Featured Guest: Paul Brady

Paul has been in the consumer finance industry for nearly 20 years. In that time, he has primarily been focused on the strategic aspects of lending products, including Credit Cards, Personal Loans, Auto Finance in the US and internationally. He has run teams responsible for credit risk, analytics, fraud, modeling, acquisition, operations, and back-office processing. At Self, Paul oversees our card program, operations, credit risk, fraud, and Bank Partner strategic management.

Prior to Self, Paul led the credit risk and acquisition teams at Mercury Financial, responsible for all customer strategies related to credit cards and personal loans. He has provided strategic consulting on credit risk to 7 out of the top 10 banks in the US.

Episode Transcript

0:02 Hello and welcome to Social Currency powered by Sunrise Banks, a podcast about the most innovative change makers in finance, technology and ESG and how they, our guests, are dismantling barriers and reshaping their industries and maybe even ours too.

0:16 I’m Tyler Seydel and I’m Eric Schurr.

0:19 Here we speak to those driving positive change through social entrepreneurship from cutting edge technology to creative grassroots efforts.

0:27 Each episode seeks to reveal the stories behind the revolution that is propelling us toward a world of financial inclusivity.

0:36 I’m Tyler Seydel and I’m Eric Schurr.

0:39 Today we’re going to talk about financial health and wellness specific to credit, credit scores and how one fintech is helping people establish and build credit within a system that may be set up against them.

0:51 You know, when it does feel like it’s set up against them or it feels a little bit circular, like chicken or egg.

0:55 That being I don’t have a credit score.

0:57 How can I get credit and if I can’t get credit, how do I get a credit score?

1:02 And so we need to break free from that thought pattern.

1:05 And our guest today is Paul Brady and he is gonna show us how Paul is the senior Vice President of Risk at Self Financial.

1:12 He has over 20 years experience in financial services industry.

1:15 He and his wife just welcomed another child.

1:17 He is witty, he is charming.

1:19 He is Paul not to be confused with Tom Brady and to jump right in out of the gate.

1:24 Paul.

1:25 We appreciate you making time for us.

1:27 Can you give our listeners perhaps a brief overview of Self and your role at the company?

1:32 And maybe if there is in your answer, why you feel you’ve been so successful?

1:36 Well, first, I’ll say it’s great to be here.

1:38 Thank you for having me on so Self was founded in 2015.

1:43 And when we were started, we launched with a product called a credit Builder account.

1:49 And so credit builder accounts are kind of or back then, were fairly unique, especially in Canada, the world of online lending and the way it works is it’s a secured installment loan whereby the customer opens a loan, the proceeds of that loan are put into a savings account.

2:06 And then as the customer pays down the loan, they gain access to the funds that are in the savings account.

2:14 And once we launched that product and kind of brought it online, there’s more companies offering it online kind of in the fintech space now, but I’d say we were kind of on the leading edge of doing that at least in the fintech world.

2:27 And then in 2019 or so, we launched a secured credit card which gave, gave customers more immediate access to the savings they had built up.

2:37 And so those products kind of worked hand in glove together to provide customers both an ability to build credit and start getting utility from that.

2:47 With a credit card, we are the only card and a fair number of our customers while it’s so there’s definitely some value derived out of just being able to use a card out there in your daily purchases.

2:58 And then a couple years back, we also purchased a fairly innovative company that reports rent and bills to the all three credit bureaus.

3:08 And so, that is another kind of key cog in the credit building world that we have is Self is bringing in that next level of innovation where you don’t necessarily need a loan or a credit card in order to be able to start building credit with the credit bureaus.

3:25 And I think the reason we’ve been so successful is we are very, very focused on this concept of building credit.

3:33 And so since that is part of our core DNA, everything we’ve looked at is very focused on a specific customer set.

3:41 And then we continue to kind of build around that very unique group of customers that needs to build credit.

3:48 And I think Tyler, as you mentioned, really the question is around, it’s very hard to build credit if you don’t have it.

3:59 And so the reason our products exist is to allow customers to do that.

4:04 So Paul, you mentioned the recent acquisition and want to dig into that chicken and egg situation that Tyler brought up.

4:11 Initially, among the factors that create barriers for people trying to build credit are access to information that affects our credit score.

4:19 The inputs that go into this fio scoring model such as the limited types of accounts that are included in the score and credit line utilization.

4:27 So tell us how are, how are you breaking down those barriers for those who may be at a disadvantage to building credit?

4:36 Yeah, I think that’s an interesting question.

