Finexio B2B Payments Executive Roundtable

Episode Transcript

SPEAKERS: Ernest Rolfson, Jared Wolff, Ronnie Selinger, Joe Proto

Ernest Rolfson  00:00

Thanks, everyone for joining. thanks to Joe and Ronnie and Jared for coming on. We're gonna have a really fun discussion on a number of topics today, collaboration between corporate banks and fintech, embedded finance solutions, digital adoption of payments, benefits to end users, all the investment excitement that's been going on in b2b and fintech in general, and hopefully a little glimpse of the future and wants to come as well. So just by way of intro, Ernest Robson, founder and CEO for Nexio were an accounts payable payments as a service company embedding payments and cash flow tools directly within large AP procurement and financial institutions services to help end customers manage their business payments. So with that, I'd like to just go around and let the other esteemed colleagues and friends here introduce themselves and let the listeners learn a little bit about each of them their company and role. So I'll just go around my screen the way I see it, maybe we can start off with Ronnie and hear a little bit from you.

Ronnie Selinger  00:59

Thanks, Ernest. Ronnie Selinger, president and CEO of Nordis Technologies.  Nordis is a communication management company that has gotten into payments as well. And we manage communications and the print, the digital as well as payments for our clients throughout the country.

Ernest Rolfson  01:17

Thanks so much, Jared, how about you?

Jared Wolff  01:19

Thank you, Ernest, for having me here today. I'm certainly thrilled to participate with all of you. I'm Jared Wolff, President and CEO of Banc of California. We're a nine and a half billion dollar commercial bank headquartered in Southern California. One of the larger banks headquartered here, we specialize in delivering relationship focused solutions to our clients in lending deposits and treasury management and payments, and helping our clients grow their businesses and improve their cash flow and operational efficiency.

Ernest Rolfson  01:45

Thanks so much, Joe. Great to see you.

Joe Proto  01:47

Hi, everybody, Joe Proto here, particularly honored to be here with Ronnie and Jared. Now we have a big audience. And I know we've got a lot to cover. I'm a serial entrepreneur in the payments industry for 40 years, built and sold my first company to Corestates bank in 1992, which is, of course, now part of Wells Fargo, sold my next company to FirstData and now part of FiServ back in 2000. And sold my third payments company to MasterCard in 2019.  Retired, semi-retired, from MasterCard in November. And I am chairman of Finexio, and honored to be serving as chairman at Finexio.

Ernest Rolfson  02:31

Thanks for being here. The intros I think we're gonna have a really fun conversation. Just to start the discussion, I think, you know, Jared, and Ronnie your CEOs of companies in and around and serving customers with FinTech and payment related products to meet various Treasury needs, I guess, be great to talk about how your organization's have evolved, or are evolving to meet the expectations of your business customers today, and just how you think about that continued evolution and investment you're both doing.

Ronnie Selinger  03:03

So a big part of the way I run my business is listening to our customers and leveraging technology to solve their problems. And so we've been a communications company and so we manage billing and communication for our customers. Part of what we've needed to do over the years is build a second facility so that we could have disaster recovery is when our customers were concerned about whether or not their stuff was going to get out. We're here in Florida. And in Florida, we all know there are hurricanes. And so as we've evolved, our print and mail business, we've evolved it by expanding and having multiple locations. The other thing that on our side is expanding communications digitally. So email, text messaging, delivering communications right to the someone's Android or Apple wallet, that's been another another area of growth for us, as everybody knows communications today are omni channel. And we've got to be able to deliver those communications for our customers the way the consumer wants to receive them.

Jared Wolff  04:11

Similar to Ronnie, was well said, I mean, we are a business bank in a wide variety serving a wide variety of businesses in sectors ranging from professional services and real estate to healthcare, software, manufacturing, and media and entertainment. And with the disruption that's occurring in payments, businesses want more digital integration between their banking and their operations. So it's easier to move money and easier to get things done. This is probably one of the most exciting times in my career in terms of the the amount of innovation that's occurring in such a short period of time. But whether it's a digital loan application that automate automatically uploads last year's financials and tax returns for loan renewal, high volume Mobile deposit or optimizing cash flow. From my perspective, clients really want a tech forward solution that's efficient and not paper based. And so The expectations of clients today and particularly businesses has just, I think has accelerated certainly through the pandemic. And in terms of wanting to find solutions that are digitally focused and things that can make them more efficient.

Ernest Rolfson  05:14

That's fantastic. I want to shift into I think a natural extension of that coming off of Jareds comments is around that collaboration between banks and fintech. I think most banks, if not every bank in the country is thinking about this. I know all of us on the call have been working with and serving either working at banks or providing products and services with and through banks. So I think this is very topical. We have some real thought leaders on this call here. Maybe Joe can lead the comment here is how have you seen in your career, I think especially with Transactis  how payments software has helped banks deliver a better customer experience.

