Explore how innovative technologies are transforming traditional banking operations to better meet customer needs and regulatory demands. Learn how automated KYC and reconciliation tools streamline compliance, and discover how sub-accounts are enabling tailored solutions for wide ranging use cases like HR benefits and property management. Gain insights into embedding risk management and fraud prevention tools, from account validation to velocity limits, while seamlessly integrating partners like investment management and FX hedging with single sign-on (SSO). This session will showcase practical strategies to enhance competitiveness, manage risk, and stay ahead of evolving regulations.
Transcription:
Janis M. Wilkey (00:10):
Hello. So this will be a little more challenging given that we're scheduled right through lunch, but I wanted to welcome all of you
(00:22):
To our session. My name is Janis Wilkey, Vice President of Transaction Banking here at Priority. And joining me on the stage is Albert Acevedo, Head of Banking and Treasury Services. Over the course of the next 45 minutes or so, we'll share our story and experiences on how we at priority have created real world solutions by solving for client experiences through the use of technology in order to simplify the complexity of integrating to legacy bank and finance services. So I know that we're in a room of experts. We hope that you'll take that opportunity to ask questions and for this event to be interactive. So please feel free to interject with your questions and share your experiences along the way. But before we get started, let's officially meet the team. So again, my name is Janis Wilkey and my roles and responsibilities within transaction banking as I help design our go-to-market strategy, determine product features, as well as be the executive sponsors for solutions that help us solve for our small to mid-size clients. And my prior to joining priority and Q4 of last year was I stepped off the stage coach after 16 years with Wells Fargo and my role at Wells Fargo was to support a small group of financial technology customers who specialized in both storing and moving money. So I wanted to join the other side of the table, so to speak, and I'm excited to be part of the financial technology world hosted and helping Al bring this conversation to light. So Al,
Albert Acevedo (02:23):
Thanks Janis, and thanks for joining the Bright Side, not the dark side. Hey, well and thanks for joining us for lunch. It looks good. We'll probably get hungry as we watch out there, but I think I know a few people out there, but Al Acevedo. So I run our banking and treasury solutions division in priority. I've been in FinTech and for about 15 or so years, both at startups and some pretty large companies across varied spectrum. So what we want to do today is just talk about the journey that we have been on priority and how we sit in this fairly unique position where we're somewhere between a FinTech company and a traditional bank. And I'll get into some of the things that we have there, but what we're seeing across the industry is really this merger of technology and traditional banking to get some solution based things. So we'll share our experiences. We'll love to have an interactive conversation as well. By the way, the lights are kind of in our face, so if we're squinting, it's not because of anything else.
Janis M. Wilkey (03:23):
Thanks Al. Before we jump into the, I'll call it meat and potatoes of our conversation, I would like to ask one question of you as priority may a new name, despite being well established within the industry, having a long tenure and tons of experience. So I'll ask the question that everyone's thinking as big as priority is. Why haven't I heard of you?
Albert Acevedo (03:49):
Who the heck is priority? Yeah, so we're probably one of the bigger companies that you haven't heard of. So we do about 130 billion of payment volume. We actually are a little bit unique, like a lot of companies in our space. We grew through acquisition, so we are one of the largest merchant acquirers in the country. I think we're number four or six depending on how you count. So if you've done any small business purchases of the credit card, you've probably used our services. We're also one of the biggest processors of rent payments. If you ever paid rent with a credit card or a debit card or cheque, you've probably used our services. We generally go to market behind the scenes with technology. That's why the name priority is not a big use case there. We're also a pioneer in the virtual card space doing B2B payments. And then of course our banking solutions are really behind the scenes, powering a lot of other FinTech companies and even some banking processes that we have, particularly in the payroll space and construction space as well. And interestingly enough, NIL, so we're one of the largest NIL that about student athletes where we power most of the wallets in NI ls today. Great. So that's who we are and kind of what we do.
Janis M. Wilkey (04:59):
Thanks Al. So moving forward to how we go to market and sharing more about the experience, can you help explain our client engagement model? I know you just did some of that, but anything to add?
