How to Properly Leverage Data & Technology Across The Entire Credit Lifecycle with Gary Byrne

foreign you're syncing up and tuning in to the lending link podcast powered by GDs link where the modern day lender can dive deeper into the future of data decisioning and credit Risk Solutions [Music] welcome to the show everyone I'm your host Rich alterman and today we're syncing up with GDs Link's Gary Byrne who leads our UK business team on this episode Gary and I are discussing a wide range of topics from the value of Technology within financial services including the current state of UK's economic climate to what a successful Tech partner looks like and so much more but first please head over to GDs links LinkedIn and Twitter pages at gdslink and hit those like and follow buttons and be sure to subscribe to The Lending link on Apple's podcast Spotify or wherever you prefer to listen to your podcast as I shared I am being joined today by my colleague Gary Byrne Gary joined GDs in June of this year with over 25 years of experience within the credit risk decision management sector with a focus on sales and Consulting related to decisioning technology and its use across the full credit life cycle of a customer including marketing originations account management and collection Gary's experience includes working for Transunion and fair Isaacs and several other companies who support this industry all right now let's get synced with GDs link foreign good morning Gary and welcome hey thanks Rich great pleasure to speak with you yeah thanks for joining me today uh where am I talking to you so yeah I'm in uh I mean God's own country in in Yorkshire in the heart of England just coming into what should be the early stages of winter but it's still mild enough here that I look for my office window and see grown men walking around in short sleeve shirts and trousers and so yeah it's uh the weather's a little bit crazy right now yeah we're having a strange weather here in the states as well I think it's supposed to be a 80 tomorrow for us here in Atlanta Georgia where I'm based so Gary uh before we uh kind of dive into the business I always like to start with one personal question for my guest I understand you're an avid bicyclist and have completed a few triathlons how long have you been doing this and can you share what type of training regimen you follow to get ready for a triathlon and how do you feel that maybe you apply some of these same disciplines into your work life oh wow that's a that's a great question and that I should start by apologize guys into any of anybody that what I would call true triathletes listening to this to paint myself as a triathlete is it it brings a degree of um artistic license so I do enjoy it I think the training is pretty varied I'm a frustrated soccer football player rugby player at heart I'd say we train myself to get on a bike and I'm not really built for that game but I really enjoy it the train is varied and mixed up and with when you're carrying injuries at my age of life you can mix it up nice going for a swim or a run or jumping on the bike so yeah I'd highly recommend anybody that's into the sports and activities to give it a shot it's really great trading great atmosphere at the events and the races the triathlon have really nailed it and been able to attract lots of different age groups and disciplines and distances to the event so it's yes it's great to be part of it I don't do a great deal of triathlons I've done one this year um I did it I might have another one booked in to one or two early next year but yeah again a little bit of artistic license calling me a triathlete think okay how do you maybe apply some of those disciplines that that you have being a quasi-triathlete into your work life yeah it's interesting so I think it lends itself a little bit right with a bit of a reach I think when you come into the technology business and what and what we do I think we've got a you know our places that we have won really highly flexible scalable powerful solution that can do a myriad of things and fix and Myriad of problems for customers and and you've got a can to be pretty flexible in your approach and be able to move left and right pretty dynamically to really offer best value and help to clients and I guess in in the if we're liking that to the triathlon world it's it's pretty similar right with when you certainly when you get to my Edge and say the injuries that you carry in the weather here in the UK Flex is up and down so you've always got to be reasonably flexible in how you approach your training and how you the timing of training as well when you can fit that in around your work-life balance and around your work heavy work commitments Etc so a little bit of a reach rich but I think there's some things we can grasp on okay well let's get down to business you know you're certainly somebody with a long tenure in the credit industry uh over 25 years when you think about changes that you've seen one of our last podcasts with Kevin Moss he and I jointly have about 80 years in the industry but you know certainly 25 years is a long time you know when you think about some of the changes that you've seen that really stand out in your mind maybe kind of share with the audience uh you know some thoughts that come to your head great question and what what the audience don't have the uh the benefit of saying rich is I can say you over the camera and I can vouch for your your part in those eight years of experience well thank you laughs but yeah the changes are really interesting I think principally fundamentally in some angles there's been a great deal of change you know the way that financial services are certainly a new financial services customer client of ourselves are in the industry that's been around for public five seven years plus kind of approaches risk and credit risk and life cycle decision pretty much the same as we did 20 years ago right the technology has changed and when I started predominantly kind of started to learn my training at a band called first director in the UK which was the first telephone Bank in the UK before then it was all all Branch walking into your branch and traditional Banking and First Direct came along and really changed the change the