Joe Proto  05:52

Yes. And now for decades in the payments industry. And the reason I've been so engaged and never, ever thought of moving on is because payments are so dynamic. And they change every five to 10 years. I mean, think about our own lives, and how we interact with our friends, our colleagues and other businesses, that dynamic changes are just so exciting. So it continues to evolve. What's different is the pace of change is faster than ever, the FinTech bank dynamics, for those on the FinTech side, who all the way over at one end of the spectrum, who think banks are being left behind, I would caution them to be aware that banks are extremely healthy and progressive. To quote Jamie Dimon CEO of JPMorgan Chase. He's investing heavily in technology, and believes in building buying and partnering with fintech. So we really have a whole new generation of younger bank CEOs like Jared who are not only embracing technology, but helping lead banks forward in where we're going. On the other side, for banks that are not moving fast enough, then I think that there are challenges and risks to them, where they won't be able to keep up and serve their customers adequately. So the pace of change is one in which I don't believe we've ever seen before. COVID is a super catalyst for this change, especially in b2b digital transformation. Working from home has changed. Everything that we expected to be able to do in the past, versus where we are today. Mark Cuban, the the entrepreneur and famous Shark Tank investor said software is going to write software. He said that five years ago, yes, we will have you know, self driving cars someday, but not anytime soon. Nor will we have software write itself. So the coming together of banks and fintechs working in unison, I think is still the magic formula for success in the future.

Jared Wolff  08:12

Joe, I couldn't agree with you more. I mean, fintechs, if anything, are accelerants for the marketplace. And they've been able to help introduce to banks streamline ways to do things, there's a you know, there's a lot of dating and and marrying going on right now between banks and fintechs in terms of trying to find the right partnerships. Fundamentally, what I see from from the banking side is, you know, fintechs have really introduced a novel and more streamlined ways for buyers and sellers to engage with each other. When you look at the ecosystem today, there are really two things going on. From our perspective. You have innovation occurring on the legacy and dominant payment rails. And you have innovation that's occurring on to introduce new payment rails, via blockchain and stable coin, and probably some others as well. And while both are exciting, from our perspective, we're focused on delivering to our clients more efficiently on existing payment rails, whether it's via fed or MasterCard and Visa with innovative solutions, because I think there's a lot of room for improvement. And it requires a lot less adoption, and can have a higher impact immediately. We're closely watching innovation, you know, using a theorem and provenance, but it kind of feels to me like we're in the very early first inning. And it's like a bet, you know, are we going to choose VHS or Betamax, and then LaserDisc is probably going to come along, and then blu ray and then some novel disruption, like digital streaming equivalent. So for us, these are all competing platforms with no crosstalk you got multiple challenges of collective action, selective adoption, and there's still intermediary tokenisation that needs to make this stuff work, which might even be less efficient than fed down. So we think that there's a lot that fintechs can share with us to help deliver solutions to our clients more efficiently today, using the existing pay rails and try to reduce the friction and optimize how things are done. And I think there's just tons of room there.

Ernest Rolfson  10:07

If you can comment, I mean, what do you feel like the difference might be just for listener like, say if I'm a business, right? Or even if I'm consumer, like the experience or difference of like, say, maybe interacting on payments with my bank versus a FinTech today? And is it more like the customer demand that's driving some of these differences? Or the banks are the ones that are driving? It feels like based on Jared's comments, certainly Jared is thinking about how do we push the bank forward to meet some of these needs? But I'm just curious about what is there a difference in feeling or is it also just to cater some capability gaps that don't exist in the market, and all of you are, but you're working with banks are serving banks, or you've developed FinTech capability. So very topical.

Jared Wolff  10:52

I think that there's a difference on the consumer side. And on that on the business side. So I would say on the consumer side, innovation occurred much more quickly, with startups that that created new front ends to allow consumers to get services more efficiently more quickly, whether it was through chime or square, or the equivalents, I would say on the business side, banks have played a leading role in helping deliver solutions to clients to help them see what they could do better, it's much more disaggregated, in terms of businesses, finding solutions, and banks can really be the innovators and delivery systems to their clients. That's how we see it.

Ronnie Selinger  11:26

And on the delivery system side, which is, you know, the side I deliver on, you know, consumers have choices, I think it was easy, at the very beginning, right, because we printed mailed everything. But today, there are choices, and the consumer has the choices. And so in customers have to be able to deliver those communications and taking those payments, how the consumer wants to get them and how the wants to receive them.