Albert Acevedo (05:14):
Yeah, what makes us a little bit unique is I think because we have the merchant acquiring and the banking and some of the B2B payments that are one roof, it gives us the ability to bring that together with some unique opportunities. The technology part comes. We are a technology first company, so we're built upon everything. Being API driven, in fact, we were probably one of the first to do APIs probably 17, 18 years ago when no one else had it, which made it less able to connect when no one else can connect you, but the world's kind of caught up. And so that's how we generally move through things. We generally operate with solutions between our banking partners, so we still rely on the banking environment, so to do transactions and holding balances and things like that with our end customers, and we're a combination of that technology and banking solution we have. So just Janis, from your perspective, coming from a big financial institution, what are some of your thoughts and what you've seen from us versus what you've seen before?
Janis M. Wilkey (06:14):
Yeah, I mean jokes aside, there's a reason I chose to come to the bright side as you'd said. So from my point of view, given my experience, priority has always been best in front as it related to meeting the compliance requirements, managing the regulations, and being really above industry standards as it related to having processes and sound procedures in place to help mitigate risk to the bank, there was also the component of applying the appropriate amount of friction to the growth of a business. So as priority grew through acquisition and we're bringing on new flow of funds, there was full transparency into the transaction at a very granular level that the bank applauded. So having technology to support the infrastructure to connect to what would be a very clunky experience if anyone's ever dealt with a BAI file what I'm talking about, there was a lot of compliments that priority brought to the table where others unfortunately struggled or tried the traditional ways. But Al you kind of touched on it before, there's a specific reason why priority can bring all of this together in one place where others may struggle. So thinking along those lines with all these comprehensive services, how are you not categorized by regulators as a bank?
Albert Acevedo (07:52):
Yeah, we do bank-like things as I say, but we're technically a licensed money transmitter, so we're a non-bank financial institution, so we're regulated at the state level. So what's nice about that is from our customer's perspective is from a KYC anti-money laundering perspective, we actually do that. We do that across actually state by state, so there's slight variations, but that gives us a little bit of comfort with our customer base. So we're not a banking as a service kind of operation. Also gives us comfort with the banks that we actually work with. So there's a safety factor that does that. Probably one of the more important things as we get into some of the solutioning that we can do that like a traditional payment processor can't do is we can hold funds. We have stored value kind of products that a lot of folks don't have, which lets us control the timing of payments, have things like escrow models and things like that have things where we can actually hold payments and wait for verification to release. And so that's a little bit of the secret sauce that we have. And yes, we also are SOC one, SOC two PCI and HIPAA compliant two. So in any given moment in time, I'm going through an audit somebody.
Janis M. Wilkey (09:02):
No fair statement. Fair statement with the customized approach that priority takes. I wanted to see if you would help double click before we move on to the ways we solution for customers on what bank-like services mean to you.
Albert Acevedo (09:22):
So if you look, there's a lot of interesting things that we can do and we really tend to focus on getting people faster to market and doing things a little bit more efficiently. A lot of what we have is we've actually streamlined our KYC and CIP, which we have to do as a regulated entity ourselves. It's a fairly automated process. The advantage we have that a lot of banks or companies that have grown over the years have is we've got a pretty modern infrastructure, so we built this in the last five years versus having multiple systems that are trying to talk to each other and things like that. As a result, we can actually open up literally thousands of accounts within a day and that's how we can put things in action to get people to market faster, help with migrations of existing processes and things like that.
(10:10):
The second piece is really because we have the full banking infrastructure, we can handle any kind of payment that's out there. We can do wires, ACHs and things like that. So some of our financial services customers, for example, don't have our size and scale, and so we can actually do that for financial services, we can do that for fintechs or just for corporates that want to do something a little bit more efficiently bringing their banking together. The upshot of all that stuff is really we have an environment where you can have all your information and transactions in one place, which leads you to a little bit more of an efficient model as well as getting visibility and data that you can create by structuring your accounts and your hierarchies in a way that fits your business needs.
Janis M. Wilkey (10:54):
Great. Thanks Al. Now, although to this audience it's probably extremely relevant, but to think through, what would it take either yourselves or others to open thousands of accounts overnight and what's the impact potentially of being able to do so? Al, I think you have maybe a relevant story of where that really came into play.