mindset a lot there and we see that kind of change and dynamic structure of changing of operations and principles it's pretty much the new normal now right that with digitalization but back then it was it was quite a big deal but even then the principles of of what we were focused on so customer first uh putting the customer at the heart of the decision and kind of customer level decision in a customer level account and customer management and collections was was really important and those principles remain today but the I guess the the major changes for me is as we look through that there was talk for a long long time about the oncoming onslaught of Big Data it was pretty much Bureau driven and that was you know it's either internal or just Bureau data we had to dig trenches and lay cables to get access to that data and now we're living in that right we just seem to have dropped into that and not talked about it too much but we live in Big Data now it's not so much it's very easy to get access to it it's not so much that you've got to you know look around and try and find the data that might be valuable to you it's actually there's a lot of data that's valuable to you the skill is identifying it which stuff is most valuable and you can make value out of in in a millisecond in the distance that you're able to make that decision so the speed and expectations of the of the market has changed and that's driven some really really cool enhancements and cool expectations and enforcing the financial services industry to go along with it I think predominantly speed the fact that we're living in big data and the expectations of kind of like gen Z coming through having some real positive impacts on where we're going yeah well thanks for that I know we'll be talking more about data later on on the news yesterday that the bank of England war in the UK is facing its longest recession since records began yeah it just raised interest rates again as we did here in the US but the most in the last 33 years and the bank of England warned right that the UK is facing and I quote very challenging times to your slump with unemployment nearly doubling by 2025 to as high as uh 6.5 percent you know with inflation hitting consumers not only uh you know you talk about the underserved and under Bank inflation's hitting across all credit classes today I don't have the exact stats in front of me but I know when I had the um I think it was a podcast with either Kevin or or Dan and I encourage our listeners to go back and listen to those if they haven't but even people in the U.S making over 100 thousand dollars a year are struggling with a large number claiming to be living paycheck to paycheck and I'm sure it's the same the UK is so kind of coming back to some of the points you were talking about what are some of the steps that you feel lenders should be taking today for to account for how inflation is impacting consumers ability to pay and what role can data analytics and and Technology bring to the table for them to you know try to as you say continue to lending we don't want source of credit to totally dry up but certainly there's going to be a pullback but you know how do they how do they do this in a smarter way when uh things are really changing rapidly for these consumers and it's going to get worse I mean it really is right you know working in risk as I have for a while uh rich and you have you know one thing that you would generally look to do is look at the past to try and identify where the where things are going to go in the future that's a generally not a bad way of kind of predicting how these things are going to play out the future here in the UK and I think globally as well is one of volatility and uncertainty and I think that volatility and uncertainty is the new future right I can't see a situation beyond the next certainly beyond the next 18 months two years probably three to five years in the UK where it's just gonna be gonna be really volatile it's going to be really uncertain right across the board and part of that is the speed of the global market and how something can happen as an example like the war that something in Europe and the almost immediate impact that has not just on the UK economy but on individuals in the UK with things like the cost of living crisis and the cost of utilities and that kind of cost of utilities hit the UK well before it needed to hit the UK really just because the the communications and the markets reacted so quickly to what was happening there so I think what needs to happen is I think the speed of decision needs to the speed of decision has always been prominent but the type of data that you're using to make that decision needs to be relevant and needs to be on point and and we're getting very close to near real-time decisions but looking at the type of data that you're using to make those decisions and I think the traditional risk data that's provided by the three bureaus in the UK is obviously very powerful for a lot of cases but when you're looking at making decisions based on such volatility I think you need we need to be moving more to transactional based data and things like open banking data and open banking I would say probably like here is the rest of the world I think it's got huge potential to really transform financial services and banking I don't think it's hit anywhere near its potential yet I think it needs to be adopted quicker across across the life cycle and the potential for bringing that in and bringing transactional data in and being able to rapidly analyze that today Gary's in good shape but tomorrow he's he's not and the uh is you know far outweighs the traditional methods of scoring month to month and waiting for chance to hit the account and that's backed up by data that we're seeing coming out on the on the UK Credit Card Market where we're seeing over the last six to nine months the you know one payment delinquencies actually goes up by three percent and it goes down by one percent and it goes up by two percent and down by three percent and it it looks a little bit unstable unstably stable if that makes sense yeah it's not necessarily climbing badly but it's not just kind of sitting at uh at recognized points but then if you look at two to three