Joe Proto  11:53

We're in a field here. And especially in the US market, in particular, we add new payment types, but we never retire old ones. Look, you go to you go to the convenience store, and you get changed with pennies, or nickels that nobody wants and leaves on the counter. As a country, we're still producing pennies, although it costs us more than a penny to create it. So we keep adding this whole multi channel experience for consumers as well as businesses and I like about this panel in particular is we've got a communications company and a bank. And when you look at where we are and where we're going, it's about this integration of data and dollars. And customers, whether you're a consumer or a business, wanted, fast, wanted accurate, wanted friction free, and wanted to do the thinking for me, so that I don't have to do that. And and when you look at this integration of data and dollars, the winners I think for the future will be the ones that serve the marketplace in this omni channel world that we live in as much immediacy in real time as possible, frictionless and cost effective.

Ernest Rolfson  13:11

Yeah, well said Well said, I thought for a minute we were going to talk about something that no one talks about, which is a piggy bank lobby, and how they may be behind the scenes keep copies, these pennies and nickels that we have to deal with. That's for another day, though. Joe, your last comments. I think the segue into this next session around embedded finance and all four of us here are working together to bring streamlined customer experiences to the marketplace, right notice would focus on receivables, helping clients receive payments help consumers receive FInexio on the payable side, Bank of California, certainly leading with Treasury Management and lending solutions. We're seeing a lot of innovation and a departure from the status quo in our sectors. And so I think it'd be interesting just to learn how your companies are navigating some of these new approaches. And as it relates to that, how have you helped or thinking about helping your customers see the need for engaging with these new solutions that we've been bringing?

Ronnie Selinger  14:15

We've seen a value in digital consumer payments from our customers. And we're a big believer in b2b payments, and this is something customers need and we're talking with the same customer that is on the communication consumer payments side as the business to business side and the b2b payments, it's you know, certainly in what Finexio is doing, more efficient, more productive, better experience to the consumer. And so we are really excited about bringing business to business payments to our customers because we'll look at it and and we feel it's just an extension on what we currently do for our customers.

Jared Wolff  14:57

I would say that from our perspective in terms of How are customers thinking about payments, demand is growing. But I think a lot of what we're doing is making technology available to help our clients see the benefits. And I feel that's part of our core mission to be a little bit ahead of what our clients may need, and then introduce them to things that can help them be more efficient. There is a learning curve and some teaching involved. I would say that clients are responding really well. And certainly that those have that have adopted ways to optimize payments are seeing benefit, it's not for everyone, but certainly with you know, the way that that we see for Nexio and the like, it's not for everyone. But if your minimum payments is 50 to 100 grand a month, you're going to start seeing some benefits today. And you know, that's who we're focused on is helping clients of that size really start to to see benefits. And I think it's going to roll from there.

Joe Proto  15:47

I think it helps to look at the history of accounts payable and accounts receivable in particular, because that's the lifeblood of every business, being able to get money in being able to pay your suppliers and vendors. In a paper based world. They are two rails of a train track, AP and AR. That never meet, right? They're distinct. And, you know, we've got hundreds of people on this podcast who know AP, and AR really well, in a paper based world, manual handling, you're not going to integrate those. But as we move now to a digital experience, and this integrated commerce, where AP and AR can move in a multi channel way, we have the potential to create a monorail so that an organization's AP and AR departments are no longer siloed they're actually come together. And the ability for the outbound payments and the inbound start to look like a singular experience at a corporation. And that is to me the driving force and the excitement around the thesis of where we're taking AP and AR. And as we start to knit together, supplier suppliers networks, I am a buyer on one hand, but I'm a supplier on the other, creating that kind of integrated network, if you will, a directory of directories is really I think, where we're going in the next three to five years.

Ernest Rolfson  17:25

So that's exactly right. If I were either a software firm listening or a payments firm thinking about how do I become one or the other, these are the kinds of companies we specialize in serving at Finexio. We work with a lot of software platforms that are managing billions and spend but don't know how to introduce a payment solution and how to do that efficiently and safely. And so I think to some of you folks can comment and this but I think Ronnie you've actually made this transformation yourself as a communications company and adding in FinTech solutions, which is different. So you bring your own perspective, but you've been successful bringing integrated payment solutions. Is there something you would attribute to that success? Or if you were giving your peers advice in the space what should they be considering? And why is that worked out so well for you?

Ronnie Selinger  18:14

Well, the value is not reinventing the wheel.  We created this incredible technology that allows our customers to manage their communications from their desktop. And partnering with payment companies and fintech companies that have complementary technologies, were able to bring these solutions to the market much faster and much more efficiently than if we started from ground zero and just started developing it ourselves. So in my opinion, fintechs really complete the circle. We're very excited about bringing b2b payments to our customers as we continue to move down this path.

