Transcription

• Speaker #0

  Welcome to FinTrends, the podcast series where we explore the hot trends and news in the financial sector with experts. Today, we are talking about the U.S. Connect. This is a major SBS event. It is dedicated this year to lenders and it's taking place in Dallas on September 16th. And so with the event that is just around the corner, I thought it would be the perfect opportunity to discuss What's top of mind for lenders today and what attendees can expect from this year's edition? So joining me are Ron Spratt and Megan Roy, who are right at the heart of this conversation. So Ron, Megan, thank you so much for being here with us. So you're joining me from Minnesota while I'm here in Paris. So a special thank you for making this recording possible across time zones. And also a big thank you. as well to the SBS team behind the scenes who helped make this episode happen. So before we dive in, can you both introduce yourselves and tell us a bit about your role at SBS?

• Speaker #1

  Yeah. Hi, I'm Ron Spratt. I'm head of North American sales and customer satisfaction here at SBS.

• Speaker #2

  I am Megan Rowe. I am an account executive with SBS. So I'm the person that you want to work with when you're trying to solve some of your problems and find solutions. So I'm either the one to help you with that or bring in the people who can.

• Speaker #0

  So Ron, you are hosting the whole event in Dallas. For listeners who don't know the event yet, what is the spirit of U.S. Connect?

• Speaker #1

  Yeah, I mean, I'm very excited. It's my first U.S. Connect. We've had two others previously. But again, this is the first time that I'll be hosting it in Dallas. That's where the previous ones were as well. But I think it's a great opportunity of networking for our customers, our partners, and our prospects to really get more of a sense of community about what SBS is all about. And we're very much looking forward to having you there.

• Speaker #0

  So SBS has run Connect events around the world this year, Africa, France, the UK, and now the U.S. Connect. What makes the U.S. market unique? and why is now the right moment for a U.S. Connect focused on lenders?

• Speaker #2

  Can we take that one?

• Speaker #1

  Yes, that'd be fine,

• Speaker #2

  maybe. So I think what's different about the U.S. Connect, which is really a North America Connect, it's just U.S. Connect because it happens to be in the U.S. in Dallas, is with SBS in North America, we are really focused on the asset finance and the specialized finance industry. And I think that's what really differentiates it from... the other Connect events that have happened globally where our focus is on those lenders, on the wholesale lending, on the specialized finance and asset finance lenders specifically. So everything that we're bringing, whether it's related to automotive lending or equipment finance or just bringing in industry experts who can give their perspective, I think that's what's going to differentiate it from some of the global events. Do you have another perspective on that?

• Speaker #1

  I agree 100%. There you go.

• Speaker #0

  Ron, so when you talk to lenders today, what are the topics of conversation coming up most frequently?

• Speaker #1

  Yeah, I mean, I think AI comes up in almost every conversation, and it's the utilization of AI. I think AI, I know we're in the early innings right now, but it's really going from pilot to production. And in fact, in SBS, we've got our first customer that's moved into production recently. But again... They're looking at efficiencies, process efficiencies, improved dealer experience, and obviously the cost of capital is always a concern.

• Speaker #0

  What's your take on that, Megan? Does that resonate with what you are hearing from clients and also from your conversations with lenders? What do you think will be the biggest topic of discussion in Dallas this September?

• Speaker #2

  Yeah, I would say absolutely. I don't think you can have. More than two conversations without AI being mentioned. And we kind of make a joke out of it where I say, oh, have you heard of AI? Of course, you've heard of AI. Everyone is talking about it. But I think what also comes along with that is, OK, are you just implementing AI to say that you have AI? No, our clients and our prospects want to know, what does it actually mean for me? And how will it help our processes and our operations? And that's going to be a big topic that we talk about at our Connect event. And some of the things that we've seen, which we'll talk about here shortly, is really around, you know, how do we implement that from a portfolio standpoint, from a risk standpoint? How do we utilize AI to help efficiencies and looking at, you know, our risk as an entire portfolio in our book of business? So those are just a couple of things that we've seen.

• Speaker #0

  So this year, the theme of the event is the road ahead, every mile counts. What does that theme mean to you? And what does it mean for what people are going to experience on the day?