months delinquent those numbers are kind of gradually and if not rapidly going through the roof the skill to this is bringing the stats around that and bringing the decision around that and when to react in quicker and that's going to be led by transaction data and that's really really difficult for for a lot of providers in the UK to get hold of today and to make value out of quickly because the systems and platforms that they've got just don't allow for the AI models required to be able to make the decisions rapid enough or even get the data in to be able to operationalize it into their existing platforms because they've built a significant amount they're not easy decisions to sell for what you're talking about right is really the ability to implement an Adaptive control type system right that yeah really can uh help better manage across a full credit life cycle you talked about that consumers that are kind of bouncing around and maybe that 30 and 60 day bucket can you kind of give some thoughts on how lenders May uh really leverage technology as that customer does age out what are some of your thoughts on how technology that not only can be used for originations but can be effectively leveraged across that full credit life cycle just having a little smile to myself as you rightly call this adaptive control when I was at uh at FICO maybe 15 16 years we talked heavily right that was one of the buzzwords around adaptive control and how how technology could be leveraged to do exactly what we're talking about today with with the introduction of cloud-based Banking and what we can do with the technology and the platforms we don't need to reinvent the wheel on what adaptive control means we just need to go back and implement it and for me that means doing just that it's taking it's taking the tech knowledge that's available to you out there which is pretty light touch and you know I say building into these platforms now is is relatively simple through apis but it's the design of that that's really important and you get that design framework right up front and you build this intelligence based orchestration layer and hang off the bottom of that reusable framework of micro services that can be used at any point across the life cycle and when you start drilling into that you start to allow yourself to actually probably redefine what originations mean and what account and customer management mean and what collections mean and how and how you should design a solution that's fit for the life cycle rather than building an originations platform than an account management platform and then a collections platform and it also enables you as well if you to to rapidly ingest and get value out of the latest and greatest data that's out there now now when you bring that data in of course you've got to get value out of it and use it and and that you know the technology needs to lend itself to Ai and ml techniques again things that have been talked about for some time but I don't think use anywhere near to their full potential but the scale of Big Data the speed of decision that needs to be made that the weight of the the data that's going to come down the pipe that needs to be shuffled and and standardized and pushed through models to get value out of in a split second you know the traditional scoring methods aren't going to do that so I think getting best use out of the technology and really revisiting the design process around that is is hugely important exactly and also because you can use that same technology right that you use for originations you know from a return on investment for that lender to be able to leverage that same platform for us the full credit life cycle uh helps further justify bringing in technology like ours and others so um you know we talked about you know I think open Banking and how open banking's really changed a lot of the landscape and lending certainly company here in in the US pedal you know they talked about how they were able to approve probably about 35 percent more consumers by using in open banking data are you seeing uh the same rate of adoption in the UK or would you say it's still more in maybe in the infancy compared to the US where I think it's been heavily heavily adopted my view in what we're seeing on our side is it's it's massively under adopted right I think it's it's not been used even those that have adopted it I don't think they're using it anywhere near the full potential I think there's still quite a lot of assessment going on of how to how I'm best to integrate that data into traditional scoring methods and and in the life cycle as well and when and where to get best value out of it I think there's a fundamental shift that needs to happen and it's probably going to be driven by the massive economic shift that's happening in the UK now Financial Services don't have the time to wait for Credit Data to refresh they just don't have the time and so you know they come back in and transactional data experts and data sources that are out there now in the UK are ready to go and they need to be adopted all the analysis has been done all the Retros have been done technology is there to enable it I think it's very to say that for a lot of organizations that probably what they what slowing down adoption is Legacy I think Legacy is a killer right and I think anybody that's been in business here in the UK for certainly five plus years has probably built a bunch of Legacy that's no longer kind of fit for purpose it makes it really difficult to entirely reshape your operation and think about things holistically on how better to serve your existing customer base or to keep or to prevent the uh you know the Black Swan from coming in and taking your business all together and it's real difficult to do that but I think the adoption of it has to has to increase in it if I think anybody that doesn't start looking at transaction data to to Really transform the customer experience and speed of speed of change is going to be left behind yeah you know when we talk about the full credit life cycle one of the things that where I think there's a good opportunity for lenders with open banking as well it's not just in the originations where it's been playing more heavily but when we think about