FinTech | Business Review Webinars

A conversation with Bo Brustkern, Co-Founder and CEO at LendIt Fintech

Bo Brustkern is co-Founder and CEO of LendIt Fintech, the world’s largest event
series that provides context to the rapidly changing universe of technology and financial services.

For over 20 years, Mr. Brustkern has set himself apart as a leader in understanding, funding and leading cutting edge developments in fintech and financial services. Mr.
Brustkern’s experience includes private equity, venture capital, fixed income, asset management and investment research.

In addition to co-founding LendIt Fintech, Mr. Brustkern co-founded Arcstone Valuation (2006), Arcstone Equity Research (2010), Cardinal Rose Group (2013), and NSR Invest (2013).

Previously, he was a venture capitalist at Rustic Canyon Partners in Silicon Valley; and a private equity investor at BACE Industries in Denver, Colorado. Prior to his career as a private equity investor, Mr. Brustkern was a senior analyst at Wellsford Residential Property Trust (NYSE: WRP), where he focused on acquisitions and development for the fifth largest residential REIT in the country.

EXPERTISE
Mr. Brustkern has performed industry research and investment analyses related to the following industries: financial services, financial technology, blockchain technologies, enabling services, software as a service, among many others.

EDUCATION
Masters of Business Administration, concentration in Finance, the Anderson School at UCLA, with distinction as a Deutschman Venture Fellow (2001)

Bachelor of Arts, Dartmouth College (1995)

BRW: What is LendIt Fintech for those who may not have heard of your conference?

LendIt Fintech is the world’s most influential fintech events company. Entrepreneurs and investors from around the world rely on LendIt Fintech for the best and most valuable industry gatherings, timely and insightful information they can get nowhere else, and as a showcase for the innovations transforming financial services.

Financial services are undergoing massive, tech-driven change, and the industry needs a way to better understand, stay ahead of, and benefit competitively from it all. LendIt Fintech is an indispensable source of connection, insight and innovation in fintech – it’s where the forces shaping the future of financial services all come together. When we create a forward-looking community, understanding and innovation flourish, money flows more freely, and the financial system works for the betterment of all.

BRW: What do you enjoy most about your role?

I love working with this dynamic and energized team. Everyone here at LendIt Fintech is driven by our mission to engender positive change worldwide through the application of innovative technologies to financial services. This spirit shows in every interaction we have, whether at our weekly stand-up meetings or in the constant conversations we have with our clients. There’s an energy here that only comes with commitment to purpose, and it’s contagious!

BRW: What is new for this year as opposed to previous events?

Our event evolves every year in response to the dynamism of the fintech industry. Most notable this year is the addition of BlockFin, our conference-within-a-conference, which is on pace to become the world’s largest event covering blockchain in financial services. We will have over 130 speakers and two tracks of content devoted entirely to enterprise blockchain, infrastructure, cryptocurrencies and investing.

BRW: What discussions do you look forward to having with the audience?

Every day we ask ourselves Are we challenging the financial services industry with our content? My favorite things to experience are audience members challenging speakers, and controversy in panel discussions. When controversy and confrontation are taking place, we know we’re posing the right questions. In that spirit, I most look forward to interactions that challenge my understanding. I love learning where I’m wrong, why, and how that impacts my world-view.

BRW: How did you get into the industry?

By accident. All of my co-founders were building fintech-related companies and we were looking for a conference to attend, of which there was none. So we decided to invite the most interesting innovators of the time to join us for a day-long conversation in Midtown Manhattan. This was back in 2013, and we were hoping to attract some 200 folks to join us for what turned out to be our inaugural event. When more than 350 people showed up, we had to close the doors for fear the Fire Marshall would shut us down. Just five years later, we’re gathering more than 10,000 delegates annually on three continents! Such growth cannot be achieved without committed support from the industry we serve, and the fintech world has been extremely supportive of us through the years. We are truly of the community, by the community and for the community.

BRW: What are a few new trends in the industry?

Fintech is always moving, and fast! Here are a few trends we are seeing that have captured our attention:

Blockchain is moving from concept to application at major banks globally.
Artificial intelligence has gone from interesting and useful to mandatory tech for financial institutions in the last year.
Most large banks are launching or are planning to launch their own online lending platform.
Digital identity is a hot topic in the wake of the Equifax breach.
Lines are starting to blur between banks and fintech platforms as partnerships and M&A accelerate.

BRW: Where is your favourite place in the world and why?

