Credit Card Innovation and FinTech Trends

Welcome to the FinWise EYE-ON Podcast Series, where we bring you the latest insights across the fintech banking, card, payments, and lending industries. In each episode, we sit down with industry insiders and experts and dive into the hottest topics and trends that you need to keep an eye on. Time to take off for another episode of the EYE-ON Podcast.

Sarah Grotta:  Welcome everyone, and thank you for joining us for another in our series of FinWise EYE-ON podcasts. I’m Sarah Grotta, Deputy Chief FinTech Officer at FinWise Bank. And in this edition, we’re keeping an eye on the fintech evolution, including challenges, triumphs, and future trends. And I can’t think of a better person to guide this conversation than today’s special guest,

Sunil Singh. Sunil is the founder and CEO of Tallied. So, thanks so much for joining us today.

Sunil Singh:  Thank you, Sarah. It’s great to be on and looking forward to it.

Sarah:  Yeah. So, can you first take just a few minutes and introduce yourself to our listeners, and also just kind of give us an understanding of Tallied, what you do and where you fit in the fintech space.

Sunil:  Absolutely. Yeah. So I’m founder and CEO of Tallied. Tallied is an end-to-end infrastructure for credit card issuance, program management, and really running the entire gamut of the life cycle of credit card programs for consumer, commercial and business use cases. My background at a high level, just to sort of connect the dots, almost two decades in fintech. I started my journey as an engineer very early on, started in India, coming off of an engineering background; and then worked in tech, big tech, Oracle, EMC, HP, for sort of the first part of my career; and then pivoted into financial services sort of almost accidentally, not something that I was looking to get into. It happened that in the 2008-2009 financial crisis, there was an opportunity to be part of a startup that was doing what is known as Neobank today. And they were offering general purpose, reloadable card products. And I had an opportunity to join that startup and that was my entry into fintech.

And then from there, sort of one thing leads to another as it generally does. I ended up being part of another company much later stage, a company named Black Hawk Network, one of the largest distributors of prepaid gift card incentive programs. And I was part of the team helping build out the financial services platform, and the services and the offering. Again at Blackhawk Network, I sort of joined a team that was focused on building the infrastructure from issuance processing and building the foundations to run what I call private label debit and prepaid products, before it was called Banking as a Service.

Again, if you see the pattern, we had actually built out the full stack card product offering. We had our own deposit network, cash load network, bill payment, remote deposit capture, everything offering as a Banking as a Service solution for brands. And we had T-Mobile Mobile Money back in 2013 as our customer; we had Safeway; Giant Eagle, some of the large retailers as our customers; we also had a tax partner.

And then from there on, I sort of continued on my startup journey for several years, working across another startup focused on SMB card product called Karmic Labs. And I had a stint at Marketa as part of the leadership team for a couple of years, helping sort of scale the foundation for program management, working with network bank partners expanding Merketa’s offering in Canada, scaling some of the programs and partners that we had. And then from there, Lendup, which was another subprime lender that I was part of the leadership team helping sort of manage the lending book, and also was sort of part of the transition that happened where LendUp was split into a loan business and a credit card business. The credit card business became Michelin.

So that’s kind of the pre-Tallied journey in a nutshell, I’m happy to sort of dive deeper into all the learnings and the trials and tribulations that goes into being part of those.

Sarah:  Yeah, but I’d be interested in also understanding– so you’re working for these organizations that are doing some really interesting things and some really market-leading things. I mean, you know, Blackhawk and the lending aspects, those are some pretty new and exciting things. What was that spark that said, you know, I want to go and be a founder and I want to start my own company?

Sunil:  Yeah, if I trace back my journey starting from India, I was actually born and raised in a very small remote part of India. I think we had one public school pretty much that everybody went to. And so for me, it was one step sort of. So there, if you’re growing up in that part of the country, your ticket to success was getting an engineering degree. So I checked that box early on. I got into a pretty strong engineering program in one of the top schools in the country. And then from there, you sort of go into the next phase, which is what is exciting.

