes how we both in the U.S.

Tedd Huff: 00:28:54

And elsewhere in the globe really look at how Latin America is moving forward.

Tedd Huff: 00:28:58

And I mentioned this on another episode, but the use of cards to

Tedd Huff: 00:29:03

to transfer money cross border.

Tedd Huff: 00:29:07

Especially in a GPR, general purpose for loadable card has just exploded from,

Tedd Huff: 00:29:15

from, all around the globe to use that as a method to move the money around.

Tedd Huff: 00:29:20

And I look at, I think the, the, blessing of the card brands to leverage OCT

Tedd Huff: 00:29:26

transactions has really accelerated that.

Tedd Huff: 00:29:29

And that offers a completely different perspective.

Tedd Huff: 00:29:32

And I know I just got way off on a tangent.

Tedd Huff: 00:29:34

Scott Johnson, Galileo Financial Technologies: love the tangent though, Tedd,

Tedd Huff: 00:29:35

cause we're a big believer.

Tedd Huff: 00:29:37

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Tedd Huff: 00:30:37

Scott Johnson, Galileo Financial Technologies: that's one of the key areas for us.

Tedd Huff: 00:30:38

Again, as we kind of look at this evolution and where we think the

Tedd Huff: 00:30:41

future is going, we doubled down on, on Latin and South America.

Tedd Huff: 00:30:46

Um, really about four or five years ago, we've got offices in Mexico city.

Tedd Huff: 00:30:49

We support a lot of the, you know, kind of leading FinTechs in, in,

Tedd Huff: 00:30:53

in Mexico, Columbia and other parts

Tedd Huff: 00:30:55

Of the continent, we really are bullish on everything you just said, Tedd,

Tedd Huff: 00:30:59

because I am a big believer on remittance products, you know, the OCT transactions

Tedd Huff: 00:31:03

and MasterCard, you know, type two transactions, all sorts of things,

Tedd Huff: 00:31:06

you know, to be able to move funding funds in real time, it just drastically

Tedd Huff: 00:31:10

changes the way that again, you go back and like we've talked about 10, 15

Tedd Huff: 00:31:13

years ago, you weren't able to do real time transfers on your mobile device

Tedd Huff: 00:31:17

to a loved one,

Tedd Huff: 00:31:19

into a different country.

Tedd Huff: 00:31:20

And that's one of the reasons why for us again, just seeing this

Tedd Huff: 00:31:23

again, what we like to call the electronification of payments.

Tedd Huff: 00:31:27

How many cash transactions were done in 2018, 2019, and some of those countries

Tedd Huff: 00:31:30

in comparison now to the number of card or electronic transactions?

Tedd Huff: 00:31:34

I mean, it's just hyper growth and I think you're just going to continue to see that,

Tedd Huff: 00:31:38

as we go into the future, I guess it's one of the main reasons why, again,

Tedd Huff: 00:31:41

the other part, like, uh, the company that, that, that was acquired Technisys,

Tedd Huff: 00:31:44

they're based in Buenos Aires, Argentina.

Tedd Huff: 00:31:46

it's core to us, um, because right now more Galileo employees

Tedd Huff: 00:31:49

are actually outside of the U S.

Tedd Huff: 00:31:51

Then there are

Tedd Huff: 00:31:52

in the U.S.

Tedd Huff: 00:31:53

And I never would have thought of that,

Tedd Huff: 00:31:56

pre acquisition three, four years ago.

Tedd Huff: 00:31:58

So, I mean, that just for us again, just shows, you know, how much we're really

Tedd Huff: 00:32:01

focused in some of those emerging markets

Colton Pond: 00:32:04

note, I want to double click into one thing and then we'll take

Colton Pond: 00:32:06

it, uh, back detour back on the path.

Colton Pond: 00:32:09

a lot of FinTech founders that I talked to often are like, Hey, I'm

Colton Pond: 00:32:13

considering international expansion.

Colton Pond: 00:32:17

I don't know.

Colton Pond: 00:32:17

And it's always this, like.

Colton Pond: 00:32:19

I mean, this ominous gray area of like, should I do it?

Colton Pond: 00:32:23

Should I not do it?

Colton Pond: 00:32:24

When should I do it?

Colton Pond: 00:32:25

Tell us like Galileo's decision to expand to Latin America and your

Colton Pond: 00:32:29

advice for FinTech companies on when it's the right time and how to

Colton Pond: 00:32:33

do it as efficiently as possible.

Colton Pond: 00:32:36

Scott Johnson, Galileo Financial Technologies: I'll tell you what the way

Colton Pond: 00:32:37

that we've looked at it.

Colton Pond: 00:32:38

And what we recommend to our partners is a couple of things.

Colton Pond: 00:32:40

One of the 1st things we look at is, you know, what, what problem are

Colton Pond: 00:32:43

you solving by, by trying to expand.

Colton Pond: 00:32:45

I mean, that's kind of

Colton Pond: 00:32:46

the first thing that we ask, and if they've got a good use case to do that,

Colton Pond: 00:32:49

or kind of looking at some different markets, you know, we look at just

Colton Pond: 00:32:52

kind of some very basic questions.

Colton Pond: 00:32:55

I'll give you one example.

Colton Pond: 00:32:57

It's very challenging to expand to the EU.

Colton Pond: 00:32:59

There's a lot of regulation.