Joe Proto  18:50

Payments are hard. Many of us on this podcast remember really well, when Google said they were going to create Pony Express and become a payments leader. And a lot of us spent 12 to 18 months of our lives in and around that project that, you know, never got out of the proverbial, you know, corral, the pony did not, the pony did not make it. And and that's Google, right who could bring a tremendous amount of capital, talent resources. There's a reason why payments companies exist. Now, when you bring technology and banking together, they what can be created is really incredible and unique. And so I love where Ronnie has, you know, continued to reinvent notice over the past 30 years is never looking at where he is. He's always looking at where the marketplace is going. And I think Jared has the same position at Bank of California. We have now an opportunity to look at where the puck is going to be. And to do it with technology simply for remembering that payments are really hard to get right.

Jared Wolff  20:05

Joe, you're right. I mean, there, there's a lot of friction and suboptimal decision in the way businesses make payments. This is a transformative time to move away from paper and have some AI and some digital thinking, help businesses optimize when they pay and how they pay. You know, why? Why are you paying a vendor that a bill that's due in 60, why are you paying them in 10, and doing them in the most costly method via check? What are you going to do to help change your decisioning to move money more efficiently, and increase your cash flow? And I think that's what a lot of this technology like Finexio, has really shown businesses, they can do it differently and save a lot of money in the process.

Ernest Rolfson  20:47

We kind of naturally started talking about some of these benefits of these themes we've been talking about. And I think we're getting a sense of why but maybe just for the group, I mean, why should companies prioritize this digital transformation in b2b payments? What is the imperative? What, if anything, are you hearing from your customers, or specifically from CFOs? I think that'd be interesting for the group to know about as you serve your customers and the kinds of problems your customers have, that you think some of these payment solutions are solving and why you decided to spend a bunch of time in this area?

Jared Wolff  21:21

Happy to start and just say that I think businesses are much slower to adopt new technologies than consumers. And so we've we felt it was an imperative for us to be looking at how we can serve our clients and be solution oriented. If they don't find it from us, they're going to find it from somebody else eventually. But if we can introduce something to our clients, which we think is truly value add, and help us become a hub of their financial services ecosystem, as we continue to deliver solutions on the lending side, on the deposit side and treasury management that we can help them on their payments. It makes us a more complete bank. And so we've been looking at this for a while. The one thing I would say, just to go back to something I said earlier is it is a very confusing landscape right now, you know, people that are looking at this for the first time, or maybe people that have looked at this for a while, understand that there are two competing things going on right now, there are the existing payment rails, which are the legacy payment rails, which have plenty of room for optimization, which is what everybody on this podcast is using daily. And then there are the neo payment rails which are being introduced, which are are still very, very nascent. These are truly highways, and they're their own toll roads. And you know, infrastructure has not yet been built on some of them. And you don't know what type of car you need to drive smoothly on it yet, and what roads it may connect to is still unclear. So we're focused on the traditional payment rails, which is what everybody's using, and how do we help our clients be most efficient and optimal on that. And, you know, we will be looking carefully at at the new rails, and what they might see. But I think we are years away from those talking efficiently and being right for most clients.

Joe Proto  23:01

Customer loyalty. I don't mean to be harsh, but it can be defined by what have you done for me lately? Whether you're a consumer or a business, nobody's waiting around. When there's something better, everyone's ready to move on. And we're seeing that with this computer, in our pocket. As individuals, we bring that same kind of thinking to work. And we expect to have these kinds of automated tools at our fingertips that just work. And as younger generation now takes over the financial positions, the senior most financial positions at corporations driving the market, driving banks driving their technology partners to move faster, to provide better to offer something that is different and unique that will help their business or they move on. It's no longer a game now where companies will stay with suppliers that are not keeping up. Everyone needs to move on for the health and the competitive nature of their business. And there are more options and more choices for consumers and businesses than ever.

Ernest Rolfson  24:19

Well said. In terms of barriers here to digital adoption with customers, and we've touched on I think that group generally agrees there's a big lack of awareness of a lot of these solutions, and it's heavy in education. I'm just curious what specific barriers to digital adoption have you seen? If anyone has any anecdotes on how you've helped overcome either your internal or helping customers adopt digital solutions and fintech? I think that's very relevant. It's something we are helping our partners with and doing ourselves every day and even it's interesting. Some clients we find have digital payments in place. They still struggle with it. And there's even more to do and more service that they're looking for. That's something I'm acutely focused on next year. But I'm just curious. Again, we've talked a lot about the benefits and the why and the vision, but also, introducing some of the reality of the barriers or challenges that are yet to overcome, I think is good to explore,