• Speaker #1

  I mean, I think a big component of that, obviously leveraging the automotive side of the business where every mile counts. But I think it's every detail counts, every initiative that you've got going on. all of your priorities. Are they process improvements or is it around inventory mix or whatever types of initiatives that you're trying to accomplish? You have to leverage AI and our solutions accordingly to either improve risk mitigation or prevent fraud. So, I mean, it has impact for the top and bottom line.

• Speaker #2

  I agree. And I like the every mile counts, but I really think of it as every hour counts, every minute counts, because when you have teams and teams behind you who are spending hours and hours and hours on various operational procedures or very manual tasks, we want to be able to help to provide some insights and some ideas on here's ways that you can help streamline some of those workflows and say, hey, let's use your valuable team members and put them to use for more higher value tasks rather than some of these manual. mundane workflow. So that's one of the big things that I see when it comes to every mile counts. I really think of it as every hour counts.

• Speaker #0

  It feels like lenders are operating in a particularly complex environment right now. There is AI, economic uncertainty, changing customer expectations, also shift in the automotive market. So what are clients most focused on navigating? successfully.

• Speaker #2

  Me? Sure. We just hear so many things. I think over and over again, we just hear we've got to reduce risk. There's risk events that we hear in the news or from our clients or from prospects constantly. So what can they do to help intervene so that those things either don't happen so that they can reduce the impact if they do? So risk is huge because that means expense to them. So what can they do to reduce the risk, reduce the expense, which means of course, increase their margin, increase their revenue, increase their profits, everything. So that's one of the big things. And then, of course, again, AI we've talked about. So that's another one as well.

• Speaker #1

  Yeah, I think it's overall increased efficiencies and improving that dealer experience. Absolutely.

• Speaker #0

  AI is a major topic across financial services. Where are lenders seeing the biggest opportunities today?

• Speaker #1

  I think there's going to be big improvements in underwriting and credit and the speed to which they can complete the transactions and also monitoring their existing customers. I think there's more data out there than ever before. And then, you know, again, I know we've mentioned risk mitigation, but I think it it transforms those processes and creates more efficiencies. And again, I think you can have your people focusing on higher value activities. A lot of the mundane things that Megan mentioned will be automated through AI. It's going to be more data driven and more involvement, human involvement for the important parts of the processes.

• Speaker #2

  Yeah, I agree. And then also with their existing customer base as well. And examples that we've talked about and I'm sure we'll talk about again is let's say they want to just essentially monitor their portfolio existing customer base. and they have a particular customer or dealer who they want to extend an increased line of credit or an increased floor plan. And they can just utilize AI to say, hey, we're thinking of extending another X amount of dollars to dealer A, B or C. Should we do it? Or what sort of risks should we consider before we actually accept that?

• Speaker #0

  So it makes me think about the fact that at the same time, factors like interest rate, affordability pressures. broader economic uncertainty continue to shape the market. So how are these conversations influencing lenders' priorities?

• Speaker #1

  Well, I think cost of capital is always important. There's factors happening around the world, as you mentioned previously, efficiencies to reduce expenses, and again, improving that dealer experience and really changing the mix. I mean, we're seeing a variety of different payment options out there. Um. the mix of what products they have as far as EV or all electric or hybrid. It's just a combination. And I think the offers out there are getting more and more in tune to what the customer is really expecting.

• Speaker #2

  Yeah, I think it's silly to think that there ever won't be economic uncertainty that's always going to exist. So I think that it's always going to be a good topic to mention. I mean. With one of our speakers, Michael Dunham, which we'll talk about in a second, that's one of the major topics is what is the impact of Chinese in the automotive market and how that impacts things in North America. And with our conversations, of course, they're primarily focused on the commercial side of things and the floor plan lending. But at the same time, you can't ignore the affordability factor from the consumer and retail auto finance thing side of things and how that then trickles up or down between. the floor plan lending side.

• Speaker #0

  One of the highlights of the event will be Michael June. For those who don't know Michael, who is he and why did you want him in the room?

• Speaker #1

  Well, as I think Megan just mentioned, I mean, he's a very respected and dynamic speaker. He's an expert around what's going on in China and what the China automotive dealers are doing and the impact clearly in North America. and other places around the world are going to be critical. So Michael is a renowned expert, and we absolutely want to hear from him and what his perspectives are.