And back in the days, this is in the mid 90s, late 99, early right before the 2000 dot com, and IT and software and technology and sort of the information technology as it was called, IT. Everything was IT back then. It was the next happening thing. And so I got into a company that was expanding rapidly, a global consulting company called Tata Consultancy Services. And I got a job out of college to go work for TCS as they were called. It’s a huge, actually I think it’s one of the top five consulting companies now. So again, sort of from there going into this, and then I worked for TCS for a few years and the dot-com sort of was playing out vividly here in Silicon Valley. And aggressively. And I wanted to be here in the San Francisco Bay Area.

So I sort of pivoted into, okay, leave my job at TCS and move to Silicon Valley to be part of this massive innovation that was happening. And sort of the reason I mention sort of these dots is that I’ve always been looking at where the center of gravity is in terms of action, excitement, and innovation. And sort of from that perspective, all the companies that I worked for in fintech or financial services were either leading or had reached a point of having market dominance and then scaling rapidly. Like Marketa and Blackhawk Network, both of them had pretty successful IPOs.

So positioning myself where I can really create an outsized impact from product, from ops and growth and innovation. And so if you fast forward that, how Tallied came about is, it’s a combination of seeing the opportunity in the marketplace. So having been in the industry for almost a decade, decade and a half, I saw that there was a lot of innovation with modern platforms and providers focused on prepaid and debit and banking as a service and lending, sort of the experience. But I noticed that there was still a huge gap on the infrastructure layer for credit cards. There hasn’t been much that has happened in the last 30-40 years. I mean, you still have the three-four main legacy players. You have Total Systems, which is part of Global Payments. You have FiServe, First Data, you have FIS, CoreCard, and some players like Marketa have tried to make a play into it. So part of it was where is the opportunity, where is the gap in the marketplace? And part of it was also when you are part of the journey of several startups that I have been over the last 10-15 years prior to founding Tallied, you realize that you are going through the grind anyways, as being part of a leadership team without the outcome, right?

So it’s a combination of seeing the opportunity, seeing where the market is. And I’ve always had this itch to be a founder and start a company someday, way back when I was in India, like 20-25 years ago. So it’s all sort of comes together. And there’s not never a perfect time to start a business. It’s when it happens, when you get the energy and sort of you put yourself out there and that’s when it happens. So, Tallied was, it doesn’t have the founder story of, my mom could not make a purchase online, therefore I open this checkout software. It’s more pragmatic where you sort of look at from many different angles of what is out there that is being offered by the providers, where is the gap, where is the future sort of trend? And then you try to sort of triangulate around those to create a thesis around building a business. And Tallied was more rational, sort of well thought out, pragmatic approach of building or setting up the foundation as opposed to, I did not have an aha moment in shower seeing that I’m going to build a company, right? Yeah.

Sarah:  Sure, so this has been something that evolved and drawing from all of your experiences– that makes sense. So what has been the experience, if you can sort of summarize that, for building and partnering in the fintech market for you and for Tallied?

Sunil:  Yeah, I think this is a phenomenal sort of last couple of years that has happened in fintech. So Tallied was founded in late 2021 early 2022 in many ways. And if you think about– the wheels sort of started to fall off on the VC investment with the high interest rate and some of the corrections, the marketplace broadly, but also from a regulatory perspective, right? So in some ways, the journey was perfectly timed in the sense that I had raised capital to build, and with not having to deal with the market noise and all the craziness that was happening with crypto, and valuations getting doubled every three months for startups without any outcome, it allowed us the headspace to sort of really focus on building a foundational sort of platform that we have on the credit card issuance processing program management.

Having said that, so that’s the good part of it. And you have the capital, you have the right team, and you’ve put your heads down and continue to build where you are not challenged by the irrational sort of exuberance or externalities that is forcing you to do things that many companies were doing at that time. So I think that’s the positive aspect of it. I think in terms of where the challenge and some of the… And look, there is never a perfect time for any startup to build. It’s really the time you see the opportunity, sort of understand the risk, you understand a framework of sort of systematically building and de-risking across the milestones. That’s kind of the approach, right?