Ronnie Selinger  25:15

I could talk on the communication side of the barriers on digital adoption, when it comes to, you know, electronic adoption has been a real challenge for customers, because every consumer wants to receive something differently. And we work with our customers on developing communication strategies, so that we can drive more digital adoptions, because in our world, you know, we want to manage all the communications and we want to deliver them how the consumer wants them delivered. But our customers definitely have been faced with the challenge. If you're, if you're using multiple vendors, if you're using the letter shop, and you're using an email company in a text messaging company, and someone may be delivered to the wallet, you've got data flying all over the place. And so from a customer standpoint, that's a real challenge, because everyone, especially in today's world, wants to protect their data. So getting the consumer to, or allowing the consumer to receive the communications, the way they want to receive, it will make the payment the way they want to make it is every customer every company needs to look at. And so you know, we're really, really excited about being in this space, and helping our customers to manage that process with their customers. And it is it is a challenge and, you know, on the business to business payments side, you know, being able to make payments to your vendors, different ways other than just your traditional check writing, and saving money, and in perhaps even making some money in some cases. That is the way of the future. And that's why we're so excited about getting into this space, because we want to help our customers become successful with their customers.

Ernest Rolfson  27:10

Yeah, I was just going to add, I mean, the learnings we've applied at Finexio are the learnings you've been applying for years in the consumer, bill payments space, right? It's, it's, you know, just having one option or one digital method, when a client supplier, that supplier, by the way, maybe Joe Smith, the contractor who's a single individual LLC, who looks and feels just like a consumer. Their payment receipt and communication preferences may be very different than Acme Corporation, the billion dollar company. And they may want to decide different electronic payment methods and or different speeds with different fees attached to that based on their own unique needs. So I've seen this evolution come from consumer that has yet to be broadly, I think, employed in the business context. And Joe made that comment earlier about right. It's like, we're all using these magical smartphones now in our day to day life. Why are we going into the office, and using technology from the 1800s in the office, it doesn't make sense. So this is where the opportunity lies is taking this investment, and innovation and ease of use, frankly, and consumer, and bringing that into the business world now where again, a business is really made up of consumers. And those expectations are now really coming in in a major way.

Joe Proto  28:35

It's so funny, because when you look back to 2000, we clear checks, America is addicted to checks. We clear checks by sorting them, transporting them to clearing houses where then they were put on planes. So that the New York check went to California the California check went to New York, even though we had the ability to capture the microline, and the image of the check, we still move checks on airplanes. 9/11 hit and what happened? We shut down the ability to move anything for that period of time. And we said, well, we've got this technology that exists. Why are we still transporting physical checks versus electronic images. And that's what that transformation it was a catalyst 9/11 was a catalyst that changed that electronic check deposit our experience and and I think that we're seeing the same thing happen, where it's a little too close yet to be aware of it, but COVID,I think is we-- look we were told two weeks on the couch, flatten the curve and everything is going to go back to normal. I shut down the MasterCard, New York office on Thursday, March 12, two years ago, and now we're finally starting to see people come back in to the office. So when we look back, I think a couple of years from now we're going to look at COVID as being this, this real motivation for the acceptance of technologies that exist, but are not prolific and being used as much. And we'll we'll look at COVID as being a big reason why we made the shift.  Shifted our entire paradigm in the accounts payable, accounts receivable space.

Jared Wolff  30:27

Unquestionably, Joe, you see things ahead of others. So I'm sure that that's going to turn out to be true. In terms of the barriers to adoption. Just to comment on that quickly. Traditional barriers to adoption are what you might find in in many things, which is, you know, inertia, right? It's, we've always done it this way, somebody who's holding the ticket has to learn to do something else. And does that person really want to invest the time and energy unless somebody pushes them to do so or they realize it's going to really make their job better, and it's going to improve the company, we're also finding that there really isn't one solution, that's great for everybody. And so we tried to be, you have to have a basket of solutions that you can use to help provide the right solution to clients. So when we see, you know, entertainment companies that we work with, might need virtual cards as payment methods, because they can, online, you know, target how they're used, when they're used for what amount and for exactly capture the right type of understand. Whereas others who have larger invoices that are in healthcare, for example, they might need to pay a lot of ACH and move money, not via cheque but in some other more efficient way. Or maybe it is virtual cards, sending them out, but they're doing it in much larger numbers, and much greater volume. So having a variety of solutions, I think, helps to overcome a lot of barriers to adoption, and help people see that there are different ways to do this that are right for them.