Albert Acevedo (11:24):
So I lived down in San Jose or Silicon Valley, so you may have heard of a bank around March of 2023 that had some issues. And so over that weekend when they were kind of having a little bit of trouble, we actually were able to work through that, do the KYC, open up a lot of different bank accounts. So that was our first actually opening of massive accounts, including over a weekend. We had a $3 billion annual processor. We basically had 'em up and running, we got the call, it was Friday at eight o'clock our time, local time, and we had 'em up and running by Tuesday full of processing and that's really taking their technology stack, plopping it into our environment and doing that. And I think that was, I would not recommend it by the way, that's a really long weekend, but the fact that we can do that just gives you the power of that. The other thing, and we'll talk about some examples of where this is relevant, it's places that are complicated. Think about payroll construction where there's a timing difference or you're splitting payments in a bunch of different ways. And so the ability to onboard things in mass is really helpful in those environments as well.
Janis M. Wilkey (12:32):
Thanks Al, I appreciate that. So now as we look at ways our clients start to customize their own use cases, I thought it would be helpful for us to go through essentially how we bring this to market and how we meet our clients where they are from a resource and IT point of view.
Albert Acevedo (12:58):
So a couple of things, if you look at on the left hand side there, that's kind of things that we can do by really utilizing our payments capabilities and our money transmission licenses. So think about stored value, it's where there's a timing element to the payments. It's things like escrow payments in a variety of different ways. It's things like security deposits for rental space. That's why we're such a big player in the rental market or the property management marketplace. But it's also things like gift cards and stored value cards. Just put that stored value on a card format and that's how you can actually start bringing these things together. You take that card and you put it on your watch and all of a sudden you've got a stored value wallet that you can use. So it's a lot of different cases for rebate cards, incentives and marketing programs.
(13:38):
Two things like payroll and pay cards and things like that. So that's stored value. And again, being a money transmitter allows us to do those types of things and that's kind of why we go through all the regulatory fund that we actually go through. If you apply that, then it's really those complicated payment systems. It's things like payroll and constructions that we mentioned. It's things like pay fax where you're combining some of the merchant processing with your banking elements and those types of things and split payments where you have insurance programs, agency commissions, all of those types of things where it gets a little more complicated. And so if having multiple accounts to do a single transaction comes in really handy and we can automate that stuff. So that's the things that we do. I think when you start putting together, that's where the stuff in the right comes into play where it's really how do we help our customers or our financial institutions that we're servicing optimize their cashflow right now you can do with multiple accounts, have concentration accounts, optimize your cash balances and investments.
(14:39):
We do a lot of work with digitizing paper. There's still a lot of cheques. We do a lot of work with law firms and they still write a lot of cheques and receive a lot of cheques. And so if we can start digitizing those types of things and put it into a ledger kind of format, now you can have better visibility and cashflow. And then last but not least, it's a lot of operations improvements. What we've been seeing over the last few years in particular is creating that metadata with all these accounts and the accounting structure so you can actually have useful information. So it's things like dashboards, dashboards to help you collect money faster dashboards to help you pay slower. Everybody wants to pay slower and collect faster for some reason. Or just from an accounting standpoint, giving you a sub-ledger of all your activities so you can tell exactly where your money is at one point in time. Compare and contrast that to a bunch of accounting systems that are trying to do the same thing by pulling money out of a singular account. We're just taking a different approach to get to the same spot.
Janis M. Wilkey (15:38):
And just to share my point of view, thinking about the contrast to a traditional way of onboarding, either opening accounts to actually owning the process or allowing customers to facilitate the same type of money movement. Financial institutions obviously have systems as old as 150 plus years old and not a lot of funding has potentially gone into reinforce that infrastructure. So it leaves banks potentially ill-equipped to make changes and accommodate the new requirements of folks who are in our space. Couple that with limitations from different risk appetites limitations with compliance and regulation, it can be really challenging as well as customers expect that this be done for them by their service providers. And I don't know that many bank partners are looking to lean in and answer these questions for their clientele. They expect them to carry the IT burden. Anything to add Al?