So I think a couple of things which made it incredibly hard, and I’m sure that other founders and other folks who are in the trenches would agree, is that the interested environment shifting in the other direction obviously put a lot of pressure on VC investment. But also if you think about in the business that Tallied is, we offer end-to-end infrastructure for fintechs, brands, and banks to launch, scale innovative credit card programs. Now, one of the key elements of a credit card program is that you need capital. You need balance sheet to support the receivables that are generated through a credit card program. And in a high interest rate environment, when things are all sort of going in the other direction, for many of our prospects and customers, one of the biggest challenge was to have the capital to deploy against a portfolio that they want to build. So I think that’s one.

The other aspect that came in was the SVB collapse obviously brought a lot of attention from a regulatory perspective and FDIC. Some of the failures in the fintech marketplace without naming names, again, put light on the whole ecosystem in a way that didn’t help anybody. It sort of muddied the water across the entire pond, if you will. So I think those were some of the downside of the macro in the last couple of years. But as I said earlier, there’s always going to be some positive and some sort of not so positive. You’re going to have to deal with some headwinds and tailwinds no matter what cycle you are in. And as long as you have a disciplined approach to sort of building and sort of bringing products and services to the marketplace that customers love and want to be part of, you sort of continue to push along, right? And then you wait for the right moment when you get the acceleration because some shift’s happening and then you continue to sort of get propelled. So I think in a balance, it was probably the right setup for many reasons to do what we did, which is our build cycle for building an infrastructure for credit card issuance, processing, program management, managing the entire value chain. It’s a long cycle. It takes two years to get the platform in place. And even the market was in a different direction.

We used this time to really be thoughtful about our overall design architecture. I think having that mental space was really beneficial. Now we are at a point where we are excited to sort of push forward as the market is turning in a different direction. Hopefully there’s a lot more momentum, energy, and clarity in terms of road maps, prioritization, regulatory outlook. So we are well positioned to sort of capitalize on that.

Sarah:  Yeah. I appreciate you talking through some of the challenges because it has got to be a little bit frustrating, because it’s really the environment around you that created that. It wasn’t self-inflicted wounds, right? You had no control over interest rates; you had no control over the banking environment and the onslaught of new regulations. So it’s got to be frustrating. How do you plow through that? As you said, just keep your head down, keep moving forward, keep your eye on the prize. Are there any secrets to that?

Sungil:  There are no secrets as such. I think number one, the first principle is that you have to start every day fresh, right? You kind of leave the challenges and the setbacks from yesterday behind and you start fresh every day. Okay, I have these challenges, these problems to solve on a very micro tactical level, to move the ball forward. And then obviously at a broader level, strategic level, you are also looking to sort of lean in on your experience, having had a longer sort of horizon of experience across a couple of cycles, if you will, your relationships in the ecosystem and partnership. And so I think without sort of naming names, look, I mean, we did get impacted by the whole sponsor bank/partner bank environment that was created in the last two years due to a few challenging sort of programs and players in the marketplace, right?

But having been on this journey, I have an anecdote. Back in 2009-2010, when I was sort of part of the first startup, we were working with one of the sponsor banks. And it was Meta Bank. It’s Pathword now. They were one of our sponsor banks. And I remember we had a pretty large program. And they got a consent order. And I remember my CEO coming to me, it was I think Thursday evening, six o’clock saying, I just got a call from the CEO of the bank. They have a consent order from OCC. It used to be OTS for those of us who are old enough to know, Office of Thrift Supervision, some funny name. And they have a consent order. We need to change our product marketing overnight, because that’s what the regulators want to do.

I got my team together. We worked through the night. We changed all of our marketing. We had a direct mail campaign that was going out, I think, the next week. So luckily, we had lined up another bank. We had lined up Bancorp at that time. And we were able to shift all of our marketing to Bancorp and continue to sort of stay in business without significant impact. So you kind of learn this early in your career, and then sort of that becomes a muscle memory, right?