4:39 One thing I’ll kind of talk about the utilization in that first and then we can move on to the other stuff.

4:43 But one thing that we do with our secure credit card, we do have to report utilization since it is a credit card.

4:51 And so we’re very consistent with messaging to our customers telling them, you know, you need to keep your credit utilization under this or you should keep your utilization under this.

4:59 This will have an impact on your score.

5:01 We give our customers scores when they open any account with us and they see the impact of their score across all the different dimensions.

5:09 But a large part of what we’re trying to do is educate our customers on what can drive changes in their score.

5:17 And the fact that I recently saw, we were doing some analysis and we saw a survey with our customers, 72% of our customers said that they had little or no financial education growing up.

5:28 And so that’s certainly a key focus for us as well is continuous education because we wanna continue to build these habits, whether it’s Self or elsewhere, because Self is frankly one leg of a much larger credit world for our customers.

5:43 And so if we can start educating building good habits here, we anticipate that our customers will be able to continue to build those habits elsewhere as well.

5:52 I think that’s well captured.

5:54 One thing that you mentioned, Paul that really resonated with me is that Self really was the first market mover or at least popularized the credit builder offering.

6:04 And now we’ve seen a lot of competition in that space, perhaps what are termed second market movers.

6:10 What is your main differentiator from the other competition in the market?

6:14 There certainly is more competition.

6:16 Now, I think one very key point for us is 40% of our customers are referred from existing customers.

6:24 So we have a very loyal and fantastic customer base that we rely on to continue to grow.

6:31 And obviously, we are not just kind of resting on our laurels as well.

6:35 So we’re continuing to work through new products, new innovations, changes to existing products.

6:40 So one thing we recently launched was with the rent and bills product that we have, we’ve launched the ability to report your rent to all three bureaus for free.

6:50 And every, every customer loves free.

6:52 So, you know, 90 plus percent of our customers or a large majority of our customers are renters.

6:59 And so this gives them the ability to start building their credit through what they’re already doing through bills they’re already paying.

7:05 And so this gives us another kind of dimension into getting working to find our customers where they are.

7:12 You know, I think that’s kind of a key concept that we’re thinking about as well as find their needs and fit them.

7:18 And so this is a big part of that is since so many are likely renters, then this product kind of fits in and helps them continue to build credit, build credit and see the value of that.

7:28 Well, with 40% being word of mouth referrals, that is phenomenal.

7:32 Certainly a loyal customer base.

7:34 Do you feel that that loyalty comes from ease of use?

7:37 I have used the Self application and it is just phenomenally easy to use.

7:42 And I know you folks do a lot of A and B testing and it very much is progression, not perfection on your end in relation to the same.

7:48 Would you care to comment on that?

7:50 Are you saying we’re not perfect.

7:52 I’m saying you’re close to it, buddy.

7:57 Yeah, I mean, I think it all goes back to that ir of learning, you know, every fintech probably in the market says that they’re very data driven and we’re no different than that.

8:07 We definitely continue to iterate through both the customer experience and the products we have, as I mentioned before.

8:13 And so continuous learning is a big, big part of what we do itself and we’ll continue to be part of our core DNA as we continue to grow.

8:24 So, yeah, I mean, we’re, that’s absolutely a large part of it.

8:27 You know, we, we’ve recently launched kind of new teams around velocity of testing as well just to continue to understand and make tweaks across a variety of different dimensions of what we have not to say we weren’t doing that before.

8:41 But now we even have more and more focus on kind of rapid learning and testing.

8:47 So Paul following up on that on, on the, on the conversation on innovation between Self and Sunrise.

8:54 We’re now well into our seventh year partnership.

8:56 And in that time, we’ve seen you introduce numerous innovations in this quest to support and serve customers on their journey to financial inclusivity in your opinion.

9:05 What is Self most proud of in that in relation to the social impact or the finance for good or the customer impact that, that you’re making in the market today.

9:16 I think it’s exactly that,, you know, as kind of a market leader and a market mover.

9:23 I think one of the biggest thing we’ve done both for our customers and more broadly is bring more light to the fact that there is a very large portion of customers seeking to build their credit, whether they’re new to credit or repairing credit that we can help along their journey And that we’ve pushed and motivated other companies to maybe even look at that even further than what they had before.

9:44 You know, I would say that we welcome competition in the sense that it continues to more broadly build the market for solutions for customers within our space.

9:55 And obviously, we want to be in front and we want to be continuously innovating within that.