Collections and we think about settlement right so clearly more and more as consumers are struggling lenders are probably going to be looking at an increase in the number of consumers they they might be talking about settlement and I think that's a perfect place where you can say to that consumer yes we're willing to discuss assignment with you but if you want to do that we need you to permission yourself into your banking data so we can look at that and get a more holistic View and and kind of once again using analytics you know from A lender perspective is kind of about not leaving money on the table right not offering a 70 settlement maybe when you should only be offering 30 settlement yeah and I think collections is a real interesting play I think it's a it's a rapidly changing environment and I'm I think what needs to happen in collections personally is that the the definition of collections needs to be looked at for adults are grave really I think there's a lot more can be done at the best lenders in the UK do a lot more on the pre-delinquency early collection side and then when they start to introduce transactional data into that effectively they know well before idea whether I'm going to hit financial difficulties or not and what type of collections customer I'm likely to be am I one that can pay but won't pay our campaign and and will pay or won't pay but you know how does this how are they gonna how are they going to balance all this stuff out and the quicker they get that view of that the quicker they they make the call to the client to the customer the more likely they are to to get the share of wallet right to get the payment plans in place but they do it in a way that's not kind of collections it's account management bring it forward with that transaction data they've got to be in a better place right you mentioned data is king and a lot of our audience today is not as familiar with the UK Market landscape as it relates to data bureaus that GDs through our modelica platform and our data exchange we've integrated with I think it's almost over 100 third-party data bureaus in the US it's it's staggering in fact I know when we uh when we're doing a a sales presentation and we show our our opportunities to slide I think their eyes kind of pop out of their head like oh my God I didn't know these all these data bureaus were out there isn't similar in the UK have you seen explosive growth on the number of data bureaus bringing Solutions around ID income verification credit both on the prime and subprime absolutely yeah I mean traditionally and it's still the same in the UK I think the you know the Big Data hitters of the three credit bureaus and a couple of them in particular have do a real good job of trying to Bringing Innovative products to the market really and trying to refresh what that relationship between financial services and Banks and the credit bureau should look like right so not just your standard Bureau data but different spins on affordability and and propensity and Collections and a bunch of other things so the bureaus are doing a quite a good job of filling that market and particularly in the fraud space as well but I would say over the last certainly over the last three three to five years the the number of new data providers that are coming to the market I think this has been driven driven in My Mind by the introduction probably of open banking over the last you know over a longer time scale and seeing the influence that and the potential that that could have to the UK Market is probably spun off a lot of much needed conversation around what data is really valuable when we're making decisions about customers and and who can hold that data and how how do we get access to that data and access again is a huge point right so the technology today lends itself to access a bunch of data any data really rapidly through apis and the technology can if you build this reusable framework you can build a single data Hub access point and have a data Hub partner that can access all this data on your behalf really and more and more there's new data providers coming on board looking at you know the cracks and of of what the traditional lenders are providing so people like data on demand and a few others a lot of them in and out of Yorkshire as well which it's an exciting time if you were talking to a lender that uh maybe pushing out an RFP for a new risk management platform and you were helping them design and write up that RFP you know what are some of the key functional requirements that you would be laying into that RFP that our audience uh who maybe is thinking about replacing their existing Legacy stack are key things that they need to consider I think there's a couple of parts to this I think first thing is that clients don't replace their full Legacy stack every every year right it's a major operation and I think there's a lot that can be doing around around the edges of it and my answer is pretty much going to go two ways here focusing on Legacy and what a lot of clients do is look at replacing the stack they realize that they've got some Legacy it's not got the flexibility the scalability the reusability but it's it's become too costly it's on-prem they want to move to the cloud whatever it may be and they want to remove that stack now removing that stack can take anything from the decision to do that they get the funding from that the sponsorship internally to line up all the players that need it that they needed to do that to go to RFP and then go for the projects can be you know anything from probably minimum 12 months out to three four years worth of of Engagement and the investment around that as we know it is significant in the interim there's lots they can be doing around that and what a lot of clients do is build more Legacy they just continue to add on to the Legacy and that's makes it more and more difficult to replace right so I guess up front what whilst they're thinking about the rfps and we're also thinking about the stack is don't don't build Legacy around Legacy right always be future thinking as much as you can and even with the small changes that you're making try and make them future proof try and use the latest and greatest technologies that are out there to to