Rich Alterman  00:04

You're syncing up and tuning in to the lending link podcast, powered by GDS link. Where a modern day lender can dive deeper into the future of data, decisioning, and Credit Risk Solutions Welcome to the show everyone. I'm your host Rich Altman and today are syncing up with Lisa Bonalle, Chief Executive Officer of GDS Link. Lisa's impressive career spans over 30 years in the financial services, loyalty, FinTech, and Mar tech industries. Lisa joined us as GDS Link’s CEO on September 7 of last year taking the reins from GDSs co founder and former president Paul Greenwood, who along with Yves Duhoux, our CTO founded the company in August 2006. GDS Link is a global credit risk leader delivering innovative decision solutions and data analytics leveraging its Modellica Platform. With over 17 years of experience. GDS Link empowers financial institutions to understand customers, mitigate risk, optimize learning through data aggregation, advanced analytics, and responsive decisioning. It's solutions span the customers' journey from acquisition to retention. Prior to joining GDS Lisa served as president of Verisk Financial Group, a division of Verisk Analytics, a leading data analytics and risk assessment firm where her collaborative approach and skilled direction yielded substantial business growth and innovation within the marketplace. Under her visionary leadership, Verisk Financial orchestrated the successful acquisition of multiple organizations, bolstering its prominence within the financial services sector. This strategic trajectory eventually led to the group's acquisition by TransUnion in April 2022. Before joining Verisk, Lisa served as President of Loyalty Solutions for Affinion Group, where she transformed the business into a customer centric organization and expanded the international loyalty business. Her career also includes senior management position with Argus Information and advisory services where she was responsible for global partnership and new product development positions in the credit card division Citibank, where she was president of Citi Cards, largest portfolio, and JP Morgan Chase, where she held the role of chief strategy officer during a period of substantial growth. Beyond her professional achievements, Lisa is a passionate advocate for diversity, equity and inclusion and she is deeply committed to philanthropy and volunteerism. Lisa holds an MBA with highest honors from New York University and a BA summa cum laude from Providence College. In this episode, listen, I want to use some of the data points from her background, her vision for GDS for 2024 and beyond, and industry trends that she feels could impact lenders and how they might address these. But before we dive into the interview, please head over to our LinkedIn and Twitter pages at GDS link that's GDS L i n k and hit those like and follow buttons. If you have not done so already, please subscribe to our podcast on Apple podcasts, Spotify, or wherever you prefer to listen to your podcast. All right now let's get synced with GDS Link. Thank you. Welcome Lisa. Hope you are having a great week so far. Thanks for being my first guest in the new year. I'm really excited to have you joining me today. And where are you joining me from today?

 

Lisa Bonalle  02:55

Hi, Rich. It's so great to be with you. I am joining you today from New Rochelle, New York, which is a suburb of New York City in Westchester County. And for those Trivia Buffs in the audience, it is also the home of Rob and Laura Petrie from The Dick Van Dyke Show. I may be dating myself a bit there, but I get that quite a bit when I say New Rochelle.

 

Rich Alterman  03:15

As you know, I spent a lot of time in New Rochelle myself growing up. I think my grandparents didn't live too far from where you actually live today. And actually the Dick Van Dyke Show is one of my favorites. It's definitely a classic. So before we get started and talk business, let's get a little more personal. One of your pastimes as we as I know is competing in triathlons. But how long have you been participating in these and how many have you completed so far?

 

Lisa Bonalle  03:37

That is true. I do compete in sprint distance triathlons, which just for the point of full transparency is the shortest distance triathlons, but I do love it and I've competed for about 10 years. COVID slowed us down for about two seasons. I compete with a team. And I really love it.

 

Rich Alterman  03:56

What is the distance of a sprint marathon or triathlon?

 

Lisa Bonalle  03:59

A sprint triathlon generally is about a half mile swim. About a 15 to 20 mile bike and a 5k.

 

Rich Alterman  04:08

So what is the coldest water you had to dive into?

 

Lisa Bonalle  04:11

Yes, we swim in the Atlantic. It's pretty cold. And we swim. Usually in September we do our big races. I would say it's in the, you know, 60s 70s? Probably that's the coldest.

 

Rich Alterman  04:24

Do you do that on Lake Jones Beach or?

 

Lisa Bonalle  04:27

Some of our races are in Sandy Hook, which is in northern New Jersey, the northern Jersey Shore, sometimes lakes in Connecticut as well.

 

Rich Alterman  04:35

Cool. Okay, great. Great. Thanks for sharing that. Obviously, as a triathlete, you're very disciplined. And when you think about how you have converted that discipline into your work life, how would you say they actually kind of line up?