Colton Pond: 00:33:01

They are much further along and kind of payment innovation that we

Colton Pond: 00:33:04

typically are in the US with with all of with 3D secure and GDPR and some

Colton Pond: 00:33:09

of those things, but it's a challenge.

Colton Pond: 00:33:11

It's regulated interchange.

Colton Pond: 00:33:13

So you might get 30, 40 basis points at the most versus areas.

Colton Pond: 00:33:17

one of the things that was so fascinating about payments.

Colton Pond: 00:33:19

Canada doesn't have credit interchange or debit interchange.

Colton Pond: 00:33:22

They just have interchange where you kind of get out and you look at some of

Colton Pond: 00:33:25

these, you're like, Oh, maybe it's the U.

Colton Pond: 00:33:27

S.

Colton Pond: 00:33:27

That's a little messed up with all these funky interchange schedules and pin versus

Colton Pond: 00:33:31

signature and Durban versus non Durban and, you know, all of

Colton Pond: 00:33:34

these different types of things.

Colton Pond: 00:33:35

So I think that that's 1 of the key things that we look at is, you know, again,

Colton Pond: 00:33:39

what is your real business case there?

Colton Pond: 00:33:40

Can you make it work economically?

Colton Pond: 00:33:43

And then the last thing that I would say and, um, on kind of

Colton Pond: 00:33:45

international expansion, here's the other key thing to think of just

Colton Pond: 00:33:49

like kind of doing it from the U.S.

Colton Pond: 00:33:51

And you're like, well, we kind of can do this and service other countries.

Colton Pond: 00:33:55

We've made the key decisions.

Colton Pond: 00:33:56

Why?

Colton Pond: 00:33:56

We've got offices in Mexico City.

Colton Pond: 00:33:58

You have to really be there, right?

Colton Pond: 00:34:01

Boots on the street.

Colton Pond: 00:34:02

Now, it's not that you need to have, you know, if you're operating

Colton Pond: 00:34:04

it, like we operate in, you know, multiple countries in Latin America.

Colton Pond: 00:34:07

We don't have, um, Offices, but we've got employees and I think,

Colton Pond: 00:34:11

uh, 12 or 13 different countries in Latin and South America.

Colton Pond: 00:34:13

So we really have like boots on the street to be able to support it.

Colton Pond: 00:34:17

Because if not, you're just, I think you're people just kind of kid themselves.

Colton Pond: 00:34:20

They just kind of are doing it.

Colton Pond: 00:34:22

They're not fully committed to it and that, and that shows through.

Colton Pond: 00:34:24

And I think that that's kind of one of the other keys.

Tedd Huff: 00:34:28

So one of the items like there are a couple card programs

Tedd Huff: 00:34:32

that I've worked with that we're doing really, really well in the U.S.

Tedd Huff: 00:34:36

Said, Hey, we want to go to Australia.

Tedd Huff: 00:34:39

We want to go to New Zealand.

Tedd Huff: 00:34:40

We want to go to Latin America.

Tedd Huff: 00:34:43

And.

Tedd Huff: 00:34:44

The funny part is, is that they were initially looking at the revenue

Tedd Huff: 00:34:49

model being the same as the U.

Tedd Huff: 00:34:51

S.

Tedd Huff: 00:34:52

And when we started to do the revenue model in these other regions, they

Tedd Huff: 00:34:56

realized they needed a heck of a lot more volume than they thought

Tedd Huff: 00:34:59

they did in order to have to really move into that space and, and

Tedd Huff: 00:35:03

actually generate positive cashflow.

Tedd Huff: 00:35:06

Is that something you see happen a lot as well?

Tedd Huff: 00:35:09

Scott Johnson, Galileo Financial Technologies: 'Yeah.

Tedd Huff: 00:35:10

You're spot on.

Tedd Huff: 00:35:10

And it's fascinating to look at kind of across our platform.

Tedd Huff: 00:35:13

It's one of the reasons why I kind of coming back, like, it's really fun to

Tedd Huff: 00:35:16

work with all these different types of companies, different constructs, consumer,

Tedd Huff: 00:35:20

commercial, debit, credit, U.S., Latin America, and look at the variation because

Tedd Huff: 00:35:26

what you've said there, Tedd is spot on.

Tedd Huff: 00:35:28

Look at just like average transaction sizes.

Tedd Huff: 00:35:30

Well, in the U S the average transaction size on a consumer debit card, you

Tedd Huff: 00:35:33

can almost set your watch by it.

Tedd Huff: 00:35:35

It's about $40.

Tedd Huff: 00:35:36

I mean, seriously, you can almost set your watch by it.

Tedd Huff: 00:35:38

In Latin America.

Tedd Huff: 00:35:39

It's about 25.

Tedd Huff: 00:35:42

Interchange rates are different.

Tedd Huff: 00:35:44

So now you look at this and you're like, oh, okay.

Tedd Huff: 00:35:47

So my model in the U.S.

Tedd Huff: 00:35:49

Is not the same model as it is.

Tedd Huff: 00:35:51

And can I can I get enough cardholders that are going to do enough transactions

Tedd Huff: 00:35:56

with with enough with a larger, you know, enough average ticket size

Tedd Huff: 00:35:59

to generate enough interchange.

Tedd Huff: 00:36:02

To have these make sense.

Tedd Huff: 00:36:03

It's also one of the things, you know, kind of getting back, you know, LoanPro

Tedd Huff: 00:36:06

does an amazing job in the credit space.