circumnavigate the Legacy that you've got in place because you'll get some significant benefits in that and a lot of time those those workaround benefits we'll pay for the project to replace the the Big Iron that yeah that you're struggling with I guess by way of a feature's functionality and what you should be looking at it's about reusability for me and it's about it's the cliche of making sure that when you buy a solution today it's as much possible it's it's future proof as possible and that you know in an environment where it's real volatile and everything's changing rapidly I think we're on our third prime minister now in as many weeks so you know it's um it's not easy to be future proof but if you build things internally if you build things on premise on iron yourself the the budget to get that budget and to secure that and you're bringing the latest and greatest technology and you put it on your own technology stack the operation that you'll build around that to maintain it and to take it forward will be significant and you'll be constantly adding to that to replace that and take it out you're gonna again be looking at that 12 to four year time scale so use the use the services that are available and out there use cloud-based Services whether you own other vendors and go through a heavy period of design make sure that you don't rush to market right you need to slow down to get there little bit quicker I think and make sure that you go through a real design phase that allows you as much as possible to design an intelligent orchestration and Architectural layer that that will address the fact that tomorrow may be different and new data may need to come in and AI models may change I think those are the key things for me which is to use the technology that's available today don't build more Legacy and as much as possible think that you know keeping your mind that it things are going to change and change is the new normal and you need to have a design framework in place that it that it's not going to slow you down great well Gary I think this has been a very informative conversation I hope our audience picks up some key talking points from us so just a couple maybe more personal questions uh before we wrap up let me ask you if you were uh if you're uh meeting with a rising University senior who was uh thinking about upcoming career choices you know what would you tell tell them about the financial services industry and why you think it would be a good career choice for them oh wow I think when you're working what we do rich and you're at a dinner party and then you go around the table and you know you're sat next to the the brain surgeon and the engineer and the and the The Butcher and whatever else right it's um traditional it's not been a particularly exciting place right and you know who knows you may get the odd drink film if you're in the middle of a banking crisis but I don't think there's a more exciting time to be involved in what we do I think the changing face of financial services it's it's front of mind for everything particularly I I I'm sure it is globally but particularly here in the UK right it's the headlight it's headline news um around cost of living crisis and economics and politics around that and I think the influence that we can have on on helping Financial Services organizations come to Market and come to come to help people and shape the market that's that's in my mind is is fairer for society um and fairer for the financial services Outlook has has never been better if your play is is that excitement or it is the you want to be on the bleeding edge of technology or um our solution framework and integration and design up or even people I think I think working in our space is a really at last it's a really exciting place to be and I I don't mind I kind of look forward to when the the you know the uh I get my nod at the dinner table and I get to tell people what they do hey well you know last thing uh you mentioned helping people so I'm going to kind of give you a little plug here is looking at your LinkedIn profile and I see that you're on the board of a Trustees for the uh pontefract Food Bank in West Yorkshire can you share a little bit about what their mission is and uh you know why you decided to get involved thanks Rich yeah without getting overly political food banks in in the UK here it's a shameful situation right one of the most wealthy Western European countries and we've got thousands of food banks here in the UK and what we're seeing and what we've been warned off by our trust group The trustful trust is to prepare ourselves for a soon Army of poverty and that's just a shameful situation to be in in the situation in a country like the UK what the food bank our mission statement at the food bank is that we shouldn't need food banks right we're not in the market of of growing a food bank Empire but it's just about you know what we're seeing it kind of lends right back to the beginning of the conversation where we're seeing more and more people really going to be impacted by the global economics of the next couple of years and you know that's not you that's not the people that's not the homeless people that's not people that you you may pigeon haulers might be needing this that could be your neighbor that could be you right and people on on very good salaries that suddenly find themselves are not able to to feed themselves or their families and it's a great thing to be part of it's really fulfilling nowadays anybody to get involved in the local communities and I honestly don't do a great deal there's a lot of outstanding volunteers that do the grunt of the work but it's it's unfortunately a much needed part of society in the UK today thanks for sharing and thanks for investing your time in that this is uh Rich Altman uh wrapping up today we've been talking to Gary Byrne who heads up the UK business team for GDs link once again both Gary and I hope you uh enjoy our podcast this afternoon and that you walk away with a couple of points that you could bring back to your day-to-day jobs and we look forward to having you join us for other podcasts thank you and make it a great day [Music] foreign [Music]

2023-01-17 08:07

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