 

Lisa Bonalle  04:47

It does translate very well. One of the things that I really liked most about triathlons is the cross training. I train with my cousin and we often say, we like the training more than the actual event itself because you're training different muscle groups, you're training for different sports, different distances throughout the training period. And so you personally, you know, as an athlete, you always have your own strengths and weaknesses. And then you're strategizing the best way to prep and be peaked for your race. And I think those same skills translate really well into business. You're continuously learning, stretching and growing new muscle, new disciplines, you're playing to your strengths, and you're always looking at ways to work on and improve your weaknesses. So I find that mental discipline translates really well into my work balance and my work life.

 

Rich Alterman  05:41

Great. How much time do you spend training every week?

 

Lisa Bonalle  05:44

So I don't do it year round, I generally will train for one or two races a season. And I'll start training in April and our races will generally be at the beginning of September and at the end of September.

 

Rich Alterman  05:58

Cool. Yeah, I ran cross country for four years. And it's funny, I just, I could jump in a pool and swim 50 yards without pushing myself off underwater with no problem. Every time I ran, I was so short winded.

 

Lisa Bonalle  06:10

Yeah it's definitely different muscles, different breathing techniques. One of the other things that I really love about triathlons, and certainly the ones that I participate in again, we're all amateur athletes, you have to wear your age on your arm, and your leg because if anything happens to you, they need to know how to take care of you. And it's such a great lesson in don't judge a book by its cover. Because, you know, I'll be thinking like, oh, I can't, I can't run another mile, I can't make another mile. And then I'll see somebody pass me with like a 78 or an 80 on their arm. I'm like, wow, if she can do it, then so can I.

 

Rich Alterman  06:46

Great. So like somebody with your experience, your talent, your background, you know, when it came to looking for a new opportunity, you certainly probably had the pick of the litter. So you know, maybe share with the audience, what were some of the attributes that GDS possessed that really helped you make your decision to join us?

 

Lisa Bonalle  07:03

I’d love that question. It was really important to me in taking that next chapter and next step in my journey, where I went. And so there are so many things that I admire about GDS as a company that led me to this role. Key among them is the fact that GDS is the market leader in providing digital decisioning software. And that speaks to many of the trends that I've seen in financial services over the past few years, creating more frictionless customer experiences, the number of companies that have reported they are on a digitization journey, whether they be legacy banks, FinTech, you know, smaller credit unions, everyone is digitizing, our children do not know what it means to walk into a branch and to fill out paperwork to take out a personal loan or a mortgage. Right, they live in an entirely digital world. And so as the world is digitizing banks, financial services, Fintechs, they, you know, they are as well. On that digital journey, digital decision making, frictionless customer experiences are really important. And GDS has led the way there for over 15 years, that is only expected to grow over the next five to 10 years, the number of banks and financial institutions that are moving away from their legacy systems, putting a digital front end, a digital interface for their customers is only growing. So I love the space. I love the opportunity. I love the market leadership position that GDS Link has, we have an exceptional solution, we add great value to our clients and to their end customers. And that market is only growing what's not to love?!

 

Rich Alterman  08:50

Cool. Well, like, I'm glad you joined us, welcome aboard. So as we said at the beginning, you have over 30 years of experience in the financial services space. And so when you kind of reflect on your career, you know, maybe you could share some of the accomplishments that you're most proud of, and kind of think about how did they shape your leadership style?

 

Lisa Bonalle  09:10

Yeah, it's such a great and interesting question, right? You always think of that, quote, when you're looking back on your life, are you going to remember that hour you stay late at work or the time you were at your children's softball game, right? But over the course of a lifetime, there's lots of accomplishments, both big and small wins and losses, and the big ones stand out, but to me, the little everyday experiences do as well. So there's kind of two things that come to mind for me, you know, immediately off the top of my head that have had a really significant impact on my career. And then my leadership style. The first one is actually the experience of working on the merger of two banks of equal size roughly, Chase and Chemical Bank merged. I was working in Credit Card division of Chase when that happened, and I was put on the integration team responsible for the migration of our balance transfer systems. And every night for nearly a year, we had a merger update. And I learned all the different systems and subsystems, you know, of the credit card business, I learned how a transaction gets from the point of origination at the point of sale to settlement on the back end. And that wiring diagram got set in my mind, right you're learning you know, is basically like the architecture of a house or of a community. And once you learn a business, from the roots up, you know  that wiring diagrams in your head, and you never get rid of it. And that taught me a lot, I got much better at any job I had in and around consumer financial services and Small Business Financial Services, because I understood the systems, the technology, how the data flowed, how the transaction flowed, how the money flowed. And that was like, that was probably the biggest aha moment in my career. Because I learned through that experience, I'm always going to get to the grain, when I take on a new job, if I move into a tangential industry, I need to understand how this works at the most granular level, and then I can from there, and that understanding, make the most of my contributions. So that's pretty technical. The second experience that’s really shaped me Rich, is that I have had the great fortune of having some amazing bosses throughout my career, not every one of them. But I've been very blessed. And I've had really amazing people leaders, teach me how to be a good people leader and how to be a people first leader, how to lead with grace, and kindness. without sacrificing business needs and strength of purpose and discipline in achieving your business goals. That's an art. And I'm fortunate to have had great role models in that regard.