Tedd Huff: 00:36:08

Here's the other thing that's kind of fascinating.

Tedd Huff: 00:36:10

A lot of these countries, like in Mexico is an example.

Tedd Huff: 00:36:12

It's a lot easier to launch a credit product than it is a debit product.

Tedd Huff: 00:36:16

It's the exact

Tedd Huff: 00:36:18

Opposite from the U.S.

Tedd Huff: 00:36:19

The U.S.

Tedd Huff: 00:36:19

It's typically maybe a little easier to launch a debit product There's not quite

Tedd Huff: 00:36:24

as many moving pieces as there are on credit But it's the exact opposite for

Tedd Huff: 00:36:29

especially from a regulatory perspective in mexico So there's those types of things

Tedd Huff: 00:36:33

as you look at like country by country

Tedd Huff: 00:36:36

very specific things and then like you mentioned PIX in brazil.

Tedd Huff: 00:36:38

I mean Brazil is, it's almost, I know it's in South America, it's almost should be

Tedd Huff: 00:36:41

like its own continent because it's got what, you know, 200 million ish people.

Tedd Huff: 00:36:45

And they have a very, very specific payment system and every transaction

Tedd Huff: 00:36:48

there has to be available for an installment transaction.

Tedd Huff: 00:36:52

It's like all of these are just installments.

Tedd Huff: 00:36:53

You're just like, you, I can literally buy a pack of gum and turn

Tedd Huff: 00:36:56

that into an installment product.

Tedd Huff: 00:36:57

And the answer is

Tedd Huff: 00:36:58

you can buy a pack of gum and turn that into an installment product.

Tedd Huff: 00:37:01

So.

Tedd Huff: 00:37:01

I know

Tedd Huff: 00:37:02

you

Tedd Huff: 00:37:02

Scott Johnson, Galileo Financial Technologies: if

Tedd Huff: 00:37:02

should,

Tedd Huff: 00:37:03

Scott Johnson, Galileo Financial Technologies: you should, but

Tedd Huff: 00:37:04

you can.

Colton Pond: 00:37:05

We could talk about a national expansion, but like what I take

Colton Pond: 00:37:08

away from that, right, is if you're going to do it, don't do it half assed, uh,

Colton Pond: 00:37:13

actually get into it, put boots, people on the ground and actually do it and two.

Colton Pond: 00:37:19

Understand the differences in your business model, that it doesn't always

Colton Pond: 00:37:22

translate one for one over as you expand.

Colton Pond: 00:37:25

And I think those are two awesome, points for any company looking

Colton Pond: 00:37:30

for, um, international expansion, especially FinTech because there's

Colton Pond: 00:37:33

so much regulatory nuances and all of those nuances you got to consider.

Tedd Huff: 00:37:38

one of the, one of the things that, that was, may not be

Tedd Huff: 00:37:41

blatantly apparent for a lot of the folks that are watching and

Tedd Huff: 00:37:44

listening is that, This requires you to approach things from a very

Tedd Huff: 00:37:50

empathetic, customer centric experience.

Tedd Huff: 00:37:54

And you have to be extremely innovative in that.

Tedd Huff: 00:37:57

that is something that I see as being super important that has

Tedd Huff: 00:38:01

changed, really, in the last decade of it just has to work this way to

Tedd Huff: 00:38:07

here's how we need to deliver it.

Colton Pond: 00:38:09

I have a unique question for you, Scott.

Colton Pond: 00:38:11

I want to understand the really cool customer centric experiences

Colton Pond: 00:38:18

that are powered by Galileo.

Colton Pond: 00:38:19

what are some of your customers that are doing just like

Colton Pond: 00:38:23

extremely personalized stuff on Galileo that you think is just

Colton Pond: 00:38:26

like, man, this is awesome?

Colton Pond: 00:38:28

Scott Johnson, Galileo Financial Technologies: I think there's a few things

Colton Pond: 00:38:29

that we do that are really cool.

Colton Pond: 00:38:31

That are like, you know, very specific customized experience.

Colton Pond: 00:38:33

I'll talk about a couple of, of the products that I think are really cool.

Colton Pond: 00:38:37

there's some, some really cool specific things that we do in buy

Colton Pond: 00:38:40

now pay later that we call it, you know, buy now pay later post pay.

Colton Pond: 00:38:44

Here's what that means.

Colton Pond: 00:38:45

Let's say if you do 10 transactions in a month and you get your statement

Colton Pond: 00:38:49

or you're looking online at your statement, whatever it is, and you look

Colton Pond: 00:38:51

and you sit and you're like, you know what, that transaction number three

Colton Pond: 00:38:54

and number seven, I want to make that actually an installment after the fact.

Colton Pond: 00:38:59

It's being able to offer like really, really cool types of, of experiences

Colton Pond: 00:39:04

like that, that are like laser focused, but are fantastic when you look at the

Colton Pond: 00:39:10

ability to be like, okay, I want to be able to enable that type of experience.

Colton Pond: 00:39:15

To say, yeah, I can now allow someone to say after the fact I

Colton Pond: 00:39:17

can make that into an installment.

Colton Pond: 00:39:19

Another one That's interesting.

