This week we talked to Jeff Mandel, CEO and President of ApprovalGUARD & iQual Corporation, a national credit advisory service in the United States. ApprovalGUARD helps consumers understand what their credit information means and what to do about it. For example, if a consumer has a credit-related goal — wanting to buy a mortgage, get a car, open a credit card, build credit, rebuild credit, etc. — ApprovalGUARD provides them with information and education via their their advisors who have an average of 18 years of industry experience.
iQual has four segments: 1) Individuals trying to build credit for the first time 2) Individuals trying to rebuild their credit who faced some hardship 3) Individuals who are trying to improve their credit 4) Individuals who are just trying to maintain their credit. ApprovalGUARD looks at these individuals’ goals and helps them apply their goals through their advisory service.
In this interview, we talk about trends in fintech and banking as well as the importance of advocating for consumers.
You can listen to the audio version of the interview here.
Can you walk us through a situation where someone would use your service?
A potential homebuyer who is turned down for a loan might use our service. When they get turned down they might not understand why, or what they can do to get approved in the future. That’s where we come in. We partner with financial institutions and walk consumers through the next steps.
What’s the incentive for your partners? Is it that these prospective borrowers will clean things up and return for a loan?
In the long term absolutely. However, for a lot of folks that get turned down it may not be a quick fix. In the short term our partners are looking to provide value, whatever that might be, so they can build customer loyalty. We help financial institutions make a good customer experience out of one that has historically been pretty bad.
Has your goal always been to partner with financial institutions, or is this something new?
My last corporate job was as a national real estate executive for Bank of America, and before that I ran strategy for all of their lending business. So I’ve been in banking and financial services industry for most of my career. It’s my heart and soul. But when I took over iQual and rebuilt it, one of our first big partnerships was with Fannie Mae and a few other large financial institutions like Wells Fargo and PNC. If somebody’s not 100% satisfied they don’t have to pay. Our whole mission is to provide something of value that the industry has overlooked.
What is the biggest change you’ve noticed over the last decade in financial services?
Although institutions have automated things like mobile banking and you don’t have the need to go into a branch as much, they haven't really changed a lot of what they do. It’s been incumbent on companies like MX and iQual to come up with innovative technologies to fill the voids and bring innovation to the industry. Other than making things mobile and electronic, they still haven’t changed much of their business. IT is still very antiquated about how they go about things.
Do you see this fintech/financial institution partnership as being central to the industry going forward?
I think it’s critical. Having worked for these large institutions, I understand the dynamics and the politics and the siloes. All of that prohibits growth and innovation. It limits the ability of financial institutions to come up with new technologies to simplify the process. That creates opportunities for, again, companies like yours and ours. That enables us to partner with these institutions that know their own shortcomings and allows for win-win partnerships, which is really a triad when you put the customer at the top of the line.
If you were to give advice to these institutions to make the transition into an increasingly digital era, what advice would you give?
Partner with fintech companies. It just takes way too long to get something developed and rolled out at these institutions. By the time they do it they’re 5 years behind what’s been developed outside. It sounds comical and a little tongue in cheek but it’s true. It’s so difficult to get things innovated and developed within an institution on a proprietary basis. Take advantage of the emerging technologies and services and find a way to integrate them with the right companies.
Some financial institutions are scared of fintech companies and think they’re the enemy. Are they right to worry?
Well, they’re always going to worry. I’ll give you a great example. After I was the national real estate executive at Bank of America, I formed my own consulting firm and I was working with some of the largest real estate brands in the US and speaking at a lot of conferences. Everybody was scared out of their mind about Zillow. And everybody thought that Zillow was the enemy, and that they were going to die and never have any kind of success.
The truth is, financial institutions either need to embrace change in technology or get run over. The companies that don’t embrace it will get left behind. It’s the reality of the world. If you’re a financial institution, do you have a reason to fear? Not if you embrace change and build strong collaborative partnerships. If you fight it you run the risk of becoming a dinosaur and having major customer attrition. You’ve got to embrace it, find the right companies to partner with, and make them your collaborative partners. If you fight them there’s a massive risk.