• Speaker #2

  And with a new book coming out next year or so.

• Speaker #1

  Yes, and you might even get a sneak peek about some of the quotes and what he'll share with us. So we're absolutely looking forward to that.

• Speaker #0

  Michael spends a lot of time thinking about the Chinese auto market. So without... Preempting Michael's session, of course. What is the question that you are most hoping he answers on the D-Day?

• Speaker #1

  Well, me personally, being a Midwest guy, I want to know what the impact is to the U.S. and North American market if the Chinese were to enter. Now, not getting into any geopolitical conversations and or tariffs or what could change. It's really getting a better understanding of what that means to the whole ecosystem here in North America if they were to enter it some way, somehow.

• Speaker #2

  I would agree with that. I'm just saying as human beings, of course, we want to know what that means to the consumer and the end buyer. But also, of course, for the context of U.S. Connect and bringing our clients and prospects here as well and the network and the community that we're bringing together is what does it mean for them?

• Speaker #0

  And out of curiosity, why end the day with that big picture view rather than open with it?

• Speaker #1

  Well, I think it really wraps it up nicely. And it really takes everything that we've built upon where it's not just an SBS commercial. It's more of an SBS update and how we can help our customers, partners, and prospects. And it's really an update of what we're doing in AI and what are the latest and greatest trends. happening across the world, and specifically in specialized finance here in North America. And I think that's probably the biggest threat is what's going on with the Chinese automakers. So I think it puts a nice bow on the day and really wraps it up. And then we also have, we have Michael after the presentation as well to interact with the rest of the group really casually. So I think it's a perfect segue and a great way to kick off the evening.

• Speaker #2

  And just to add to that, yeah, we want to be somebody who is here to partner with our clients and our prospects and not just bring a product to you, but to say, hey, here's some things in the industry or here's strategic ideas that you might not even be thinking about. So I think this is a perfect way to be able to do that, too.

• Speaker #0

  So if someone is still on the fence about making the trip to Dallas, what is the one thing that you would say to get them there?

• Speaker #2

  I would say, but I'll let you go.

• Speaker #1

  No, no, you go first.

• Speaker #2

  I would just say you need to be there. There's going to be people in your industry. There's going to be people from other industries that relate to yours. And you're going to get cross-industry knowledge sharing. If you're in the automotive lending space, great. There's going to be people from the automotive lending space. Then there's also going to be people from the equipment finance side of things. There's going to be people from the banking side of things. So it's a great way to kind of get out of your box and get a little bit out of your comfort zone because that's where the best idea sharing, knowledge sharing, networking happens. And if you've gotten an invitation, then we want we want you there to connect. So.

• Speaker #1

  You say that. That's very nice. I agree. I mean, I think the networking is going to be key. And we want to really bring everyone together and provide more of a sense of community around the SBS solutions. Because we really feel strongly that we have a global business where we can be your entire solution provider. So come down to Dallas. It's the middle of September. Hopefully the weather will be very, very good for everyone. And we'll have a great time. We look forward to seeing you there.

• Speaker #0

  You, I, Kinect. What are you each personally most looking forward to on the D-Day?

• Speaker #2

  Go ahead. I think every time we do this, it's fantastic. You get a group of people together that you get to see a few times a year by getting them all in one room with all these different thought leadership pieces. It's just, it's always a good time. There's always good knowledge that's shared. And then you get to talk about it and then you get to start planning for the next one.

• Speaker #1

  Yeah, I agree 100%. I think it's all around the networking and getting yourself out there. And hopefully you learn some things, you make some new friends, and you get to interact with your peers that either you've known for years and years or years or meet new ones around what their initiatives are. And it's always a chance to learn and enjoy time together. So we look forward to seeing you there. Well, and thank you. Hopefully it didn't feel like it was one-sided at all. I know that I've enjoyed it, Megan.

• Speaker #2

  Absolutely. Of course, I've enjoyed it. So thank you. We want you there. We understand the competitive landscape that you're dealing with and then the competitive landscape in the asset finance side of things, too. So we're here.

• Speaker #1

  Yeah, we look forward to seeing you there. And thank you again for your time.