Ernest Rolfson  31:53

I think one of the most remarkable things and this is kind of taking off of Joe's story was like, COVID hits. And now you couldn't go in the office, but you still had all these checks. So companies adopted because there really are not that many solutions out there. And it's actually very hard to even find the web for solutions to help you. And or meet every single requirement you may have, instead of doing that, but could be brain damage really hard. It's a very opaque market, right? It's very if you don't who has the time to research, by the way, when we have to make payments the next week, right? So folks are going in to the office. And then, you know, one day a week just to print and mail checks. And on the other side, just to check the mailbox to see if any checks came in the mail, and come and grab it. So very remarkable that is actually still going on. And what clients tell us routinely as a blocker is they're not aware of solutions that are out there. They need their bank, right, they need their bank of California adviser to call them and educate them on what's available, because they don't have the time to do it themselves. They don't they're busy, business is booming. And they don't have the resources that are available that are deep payments experts like some of us on the all of us on the phone here to know that even what to do with the solution. How could you get off of paper? If that's all you know, and that's all you've ever known? And now you have to figure it out? There are no or very few YouTube videos explaining how to do this. So it is a challenge. So they're looking for trust. They're looking for brand recognition. They're looking for advisement. And I think that's why I think banks is a very obvious path here. Because if I bank with a bank, I pretty much trust that bank implicitly.

Jared Wolff  33:44

You're right. I mean, that's why to the point, I mean, there is a lot of teaching and learning going on. And you know, we have to be looking for things that are going to help our clients for all the reasons that you mentioned, and then find a solution that we can introduce to be ahead of where they need to be because if we don't do it again, they're going to find it from another bank. So we've tried to stay ahead of it.

Ernest Rolfson  34:04

There's certainly some Landgraf dynamics right now in the market that are that are very exciting. So you're all investors in the space your investors in FinTech, SEO and b2b payments, what should investors be looking for? Or do you think are interesting to look for in around this b2b sector? I'd love to just start there in terms of how you think investors are thinking about the space Fintech is been a phenomenon over the last several years, but there's, I think, a laser focus now also on b2b. So we'd love to hear your thoughts.

Joe Proto  34:41

I have a lot of experience in venture capital, growth equity, private equity, and have been, you know, the beneficiary of having my businesses supported not just by traditional financial investors, but my last company had  five of the top 12 banks as investors with me, Wells, PNC, the third, TD and Capital One. And, and it's part of this whole thing that we're talking about where banks are not going to be left behind. Banks are actually coming together to pool their resources and their capital to make investments in financial technology, not necessarily because of the return on investment, although that's not a bad thing. But because they want a seat at the table, to bring that technology into their bank. To me, that is the most advantageous position for a FinTech to be able to have not just financial investors, but to have strategic investors, investors who are driving the use of capital, not just for return, but for creating something that is going to support and improve the industry and challenge the incumbents to be able to change with where the marketplace is going. And you know, this is a conversation that I am deeply passionate about, since retiring from MasterCard in November. My only objective in this last chapter of my career, is to help FinTech entrepreneurs, like Ernest, like you become successful, and to do it in a way that is collaborative with banks and other strategics. And so there's a lot of change happening at the macro level, especially when you look at the public markets, we're seeing some of the high flyers really being brought down to earth. And I don't mean like some of the new fintechs I mean, companies like PayPal, that have been around for, you know, a long time and are very, very well established. The PayPal stock is down, you know, 60 to 70% right now. So we're seeing this recalibration of the FinTech investment space, from venture capital all the way to the public markets, I think it's really healthy. I think it brings discipline, it brings normalization, it can't just be a growth at any cost, it has to be one in which you have to bring value to the market, the market has to be willing to pay you for it. And with that, you need to do it in a way that is efficient, just like every business, just like that, you know, the hundreds of people on this podcast run their businesses, they run it with a lot of efficiency, Jared cannot go to his board and say, I'm going to spend more than I bring in. That's been a way for fintechs now for a long time. And I think we're starting to see some additional maturity in the investment space.

Ernest Rolfson  37:51

As board chairman and investor here for Finexio, what did you see that was the most compelling reason to join, just given your purview of the entire market, and you could really spend your time work on any number of things.

Joe Proto  38:06

I just really have been very lucky my whole career to be a little bit of where the puck is going to be not where it is. And my belief is that the next three to five years, this digital transformation of b2b is going to be so accelerated, so dynamic, so exciting. It's going to help propel a lot of people's careers into areas where they'll be successful that they that they couldn't have even imagined before, there is one footnote that we're all experiencing, which is this talent war that we are in, especially in technology, there is the ability for people to now switch companies switch jobs, switch careers, and we're seeing something that we're at the early stages of, where FinTech folks are moving to financial institutions. Financial institution folks are moving into fintechs. That cross pollenization might be a little bit painful at times. But I think it's fantastic to be able to see. Ronnie is able to attract and retain talent in his business that he might not have had access to before. Because people want to go to a business that's on the cutting edge, and helping transform. People want to go to a bank like Banc of California, because they get opportunities that they might not have in a tech business or not in a larger bank. So we're seeing this, this combination of this dynamic change, coupled with a talent war, where I think the next three to five years, the winners will emerge. Not everyone is going to be a winner, but we can expect people in their career moves to really put amazing things on their resumes in the next couple of years.

