Jim Marous (00:00)
So I wasn’t able to make your entire Co:lab event this year, but it is always something on my calendar that I go, really looking forward to it. Not just because there’s so much sharing information, but the actual connections between the people that are from different parts of the country that aren’t competing, but even those that are competing to get together and actually share the ideas. But you’ve been with your, you founded the company 16 years ago. That is astounding to me that Alkami is as old as it is only because
It’s such a modern company. It’s such a modern platform. What have you seen over the last 16 years between how it’s changed, but also what your vision was, if you can remember that far back, 16 years ago?
Stephen Bohanon (00:42)
Yeah, well, I think one of things that’s been fortunate for us is that really the vision has remained the same. In fact, in some ways we’re still trying to actually achieve what it is that we laid out. know, back when I started Alkami, it was at a time where, you know, digital banking was, looked like a spreadsheet on a webpage. I mean, that was basically the experience. So only on online, mobile was a kind of a thing starting. And really when we started it, it was about user experience has to rival that of the other B2C experiences that are out there.
You’ve got to be able to bring in content because you have to be able to cross sell because the branch traffic or the branches as a way of cross-selling is going to continue to diminish over time as people interact with it. And then the other thing was that they kind of the whole idea of a, a singular experience from the time you are interested in becoming a customer or a member to the time that you then service those accounts that you open and then trying to cross sell and then open those accounts again, all through the digital experience. So that was actually, if you go back and look at like the original kind of founding
precepts around why do we deserve to exist as a company, it was those same things that we’re actually talking about today. So the reason I say it’s fortunate is because, you know, when you’re a small company, young company, you can tend to be pulled around by kind of whoever will pay you money, right? Because you’re just trying to pay the bills. So someone says, well, you know, I really wish you’d do this and you could kind of get off track of actually what the vision is. you know, fortunately for us, we had the right people, we had the right investors, we the right early customers that bought into it.
that kind of always kept the momentum going. So it’s really been a perpetual motion in one direction. And I don’t think we’d be here today at the scale we are today if we had kind of changed visions two or three or four times trying to follow whatever customer would pay us a little money in the short term. So I think it’s very, very fortunate. ⁓ When you talk about the kind of like what, what, what’s common throughout that time and how much has changed? think that the constant about Alkami that has stayed, which has allowed us to change is
We just have a very, ⁓ the mindset of adaptability. So it’s always willing to kind of question what do we do? How are we doing things right now compared to last year compared to two years ago, whatever. What do we need to reinvent? What do we need to tear down so that we can build back up and no one ever, you know, no, no sacred cows. No, this is the way we’ve always done it type of thing. So I think having that mindset is probably the biggest reason that we’ve been able to be successful to this day is just.
constant adaptability to the changing times. it also is what makes it fun because it’s a fun business to be in because things are always changing. There’s always new threats. There’s always new opportunities. And so, mean, otherwise this would be kind of boring if you think about it. So I think that’s the reason that even though you say, it’s almost been 17 years now, doesn’t feel that way. It doesn’t feel old or stale. It actually feels fresh all the time because there’s constantly something new to respond to and to adapt to.
Jim Marous (03:10)
Especially now.
know what’s interesting? I’ve worked with your firm for about five years now. And it’s interesting because the North Star really never changed. And as I look back, it was pretty much the same when you started the company. And so that helps that anybody bring on the employee base has expanded. Your company has expanded tremendously. It hasn’t changed the way the company looks. And it’s almost what you try to teach your customers and members that as organizations, financial institutions, you got to know your North Star. You got to know what your strategy is going to be. You got to know
where you’re going in order to get there. But it’s not like you haven’t had some challenges. You had COVID, you had the financial crisis like two years after that. And now you have the speed of AI that has just hit you from all angles. It’s really the way we define organizations. But your target market has pretty much stayed pretty constant. You haven’t said, I want to get out of my lane, I’m going to go here, I’m going to go there, I’m going to go overseas or something like that. The reality is you’ve kept within your lane, but doing more for those organizations at a time when they need more.
This year at Co:lab, you announced some pretty significant changes, which was built on your MANTL acquisition, but I’d also say on your Segmint acquisition years before that. Can you explain a little bit about what your vision is right now and what you’re doing for your customers?
Stephen Bohanon (04:46)
Yeah, well, we made the, ⁓ when we made the MANTL acquisition, was really to kind of complete that, that flywheel we talk about, which is onboard, engage and grow through one single platform. So it was, yes, the Segmint acquisition was part of that same strategy. And then, and then the MANTL acquisition really just completed that particular picture. ⁓ but that, that whole idea of how do I, as a financial institution, you know, compete with, we talk about the mega banks and the fintechs when it comes to onboarding, engaging and growing customers.
that last year we announced the main acquisition as ⁓ we call it the potential the promise. You here’s what we have and what was really nice about this year what we rolled out was the actual execution and performance of that. So we have we had a team that whose entire job was not to really build necessarily new features in the system is simply to integrate the three systems together in a way to where it’s one singular experience and and really a fluid flywheel there. So what we announced this year was really Hey, remember what we told you last year?
We talked about the big vision, we talked about the slides. Hey, isn’t it going to be great when he can do this? This year we were saying, we’ve already rolled this out to six customers. We’ve got over 40 more that are in queue to be implemented. Here are some of the results they’re already getting, even though was obviously only a few weeks at that particular time. So I think that that was what was so nice about this year’s. It’s always great to get up and talk about what you’re going to do, but it’s really nice whenever you can actually stand up and say, here’s what we did.