Colton Pond: 00:39:20

Um, and again, it's some of the ways we partner with with LoanPro but we've got

Colton Pond: 00:39:24

we've got customers who Again, i'll kind of go back look one one example Maybe

Colton Pond: 00:39:29

they want to do a parent teen program and they want to be able to say again

Colton Pond: 00:39:31

like my 16 year old I want him to be able to eat at chipotle that's three or

Colton Pond: 00:39:35

four blocks away from my house But not necessarily 30 blocks from my house.

Colton Pond: 00:39:39

So that we can, you know, with our technology, make it very specific

Colton Pond: 00:39:43

to where that card can only be used at Chipotle store number 1,

Colton Pond: 00:39:46

2, 3, 7, not 1, 2, 3, 6, et cetera.

Colton Pond: 00:39:51

And getting laser laser focus with what we call our account level controls

Colton Pond: 00:39:55

and the use of our auth API as well.

Colton Pond: 00:39:56

You can do it a few different ways from a technology perspective, but using these

Colton Pond: 00:40:00

account controls to be laser specific.

Colton Pond: 00:40:02

Down to the merchant ID, the merchant name, we can get, so you can get

Colton Pond: 00:40:06

down to a terminal ID, not that you'd ever necessarily need to do that.

Colton Pond: 00:40:09

But there's things like that, that we can do that are like so specific that

Colton Pond: 00:40:14

really enable these kind of great, great use cases across platform.

Colton Pond: 00:40:18

One of the things, Scott, that we've talked a lot about is increased

Colton Pond: 00:40:20

personalization, and what that looks like in the ecosystem and the need.

Colton Pond: 00:40:26

I believe modernizing your infrastructure allows you to

Colton Pond: 00:40:30

drive personalization and finance.

Colton Pond: 00:40:32

To the level of one.

Colton Pond: 00:40:33

And that's where like your son who wanted to open up a bank account.

Colton Pond: 00:40:37

That's what he expects because that's what he gets from Netflix, Spotify,

Colton Pond: 00:40:41

and, Apple and all these brands of like, here's a recommendation, an actual

Colton Pond: 00:40:45

personalized recommendation that makes sense for me and based on my behavior.

Colton Pond: 00:40:50

And those are the types of things and products that I think Galileo,

Colton Pond: 00:40:54

LoanPro, other folks are, are going out in the market and trying to drive

Colton Pond: 00:40:58

forward within financial services

Colton Pond: 00:40:59

Scott Johnson, Galileo Financial Technologies: Yeah.

Colton Pond: 00:41:00

I I'll touch on a couple of things.

Colton Pond: 00:41:01

I think you're spot on as you look at kind of the way we think about

Colton Pond: 00:41:05

personalization, it's just absolutely in our DNA of the way that we've built our

Colton Pond: 00:41:09

system, our corporate hierarchy structures and the way that we think about it.

Colton Pond: 00:41:13

One of the areas that why I think we've been so successful is our

Colton Pond: 00:41:17

architecture and hierarchy allows for again, personalization to

Colton Pond: 00:41:21

the individual level, right?

Colton Pond: 00:41:23

We don't just say, oh, Like on the card side, well, every, every

Colton Pond: 00:41:26

person is part of this bin has to have the exact same, you know,

Colton Pond: 00:41:31

fees limits, you know, all

Colton Pond: 00:41:33

these types of experiences.

Colton Pond: 00:41:34

It's just like 1 big bucket.

Colton Pond: 00:41:36

We can be very, very specific down to like, different levels in our system.

Colton Pond: 00:41:40

Like, we think about programs.

Colton Pond: 00:41:42

We think about products and then underneath that we.

Colton Pond: 00:41:45

Go all the way down to individual accounts, and that's honestly one of

Colton Pond: 00:41:48

the reasons why I think we've we've continued to be able to work with so

Colton Pond: 00:41:52

many great FinTechs because that's so key to what they want to do is

Colton Pond: 00:41:56

being able to deliver personalized,

Colton Pond: 00:41:58

experiences personalized feature functionality.

Colton Pond: 00:42:01

At the individual customer card holder level, and it goes back a

Colton Pond: 00:42:04

little bit to what we're talking about earlier about modern banking course.

Colton Pond: 00:42:07

It's 1 of the reasons why I think that banks are

Colton Pond: 00:42:10

struggled, especially over the last 3, 4, 5 years in delivering these types

Colton Pond: 00:42:14

of products and services, because it gets back to what we've talked about.

Colton Pond: 00:42:17

They're bolting things on here or there, but at the end of the day, they

Colton Pond: 00:42:20

don't have the right infrastructure To really personalize something for

Colton Pond: 00:42:24

Tedd versus Colton versus Scott.

Colton Pond: 00:42:27

And I think that that's where it gets hard because the core infrastructure

Colton Pond: 00:42:30

doesn't support that, which is again, back to the thesis of this is why

Colton Pond: 00:42:34

banks ultimately need to modernize their infrastructure to be able to

Colton Pond: 00:42:37

provide those personalized experiences.

Colton Pond: 00:42:40

And it's native within the architecture, not just like the, the

Colton Pond: 00:42:43

user experience or like a customized, you know, marketing campaign.

Colton Pond: 00:42:47

I mean, those are easy.

Colton Pond: 00:42:48

we're talking about being able to offer this functionality at the

Colton Pond: 00:42:51

core level of the system to then be able to permeate that throughout

Colton Pond: 00:42:54

the entire product offering.