Wow! That’s a tough question. If I had to choose one favourite place to be, it would be swimming across Horseshoe Lake on Blakely Island USA, a small private island in the San Juan archipelago of Washington State in the glorious Pacific Northwest. There are only about 200 residents on this 6-square mile island, where a wave and a smile are always de rigueur. That said, if you allowed me to have a half-dozen favorites I would add:

Stoddard Cabin in the Second College Grant, New Hampshire USA
The train station at Kleine Scheidegg, in the shadow of the Eiger, Switzerland
The balcony of Phaedra Hotel in Idra, Greece
The Cabo Surf Hotel in San Jose del Cabo, Mexico
Late night at The Mighty Session in Dingle, Ireland

Digitization is very topical at the moment, it has triggered many conversations and its impact in banking has been hotly debated. Financial services seem to be ripe for disruption by the new breed FinTech companies for a number of reasons including rapidly evolving customer preferences, declining customer loyalty and the proliferation of options. While some FinTechs have offered new approaches to lending, the majority of the traditional lenders are still not fully embracing digitization and offering its benefits to their customers. Why is it so? Some believe that it is a passing fad or used only by young people while others believe that regulators will protect their businesses from disruption.

It is clear that the banking and financial services space is undergoing a digital transformation wave, but it is not clear how the future will unfold. A recent survey by PwC reported that while 30% of customers plan to increase their usage of nontraditional financial services providers, only 39% plan to continue using solely traditional service providers. The same report states that 88% of incumbent financial institutions are increasingly concerned that they are losing revenue to innovators. This indicates that FinTechs have been able to take advantage of the gap in what customers want and what banks have to offer. Moreover, it appears that some financial institutions may have taken too much time to implement the digital strategies required to turn the tide to their advantage.

Some of these actions could have been driven by misconceptions. For example, some people believe that digital starts and ends with mobile. However, digital is much more than that; it is more than being online and mobile. Today’s customers compare their banking experiences to that offered by the leaders in technology, retail and entertainment. While it may appear that customers like to visit bank branches for loans, it might not be because they prefer human interaction but rather because the bank’s digital experience isn’t fast, simple or user-friendly.

When embarking on or evaluating a digital transformation program it is vital to check what the primary drivers are – was it cost reduction, or efficiency enhancement, or expanding business reach or matching competition? To achieve the desired outcome it is vital to ensure that the program is aligned with the objective, and that customers are at the heart of that objective.

Let us talk about a few pointers, which can help lenders in bridging the gap between customer expectations and their efforts.

Get closer to customers’ expectations – While it is never easy to identify the missing element, it is the first step to reach where you want to be. As per an EY survey, there are a number of reasons prompting customers to try non-bank service providers and the most important of them are related to customer experience. While ‘trust’ and ‘long term association’ are extremely important criteria for customers in banking, current trends indicate that customers are open to exploring newer options in niche areas such as lending. Anticipating what your customers want and offering personalized products over a channel of choice could well be a game changer.
Make the transformation “transformative” – Adding new delivery channels at the front end isn’t the real game. The back-end needs to move in sync with the sleek front end to deliver the real benefits. The power of digital lies in ensuring that there are seamless, automated processes across the loan lifecycle, irrespective of the systems in use. As an example, while a lot of focus is levied on the loan origination aspect, banks should not ignore the loan servicing area where customers spend the longest period of their relationship with the bank, an area which can make or break the chances of a cross-sell/up-sell opportunity.
Make better credit decisions faster – Processing loan applications quickly and maintaining a high quality credit portfolio are not mutually exclusive objectives. Incorporating comprehensive credit scoring mechanisms guided by insights from predictive analytics helps to process applications faster, while improving the ability to reach new customer segments, and reducing the cost of operations. And all of this can be done while delivering higher quality credit decisions.
Personalize with ease – The rise of FinTechs has proven that a one size fits all approach does not work anymore, especially as customers become more used to tailored services across industries. A digital setup helps in capturing the digital footprint of the customer, which in turn makes it easier to analyze their needs and offer personalized services.
Put your data to work – From identifying the right products for a specific customer segment to adopting the most preferred channel and identifying strategies for reducing customer churn to taking proactive steps for boosting collections – working with analytics is best suited for banks sitting with huge piles of rich data. As customers trust their banks with their money and confidential information, they expect their banks to know them better and provide solutions tailored for their needs.

A unique combination of customer expectations, regulatory push, volatile economic scenarios, evolving political climate and ongoing technology advancement has ensured that lenders need to think beyond the normal. Digital lending offers one such opportunity where the benefits outnumber the risks by a huge margin. It is going to be extremely difficult to build an organization of the future by ignoring this vital aspect which has now been brought into focus by the disruptors. It is true that customers’ trust is an asset for traditional banks but it is essential that traditional lenders fulfill their obligations by embracing the wave of change and taking their customers with them.

Join me and Megha Dalela in the webinar “How do you become the digital bank of tomorrow – Today” on the 21^st Nov 2017 to understand how banks and financial services companies can drive innovation in lending by leveraging the power of digital, personalization and analytics. We will discuss a number of topics including how digitization in lending is much more than online and mobile, why personalization is a must in the age of Artificial Intelligence and how to making better credit decisions faster with predictive analytics.

Written by Daragh O’Byrne, Vice President, Global Head of Marketing & Alliances at Nucleus Software

Tag Archives: FinTech

Bo Brustkern – Co-Founder & CEO, LendIt Fintech

Does Your Digital Lending Go Beyond Mobile?