Albert Acevedo (16:51):
Yeah, and that's the interesting position we find ourselves in where from a bank and financial institution, large institution standpoint, larger institutions are generally looking at us for our technology solution like helping them ledger things out, doing some spot kind of transactions and things like that. Even smaller community banks are using us for different capabilities. We have international wire capabilities, ability to do forwards and things like that. So it's really helping them compliment what they're doing today. The other end of the spectrum is a lot of fintechs are using us to really get into some of the bigger banks and relying on some of our licensing, which they probably don't have, and our compliance checks, which we are required to do to kind of compliment what they're doing from a technology standpoint. So that makes us a little bit unique as we talk about how technology banking and all the infrastructure is coming together. I think we're living it every day and we see that depending on where you are in this ecosystem, you're probably moving towards that having both at some level.
Janis M. Wilkey (17:50):
Al, can you elaborate on the fact that from a technology point of view, what makes this a sustainable model is the fact that technology has been part of this process from the inception. So where you have other institutions and organizations solving these problems through hiring additional FTE or building out full teams of people to manage everything within that cash conversion cycle or money movement from reconciliation to facilitating invoices. Maybe you can share or elaborate on the fact that this is a very low cost model because of the technologies created nearly two decades ago.
Albert Acevedo (18:36):
So again, we're lucky enough not to have a lot of legacy infrastructure that we have to talk to. So we built it from scratch. So we started out as web enabled. We've got, we're on AWS, so we don't have a bunch of legacy stuff that we had to talk to. So starting from scratch, that's actually an advantage that we had. But we also, we were born to be technology first. Funny story, the original name of our banking solution was Bank in a Box. This was 20 years ago and we couldn't talk to anybody. We were going to API the whole world. So we were just the box. So we pivoted and we started to win payments, but that's kind of not having that legacy has been an advantage for us. We can move a little bit faster. Also gives us the ability to scale up without a bunch of legacy infrastructure. So that's one big advantage that we have. And now that we have all the, it took us about a decade to get the money transmission licenses too. Now that we have them, we just iterate on that and make sure that we stay current and it's an easier process. So I get to sit on the top of an iceberg that's a decade in the making and take a lot of credit.
Janis M. Wilkey (19:40):
Which leads us into solutioning with a purpose. So I know that there are several use cases. This one seem extremely relevant. I'd love for you to expand on our ability to help bring the banking infrastructure to add value to HR products and services and the client experience.
Albert Acevedo (20:05):
Yeah, so we thought we'd give you a couple of examples of how we bring all this stuff together and how do we make this really relevant because lots of people can move money from point A to point B. It's when you move money from point A to point B and then have a bunch of twist and turns in the middle of it that it gets a little more challenging. We love these complicated solutions. It lets us shine and do some of the things that we have. So if you think about an HR solution, so we do a lot of work with benefits companies, payroll companies, and PEOs. If you don't what a PEO is, that's kind of a combination of benefit and payroll kind of company. And instead of thinking about a lot of institutions think about, Hey, I've got to get a nacho file in and do direct deposits and they'll send a wire and that kind of stuff. We've actually taken the problem and broken it down to inside the organization what's important to different people. And if you think about a typical payroll run that would go through, you've got a lot of folks that are the collectors and they're making sure that employers are going to give you money. You don't want to pay people if you don't get the money in. That's apparently a bad business model.
(21:09):
But the tools we developed around that is how do you get the money in, right? Well, let's do wire draw downs and give you a little bit of a competitive advantage for some of the smaller players out there, or let's give you some ways to have reserves so that you can actually manage your risk better for those types of things. And then aging and things like that. So this is a lot of information around the actual basic function of need to get money in, make sure it's there. If you think about the next, who's usually sitting right next to the person that's collecting when you send it out, they tell me it's a problem when people don't get paid on Friday, I don't want to figure, find out that we missed the payroll run, but that's a bad thing. And so if you think about what's important to those folks, it's making sure that the money got to where it's supposed to be.
(21:51):
A lot of that as you go into that is where is your payroll file? Is it at the bank? Is it at the Fed for early pay and things like that. And so it's a lot of different statuses that we can kind of go. So again, at the end of the day, it's a notch a file going somewhere, but we're giving bells and whistles and tools so these folks can be a little bit more efficient in what they're doing. And that's how we kind of take a payment kind of program and make it a real treasury management type solution for our customers.
Janis M. Wilkey (22:15):
Since the format hasn't changed since 74, I think we'd all agree notch is not the easiest type of file to work with. So to be able to extract something beyond an acknowledgement or even a C note, those are the types of enhancements that we're hoping to help bring transparency into what will be very muddy waters.