Tedd Huff: 00:42:56

What you make me think of as you talk about this, Scott, is years ago,

Tedd Huff: 00:43:01

I'm not going to say how many years ago,

Tedd Huff: 00:43:02

I worked on a project around healthcare's auto substantiation of being able to

Tedd Huff: 00:43:07

use, let's say, an HSA cards only.

Tedd Huff: 00:43:11

On the items that qualified, and then I also worked with a couple of the snap

Tedd Huff: 00:43:16

programs to do a very similar process

Tedd Huff: 00:43:20

looking

Tedd Huff: 00:43:20

at that.

Tedd Huff: 00:43:21

It sounds like what you're talking about is taking.

Tedd Huff: 00:43:25

That personal that that level of detail over to not a can I or can't I.

Tedd Huff: 00:43:32

But what can I do with that individual line item?

Tedd Huff: 00:43:36

What can I decide to do with that piece of it?

Tedd Huff: 00:43:41

And I think that, and Colton, we've talked about this a little

Tedd Huff: 00:43:44

bit on the episodes as well.

Tedd Huff: 00:43:45

It's like, this is an area that I think that's the next level of personalization

Tedd Huff: 00:43:50

that we're really going to be seeing.

Tedd Huff: 00:43:52

Scott Johnson, Galileo Financial Technologies: It's interesting.

Tedd Huff: 00:43:53

Tedd, Colton, I, we have some partners that are doing some

Tedd Huff: 00:43:56

phenomenal work in this kind of SKU level or basket level data.

Tedd Huff: 00:44:02

So, you know, again, you've had a lot of experience in that space, specifically

Tedd Huff: 00:44:05

on HSA side, and, Uh, there's some really, really, really, really cool

Tedd Huff: 00:44:10

stuff that's being developed now.

Tedd Huff: 00:44:11

Again, it requires kind of the broader payment infrastructure.

Tedd Huff: 00:44:14

Like, we've got part of the solution on our side, but we're

Tedd Huff: 00:44:17

not necessarily acquiring the transaction at Walmart or Target

Tedd Huff: 00:44:20

and saying, oh, you can buy bananas.

Tedd Huff: 00:44:21

You can buy bread.

Tedd Huff: 00:44:22

but you can't do the beer and cigarettes.

Tedd Huff: 00:44:24

Okay.

Tedd Huff: 00:44:24

This is going to be not, not part of this, this type of, of, of healthcare program.

Tedd Huff: 00:44:28

But there's some really cool partners that we work on work with right now.

Tedd Huff: 00:44:32

That have developed some really, really innovative solutions there.

Tedd Huff: 00:44:35

I think that one in particular is an area where you're going to

Tedd Huff: 00:44:39

continue to see more and more of.

Tedd Huff: 00:44:41

So we kind of think about the future.

Tedd Huff: 00:44:43

You're going to see a lot more programs using this kind of laser

Tedd Huff: 00:44:47

specific type of technology to be able to get down to that level.

Tedd Huff: 00:44:51

Instead of again, just like this.

Tedd Huff: 00:44:52

This massive, like you can, you know, kind of just block an MCC.

Tedd Huff: 00:44:56

I mean, that stuff's like, again, that's really kind of

Tedd Huff: 00:44:58

antiquated when you think about it.

Tedd Huff: 00:44:59

So this is where now you're, you're looking at this to say, yeah, now we

Tedd Huff: 00:45:02

can really, really specific down to again, like basket or SKU level data.

Colton Pond: 00:45:36

shameless plug.

Colton Pond: 00:45:37

But that's 1 of the reasons why we're stoked about our, our collaboration.

Colton Pond: 00:45:41

What we're doing with Galileo, LoanPro's developed what we call transaction

Colton Pond: 00:45:44

level credit, the ability to charge interest rates at the transaction

Colton Pond: 00:45:47

level, and you can build really unique credit programs with that.

Colton Pond: 00:45:49

I don't know if we brought it up on the podcast, Tedd, but we've

Colton Pond: 00:45:52

talked for a while about an active military duty card where when

Colton Pond: 00:45:55

military member goes on deployment for

Colton Pond: 00:45:57

family back home, you geofence a five mile radius around their house.

Colton Pond: 00:46:01

And any gas and groceries are at a reduced

Colton Pond: 00:46:03

2 percent interest rate.

Colton Pond: 00:46:04

For any emotional wellness purchases on the card.

Colton Pond: 00:46:07

Uh, their interest abated for the time of deployment.

Colton Pond: 00:46:10

And think about that little personalization, the loyalty

Colton Pond: 00:46:13

that that in turn drives

Colton Pond: 00:46:15

an

Colton Pond: 00:46:15

increased share of wallet.

Colton Pond: 00:46:16

Where a lot of institutions right now are, Scott, you brought it up.

Colton Pond: 00:46:20

Cost of capital is up.

Colton Pond: 00:46:21

Deposits are king.

Colton Pond: 00:46:22

How do I drive greater deposits?

Colton Pond: 00:46:24

You drive greater deposits, in my opinion, by launching personalized products and

Colton Pond: 00:46:29

people being like, man, I'm going to move more of my financial life over to

Colton Pond: 00:46:33

XYZ institution because they get me.

Colton Pond: 00:46:36

They get who I am and they can help me drive and succeed in my life.

Tedd Huff: 00:46:41

you talk about that program, Colton, it gives me chills for the simple

Tedd Huff: 00:46:44

fact that I remember when I, I was.

