Show notes:

• 0:30 Opening story — rationality and facts don't influence behavior very much. Dan Ariely says we need to change the environment. The Kasasa Loan does just that. Plus, a big announcement on the future of the Kasasa Loan happens at 29:45.
• 2:37 Greg and Chris introduce themselves and talk about their roles at Kasasa.
• 3:49 Elevator pitch for what the Kasasa Loan is and how it works.
• 7:50 Does the Kasasa Loan work? How consumers use it and how their usage has changed during the coronavirus pandemic.
• 13:50 Net Promoter Score for the Kasasa Loan is around 70+ compared to an industry standard of 20+.
• 15:24 Unpacking the reason why the Take-Back^® isn't a risk to the institution who is offering the Kasasa Loan. Consumers aren't taking their money back right before default. They're using it to cover financial gaps so they can restabilize and continue paying.
• 17:25 More than 70% of Kasasa Loan borrowers enroll in Autopay. The product addresses consumer needs and concerns at a fundamental level, so their participation and profitability for the institution are much higher than conventional lending products.
• 20:10 Most of the innovation in loan technology is centered on speed and compressing the part of the journey leading up to the loan itself. Why does the Kasasa Loan focus on something other than speed?
• 21:52 There was a market need to compress the time from application to approval. We work with MeridianLink and other partners to ensure a speedy onboarding experience.
• 23:10 Nobody goes out and says, "I wish I could get into more debt in as little as six minutes." The Kasasa Loan was an answer to the question: "How do we (Kasasa) give consumers better tools to get out of debt?"
• 24:09 Greg suggests that speed is a proxy for convenience, and the Kasasa Loan offers superior convenience to the experience of having and paying back a loan.
• 25:25 A brief timeline of how the Kasasa Loan went from initial concept to fully launched product.
• 27:23 In a perfect world, the story would be written that everyone said that it was a good idea and said, "yes." In reality, there was a lot of begging and pleading and having clients tell us that it was illegal. Once we saw how consumers responded to the concept (very well), it was a fairly traditional path to launch.
• 29:45 The Kasasa Loan is currently auto and personal. Where is it going from here? Mortgage was always part of the vision, but now it's coming to fruition. We're working with institutions as beta testers, with intent to launch it to everyone else this fall.
• 32:05 We never have hiccups with product launches, right? (laughter). We learned a lot of things through that initial process, and those are mistakes that we won't make again.
• 33:18 If you could distill it down, what's one learning you took from that early process? If Chris could go back and do it again, he would have spent more time working with front-line staff to learn about their workflows and needs. Sometimes the boardroom isn't the best place to get feedback; sometimes, the teller line is the best place to get it.
  
  Greg feels like we hit the bullseye for consumers, but failed to realize that for an institution, a loan represents an ecosystem of products, vendors, and infrastructure. Consumers don't know to ask for all the things that make a loan possible, only lending staff at the institution could tell you that.
• 38:29 Partner integrations are way more important than they first appear. In reality, they represent "the rest of the iceberg." What was our journey like on that front?
• 39:50 The US banking landscape is incredibly fragmented. Every institution is unique in their needs and ability to connect to other vendors and software. The borrower doesn't really care about the specifics of those relationships. The borrower does care when they ask about their next loan payment, and the teller has to open up a new system just to fulfill that one request.
• 40:01 Kasasa has tackled this challenge for 15-16 years with reward checking, where we've built data-flows for various vendors and tech-stacks. This has allowed us to move quicker in the lending space.
• 41:19 Sometimes you look at making a change that seems small, but as you start to live with it, you realize that it just doesn't work.
• 43:00 What's the marketing story with Kasasa Loans? We knew there was something special going on when 98% of consumers said they would refinance all of their debt just to get a Kasasa Loan. Let's layer that on with the fact that the coronavirus pandemic has caused massive unemployment, and deposits are up, so institutions need to counterbalance with loans. Ask consumers, not if they want to refi, but if they want to get out of debt faster and safer.
• 45:30 If you offer me a loan, I don't actually want one. But if you ask me if I want to get out of debt, of course I do. Lifecycle Marketing helps institutions to reach their existing database of consumers, and then we offer a lot of outbound programs to assist with new consumer acquisition. We've got 8 out of 10 people recommending the Kasasa Loan to friends and family. That's the best marketing you could ever get. Word of mouth marketing still rules the day.
• 47:24 What is the current leading edge of the lending marketing space? How are SoFi and Rocket Mortgage approaching consumer acquisition, and how does that contrast with Kasasa's approach? There's a microfocus on refi. And the Kasasa Loan is the best refi product out there. Most of the big players are offering the lowest rate in as little as six minutes. In contrast, Kasasa is saying, "Expand the relationship with the consumers you already have, use the data analytics at your disposal, leverage our retail training to maximize every interaction." It's about smarter at-bats, more at-bats, and that's way more important than faster and cheaper.
• 51:30 What would this process look like for an institution that wanted to develop a product like this in-house? Is it even possible for an institution to spin up an innovative lending product in-house?
  
  Yes, it's possible, but it's going to be way more expensive than you think it is. It's not just the cost of research or software development; it's the entire orchestra. Early on in our process, we had some meetings with core processors that lasted five minutes because they weren't interested in supporting it. Compliance is a massive undertaking for releasing a new product.
• 54:25 Let’s say you make it through the gauntlet of development and launch. Then you have to market the product and figure out how you're going to support it from the retail side. Then you are faced with the reality of "is this product performing as we hoped?" If you're a test-pool of one, then you have no way of knowing what the best practices are. At Kasasa, we can compare 900 institutions and reveal what the very best strategy is for any given institution's situation.
• 56:20 If you missed it: The Kasasa Loan Mortgage is coming to you this fall.
• 56:50 Shout out to all of our nation's community financial institutions, you're the bedrock of our country. Kasasa is here to support you, even if you decide not to do business with us, we're always happy to take phone calls and offer whatever help we can.
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