And it happens again, when I’m at Blackhawk Network, we had just launched the T-Mobile program, pretty large, marquee, a lot of marketing, a lot of PR around it. And Bancorp was the issuer and they got a consent order right after that. Luckily again, we had other banks lined up. So you kind of have this framework where you have sort of understood that this is part of the business. So in the Tallied scenario, even though we had a bank partner that was challenged by regulatory sort of action, we knew that we needed to do more so we had started the journey with FinVise well in advance. And we are lucky that we found a partner in FinVise that was ready and understanding of where we are coming from and how we could partner. So part of it was strategic planning, knowing the risk, knowing the inherent risk in the broader sort of framework. Part of it was also leaning on the existing sort of relationship that I had in the industry with folks that I had worked with before. And you cannot minimize risk down to zero. What you can do is you can sort of assess it and have a roadmap to manage it. So that’s what we did. So I think in summary, it’s more of you learn from your experiences from prior, sort of understand what is at play, and have a sort of preemptive plan of risk management; and then leverage the relationship and the partnership that is there to build for sustainability, and build a foundation that is not a short-term outlook. I think another piece that I, mean, again, you learn and you figure out is that, yes, there are platforms and there are players who for them compliance is an afterthought and has been, right? And I know when I have had conversations with bank partners and FinWise or others, from day one, we made compliance as part of our core tenets. Because if you want to play this game and build an enterprise-level platform that supports credit cards for large issuers and fintechs, we need to have compliance at the core of it. So it was not–the platform was designed with compliance inherently embedded in every aspect of the way we thought about each and every aspect of the core, and how we operate on various parts of the value chain. And that has been a tenet. Even the engineering team, the engineers who worked on the code base, they understand that there is benefit to taking shortcuts in the short term. But if you want to really be around and build a scaled enterprise platform, then we may have to sometimes spend the extra cycle and diligence to build it the right way.

So that’s the other piece as I narrated. When you have been around and you’ve seen what has worked, what has not, and you bring it all together and make it part of your core philosophy of how you build financial services, infrastructure platform.

Sarah:  Interesting. Yes, zeroing in a little bit, I guess a little bit selfishly on some of the bank partners that you’re finding in the industry these days: have the conversations with other financial institutions been materially different than they have in the past, say before, you know, things started unwinding a couple years ago?

Sungil:  Oh yeah, absolutely. Look, I was on a call with a colleague who is at FIS and they have this banking as a service business that they are looking to, sort of embedded banking, embedded fintech, looking to expand. And even at that scale, as large as they are, they have had a challenge finding the right sponsor bank and partner bank. So the conversations have been very, difficult for any fintech, especially if you are early in the cycle, which is series A prior or you’re just coming out of the gate with a platform. The bar or the hurdle to get a fintech platform onboarded with a bank is very high now, both from a capital equity fundraising, the type of compliance and diligence that you have to go through. And in general, I think there is overall a sort of delay.

So one of the challenges with any startup is that time is never your friend. So every month that goes by where it takes longer for the bank to onboard, integrate and launch a program, is an opportunity cost for that, right? And you are burning through sort of your runway. So I think at all levels, it has been incredibly difficult from getting engagement from a bank to even consider you to be a platform or a partner from fintech; then you work through the process where there’s all these hurdles that you have to sort of cross; and then even after that, getting a program launched and stood up, there’s just too many cycles to work through. Again, it’s just the environment we are in and you can try to sort of fight it, but that’s the reality of where the market is. So, yeah, I mean, that has been my experience and I’m sure across the board as I talk to other fintech founders, or even existing large public companies and providers, they have similar challenges.

Sarah:  Yeah, I do feel sorry for some of the early stage startups with some really good ideas, right, that are thoughtful, that are just not going to see the light of day anytime soon, just simply because it’s the wrong environment. But to that point, let me get your opinion on sort of the current status of the fintech industry. I’m starting to see funding come back a little bit. But of course, financial services have just been through the wringer in the last year. Are you seeing that impacting certain trends? Are you starting to see some nice growth areas, though, coming of late?

Sungil:  Yeah, look, I mean, 2022-2023, and to some extent, I think 2023 was the peak of the abyss, or the bottom, if you will. And with SVB and all of the regulatory action, I think 2024, we started to see the later part of the year, thawing of some action. I think part of the challenge was also, we were in an election year. There was sort of people who were waiting for clarity in terms of policy and regulatory direction. So I think with the new sort of administration coming on, I think generally there is a level of understanding. The uncertainty is gone and people have a high level sort of thesis on what this new administration will do or will not do. Right. So I think that brings a level of clarity that’s important.