Tedd Huff: 00:46:46

In the, in service, it was complete opposite.

Tedd Huff: 00:46:50

it.

Tedd Huff: 00:46:50

was like, how can we charge the most interest?

Tedd Huff: 00:46:53

How can we take the most advantage of the service members?

Tedd Huff: 00:46:57

Because there were laws put in place that basically said, if you get a

Tedd Huff: 00:47:03

loan as a service member, guess what?

Tedd Huff: 00:47:05

You can never

Tedd Huff: 00:47:07

escape it.

Tedd Huff: 00:47:08

doesn't matter.

Tedd Huff: 00:47:09

You can never escape it.

Tedd Huff: 00:47:11

And so that was.

Tedd Huff: 00:47:12

That made a lot of us really scared to do any sort of loans because we didn't

Tedd Huff: 00:47:17

know, are we going to get taken advantage?

Tedd Huff: 00:47:20

Are we not?

Tedd Huff: 00:47:21

And it wasn't just the, shady folks that

Tedd Huff: 00:47:24

were loan sharky style guys.

Tedd Huff: 00:47:26

I mean, this was happening for major financial institutions that

Tedd Huff: 00:47:29

were really leaning heavy into it.

Tedd Huff: 00:47:32

So it made us all really scared.

Tedd Huff: 00:47:35

is one of the things

Tedd Huff: 00:47:35

that.

Tedd Huff: 00:47:36

really started to pull me into the financial services industry is

Tedd Huff: 00:47:39

like, how, how is this happening?

Tedd Huff: 00:47:41

How can this happen?

Tedd Huff: 00:47:43

And that's what really pulled

Tedd Huff: 00:47:45

Scott Johnson, Galileo Financial Technologies: That's a fascinating

Tedd Huff: 00:47:46

me in.

Tedd Huff: 00:47:47

Scott Johnson, Galileo Financial Technologies: I love the use case that you're

Tedd Huff: 00:47:48

talking about as far as the solutions that LoanPro brings to the table.

Tedd Huff: 00:47:52

I mean, this is one of the things that got us excited about our partnership.

Tedd Huff: 00:47:54

Colton and Tedd is this exact use case.

Tedd Huff: 00:47:57

And if you can do,

Tedd Huff: 00:47:57

flexible interest rates down at the transaction level, and

Tedd Huff: 00:48:01

just, just let that sink in.

Tedd Huff: 00:48:02

All of the various use cases, but certainly in supporting, you

Tedd Huff: 00:48:05

know, our, our military personnel.

Tedd Huff: 00:48:07

And you think of being able to do that and all the other types of use cases.

Tedd Huff: 00:48:11

That's the way that we think about it as well as to say, listen, this

Tedd Huff: 00:48:15

is where it gets laser focused.

Tedd Huff: 00:48:17

This is what moves the needle.

Tedd Huff: 00:48:18

I'm being able to do those very, very specific onto our per transaction basis.

Tedd Huff: 00:48:22

That's again, where I think the future of this is going to be.

Tedd Huff: 00:48:25

And I, that's why, again, I think one of LoanPro's technologies

Tedd Huff: 00:48:27

is fantastic in this area.

Tedd Huff: 00:48:29

it.

Tedd Huff: 00:48:29

So we're talking about all these really cool upcoming new stuff.

Tedd Huff: 00:48:33

I wanted to transition into the

Colton Pond: 00:48:35

Let's do it.

Colton Pond: 00:48:36

That's exactly what I was going to say.

Colton Pond: 00:48:37

We're talking about.

Colton Pond: 00:48:38

the future here.

Colton Pond: 00:48:39

I, was just going to say, like, we've been talking about that active

Colton Pond: 00:48:41

military duty card for a while.

Colton Pond: 00:48:43

If, if no one actually launches that card, I'm going to go start

Colton Pond: 00:48:45

my own business, my own credit card company and go launch it because I

Colton Pond: 00:48:48

know it will work, And

Colton Pond: 00:48:49

Scott Johnson, Galileo Financial Technologies: idea.

Colton Pond: 00:48:50

I know there's lots of impact there, but, um,

Colton Pond: 00:48:52

let's talk about the future.

Colton Pond: 00:48:53

Tedd, let's jump into it.

Tedd Huff: 00:48:55

I want you to, uh, hop in Doc Brown's DeLorean, go to the future,

Tedd Huff: 00:49:01

come back and let us know what you see happening in FinTech, banking,

Tedd Huff: 00:49:09

lending in the next five to 10 years.

Tedd Huff: 00:49:12

Scott Johnson, Galileo Financial Technologies: You got to look back to the future,

Tedd Huff: 00:49:14

but I think, you know, as we think about it, you know, I'm amazed we've

Tedd Huff: 00:49:17

made it this far into the podcast or discussion without actually

Tedd Huff: 00:49:19

bringing up AI and machine learning.

Tedd Huff: 00:49:21

it seems like that's on everybody's mind right now.

Tedd Huff: 00:49:24

as I think about, you know, kind of the future, where is this going?

Tedd Huff: 00:49:27

I can't, I can't help but say, how are we going to think

Tedd Huff: 00:49:30

about AI and machine learning?

Tedd Huff: 00:49:32

And I'll give you kind of a couple of examples of areas where we're playing

Tedd Huff: 00:49:35

today and where we just think this is going to continue to increase.