Ronnie Selinger  40:00

Just to jump on with Joe saying, I mean, from the Nordis perspective, you know, we love the managed hosted service model. I mean, that's what we're all about that is Expresso. So that is what we've developed for the communication and payment space. And, you know, we've talked a little bit about COVID, and what its done. And it's it's been a little bit of a disrupter, and also a catalyst, right, because changes have happened so, so quickly. And I think the, you know, Finexio, and what you're doing there and what we're doing here at Nordis, and being able to have our customers access our platforms from wherever they are in the world, having our teams working on their deliverables. I mean, all those things on outsourcing, your communications, your payments, whether your payments are on the receivable side or other payable side, it's where everything was moving now, because I think when when COVID hit, you know, everybody, most companies were stuck. They were stuck either on the communication side, if you had a whole team of people. Well, let's take it a step back. If you had the communications being done in house, and you were shutting down in house, and how now do you get your bills out? We've developed expresso because it was really important for us to put this in the cloud so that no matter what was going on at Nordis, our customers were able to access and manage their communications. Well, I think the same thing goes on the Finexio side. You know, I remember sending a check out for a bill and I was paying and you know, I got a call three months later, that they didn't receive it. And it was literally sitting in the lobby, because nobody went back to the office. And so this is a disrupter. And this is where we're all going. And we're really excited about being there.

Ernest Rolfson  42:00

In what ways has this group seen the emerging tech influence the roadmap for financial services? And what does that trend? I don't know if over the next 10 years, I think we can speak maybe more crisply to the next five. But how is this emerging technology explosion here really pushing on financial services broadly, Jared already made a lot of interesting comments around crypto and some merging rails. But I know for me, being able to offer payments just from the web. Now anywhere or embedding payments solutions via web based other third party apps has been incredible for our business. I wasn't even aware of that technology a few years ago, and now we're using it with our partners. I'm curious to see what other technologies or things you're really excited about that will impact your businesses or this industry as a whole.

Jared Wolff  42:53

We're really excited about a minute finance and the ability for our clients to more efficiently move money or to tack on a borrowing solution, for example, to something which you know, in real time. So you know, the ability to process an invoice, click a button and say, hey, I want to finance that invoice without doing a whole lot of paperwork, is something which I think will be a big behavior change for clients going forward. I think also the way that we move money, the expectation will be that if I got paid by somebody yesterday, why do I have to wait for settlement? See that money, you know, in two days? Why shouldn't I be able to see it in relatively real time? Even if it's provisional credit, why can't it show up yesterday in my account?  And so I think that those two things, being able to access borrowing solutions really quickly. And then to be a receptor of money really quickly, are two things which are changing and are pretty exciting.

Ronnie Selinger  43:57

And on the Nordis side, I think the big word is API's I think that API's today have really given us all I mean, when you have technology partners, major systems are talking to create one solution for our customers and through you know, things have moved from a batch processing to it's going to go out to real time and you know everything in real time whether it's communications payments on the receivable side or on the payable side, it's been a big game changer and I think that the advancement of of API's in our world is just going to continue to get better and better. I mean, you know, it's changed the world or booking an airline ticket, right? You know, your airline ticket and then you'd wait a long time or you know, hours if not days to get your information back and now it's instant you book a car, it's instant. And I think you know, payments and communications are going the same way.

Jared Wolff  44:56

Ronnie, one of the implications of that for us is the ability to bolt on multiple solutions for our clients to access them in a single spot. So they're going to be able to come to us as a financial services hub. And we're going to have an ecosystem where they can tap into all these solutions, which we might have connected to via API, if it's core to what we do, it might be something we invest in. But it doesn't have to be for us to provide it as a solution for our clients don't have to go to 50 places to find a whole bunch of different solutions. So I fully agree with you.