 

Rich Alterman  12:15

Yeah, it's interesting, you know, if I can send a word of wisdom to our younger audience today, and that is to really seek out a mentor, because it can be so important to your career as you move forward. And it doesn't have to be somebody that you necessarily work for. It's a person or someone, you just happen to meet somewhere and just kind of stay in touch with them. The other thing is that opportunities sometimes just fall on you. As you were talking about the merger between Chase and Chemical was, I was remembering when I worked for American Express. And I became actually the Citicorp at that time. And I became part of the pricing team. And we were going out and putting proposals together for our private label credit card offering and how we had to break down every single transaction in our business and understand what did it cost for a customer service call? What did it cost to process a payment. And when you have that opportunity to really get that granular, it really is something you carry with you almost like riding a bicycle. Right?

 

Lisa Bonalle  13:20

Exactly. You know, you can't unlearn it, right? And you learn how deep you need to go to get to real understanding. And then, you know, the other thing you're noting, which I think is a great advice, too, is sort of, you know, look for opportunities, look for that, you know, opportunity to raise your hand to stretch yourself to stay late and do something that nobody else wanted to do, because there's learning in those opportunities at every turn.

 

Rich Alterman  13:50

And the other thing I like to promote, and I know, you probably feel the same way, Lisa, is be curious, right? If you don't understand something you're working on. And you could dig a little more deeply, deeply. Now, there's so much with chat, and there's so much information out there, but also reaching out to your own manager and saying, Hey, can you help me learn more about why our client does this in this way, for example? So anyway, just for our younger crowd? It's some words of wisdom. So Lisa, you spent a lot of time at Verisk Financial and Argus, we talked about that. But you know, maybe there are people in the audience that are not familiar with those two companies. So maybe just, you know, talk about what they did and how, what you did might resonate with some of our listeners.

 

Lisa Bonalle  14:31

Yeah, for sure. Well, Verisk Analytics is a holding company. And they are focused on owning businesses that are data and analytics businesses. They focused on three domains: insurance, energy and financial services. And Argus was one of the companies it's now owned by TransUnion. But it was one of the companies in the Verisk analytics Financial Services Division. Which was the Division I ran, it was the largest company within that sector. And so again, remembering everything Verisk Analytics owns is a data and analytics company Argus is a company very much related to the types of solutions GDS link provides. Argus provides data and analytic solutions to financial institutions across the globe. So in that way, it's relevant to our GDS link customers, right? Where we provide technology connectivity decision engines. Argus delivers benchmark reporting, for example, to help a financial services firm compare their business performance to peers. How am I doing and setting my origination credit line? How am I doing and setting price for the mid risk tier of customers, right? You get a view of relative performance of your portfolio to a group of your peers never one peer at a time. And that can help you set strategy adjust strategy, increased profitability, so very much related to what GDS link does. They're interesting compliments to each other. Right, Argus can give you sort of offline high level portfolio comparisons. What Argus isn't, is embedded in the customer workflow, when GDS link is, is deeply embedded in the customer workflow. So I find them really complimentary. And, you know, I believe there's great upside, as I bring my experience from Argus over to GDS link to build out our analytics and data solutions. We have put a stake in the ground around analytics and data solutions. It's a growing part of our business. I think a lot of my learnings from Argus could be applicable, you know, not directly in the same manner that Argus did it but building out more data solutions, analytic solutions for our clients that relate to the types of services GDS link provides. So for example, today, we do some model monitoring and model building for our clients. I see that as a key growth vector for GDS link going forward.

 

Rich Alterman  17:18

Well, you touched on a little bit. My next question. So you have a long tenure now at GDS, we're going on a little over four months. And, you know, I know I had the opportunity to sit through your initial townhall meeting and even then, which was only I think, one day into the job, you kind of mapped out some of your strategies for 2024. Obviously, you just talked about analytics, but you know, what are some of the other things that you see GDS focusing on this year? And what are some of the benefits that you feel that it will bring to the market?

 

Lisa Bonalle  17:50

Yeah, I love that. Well, I mean, I you know, some of our listeners may know this, but some may not for the past two years, GDS link has been hard at work at upgrading our, our technology and our platform behind our core decisioning software. And, you know, I am very confident that with that technology built behind us, we now have the best in class platform. So one of our key goals for 24 is to focus on getting out there and you know, both selling on next generation platform to new customers, making sure that we're upgrading and migrating our existing customers to our best in class platform and the latest version of our software to better meet their needs. One of the other key goals that I see for GDS in 2024, is to serve our customers across more of the customer lifecycle. So primarily, and traditionally, our focus has been on working with our clients on account origination. Now, that's not to say we don't work across the lifecycle already. We already with a number of clients work on account management, portfolio review, customer management solutions collections. Our goal this year is to expand the number of clients, where we serve with more of our account management and collection solutions continuing to move through the customer lifecycle with our clients beyond that point of Origination.