Tedd Huff: 00:49:37

one of the products that we have is, is a machine learning AI chatbot.

Tedd Huff: 00:49:41

Um, that we've built a product called Connecta that's really

Tedd Huff: 00:49:45

kind of more of an empathy engine.

Tedd Huff: 00:49:46

And we've already seen, you know, a number of banks that use this

Tedd Huff: 00:49:49

and it's, it's really interesting to see how well this works.

Tedd Huff: 00:49:52

So when you test it out, it's like, it can really sense when you are getting

Tedd Huff: 00:49:55

more frustrated and can kind of drop you right into a customer service queue.

Tedd Huff: 00:50:00

It's amazing to see kind of that aspect of AI and machine learning.

Tedd Huff: 00:50:03

I think you're going to see more of that.

Tedd Huff: 00:50:04

But another area where I think you're going to see just continued focus in this

Tedd Huff: 00:50:08

getting better and better is, again, you talked, I think, at the beginning, Tedd or

Tedd Huff: 00:50:11

Colton mentioned kind of where we, where we're at in our, in our risk mitigation,

Tedd Huff: 00:50:15

our payment risk platform is our product.

Tedd Huff: 00:50:17

this is really, as you think about areas of our platform, one of the

Tedd Huff: 00:50:21

key areas where our program managers and our customers are saving a

Tedd Huff: 00:50:25

lot of money because they've been implementing this over the last

Tedd Huff: 00:50:27

year, year and a half, 2 years.

Tedd Huff: 00:50:29

And it just continues to get better and better.

Tedd Huff: 00:50:31

The way that this really works is we're able to, look at spending patterns,

Tedd Huff: 00:50:36

look at modeling, look at behaviors, look at geofencing, some of these

Tedd Huff: 00:50:39

areas to really, really mitigate the fraud that's done on a card portfolio.

Tedd Huff: 00:50:45

we typically see, and I think Visa and MasterCard have published some

Tedd Huff: 00:50:48

similar numbers and kind of an average card portfolio might have.

Tedd Huff: 00:50:51

8, 9, 10, 11, 12 basis points of fraud loss.

Tedd Huff: 00:50:54

If you're running, you know, Mastercards or Visas neural net at their level,

Tedd Huff: 00:50:59

which card programs do, and then run our payment risk platform underneath it.

Tedd Huff: 00:51:03

We're seeing fraud losses down into the three, four, five basis point level.

Tedd Huff: 00:51:08

So it's an immediate cost savings.

Tedd Huff: 00:51:10

But then the other thing that's got us so excited about the future is also

Tedd Huff: 00:51:13

now think about the cost savings of now someone's not having to call into customer

Tedd Huff: 00:51:17

service to actually dispute the charge.

Tedd Huff: 00:51:19

Because that never even happened.

Tedd Huff: 00:51:21

And now you don't have the cost of the, of then submitting the charge back

Tedd Huff: 00:51:24

and going through that and the back and forth of Visa and MasterCard and

Tedd Huff: 00:51:27

the merchant on these transactions.

Tedd Huff: 00:51:29

And so that's an area where we really think you're just going to continue

Tedd Huff: 00:51:33

to see more and more innovation using AI and machine learning kind of across

Tedd Huff: 00:51:38

the payment and banking landscape.

Colton Pond: 00:51:40

I love that.

Colton Pond: 00:51:41

I knew we knew you were going to bring up AI.

Colton Pond: 00:51:43

It's been brought up in every single episode, with differing opinions.

Colton Pond: 00:51:47

Tedd, what we should probably do is clip together everyone's perspective

Colton Pond: 00:51:50

of AI, and we do a clip on like all

Colton Pond: 00:51:52

unique perspectives of AI.

Colton Pond: 00:51:54

I appreciate, and I agree, like the two biggest things, the three

Colton Pond: 00:51:58

biggest things that I hear are.

Colton Pond: 00:52:00

As I asked, like, what does the future look like?

Colton Pond: 00:52:02

It's AI, obviously, fraud is still a big problem.

Colton Pond: 00:52:06

how do you decrease fraud?

Colton Pond: 00:52:08

What does that look like?

Colton Pond: 00:52:09

And then the third is, increased focus on small business and, and small

Colton Pond: 00:52:14

business banking, small business credit.

Colton Pond: 00:52:17

how do you serve the small business customer?

Colton Pond: 00:52:19

Because some organizations serve them like a consumer.

Colton Pond: 00:52:23

Which they are kind of a consumer, but not really a consumer.

Colton Pond: 00:52:26

And some serve them like a commercial client and they're kind of a commercial

Colton Pond: 00:52:29

client, but not really, they're this middle ground that we've kind

Colton Pond: 00:52:32

of like left in this gray area.

Colton Pond: 00:52:33

in closing, there is one last question I had actually, because I personally

Colton Pond: 00:52:37

think that one of the most value on this podcast is, uh, I hear from my, uh,

Colton Pond: 00:52:42

FinTech, uh, founder and tech friends on like, Hey, I want to understand.

Colton Pond: 00:52:47

Unique insights that I can take and apply into my business to be successful.

Colton Pond: 00:52:53

as much as you can, Scott, walk us through, the transition of, the

Colton Pond: 00:53:00

acquisition with SoFi and like what that looks and like insights and

Colton Pond: 00:53:04

learnings from that process, because SoFi is a financial institution, but a

Colton Pond: 00:53:09

very different financial institution.