10:00 But we also know that there’s other solutions for other customers at other times.

10:05 And as long as you know, the, as I said, the new credit or rebuilding credit population has access to options that lets them continue to build and is empowered to do so, then I think that’s a great thing.

10:18 And then the last point I’d make there is like one word I just said, that’s kind of key to our philosophy is we are all about empowering our customers.

10:26 So we feel we are not going to do the whole journey for our customer and building their credit, but we are absolutely building solutions that empower them to do that.

10:38 So if you gave Paul Brady a Self credit builder account, but I chose not to pay it or something along those lines, then my credit isn’t gonna continue to build.

10:48 But we have given you the tools that you can put in your tool kit and choose to use them to continue to grow and build.

10:56 And that’s every, that’s kind of core to our philosophy as well.

11:00 And I think that also continues to build the good habits and things of that nature.

11:04 Well, as you look to the next five, maybe even 10 years and you start to see the future of Self.

11:11 Can you articulate what that future looks like and how are you folks seeing Self continue to help those that are disadvantaged in the credit space?

11:21 I think it really goes back to the concept of meeting our customers where they’re at still, you know, the world of credit is ever evolving and changing.

11:31 The rent and bills products that we have, the premium product, which is the free rent reporting are all built around this concept of continuously changing kind of credit environment.

11:43 So there are new credit scores coming out all the time.

11:48 You know, I think Fico 10 and 11, I’m not sure if 11 is out, but all these new scores are using different attributes and different elements within the world of credit building.

11:58 And so we wanna make sure we have products that fit in.

12:01 Well, there, we have relationships with all of the credit bureaus.

12:04 You know, we talk to them about what they see coming down the pipeline and we think about products that may fit in there and make sure that they’re still product fit without, with all of that.

12:16 And so, you know, that’s one leg of it and then on a other side of the house, you know, kind of non credit products that we’re working to offer right now, we have a relationship with a firm called Spring for which offers a variety of solutions to customers, not necessarily directly in the world of credit.

12:37 But it does offer them the ability to find places to either find savings within their local area or potentially get additional rep income and things of that nature.

12:49 So, you know, again, it’s thinking about the whole holistic viewpoint of our customers, finances and finding ways to help them not only on the credit building side, but other areas that might be helpful for them as well.

13:02 I think what you position around meeting your customer where they’re at is immensely powerful.

13:06 And as folks really start to engage in that and you start to move forward in that thought concept or precept, you start to enter into omni channel experiences or introducing financial components into daily activity or those experiences that you carry out in your day to day.

13:22 So I think what you capture there is just immensely powerful and uplifting from a customer perspective.

13:27 So Paul, knowing that you are a key member of the Self staff at work and then knowing coming home, you’re a parent of a newborn.

13:36 One of our final questions about social currency, we like like to ask our guests is what fuels and inspires them outside of work.

13:43 So can you tell us what fuels and inspires you?

13:48 Well, as you mentioned, kind of outside of work.

13:50 I’m lucky to have three great kids with my wife.

13:54 We’re very fortunate and as you mentioned, we have a two month old baby right now at home.

14:00 So what fuels me is lots of coffee and caffeine and what is my big inspiration right now is continuing to sleep.

14:08 We just this week hit, sleeping through the night with our youngest.

14:12 So that was a, that was a big win.

14:14 But on top of that, you know, I love getting out in nature.

14:18 I love going hiking.

14:19 I carry my three year old on my back and drag my eight year old along with.

14:25 And so we get out there.

14:27 I try and put the screens down as much as possible for all of us and just kind of decompress and taking time away from all of that to be in nature.

14:35 I’m a big fan of that.

14:36 I think there’s a lot to be said for decompressing even for an hour or two if you can.

14:43 That’s great.

14:43 Well, well captured, congratulations on the, the newborn.

14:46 Well, I appreciate you Paul taking the time out of your busy day to join us here on social currency to talk about all things Self, future trends and how you guys are making a difference in your customers lives.

14:59 I’m looking forward to seeing what you folks all do in the future and I’m excited to connect, connect with you the next time we have an opportunity.

15:06 Likewise.

15:06 Thanks for having me.

15:08 Thanks for joining.

15:11 And that engaging dialogue was powered by Sunrise Banks member FDIC.

15:16 Thanks for listening to the social Currency podcast by Sunrise Banks.

15:20 If you’ve enjoyed this episode and you’d like to help support the podcast, click like and subscribe anywhere you get your podcast content.

15:27 We’ll see you soon.