Joe Proto  45:28

Above are talking about blockchain and digital currencies. And the administration just came out with a, you know, a watershed report on where we're moving with, you know, our digital currencies. The whole idea of embedded finance is already happened in the consumer space, whether it's buying my Peloton or buying a $50 pair of jeans, I can buy now pay later, we've just embedded financial experience for the consumer that existed before maybe with your card, but now exists outside of that card experience. You could say, it happened so fast, that we don't yet know what the downstream effects may be. I would not be surprised if we see some of that go from what it is to buy now pay, maybe, or even buy now pay never?  Are we kind of laying the seeds for the next, you know, financial crisis at the consumer level? But when you look at it for the business, to the business to business experience, the large enterprise doesn't necessarily need to finance their receivables, but their suppliers would be willing to pay for that payment. And so we're seeing this AP AR experience merge in a way that is really, I think healthy. So the large corporation can say, hey, small business, I'm going to pay you in 60 days. But I know you need that cash flow faster. I'm willing to accelerate my payment for a small discount. And now we've got embedded finance happening, right in the experience between buyer and seller, like we're seeing between sellers and consumers in buy now pay later.

Ernest Rolfson  47:22

I think what's happening here is in b2b, there's just more steps that are required. And that's where the barriers will come down right now. So like I'm working with Jared on working on, say embedded finance, but then Finexio, is then working with somebody like a Jaggaer, where we then have to integrate into procurement. So then the buyers have a seamless end to end experience. The bank knows about it, has the information, but you're removing that friction. So it's multiple steps of embeddedness, to create that ultimate experience. And that's what's really cool and transformative. And that may all get triggered because there's an email delivered by Nordis that the supplier might see what those options that they then choose. And maybe eventually it's a text, maybe it's an email, maybe, you know, probably not carrier pigeon, we know that. So it's just it's this dynamicism of the connection points that several of us on the phone can clearly see. And we're actively building these bridges. That's what's really exciting about the future for me, and it's completely untapped.

Joe Proto  48:29

In the meantime, one of the questions that was written in was, how can I get my customers to stop sending their payment to an old PO box that, you know, my company pretty much discontinued using years ago. And so while we're, while we are leaning into this great digital future, we still have legacy systems out there that have a PO box on that check that just got cut, and is being sent to where, you know, there may be the odd piece of mail and you can't, you just can't shut it down.

Ernest Rolfson  49:00

And the good news is there are solutions out there in the AR side, and we're looking to connect to as many of those as we can. So just a few minutes left here, and that was great. We've been talking about the future. I think I'll pause for a minute and open it up to the audience. We didn't just address one audience comment if there are any other audience questions, themes, we didn't touch on something you'd like to revisit or press us on, by all means. There's over 100 people here that we'd be happy to engage with this point. So feel free to submit through the app. If there are any questions or comments, someone sent us some love. And this is from an actual customer that partnering with the next sale has transformed our AP team. Thank you. So that's fantastic. Thanks for that feedback. That is a real customer of ours and not a planted question. So thank you, Daniel. We appreciate you, man. This was from Jeff. So a question here regarding the strengthening of security measures. and thoughts on on fraud elimination. I'll make a quick comment on that. I think one of the ways that companies can avoid this issue is by partnering with FinTech solutions to help manage and apply technologies to validate and authenticate bank accounts, identities and store that critical information off of the corporate systems themselves. That's something we've invested in heavily at Finexio. In moving money, as Joe will tell you, having those systems in place is table stakes for doing this.  I think that is a benefit of actually adopting some of the solutions and approaches we've been talking about is so that is a corporate end user. Why should you have to really figure that out or know that yourself, especially if the technology is commercially available?

Jared Wolff  50:46

Ernest, if I can address that for a minute, I mean, we obviously as a bank are on the frontlines of seeing this. And fraud most often occurs through actually the workplace where fraudsters know that they can't penetrate a bank network. But they can likely get into a less secure network of a smaller, medium sized business. And often it's getting access to the email system, monitoring email for transactions and wires, and then sending an instruction, you know, masquerading as something. So I would encourage everybody to make sure that they have the right verification procedures, that they have dual controls in place, and that they partner with first their bank to make sure that their controls are right. I mean, you really need to do a review, if you haven't done one and make sure that you're doing it right to protect yourself. But there are tremendous FinTech solutions. And that's one of the huge benefits of fintechs is that you're going to really bypass the traditional methods, that fraud has occurred on and protect yourself even more.

Ernest Rolfson  51:39

One last quick thing before we go another question was around Joe's comment of never eliminating payment rails and was just, you know, how does the industry promote interoperability? And I would say, I think by continuing to invest in the maintenance and integrating and keeping these things alive and active, so that customers continue to have the choice. I think that's how a lot of our companies have grown. I don't think they're sunsetting anything to Joe's point, it's more about how do we make it be easy to continue to use alongside everything else?

Ernest Rolfson  52:10

Okay, great. Well, well, fantastic event, engaging conversation. This was our payments executive roundtable we heard from Jared Wolff, the CEO of Banc of California, Ronnie Selinger, the CEO of Nordis, Joe Proto the Chairman of Finexio, and myself, Ernest Robson, CEO at Finexio. Thanks all for being here.

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