Colton Pond: 00:53:12

Scott Johnson, Galileo Financial Technologies: It's a great question, Colton.

Colton Pond: 00:53:13

And I think it's interesting again, kind of, we touched on the beginning, like, I

Colton Pond: 00:53:16

think of like kind of the evolution of my experience at Galileo and really, going

Colton Pond: 00:53:20

from like a true startup now to where we had, the acquisition in 2020 by SoFi.

Colton Pond: 00:53:26

They're a regulated banking entity.

Colton Pond: 00:53:28

So we're now part.

Colton Pond: 00:53:29

Of a bank holding company.

Colton Pond: 00:53:31

So one of the things that's so just fascinating to go through is not

Colton Pond: 00:53:35

only from kind of like me putting out like, Oh my gosh, there's water

Colton Pond: 00:53:38

coming into the data center to now, like, how do we stay compliant, you

Colton Pond: 00:53:42

know, across everything that we do.

Colton Pond: 00:53:43

And I actually think it's one of the kind of key learnings that

Colton Pond: 00:53:46

we've had as a business is using all of the experience that SoFi

Colton Pond: 00:53:51

as a financial institution now as a lender.

Colton Pond: 00:53:54

have brought to the table to kind of give us a different

Colton Pond: 00:53:57

perspective.

Colton Pond: 00:53:58

we were fortunate enough to partner with SoFi back in

Colton Pond: 00:54:00

2018 from the processing side.

Colton Pond: 00:54:02

But now when we got acquired and looking at this, they've brought

Colton Pond: 00:54:05

an entire different kind of view for us in the marketplace.

Colton Pond: 00:54:09

And I think that that's something that's really key to us now.

Colton Pond: 00:54:11

And it's why, again, we're so focused on financial institutions is because we

Colton Pond: 00:54:16

will always consider ourselves the AWS of FinTech, but oh my gosh, it's opened

Colton Pond: 00:54:20

our eyes into all this opportunity, within the financial institution space.

Colton Pond: 00:54:23

And that's probably the key kind of learning that we have is how

Colton Pond: 00:54:26

much opportunity we have in that, in that side of the business.

Colton Pond: 00:54:29

the importance of being adaptable, right?

Colton Pond: 00:54:31

We've seen lots of acquisitions go poorly.

Colton Pond: 00:54:33

and we've seen lots of acquisitions go well, right?

Colton Pond: 00:54:36

And one of the key differences I see on my side is.

Colton Pond: 00:54:40

The ability of the FinTech who's being acquired to be adaptable

Colton Pond: 00:54:45

but where there's extreme resistance, often it doesn't work nearly as

Colton Pond: 00:54:49

well as it does before.

Colton Pond: 00:54:50

So Scott, thank you for the insights.

Colton Pond: 00:54:52

Really, really appreciate it.

Colton Pond: 00:54:55

Scott Johnson, Galileo Financial Technologies: Well,

Colton Pond: 00:54:55

thank you, Colton.

Colton Pond: 00:54:56

I appreciate it.

Colton Pond: 00:54:56

It's always nice when, when the company that acquires you has an NFL stadium in

Colton Pond: 00:55:00

Los Angeles, so that never hurts, right?

Colton Pond: 00:55:02

Let's, let's be honest here, right?

Colton Pond: 00:55:04

That never hurts.

Colton Pond: 00:55:05

So that's always helpful in the process.

Colton Pond: 00:55:07

No, it's been fantastic working with SoFi, but,

Colton Pond: 00:55:10

Tedd, Colton, thank you very much.

Colton Pond: 00:55:11

I really appreciate your time today.

Colton Pond: 00:55:12

It's, it's been, uh, been a lot of fun.

Colton Pond: 00:55:14

Um, I learned a lot, great to always talk about Galileo.

Colton Pond: 00:55:17

You can see I'm very passionate about it.

Colton Pond: 00:55:18

So it's been a lot of fun today.

Tedd Huff: 00:55:19

that is another episode of Accrued, a FinTech Confidential

Tedd Huff: 00:55:24

series presented to you by LoanPro.

Tedd Huff: 00:55:26

If you haven't already, go ahead and subscribe to FinTech Confidential at

Tedd Huff: 00:55:30

FinTechConfidential.com/access and get notified every time there's a new episode.

Tedd Huff: 00:55:37

Also, if you haven't already, download it from your favorite

Tedd Huff: 00:55:42

podcast player or watch it on YouTube.

Tedd Huff: 00:55:45

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

Tedd Huff: 00:55:49

If you're in the trenches fighting fraud and financial crime, you

Tedd Huff: 00:55:53

know it's a complex battlefield.

Tedd Huff: 00:55:55

That's where Hawke's AI tools for real time payment screening, AML,

Tedd Huff: 00:56:00

transaction monitoring, and dynamic customer risk rating come into play.

Tedd Huff: 00:56:05

These aren't just buzzwords, they're game changers designed to make your compliance

Tedd Huff: 00:56:10

more effective and less of a headache.

Tedd Huff: 00:56:12

Imagine slashing through false positives with precision and giving your

Tedd Huff: 00:56:17

compliance strategy the edge it needs.

Tedd Huff: 00:56:20

Head on over to gethawkai.

Tedd Huff: 00:56:23

com to sign up for a demo and discover how their platform can revolutionize

Tedd Huff: 00:56:28

how you fight fraud and financial crime.

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