 

Rich Alterman  19:21

Yeah, and there's such a wealth of data out there now. Certainly with open banking data, you know, if a customer has permission themselves at the point of origination, and that ability to do a refresh on a monthly basis, combining that with credit bureau data. And you know, as you said, we already have clients that are doing that very successfully. And it's definitely something that especially in this increased level of delinquency, we're all seeing now, credit card debt increasing. There's just so many foreshadowing events that you can identify, to help better strategize on how you're going to work your accounts moving forward. So thanks for sharing that. So certainly, we're in a market where new entrants are popping up every day. And that's a good thing from one hand one standpoint and may not be a great thing or another. But you know, as you talk to the audience today, who maybe are evaluating our type of technology, and coming across some other companies in the market, you know, what are some of the things that that you'd like to share with them? And, and how we, you know, really kind of stand out from the competition?

 

Lisa Bonalle  20:26

Yeah, that's true. You know, I am a free market economist at heart, that is for sure, I firmly believe that good, healthy competition is good for our clients. And more importantly, it's good for us, it forces us to be on our toes to be our best to stay sharp, to continuously innovate and think ahead of the emerging needs of our clients. And you know, and that pushes us to be a better version of ourselves each and every day. In terms of the competitive advantages I feel that GDS link brings. First and foremost, we have deep industry experience, right? We've been doing this for a while, the vast majority of us are former lenders, we've been bankers, we've stood in our client's shoes. So we know the challenges they face, we know the pressure they're under, as the credit cycle shifts, right, those pressures change. And additionally, as I think we've already noted, a real point of distinction for us, is our analytics and data solutions team, right? That is something where we bring a unique set of solutions to the table that our nearest in competitors don't bring. So the upgrade on our platform, the combination of analytics with our software solutions really distinguish us in the marketplace. And that competition pushes us to expand, to grow, to sharpen our solutions each and every day.

 

Rich Alterman  21:51

For the last couple of years, I've been heading up partnerships at GDS. And I know that you have a very strong background in partnerships and passion for it. So as we talk to some of our audience here today, both existing partners as well as potential partners, you know, what are what are some of the key factors that that you believe really helped contribute to a very successful partnership?

 

Lisa Bonalle  22:11

Yeah thanks. I love partnerships, right? I have spent a great deal of time cultivating and growing businesses significantly through successful strategic partnerships. And I have a real appreciation for the nuance and complexity of managing partnerships Well, right. So I think of partnerships like a three legged stool. They work best, when we create a win win win situation, right? Like, each partner brings something unique to the table to a mutual client, that individually we couldn't bring on our own, or we couldn't bring it as well. So those are the three legs of the stool, one partner, the other partner and the client. And if you took one leg away, one partner, for example, the stool would be less stable, it might topple over. So when both partners bring unique strengths, unique data assets, unique technologies to bear; to create value for a mutual client that you couldn't have delivered without either partner that is partnership at its best. And GDS Link has a number of wonderful partners that we work with that bring that you know, three legged stool together and create that great stability and great value for our customers.

 

Rich Alterman  23:31

So as part of your vision leadership, do you also see the opportunity where partners actually co develop products?

 

Lisa Bonalle  23:37

Yeah, absolutely. I think that is, you know, there's almost like a hierarchy. If you were to build a grid up into the right, you know, you could resell each other's product, that's partnership, right? We are collaborating to grow our business and grow your business, right. You could have referrals, you could have rev share, but when you co invent, and your ingredients become more stew, than meat on a plate and potatoes on a plate, when it's all mixed together, and it's so intertwined, you can't untwine it, we've co invented something, then you're really moving up the strategic partnership ladder. And I think that we have great opportunity to do that with our partners.

 

Rich Alterman  24:22

When you were describing the value of Argus data to lenders, financial institutions, I would envision that a potential partnership might be considered between us and Argus. Okay, so it seems on a quarterly basis when I when I do these podcasts, there's always some new buzz term that I'm having to interject into the conversation. So of course today, ChatGPT generative AI and large language models are some of the latest buzzwords our audiences encountering on a daily basis. GDS has already been leveraging machine learning techniques in our customer development. You mentioned that a few minutes ago. So, you know, thinking about the 2024 product roadmap, do you envision incorporating ChatGPT general AI maybe large language models into any of our solutions? Not only augmenting what we do today, but maybe beyond that.

