Hi, everybody. This is Tony Nash. I'm the
founder and CEO of Complete Intelligence.
This is our Quick Hit where we talk to
industry experts about issues in markets
and in industries. Today we're with Dave
Mayo. Dave is the founder and CEO of FedFis
based in Texas. Dave, thanks for
joining us,
I really appreciate it.
Can you tell us a little bit about what
FedFis is and then I'd really love to
kind of jump into how you're helping out
the financial services sector. Sure. We're
a unique company and the fact that we
sit as a layer above banking, we call FI
fintech, and then fintech. So all three
pieces of that we have our effect in one
way or another. From the banking side
obviously, we are a data company and
provider and intelligence. From the FI
fintech, those would be the vendors to
the institutions like their core, their
mobile offering. And then FinTech, that's
the new stuff, right? That's the sexy
stuff that the chime and the sofas and
those types of companies that are
used to be alt banking and now they're
kind of joined back to banking again. So
we help all of those different layers in
one way or another through a data set
that we have and information intelligence.
Okay, great. Dave, so with
everything going on in the wake of
coronavirus, there's been a lot of
talk about fiscal stimulus coming out of
DC and stimulus through the Fed and
other things. Generally, you know, what is
the health of the banking sector from
your perspective? Because back in 2008
the banking sector was the worry, right?
Is that the worry now? Is that
something we should be worried about?
I think our banking industry is based on
a level of faith. It always has been,
right? Now that said, this is a completely
different situation. Banks are very well
capitalized. Banks are not the cause of
the problem.
We don't have a systemic banking problem
or issue. We're very, very healthy right now. So I think when you talk about a stimulus
being put into the economy, the more
money flows in and out, the more people
spend and buy and purchase, the better
things are. That's just the way the
banking industry is built. Okay, great. And
so, how do you see banking and FinTech
really helping. Obviously we know how
they help big companies with big
placements and debt and these sorts of
things. But how do you see them helping
small and mid-sized companies with this
kind of, with this economic kind of gulf
that we have right now right where
there's just the economy's effectively
been turned off for a period of time,
which is a bit weird. So how do you see,
what you're doing, and and banks
generally really helping out there on
the smaller and midsize level? I think
there's a big gap in education in our
country when it comes to banking. People
are like, "I don't like banks" or "I like
banks." When they're the big banks. The big four: the B of A, Wells Fargo, Chase, Citi.
And then we have community banks.
Community bankers all across the country,
they're the life, you know, of our banking
system. They're the heartbeat. It's
actually a lower touchpoint for consumer and I think FinTech would, you know, the
dramatic decline in number of community
institutions has really opened up this
opportunity for a FinTech. And the reason
being is it's a direct touch point. So if
you were to say "I want to use my mobile
device" or "I want to use my online to do
banking without having to actually drive
to an institution and deal with all
their policies and all of the things
that go with it," it's a faster connection
point. And I think we're probably going
to see a lot of that in these business
loans the PPP loans through the stimulus
plan. How do we actually execute that
from the Treasury to the to the small
business owner or to the individual that
needs help? So, do you think that some
of these FinTechs are, you know, are they
kind of non-banks? I mean, would you
consider them kind of non-banks within
this system? Do you think they'll be able to
do this stuff faster? And I don't mean
this as a negative otis on to banks.
Banks are highly regulated. So but do you
think some of these FinTechs will be
able to do some of this stuff faster? It
depends on which way you look at it.
Because here's the deal: so when we talk
about banking and then we talked about
FI FinTech and then FinTech. So a bank is
a chartered institution and FI FinTech is
a technology arm of that like online
banking, mobile banking. A FinTech is
something that looks like a bank, talks like a bank, but it doesn't have a charter. It's
not really a bank. So they have to
partner with an existing bank
to charter. So there's a bank behind
every FinTech company. So when you think
of Chime and companies like that, there's
an actual bank behind that company
that's doing the regulatory side of this
to protect consumers. Okay, great.
What are you also seeing... you guys track
a lot of data around banking and real
estate and consumer stuff and industry
stuff... are you seeing any data that's,
that's really talking about or raising
your worries about the velocity of money
about how quickly people are spending? So are you seeing that data and if you are
is there, you know, if it's worrying you,
when does that worry end for you? Do you
see us kind of going back in to say a
quasi normal situation within the next
say two months or something? Predicting
the time future I've never really been a
big proponent of predicting the future.
That's your business.
Right. But for us, what we look at are key
components. So one way to measure things
right now I think is to look at like if
you looked at a mortgage note on a 15 or
a 30, you know. What is the spread between, you know, what we would call in the old
days, prime and what the asking rate on
that loan is? So you're generally looking
at, you know, above 3 percent. And as long as you're looking at, that that's a strong
indication that there's a lot of revise
going on right now,
right? And so the spread is there. That's
like an adequate spread for banks to
make money. There's a huge volume of it
going on.
And as long as we see that volume and
people continue to go to the bank, cash
their checks, direct deposit always
helps, right? So when we use our debit
cards, when we go out and do the things
that we do. Changing our mechanism of
spending money whether it's through
Amazon as opposed to going through the
mall doesn't change the fact that you're
still spending money. So they're all
positive things. But I think the one
thing we want to keep an eye on is the
volume of lending. Everyone in a
situation like this is going to have a
tendency to kind of climb up a little bit.
And, as long as that continues to flow,
and one of the primary things that I'd
be looking at is Reefys and other
lending types of loan, etc. Okay.
Are there any specific indicators you're
looking at on the commercial side to see
if people are climbing up? I don't
really see anything from that
perspective. I mean, I don't think people
are running out there right now at a
time like this. It's fairly obviously.
You wouldn't want to run out and start a new construction project or something like
that. So, those are gonna have an impact.
There's no way around it, but there again
that's what stimulus is there to offset.
So, right now, I would say we've got a
very healthy banking existing. We're
coming out of a very healthy economy and
so what's our time frame of a
bounce-back is it going to be a v-bottom
or is it going to be spread out? I think
it'll be a little more spread out than a
V-bottom and I think they'll probably be
multiple cycles of this that go on to
some degree. But starting from a really
healthy position in our banking system
and in our economy, this will pass. And
when it does, here's the thing I think is
so interesting, unprecedented levels of
stimulus and, you know, the old saying you
don't fight the Fed, right? So does the
market go up and we have a stimulated
economy? Of course it does. And with this level of pent-up demand and stimulus,
will there be a bounce back? Yeah, there'll
be a bounce back. The question is how huge
will it be and how fast? That's great Dave. It's a huge source of optimism. Thank you so
much for that and I really appreciate
that you've taken the time to join us
today. So really appreciate your time and
and thanks very much for, for all that
you've shared with us today. I really appreciate it. You bet.