The other aspect that is, obviously people were preempting on some sort of the interest rate reduction, and that becomes a big part of the private equity playbook and where capital flows in and out. So I think generally there is an understanding that there is more activity under-p which relies on a low interest environment and it’s actually beneficial. So I think we have started to see that some of the companies that were valued exponentially in multiples of revenue or in some cases, no revenue in 2021, they had to do a lot of course correction to optimize their growth and bring in line their profitability so that they can justify the valuation. So I think a lot of those companies have become more strong with the discipline and the focus that they have done.

I think it’s still for early stage companies, I mean, the challenge is still there because of the reasons we talked about. It’s still very hard for them to get the right financial services or FI support that they need to go to market and launch and scale. And look, I think the other aspect that hurts some of the early stage companies is that there is general concern about the viability because the funding environment is tight. That means companies are more careful of who they partner with. They would rather go back to safety and work with a legacy provider just because it brings comfort that they are going to be around versus an up and coming startup that has much better product and services and exciting from overall roadmap. But there is always this concern, are they going to be around because the funding environment is so harsh and hard. So I think that’s the balance.

But I think as we have seen generally, the public markets have started to correct in the other direction. Many of the companies that had very high profile IPOs, their market cap went down. Now they have sort of clawed back. So overall, I think it’s moving in the right direction. Will it be at the same level as 2021? Probably not, and it will never go back.

So I think we’ll end up in a good, healthy balance through sort of the later part of this year, where it will be a more rational, objective sort of understanding of what valuations the investors can support and pricing those fundraising. And I think there is general sort of momentum also, as folks look at some of the lightning or reducing the hurdle from a regulatory perspective that allows startups and FIs to at least start to invest in more innovative programs and products than something that they did not. In the last couple of years, it was mostly stay the course, improve your bottom line, and see what comes after a couple of years. So that’s definitely trending in the other direction.

Sarah:  That’s interesting. Now, the practical advice that you would give to a new fintech starting out is to kind of start to look to build something very pragmatic again and create that path to profitability from the initial stages, because all of that froth has kind of come out of the market and we’re not going back. Is that a way to summarize it?

Sungil:  Yeah, absolutely. I think it was all about growth a few years ago, and people did not even understand what a gross margin is. And forget about all the operating margin, or the other bottom line impact of a product or a service that they were offering. I think the last couple of years brought a significant focus on unit economics, profit margins, gross margins, and how businesses are built. So that has definitely–we went on that direction. I think we’ll end up in somewhat of a healthy mix because if you’re getting started and if you are just getting entry into the market, your success is, a big part of it, is still going to be driven by how quickly can you grow and expand your market offering, get as many customers as you sign.

Of course, you have to have the discipline of the unit economics. These days companies are challenged to be profitable from day one; then it limits their ability to execute on certain areas where– they will never become a big business unless they have found a real mode where they can invest the profitable cash flow into growing the business. I think we’ll end up in a good balance where growth combined with a strong outlook for unit economics, profitability, and all of that layered in is the model, which in my view is the healthy mix. It cannot be all growth where companies were losing money in the millions of dollars on CAC (customer acquisition cost), or pure giveaways that we knew that was not going to be sustainable. But I think we will have a good balance looking into where we are and going into 2025 and beyond.

Sarah:  Yeah, I can’t wait till like 15 years from now when we look back at that era and say, what were people thinking? What was going on? Because it’s a little bit unbelievable sitting where we are today thinking that that happened. But can you provide some insights on what you think fintech companies need to prepare for to take advantage of some of the evolving technologies in the marketplace today. So I’m thinking obviously of AI, but some of the other new technologies, how do they sort of bring that and wrap that into what they’re doing?

Sungil:  Yeah, I think at a very fundamental level, there are three layers of AI enablement, and especially as you look into the financial services industry, So the foundation of it is data, right? And how easily the data is available and what can you do with it? Then there is your baseline software layer, where your business processes and workflows and all of those operational customer-facing activities happen driven by software. And on top of that, you have the machine learning and the AI layer, the intelligence layer that comes in. So from a fintech perspective as we look into it, is that a big part of the financial services business as it is managed and housed inside large banks. In the credit card industry, for example, the top 10 banks hold about 80 % of the receivables. There’s such a high concentration. If you go JP Morgan and Citi, and some of these banks have large portfolios. And you can extrapolate that into other businesses like mortgage and lending and deposits.