Albert Acevedo (22:41):
And it's funny, right? We do that and we've got the technology extracted. So yeah, honestly, that's our quality checks too. So we're just applying what we're doing on every day to our customers. And again, that's where the technology helps from the basic kind of format. The other thing that's interesting is inside that environment people think people getting paid and that's a point a B kind of thing. But again, if you're a payroll company, you have to pay taxes. Apparently if you miss taxes by a day, it's a 10% penalty and no one wants to pay that. Again. That's another what I'd call a bad thing. And so for that audience, it's really making sure that you've got enough money that came in that you can actually make that payment out. IRS has special fed wiring instructions that you have to follow or everything bombs out.
(23:24):
Again, if that bombs out, bad things happen. I never want to find that out either. So it's the tools that actually format that and maybe automate some of that around there. Same thing with benefits companies. So if you think about the benefits, if you're a benefits administrator, you may have multiple retirement programs all with a different trustee. You may have healthcare vision, all those types of things. It's really getting money to the right place is where you have to do. And then the other part is finance and accounting. As a former accountant near and dear to my heart, but it's really understanding where all your money is at any given point in time. You've got some stuff that's actually went out on Friday for a payroll. You've got some things that are earmarked ready to go to the IRS for that Monday run. And this environment we built just gives 'em the ability to do that
Janis M. Wilkey (24:11):
Across state lines,
Albert Acevedo (24:12):
Across state lines and even internationally. Crazy, right?
Janis M. Wilkey (24:15):
I know. Well, I think that's a big component too though in differentiating is depending on who you're paying when and where and what state they're employed in, those rules change and are dynamic and that's another way priority shines in being subject matter experts within the line of business.
Albert Acevedo (24:37):
So maybe just show you how this whole thing works from a funds flow standpoint. Finance folks, we love those funds flows. Essentially all we've really done is the employer money comes in, the collection tools are coming in, and then we've opened up all that. Orange is really a series of just accounts and our accounts, their existing account number, you can do transactions. So for all intents and purposes, they're an operating account that you would see. And so you can actually launch payments straight from there. And because we have that, we have everything earmarked. So all of a sudden that ledger becomes the reconciliation ledger for the entire company that ties into their ERPs and what have you. Also, you can tell exactly at what point in time where all the funds are. So I may have 10% of my money or a million dollars waiting in the FICA kind of account knowing that I have enough money to make that payment that on Monday, if I don't have that money in there, I can set up alarm bells and say, uh oh, something happened and you can easily trace it back. We have transaction details. These are accounts and these are real transactional accounts, not just an accounting account. So all in one system we're actually supplementing the accounting system. So that's how we live inside a banking environment, treasury management environment, and a accounting environment all in one. So that's how we put it together.
Janis M. Wilkey (26:02):
A legitimate virtual account versus some of the others I've seen out there that are non transactable account types. So thanks for sharing.
Albert Acevedo (26:20):
A little bit of how this is actually, this same logic kind of applies in a lot of different use cases. Another big one that we've seen is just we do a lot of work with financial firms, strictly private equity or venture firms that have capital calls. And when you have capital calls, there's two big issues, right? Often you have a special purpose vehicle that you have to set up and sometimes it takes weeks to set those kinds of things up. Remember we have our own KYC, we generally can open up accounts in minutes if you have a legal entity, as long as you're not on the naughty list anywhere. Part of what we're solving for is I'm opening up these special purpose vehicles so we can let things move forward. The other big challenge you have in the capital call situation is often people are wiring literally hundreds if not thousands of people.
(27:06):
Institutions are wiring into one big bank account and you got to figure out who paid you and you're trying to crank things out and get all the money out in a really short amount of time. So the other part of what we can do is open up a specific account for each individual investor so they have their specific wire instructions. So then at a glance you can actually build a dashboard and say, ah, this guy paid me, this guy didn't pay me. Funny story, what we said, somebody, this is a real problem that people have. Sometimes I guess somebody was on a yacht in the middle of the Pacific and their SAT phone wasn't working and they had to try to get money from a capital call. Again, not an everyday problem for most people, but these are the kind of problems that we can have where you can figure out where it is and then how to get back with them. And if we had wire draw down instructions on the backend, we can actually pull that out. And it's all one environment for those types of things. Again, if you look at that, funds flow pretty similar to the payroll thing, but totally different context, different emphasis on what we could do. And that's really a lot of technology over that basic infrastructure that we have.