 

Lisa Bonalle  25:19

Yeah, it's a great question. And there's certainly a lot of buzz around these topics today, right? From my perspective, it's really important for us internally to distinguish the technologies like machine learning applied to mathematical models, regression models versus generative AI, right, which ChatGPT falls under. And as a starting point to really think about best use cases, where is generative AI ChatGPT most beneficial, right, whereas ml in a model most beneficial, and to continue to learn and develop that. For example, I'm not sure that using generative AI ChatGPT in a mathematical model, is the best use of that technology at the moment, right. Machine learning, on the other hand, has been used in mathematical modeling financial modeling for regulated companies, for a good number of years now, where we know that those techniques are additive to our forecasting models. I think where we sit for GDS Link in 2024, is kind of in a learning mode, I think, of course, will continue to use ml in the models that we build for our clients, and continue to educate ourselves and stay abreast of generative AI. And where that might best be used in the solutions we put out to clients. Where I actually think we might start is internally are there things we could automate? Are there things we could augment, do faster, do better, make less errors by incorporating some generative AI or ChatGPT into our internal processes. So an indirect way of using generative AI to benefit our customers because we can do things faster, better with less error, while still using the ML in our mathematical models?

 

Rich Alterman  27:16

Yeah, thanks for that. So of course, with any new technology, there's always the good side of it. There's always the evil side of it. When we see what's going on with the deep fakes. It's scary. Just read an article before I hopped on this call where there were I guess robo calls going on during the New Hampshire primary where it was Biden's voice, telling people, they didn't need to go bother to vote. So lots of things there. So certainly fraud is an area that our clients all contend with. And first party third party synthetic, we saw a lot of uptick during COVID. We talked about digital lending, so customers not standing in front of you even more risk. So you know, as you think about GDS, and fraud and some of your experience in the past, kind of where do you see us maybe trying to play a greater role with our clients?

 

Lisa Bonalle  28:03

I am really excited about the opportunities for GDS Link in fraud, right? Because I think that solving fraud is a problem best solved by the many. And then the fraudsters are always still going to be a step ahead of you. But we sit at a very unique intersection, right? Today, we work client by client. And even if we might observe fraud, or we see clients catching fraud with some of the tools they use, we're not creating a repository of known bad actors, known good actors and sharing that back, but we could with our clients permission. So this is a journey. How can we develop unique broad solutions, because we sit uniquely at an intersection, the creation of a technology platform that helps clients do what they do best, right. But in doing that, if we were to look horizontally across our client base, with their permission, we might be able to create a consortium based approach, a way to add to whitelist or blacklist or identify pattern geographies of note, right? So there's some AI and ml in that there's some data sharing that would have to be built out. But I think of this as sort of Greenfield but with a company and technology and know how that is well suited to help each and every one of our clients address a problem that's only going to grow as the world digitizes. So, the good news for us is the banking world is digitizing, which means our digitally-based decisioning system has great upside potential. Along with that, we're no longer as we talked about earlier, going into the brand sitting face to face with the community banker, right. I love the movie. It's a Wonderful Life, right? Everybody knew George Bailey Right, and he was the lender and the savings and loan the Building and Loan. Nobody makes loans that way anymore, right? We are moving away from that. And therefore if we don't sit face to face, if our kids don't play on the same lacrosse team, then how do I know that you are who you are in a digital world? There's great upside, frictionless lending, faster lending more data driven. The, you know, the downside is that there are bad actors, and bad actors are always going to try and penetrate and take advantage of vulnerabilities. So I am extremely excited about fraud as a growth vector for GDS, you know, I think we're going to have to really think big and frame our solutions there. But that's something we're starting this year and will continue to develop out for our clients.

 

Rich Alterman  30:53

You just had me do a little flashback thinking back to when I was in the Visa, MasterCard program, Bank of Boston, just getting introduced to the issuers clearing house. Right, you had to report into it, you didn't have to use it, but you had to report and that was back in 8586. Right. So that was kind of your first consortium mandate. It was a mandated use of a database to help prevent fraud. So interesting to see ya be interested to see how we move forward there. So it's still unclear if the Fed will cut interest rates anytime soon, which remains stubbornly high. While inflation is down a bit, consumers are still struggling to make ends meet as of November 2023, so only a couple months ago, over 60% of Americans were living paycheck to paycheck with 20% struggling to pay their monthly bills. It's a trend that has come to stay According to Andrew Carroll, Senior Vice President of membership and lifecycle strategy at Lending Club, one of GDS' clients, credit card debt is at an all time high. And I share these statistics a lot and they don't change so they're getting worse, not better. So in addition to challenges these factors present to lenders or other critical events, including regional conflicts, New COVID variants and of course, the upcoming election, which I just mentioned a few minutes ago talking about the New Hampshire primary. So my question for you is, you know, what adjustments do you feel lenders may be considering as they review their credit policies and pricing strategies for 2024? And with all of your great experience, what suggestions would you like to share with them?