I think the real opportunity is that, as you think from a fintech perspective, where do you want to play into it? It’s very tempting to play in the top layer, the AI, because it’s easy, the tools are there, you can leverage and build an exciting whiz-bang tool, whether it’s on dispute handling or whether it’s on underwriting, which has been leveraging machine learning for almost a couple decades now, right? It’s coming full circle.

So I think there are questions around which part of the stack you want to play into. There will be companies that will enable banks or large FIs to get more out of their data so that they can be empowered to leverage the AI bandwagon that is available now. But many of the banks don’t have that capacity today. Their data is siloed. Their mainframe systems, they have multiple acquisitions. So they are running several different cores on the core banking. How do you bring it all together? So there are companies who will try to create that enablement layer, and that’s one. We’re not really directly playing into the AI ecosystem, but they are enablers. Then there are players who are in the software workflow business process where they will try to take a small or a very well-defined area and try to optimize in ways where you can finally leverage the efficiency that you get from AI. So let’s take dispute handling, for example. That’s a great area where there is a lot of back and forth that happens today between networks and merchants and the cardholders, and how do you make that efficient for banks, right? And it’s a combination of software, workflow and AI. And of course you need the data from underneath there. So there will be companies who are operating in that. I think that will be a busy section, meaning there will be lot of players who will sort of attack different parts of the puzzle, if you will, to solve for it.

And then there are what I call foundationally defining companies on the top, which are bringing something unique and innovative, which, let’s say, in the realm of solving for customer experience in ways that hasn’t been done. Or customer acquisition is a big challenge for issuers, right? And those are focused on retail-based relationships in many cases, some of them are heavily online focused. Is there a world where you deploy AI in ways which reduces the cost and makes it easily available with the experience and the interaction and the communication that the prospective customers or bank customers need? So the way I think about it is that you’ll see a plethora of companies playing into all of these layers.

Where we see ourselves, we are horizontal in the sense that Tallied is the infrastructure for the full life cycle of credit card, all the way from intaking an application to underwriting to issuance processing and servicing where you deal with payments, credit bureau reporting, rewards management. So we see an opportunity to really bring AI in an efficient and meaningful way across all of this where we can improve the profitability aspect of credit card portfolios for banks and FIs. And that’s what we are focused on. So it’s not one thing that we will solve.

For example, we are already working on a solution to use AI in dispute handling that will reduce the cost significantly lower for insurers, right? We are already talking about, can we create almost like a currency or service which is sitting in your cardholder experience, which you can talk to as opposed to calling an agent. That agent /tech AI knows everything about your profile, your cardholder history, are you going to be late on your payments, and so on and so forth. We are looking at horizontally where there is opportunity, and which are the big areas where traditionally issuers have left a lot of inefficiencies, which are part of the cost structure.

So those are some of the examples from our perspective. But I think this is just the beginning of where we will see the real transformation happening. If you think about going back 10-15 years ago, a couple of the major trends that happened, the banks and the FIs needed to move a lot of their services from data-centric client server architecture to cloud native. And they have done most of it, right? But still many of the banks, the core is still hardware. It’s sitting in some mainframe data center somewhere. So that hasn’t happened, but there are some layers in the software layer that has happened, like many of the business processes and workflows for a cardholder experience, onboarding, everything that happens in cloud, but the backend code is still legacy. And in terms of the customer experience, the banks had to move from, many times, branch-based and paperwork-based, you have to apply to get a credit card inside a branch to online and then to mobile. And so that process is still not done. I’m amazed by it. I talk to banks all the time. There are still banks. I mean, these are not small banks, probably close to $100 billion in assets. They still intake credit card application through a form-based, paper-based application flow where somebody goes in and reviews it and underwrites it, right?

Sarah:  That’s just hard to imagine.

Sungil:  Yeah, so from the FI perspective, it’s a big chasm where for them to even leverage and benefit from this AI revolution that we are seeing in front of us, there are a couple of steps for them to organize and get ready before they can really benefit from that.

