Thought Leaders in Financial Technology: Brock Blake, CEO of Lendio (Part 6)

Sramana Mitra: I’ll tell you from my point of view because in 1Mby1M, we’re trying to get entrepreneurs to be disciplined, scalable, and be able to do more things. If you’re going to go apply for a loan, keeping your QuickBooks up to date is an important piece of the housekeeping.

Brock Blake: Yes, no question. I think everyone knows that. I, 100%, agree with you. I think a business wants to keep their housekeeping in their QuickBooks up to date. But I think that it slips and it’s not always up to date. People at home in their personal life, they want to have their own budget and they want to be able to have it where they’re keeping track of their daily expenses and things like that but it sometimes slips.

You go days, weeks, or months without updating it. I think it’s the same concept. In theory, it’s something that’s very attractive as a data source. But in practice, it’s not always the most valuable because the data isn’t always cleansed and up to date.

Sramana Mitra: Fair enough. However, if you look at the other data sources like eBay, Amazon, or any other transactions that’s inherently up to date, that doesn’t have any of these issues.

Brock Blake: Yes. That’s exactly right. If I have a merchant and it’s showing how much revenue I’m getting from credit cards every single month, that’s just part of your business. If I’m an Amazon seller and it’s showing all the transactions of all the revenue I’m generating from myself, I don’t have to go and update that. Any data source that’s just a reflection of what’s happening in your business is extremely valuable and something that everyone is seeking for a proprietary data source.

Sramana Mitra: To extend that line of thought, banks have the most current data because all checks and credit card transactions are eventually getting deposited into the bank account.

Brock Blake: Yes. That’s where you bring it full circle which is why I thought banks would’ve been quicker to adopt and do some of these things. The reality is, the bank has the data, the customer, and the cheapest form of capital.

Sramana Mitra: Capital, exactly. They have capital. They can lend capital. That’s their business.

Brock Blake: That’s right. They have three built-in inherent advantages from day one where there are significant disadvantages on the technology. Not that they should be disadvantaged, banks are controlling the financial system in the US. We don’t want them to be the most innovative kind of risk-taking organization.

They’ve got regulatory oversight that keeps in check and flows them down a little bit in compliance. They can’t move extremely fast and that’s probably an okay thing. That’s where they have the disadvantage. They don’t have the technology and the speed. They have some of these compliance hoops that they got to jump through. But in some of these other things, the advantages are real advantages.

Sramana Mitra: Yes, they’re real advantages. I think that, eventually, when this comes full circle and once the banks do get fully up to speed in being able to offer light speed loan approvals in this mode for small businesses, I think it’s going to make a massive difference in the economy.

Brock Blake: Yes, I agree.

Sramana Mitra: That was a fascinating conversation and a real meeting of the minds. Do you have any other thoughts that you want to share?

Brock Blake: I think we’ve covered a pretty good amount of items for your audience unless you have other topics or questions.

Sramana Mitra: No, I think this is what I wanted to talk about. I’m actually very pleased to hear what you’re thinking about. I really see the opportunity on the banking side more than anything else. Glad to hear that you’re also thinking the same. Thank you for your time.

This segment is part 6 in the series : Thought Leaders in Financial Technology: Brock Blake, CEO of Lendio
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