 

Lisa Bonalle  32:19

Well, there's a lot in that right. So let's close it right. So first of all, credit cycles come and go, they are cyclical. And based on the rising rate environment we've been experiencing over the past few years, right? And stubbornly high inflation, as you noted, it just ticked up again, right, it's down off of the high, but it did tick up, we haven't quite tampered it and, you know, controlled it, although the Feds done a wonderful job managing through that. And there were some unexpected silver linings in COVID. Right, there were some, you know, there were layoffs, but there was government aid. And there was an increase in savings during that period of time from the sum of that. Now, that wave has sort of rode itself through, you know, the tide sort of normalized, again, you've got rising interest rate environment, prices are higher, and for sure, indeed, consumers are stretched, which means in the credit world, for lenders, delinquencies, and losses will rise, right. And then you get into this sort of vicious cycle, where lenders tighten their credit criteria, because they are in business to make money, make a profit, make their margin. And that means then when you tighten your credit criteria, you know, sometimes the most vulnerable, those that are at greatest risk are squeezed even tighter. And that tightening has another impact on people's lives. So I, you know, I think about this, in many ways, and the most interesting way is that it is complex, there's no silver bullet, and that for our clients, my suggestions are twofold. One, don't use blunt instruments, right, like a credit score is great, but it's nuanced, right? There's a usually a matrix of behavioral analytics, scoring analytics, trended analytics that will help you refine your audiences or the actions you want to take. So the less you can use a blunt instrument, and the more you can use a matrix or a more complex set of criteria to put consumers into homogeneous groups and then take more targeted actions. I think the better off you're going to be. Right. And then the second thing I would say is, you know, prior to COVID, we were you know, we were we entered COVID With loan losses at an all time low on a percentage basis relative to balances, right. And with unemployment at an all time low. So focus on collections strategy pre collection strategies. Those haven't been an area of focus for a while, but that's coming back into the foreground. Both of those things, right building refinement of your credit criteria, looking at account management and portfolio review with a more granular lens for action, building your collection strategies. Both of these areas are areas where GDS Link is expert at assisting our clients, and we would love to assist more clients in those areas. But those are the areas of focus as the credit cycle shifts, and you know, lenders need to strengthen their toolbox in both of those areas.

 

Rich Alterman  35:58

Thank you for that, in addition to the ones I've outlined, are there other headwinds or tailwinds in 2024 that you think could really have a big impact on the industries that we serve?

 

Lisa Bonalle  36:09

Yeah I mean, the headwinds, sometimes they're easier to see, you know, the tail winds, I think we're all kind of counting on. Will there be an easement of interest rates kind of mid to end of year? That's still to be determined. In terms of the head winds? I absolutely think there is continued momentum, I wouldn't call it a groundswell yet on the importance to our industry in the coming months and the coming years around the issue of consumer data privacy. So in Europe, GDPR is now firmly entrenched. And the regulator's there keep making inroads, like what data can be used in pre screening customers for lending, what data can't be used? What is permission data? What are the penalties if you violate that they're steep in the US for the moment, we've taken a state by state approach, which frankly, could become really unwieldy for lenders to manage right? Now, today, we have privacy laws in a few states, and CCPA, you know, mimics GDPR to a light extent the California privacy law, that's now been in existence for a while, they're refining that again, and there are a handful of other states that have mimicked California, but for lenders to have to manage the nuance of Iowa's law looks like California, but the existing financial services relationships are included or excluded. Managing that in a business, financial services setting lending, which has been long data driven right way ahead of retail or telecom or other areas that are now starting to use data, the accessibility of the data we use to make optimal decisions. And the nuance of managing state by state regulation on the data you can use could be real complicating factors and tremendous headwinds for our industry. So I think we've got to watch that as an industry. We've got to be vigilant, we should be organized. And for the lending industry it is about how we approach that. It's been sort of backburner as a federal legislative item. There are pending legislations in both the House and the Senate. They haven't moved forward. You know, we've been distracted with other things. But those are things that we should keep an eye on, they could become significant headwinds for the lending industry.

 

Rich Alterman  38:37

Yeah, I was reading yesterday, the other day about some proposed legislation in Europe that could actually make it more difficult to use credit scores. So yeah, we definitely think we need to keep on so since we mentioned Europe, so the GDS has clients in 64 countries today with headquarters, of course, in the US a few offices in the UK, Philippines and Spain. So if you think about our 2024 strategy, you know, what are some of the other countries that you could really see us putting more effort into in addition to the US and other areas.

 

Lisa Bonalle  39:06

Yeah I mean, I want to like, talk about that in two respects. We do have clients in 64 countries today, that has occurred, because we have great clients who have expanded their relationships with us that have taken us to 64 countries, right? We don't today have a team planted in 64 countries. But that doesn't mean we can't grow from where our customers take us. If I think about where we are actively focused on growing our business growing our teams growing our presence in the market. There areas we play today, but we're going to focus on expanding our presence in the future. So the UK is a market that we've been in, and we've made an intent to strengthen our team there to grow our go to market focus there. Mexico and South Africa are also markets where we have presence today. We have customers today. But we want to intentionally grow those markets over the next year or two.