Janis M. Wilkey (28:06):
And I think different priorities. So you had mentioned the timing, but another priority that comes up with these certain things is maximizing your return on investment and other investment options.
Albert Acevedo (28:20):
And so we have all those kind of tools that we have in place. So that works if we control the money as priority. So Janis, what if we don't actually control the money? Some of the things that we can do in that case.
Janis M. Wilkey (28:33):
So obviously this is near and dear to my heart. You can tell from the squiggly line on the left to the simplified iconic light on where I think that this can truly add value as I look across what I understand both businesses, financial institutions and otherwise to really struggle with is there's still a need to improve visibility at a granular level. And in the past it used to be nice to pass your audit with flying colors and to be able to refer to the nacho file debiting and there being a hundred thousand transactions in there. And oh, by the way, no problem. I can show a total amount being debited from the account. Well, now that there's more scrutiny around those who manage transactions on behalf of others, identifying Al's direct deposit from Janis's direct deposit, we're getting a lot of inquiries, banks, fintechs alike about, well, how do you know?
(29:45):
And the regulators are paying attention and they're holding everyone accountable to delineate between the two. So when we talk about what cashless reconciliation is, it's more of the data and the ability to translate what would be standard reporting, whether fed through a file-based system or through API, and coupling that together with our own ledgering tools and the technologies that we have to tie the information together in a seamless way. How this benefits the masses is this allows those who would like to continue to have the luxury of a high interest rate and earn return on your deposits for all of that to stay intact as we're not taking over possession of any of the funds themselves. And so whether you're a single bank wanting to maintain deposits and meet the compliance requirements of the FDIC or you are an enterprise customer who has multiple banking relationships, this solution would potentially help you manage the reconciliation at the transaction level in a very simplified way from a go-to-market perspective.
(31:13):
And so I kind of already highlighted why this is important. Now folks are asking for visibility. You need to be able to deliver this type of details either for yourselves or your auditors on a moment's notice. And so this helps solve for that. Also, resources too many are asking, well, do I build this out myself? Right? Do I buy it or is there a way of outsourcing this to solutions that would allow for best in class? So again, this is an existing tool that we've been using for more than two decades. So you can of course build it by yourself, but I feel very confident with the numbers Al had shared. And there's a reason, again, the biggest testament of my belief in what we're doing is the fact that I'm now here. So I'm really excited about that and risk, I think I've already covered that, but before we go on, just kind of reiterating maybe Al you can dive in deeper. Again, these are new age technologies, so legacy infrastructures and we have real life use cases where we're solving.
Albert Acevedo (32:28):
Yeah, thanks. I think there's, and remember this is the evolution of data now along with the payment versus just traditionally the payment was the thing that we used to do and a couple of things. So if you think about financial institutions and different technology players, a couple of live examples that we have right now, remember all that payroll stuff we were talking about? We actually had a bank come to us and they couldn't do that, but they liked all the accounts that we can have the subaccount structure to help them with all those tools, but they didn't want to give us their deposits because banks like their deposits as you guys probably know. And so that's exactly right. We didn't take over the cash, but we basically built a ledger inside their own banking environment. And so the payroll company still has one, maybe two accounts that are there, but there's literally hundreds of accounts for each of their employers and their taxes and things like that all in that environment.
(33:21):
So it's a little bit of us. We have evolved to more of a virtual accounting system versus our origins are in payments. What makes it nice is remember we're used to dealing with BI files and APIs, and so that connectivity is there. The trick on that is how do we get that mapping right? So it becomes a mapping exercise. Most banks, if you've dealt with any of the TMSs out there, you probably have that infrastructure to do that. So we just kind of do on that and we do that. But again, bank gets to say if their deposits, we get basically a fee and participate in that as well. And the most important thing is their payroll company is happy and is staying at the bank instead of leaving. Another similar thing is there was all the FDIC proposed guidance that had emphasis on reconciliation.