Sarah:  Yeah, I hear from some of these legacy organizations that have so much infrastructure. They talk about sort of hollowing out their core, right? So they’ll take a little piece of it and move that to some more modern technology, while there are other functions that continue along that are just absolutely ancient at this point. So it’s kind of interesting where they pick and choose to become a little bit more modern. But that’s absolutely fascinating. I love the way that you’ve described that. If I could shift gears a little bit, we got into a little conversation specific about Tallied and I’d love to know where Tallied is seeing opportunity in its business today. Are there specific vertical markets that you find are just really interesting right now?

Sungil:  Yeah, I think what we have uncovered through the journey of talking to lot of customers in the ecosystem is that there is a segment of FIs or banks who are somewhere between, let’s say, a billion dollars to a hundred billion in assets who got squeezed by the large banks because they don’t have the budget or the resources or the brand to hire the talent or put money in technology to get the feature compatible products and services that they want to offer. They don’t have $20 billion IT budget like the top five banks have. And they also got squeezed from fintechs who came around and captured a lot of their customer base from lending and banking products and so on and so forth. So what we are uncovering is that there is this sweet spot of banks who have enough of a strong balance sheet, high quality customers and relationships that they have built over decades, in some cases over 100 plus years, there are banks out there. And how do we sort of enable them to offer competitive products that their customers would love and not shopping somewhere else? So that’s one, specifically in scenarios where there is mid-market banks, regionals, community banks, credit unions, they need help, right?

And here is an opportunity for us to be part of that ecosystem and enable them to stay competitive. There’s going to be consolidations, as we know. There are banks that are merging and that will happen. That’s one. The other aspect which we have had a strong thesis, but hasn’t played out as strongly as we expected. I think embedded credit still very early. I mean, you have seen merchant cash advance providers and platforms that has come up in the last few years and offering loans to small medium businesses in line with their revenue stream and merchant acquiring integrations that plays underneath. So I think embedded credit is still a fairly large spectrum that hasn’t been tapped into. I mean, you have seen the advent of charge cards and so on and so forth that has been offered.

But even companies like Ramp and Brex, they focus more on the venture-backed startups and all of that. But that’s a very small slice of the larger SMB framework. So how do we bring efficient underwriting, efficient risk management? And that’s where I think AI for some of these platforms can be the huge unlock. For example, accounting platforms or software platforms that have an entrenched, existing customer base and how can they offer attractive competitive credit products, credit card being just one of them, to enable these businesses to manage their cash flow and continue to grow efficiently. So I think those are the two areas that we get excited about and something that we are aggressively pursuing.

Sarah:  Excellent, excellent. So I have a final question for you. If you could please share with us sort of your personal philosophy on what success looks like having given, your years in the space, and really what keeps you motivated as a founder?

Sungil:  Yeah, for me, I think it’s about value creation. I’m very driven by value creation and the opportunity to produce value for customers, for employees and our shareholders. That’s kind of the cliched response. But at a personal level, I get driven by the fact that I’m solving problems every day. And there’s a need and there’s a gap. And if I can make it slightly better or in some cases, hugely better for some customers that we talk to. So that’s definitely a big part of what drives me. And there is always exciting momentum in the industry, especially if you’re playing in tech. And I’ve been very lucky and blessed to be at the heart of it in the last 20-25 years in the Silicon Valley.

So for me, I get a lot of energy from what’s coming, what can be done differently, what can be done better, and then deploy that energy into solving hard problems. Look, credit card is a very old, established industry. It’s very complicated from a regulatory perspective. There are a lot of moving pieces, but somehow I get drawn into hard, gnarly, complicated problems. And that’s where I really, if it is simple and easy, I might get bored very quickly. So I gravitate towards hard problems and figure out if we can unlock value there. So that’s how I look at it.

Sarah:  I love that. That’s fantastic. We’re just so appreciative to have your insights today. I think we could probably talk for a couple more hours, but thanks again for the time today. And I am so sure that our listeners are appreciative of your insights, also.

Sungil:  Thank you, Sarah. It has been great to have this conversation and we really appreciate the support and partnership from FinWise. So thank you again.

Sarah:  Awesome, thank you.

Thanks for listening.