 

Rich Alterman  40:13

Lisa, many banks today are saddled with inflexible legacy technology that has impeded their ability to innovate as quickly as fintechs. Some of these legacy systems, and there's been a lot of articles about this recently, you know, that rely on COBOL are really seeing a brain drain as COBOL programmers aged out actually thought there could be a whole business opportunity there alone. But anyway, so you know, as we as we think about these companies, you know, one of the things we talked about a lot is that we don't need to think about a full wholesale rip and replace, right? Because asking is to financial institution to do that is a long, painful process. So how do you see that GDS Link can coexist with those legacy platforms and really help these lenders become more competitive in the digital lending environment where consumers we talked, you mentioned this earlier, really do expect that low friction immediate decisioning?

 

Lisa Bonalle  41:06

I mean, I actually think I'm joking about the COBOL programmers, my dad worked for the Reader's Digest company, in information technology, data systems his whole life. And when they were going through y2k, they had to get technologists out of retirement, to come back and program COBOL to you know, carry over the y2k issue. So it's real, it is a challenge, right. I mean, you know, the colleges that teach COBOL on the side probably can make a lot of money if we train some young kids to do that. But the layering of technology is what's really happening. And it's happening in a great way. That's going to allow companies that have that technical debt, not to have to pay it off all at once. And GDS Link is a great example of that, like, because we are a point solution, right, we are a digital first point solution that can integrate with banks and financial services companies as they set their schedule for paying off their technical debt, modernizing their systems, digital transformation, as many banks are calling it, that our point solution which can connect into your system, whatever it may be, in essence, we create that digital first layer, right, we create a digital front end that creates the ability to offer loans digitally, create a seamless customer experience, decision, those instantly. All of those things come from our modern technology layered over legacy technology. And it enables banks not to have to make all of those changes at once to get into the digital game. We're a great partner in that regard. You can leapfrog some of that technical debt and get to market sooner with digital opportunities by using GDS Link.

 

Rich Alterman  43:06

We talked earlier, one of the questions I put forward was about competition. And with that question, I was focused more on third party competitors. So of course, another competitor we contend with is the in house technology, focus of build versus buy. And certainly in time I've been with GDS, we've come up against that a lot, right? Absolutely. Why should I build versus buy? So you know, if you are talking to the CTO of an institution, startup bank, that's really saying, well, I could just build this myself. What are some of the arguments you would put forward? Were really the buy decision is actually a better one. And I know that yeah, yes. In your own career?

 

Lisa Bonalle  43:45

And I have, right? And that's true. And it's an important decision, and evaluating build versus buy is, is probably a really important part of deciding to go with GDS. Right? I think that for me, there's two things, one thing that any client needs to consider on the build side is, what are the opportunity costs, right? If we've got something built, that you were going to go build, and I would submit, you could build it, it's possible, it will take you time, it will take you money, we've got a lot of data connectors that are already pre established, you'd have to go out and build those, get the relationships, right, get the data flowing, keep the pipes open, that are broad enough for all that connectivity. So bigger clients could certainly evaluate the build decision, evaluate the opportunity cost of building out their, you know, point based digital decision system, or updating their ports of their COBOL based legacy system, right? You can make those trade offs and there are trade offs that say, well, we want it it's ours. It's proprietary. But you know, I think I would counter that you as a business should invest in those things that set you apart from your competitor, right? Let us do the connecting, build the, you know, the technology, you focus on investing in the product, the differentiation, the client base you serve, right the customer service you provide, let us focus on the technology for other smaller clients, you know, you're kind of in a situation where you may not even have the level of investment in any given period that you need to build the system internally, it may just take you a long time, because you are budget constrained, right? So I have often had to make that build versus buy decision. One factor that I think is important to consider on internal systems. Is that prioritization, queueing, you know, there's always trade offs, everybody needs those resources internally. And do you have more leverage to meet a timeline with an external resource, right, you may get 80% of your internal system built in the third quarter release, but you don't get prioritized again, until the second quarter release of the next year, right. So there's leverage in being able to use external resources and hold them to a timeline. And then you might have to wait. If there's an implementation and you want to change it, you’ve got to get back in your systems queue. And you might have to wait for those changes. So the nature of the business we are in is customer service, right? We're building one thing, we're building it repeatedly. And we are good at building that system, making changes to that system. So I would submit we have, you know, deep expertise, in the solutions we provide, where your internal resources are more jack of all trades, right? And so there's a learning curve there, there's a prioritization, there's a waiting period, to develop it internally. I'm not saying that that might not be the right decision for certain customers. But I think if you were to build the pro and cons list, there's a lot to be said, for leveraging external resources, who build one specialty system, and are expert at it.