(34:10):
We have a few smaller community banks that let's say were nervous about their ability to do that reconciliation on a daily basis. Wouldn't it be nice to have a ledger? And we said, of course it would be. And so same kind of thing, it's that technology overlay for that. So it's a little bit of us acting more like a traditional TMS, but because we have that infrastructure and we're built to do things on an account level at a sub-account level, it works well for them. A couple of other examples in the corporate world, believe it or not, we have a lot of customers that come to us, but they don't want us to be their sole banking partner. They like their banks, they want to keep that. So it's a way for us to actually bring in their a hundred percent picture of what's going on if we're doing only 50 or 90 or 80% of the actual activity.
(34:57):
So it gives them a holistic view of that, and it was really designed for that. So you don't have to, we're not an all in one solution. We can piece it out and give you the information you need for that step. And the other super interesting one is our ledgers that don't have cash, but you can actually add things up, can work in any environment. So if you're looking at doing something international, let's say you have only one Canadian bank account, but you want us to do the same thing in Canada, but you don't want kind of break that up, you can actually take what we have in the US and actually put that in there. Just know that it's Canadian dollars instead of US dollars. And we've got a few folks that are using this to go international or at least try out international before they actually have their full banking structure involved with. That also works well for acquisitions too, when you have a whole bunch of banks. So those are the types of things, and again, if you can think about that, if you take the Ledgering information part and separate it from the actual money movement and control part, that's why we're both things.
Janis M. Wilkey (36:00):
And as I think about the importance of delivering priority as a service, that really sticks in my mind because enterprise companies may have a syndicate loan or again, we're partnering with companies that want to keep the deposits intact, but that doesn't mean you have to sacrifice your experience or your customers have to sacrifice their experience. And so this allows the opportunity to deliver set experience at a low cost, but also get in front of the changes that are written on the wall for anyone who is moving money on behalf of someone else. But that's what the prepared materials were. We're more interested in what you all have to say and they've even given us a mic. So this should be really interesting because Al likes to walk along. Oh, walk around. So are there any questions that we can answer about the materials? I mean we can't see you very well, but raise your hand. Real high wave. You just don't care. There it is. Okay. No, thank you. Yeah, okay. It's also true, I'm not, because they said they were filming and I was like, oh, thank God. Keep the light on you.
Audience Member 1 (37:30):
So one thing I was curious about with the various acquisitions that you've had throughout the years that have been a part of your growth, were those acquisitions to help fill a gap you might've had in technology and bring the technology into your portfolio? Or was it more so that you saw that company you could utilize your technology to take that company's business and make it more efficient? Or was it both? I'm just curious, as you've acquired companies over the years, was it tech based? Was it portfolio based or was it a little bit of both?
Albert Acevedo (38:05):
So I think it was a little bit of both. So priorities started as an if you are a merchant acquirer or an iso, you know who we are, like a big name there. But they were doing really good work in the kind of credit card kind of processing kind of world and things like that. Three big acquisitions that we did over the years. We acquired a company called ach.com. Anybody want to guess what they do?
(38:29):
That got us into the bank draft and that kind of world, and that gave us a lot of volume in nacho files and all the bells and whistles that turned into some of that part. On the payment side, we did that. That was probably about seven, eight years ago, five years ago, four years ago, they acquired a company called Finra. I was part of that acquisition. I actually think that's probably their best acquisition. We actually had all the money transmission licenses and things like that. So instead of taking that 10 year journey to get their own, that's how they bought it. That's how we brought it in. That came the ledgering infrastructure in that stuff. So those are the big three components that makes up what we have today. There was a vision, interesting enough, Finra, my old company had the same exact vision. We couldn't do credit cards, and so it was kind of kismet that we actually got together.
(39:20):
So one of the pieces of advice, and by the way, I was CFO of that business as well. So I got a little bit of insight into what the strategic planning process is for that. But I look at that, there's always a build versus buy that you have from these things because starting out from someplace, either you're a FinTech and you've got a lot of technology that does a lot of cool things, but you may not have the infrastructure of payments or the other way around. So just figure out what that balance is. We have a lot of partners though, so we have a wire and an entire wire station that we can do for international wires, the currency conversions. We can't do that with our money transmission licenses. So it's a whole partnership that we have for that. But we brought that technology and it's a holistic thing and you don't know what exactly which rail you're doing, but most customers don't care most of the time that it just works seamlessly and you go from point A to point B. So thank you. Good question. Any other questions?