Jim Marous (06:09)
So
those six customers, were they self-selected or did you select which ones you wanted to move on that platform?
Stephen Bohanon (06:15)
We reached out to, think at the time we had like 11 customers that ⁓ had either, they already had listed the Alkami Digital Banking System and the Segmint Data and Marketing System. And they were, in these cases, they were already a customer of MANTL separately before the MANTL acquisition. So we found, we had 11 customers total in our base that actually had already contracted for all three products. They’re some high-value customers. ⁓ So we reached out to all of them and seven of them raised their hand and said, yeah, we’d love to be a beta partner with this.
So, so I would say it’s a combination. selected those and we thought, Hey, you’ve already got all three systems. You’d be the net. You don’t have to go through any other conversion. You don’t have to have any sort of big project. This is a matter of just taking and allowing those seams to disappear between those systems so that you can have this experience. So a little combination of we picked the pool and then of that, you know, we had seven of the 11 raised their hands. So we want to do it.
Jim Marous (07:06)
So when you look at early results, and as you said, it’s very early, what do you see that’s different than where these firms were moving already? Because obviously you caught them in process, you caught them on the freeway already, and you said, we now have pieces that are making this even stronger. What changed in those organizations that made it so that what you’re bringing to the marketplace is actually going to change the trajectory if nothing else?
Stephen Bohanon (07:31)
Well, the early stuff that we see today, and of course it’ll take over time because we just rolled this out kind of towards the end of March. so I would say we’re, you know, right now about 60 days in, roughly. ⁓ but, the early stuff immediately, what we, what we showed is that people are automatically getting engaged in the mobile app much quicker. So there’s about a 50 % increase in the amount of people that go ahead and download mobile app when they become a customer. So I went from like the low 50s percent. So
Out of every hundred accounts you have, let’s say 52, 53, but actually go and download the mobile app and log in and get engaged. And now that number’s in the mid seventies. The other thing that we did is we eliminated some friction points that would show up as part of the, uh, the integration where if you were like launching them out to the MANTL experience to open up another account and people, uh, you know, we had one of our customers talk about how they, you people have pop-up blockers on or something. They would call the call center. we’re lowering calls to the call center of people asking.
Is this the same site? You know, you’ve kind of passed me off to this other thing that doesn’t, it kind of looks the same, but not the same. I’m afraid I’ve been hacked or I, where do I put this information in or how come it didn’t already put my information in? So we basically lowering those friction points to lower calls to the call center for that. So I would say that give us another 30 to 45 days and then maybe 60 days. And we’ll be able to look at any trends on like, ⁓ average accounts open the things like that. We’ll, look at that. What we know already though.
And the reason why this was so important to get that first step right is what we, what we see is an absolute clear correlation that would that, ⁓ customers that haven’t engaged, ⁓ a digital customer or digital member base. we say engaged ones that are logging in 21 times a month versus 17 times a month, just four more times a month. These customers perform better on average accounts per customer. They perform better on their ROA. They perform better on the ROE. They perform better on their non-interest income.
So what we know is that if we can just get them in digital and get them logging in a lot and they’re checking out their accounts and they’re looking at their credit score and they’re setting up aggregated accounts and they’re using their accounts for bill payment, external transfer and things like that. We know that an engaged digital customer leads to dramatically better financial results for financial institutions. So I think this, well, what do we got to do to get them in there faster and get more of them in there? So the first, the first goal, which was ensure that when we am on board people, they immediately become digital, digitally engaged.
that’s already happening. So that’s like number one, and then we’ll obviously start tracking the financial metrics over time and how they do
Jim Marous (09:52)
So you’re talking a lot about the brand new customer, making sure they’re more effective, more engaged, more involved right from the beginning. How about that customer that’s been a customer for let’s say three to five years and you’re saying, want to make sure that I have a real relationship with them and I’m going to try to stop that as we know, attrition.
Stephen Bohanon (10:11)
Yeah, so that’s really where the Segmint acquisition came into play. then, here, I’ll say how MANTL really helps that. So when we acquired Segmint it was all about being able to make sure that you can expand the relationship with the customer in the most effective way. looking at all their data, looking at the transaction analysis, ensuring, in fact, we use AI models to actually get lists of the, you know, kind of the customers that are most likely to buy these next products. So we had that. What our customers would tell us is,
Hey, that’s really great. I’m getting the right targets. The right people are clicking or tapping on my content to open up that additional account. But then I got lots of friction. I have a lot of accounts I can’t open online. have to, tell them that they have to come into the branch to close on that particular account or it’s very convoluted or Alkabee. didn’t have a way to do KYC for net new.
product or net additional products. So I couldn’t open, for instance, I couldn’t take a loan only or a savings account customer and turn them into a checking account, primary checking account customer in the digital channel without sending them out to my website again. So it was just these friction paths where you’re going, you’re doing a great job marketing, but then once people express a desire to buy, you make it hard for them to actually buy that product. And that’s really what, so, so what the MANTL acquisition did is it gave us a way to where
All of the accounts now that you could open is to start a new relationship with that customer member. You can now open them directly in digital banking seamlessly within seconds once they express that interest. So it really, again, just completed that loop. it now is, it’s no longer an attenuator on your marketing success. It actually is an accelerator to it because now, and this is part of what we’ve been demoing and showing people is that now that whenever they come in, they express an interest to expand that relationship.
you expand it within seconds to maybe a minute. So that really made the biggest difference is just the expansion and how easy it is and how little friction there is.