 

Rich Alterman  47:23

Right. And, you know, one of the things that we didn't talk about, as far as what we see as a competitive advantage, and you kind of touched on, you mentioned professional services. So one of the things we talk, we refer to it internally, we talk about, like the hybrid model that we present, right that you could do it, we could do it, or we could do it together, if you'd like to add about that, because I think that's an important distinction for our company.

 

Lisa Bonalle  47:45

It really is. And you know, we did touch on it lightly. But if you were, a less mature financial services business, a new lender, right, you may have the expertise you've been able to hire. But that's it right, you know, you're starting up, you're less mature, you're two to five years old, you have your own budget constraints we can bring to bear man-years of experience that we have learned along the way that we can guide you and accelerate your learning curve and state of maturity, because we can bring that expertise to you. Again, as you noted, not every client wants that. But we have the opportunity to bring that to our customers when they want it. So again, it's sort of a you can do it, we can do it together, or we can do it for you.

 

Rich Alterman  48:39

So keep an eye here on the time. So we've got two more questions for you. We touched on this a little bit with the data privacy. But you know, certainly our lenders operate in a highly regulated environment, with new regulations being proposed frequently and implemented on a periodic basis. For example, several states, as you mentioned, have adopted or considering regulations like California consumer privacy protections, and the CFPB has proposed significant reductions in late fees on credit card issuers, which some projected cost the industry $9 billion. And of course, we're all waiting to hear about the final rule 1033, which is focused on open banking. So you know, when we think about our clients that when they're evaluating systems like GDS, of course you have underwriting, you have broad things that you think about, but certainly compliance is one of the things that's on the forefront of their mind. So what role do you feel solutions like GDS Modelica play in addressing these various regulations? And, you know, how do we kind of think about those as we're thinking about our product roadmap?

 

Lisa Bonalle  49:40

Yeah, I mean, it's a great question. And there's a lot there, right. I mean, largely, we work in a regulated industry, right, right. Our clients are regulated or could be regulated in the future. Right. And we chatted a bit about the use of data, data privacy legislation, and more states adopting that, that could be a significant headwind for lenders. Our job is to think about what is that baseline of data? How could you make equally good decisions with less data, becoming expert at that and helping our clients with that, there's always changes in legislations and pending legislation. One of the key roles, I think we have the opportunity to play a GDS is to ensure that we're a real knowledge partner and thought leader with our clients on these issues. So being fully knowledgeable about legislation, the legislation that our clients operate under today, changes to that legislation. And you know, roadblocks or hurdles we see coming could be very valuable to our clients, it means that we have to shift our mindset a little bit, you know, constant learning, growth mindset. But we should be a partner that you can bounce ideas off of, we should be fully knowledgeable about the regulatory landscape, it is not to say that takes the burden off of any lender, to make their decisions about how they comply with regulations, or build their business. But our job is to be a strategic partner. And in order to be a strategic partner, we need to know this industry as well as any of our clients, we need to have a point of view. And we need to be willing to share that point of view with our clients when asked or offer it. If we think there might be somewhere that they have a blind spot. That means a little bit of learning and growing and reshaping ourselves on our side. Okay so as we wrap up, it's easy to predict that some of our listeners are GDS clients, and then some are potential prospects. So a shameless plug here. Before we wrap up, is there any direct message you have for them as they think about their current or potential relationship with GDS link? Yeah and it's a nice way to wrap up, I cut it kind of takes us all the way back to the beginning of our conversation. And I'd say the one thought I'd love to leave both our existing clients and new prospects with is one of the points I made at the very beginning, GDS has just spent the past two years upgrading our decisioning platform, ensuring that we are bringing you a best in class solution. Additionally, we are expanding our analytics, our model monitoring solution set in order to provide a really differentiated value from the competition. And lastly, we intend to earn and keep your business by becoming that strategic thought partner, helping you navigate the changing economic landscape and regulatory landscape. So those are our strengths. That's what we bring to the table. We help we're bringing that to each of our existing clients, and we hope we own the trust and business of our prospects out there.

 

Rich Alterman  52:53

Qwll thank you for that. Lisa. This is Rich Ultraman. And we've been syncing up with Lisa Benelli, CEO of GDSL, Inc. Thank you, Lisa, for joining me today and sharing some data points on your background, your vision for GDS for 2024 and beyond, and industry trends that you feel could impact lenders and how they might address these. We hope you've all enjoyed this podcast. Please stay connected with GDS link and the lending link to listen to future podcasts and catch up on ones you missed. Thank you and make it a great day. Thanks for listening. If you've enjoyed today's episode, please be sure to subscribe on Apple, Spotify, Google or wherever you listen to your podcasts. And be sure to leave us a review. Follow us on LinkedIn and connect with us on Twitter that GDS Link that's at GDS l i n k have a question for the show or have a specific topic you want us to cover. Hit the link in the description to drop us a note. Thank you for letting us part of your day. Make it a great one.