Janis M. Wilkey (40:19):
And we were out. Oh, big wave.
Audience Member 2 (40:24):
Maybe a basic question, but how do you open thousands of accounts overnight?
Albert Acevedo (40:33):
So we actually on a regular basis, so we do about 70,000 consumer accounts every month just on a regular basis and about 15,000 merchant accounts every month. So we've actually got everything systematized. So to do that kind of volume, it's kind of interesting, the infrastructure for the consumer business. So we have about a million consumer accounts in our portfolio that are active right now, probably about seven or 8 million over the course of 15 years that openly close and things like that. That infrastructure, we basically have wired in all the checks to do the KYC, the OFAC checks and SIP and everything just hits databases. Most state databases are online now. So we hit most of those things directly and we've got that all built. The interesting thing is all the business KYB comes from all the merchant processing open a bank account. It's actually easier because I'm not doing the credit checks that I do to open up with small businesses, but it's the same infrastructure from KYC to do a small business versus a multinational corporation. Interesting thing that we did though too is all that consumer stuff that's automated, that's how we do the beneficial owners. So that's what we done. Let's see. A couple of things we did. Our record is 200,000 in two days.
(41:50):
No, that was an interesting thing. That was doing a bunch of payment processing. There was a big consumer thing that we moved over, and then the recent one, it took us three days to do 80,000 employees for a payroll company. And again, we have everything kind of systematized. And the lucky thing is they had their information already. So the breakdowns are usually where that comes in, where you don't have, what's that driver's license number for those little things like that. But that's how we do it. But again, looking at the databases and having everything automated, making it as no touch as possible. Any other questions? No, by the way, do you guys remember Phil Donahue or if I just be Okay,
Audience Member 3 (42:37):
Thank you. You mentioned the cross border that, what are the rails were using there?
Albert Acevedo (42:46):
Great question. So we actually have a partner that works with some of the larger banks. They're actually out of Canada, but it's same swift rails and things like that. So what we do is via API, we pull down all the information that they need. They have all the compliance checks too on the receiving side from their infrastructure. So we just plug and play into their infrastructure for that. And what's nice is that's a service now that we can offer to our customers. So one of our big customers, they're a marketing company, so they pay a lot of influencers all around the world. And so there's a lot of, as you can imagine, a bunch of compliance that you have to do in every country that you have, including countries that you can't send things to. And so we just rely on their rails for that kind of stuff. That's a classic case of a good partner versus us trying to build all that stuff ourselves. Sure. Any other questions?
Audience Member 4 (43:45):
Is your solution, are you involved with Zelle or develop processes for that?
Albert Acevedo (43:50):
Great question. Not yet, but soon. So there's two things that we've kind of not done a lot of direct things into. One is we have a user interface. We think it looks good, but not a lot of people use our user interface. Most people have their own branded stuff and we're just kind of sitting in the background doing the boring stuff, like compliance. We haven't built the res for Zelle yet, but that's coming up as we get more into a direct consumer kind of marketplace, I think that's going to be one of the things we're going to have. Zelle, Venmo, PayPal, direct, we're looking at all that as we go into that. We focused on the commercial side of the house, but that's probably coming in probably the next couple of quarters for us,
Janis M. Wilkey (44:35):
Especially as we expand to meet the needs of those PEO and HR adjacent type of solutions.
Albert Acevedo (44:45):
Yeah, I think our story of growth has been, our customers have actually helped us evolve a lot. So if you think about a payroll company, one of the problems is you have an unbanked marketplace for that. You're sending up a bunch of cheques, you replace that with payroll cards. Well now we can give you a consumer account, so that gives you ATM access and things like that. We've got a growing base of those kind of folks, and that's turning into the need for Zelle and being more consumer oriented. So that's exactly how we've been evolving. Great question.
Janis M. Wilkey (45:14):
You're out of time.
Albert Acevedo (45:17):
Alright, well I guess we're out of time. Thank you. I am not Oprah, so there are no cars. We're receipts. But thanks for everything and we're around for a while. Feel free to look us up if you have any other questions and hopefully this was helpful.
Janis M. Wilkey (45:31):
Thank you.
Applying Next Generation Technology to Enhance Traditional Bank Capabilities
March 17, 2025 8:06 AM
45:37