Charlie Lewis Originations, X-General News, X-Series-Baby

Does the topic title “Throw the Baby Out With the Bath Water” still mean the same thing now that it did at the beginning? If not, why?

defi SOLUTIONS Speakers:
defi Strategy Team
defi Product Team
defi Solutions Engineering

This presentation is a part of AFSA’s Business Partner webinar series, which allows industry experts to share timely educational topics directly with AFSA members. The defi Strategy Team facilitates a “fireside chat” between The defi Product Team and defi Solutions Engineering. This transcript has been edited for clarity and brevity.

Strategy: My feeling is that even through the course of these 40 minutes together … and I want to thank both teams in advance for playing the different roles in this rather unorthodox approach to a fireside chat. But what is orthodox anymore after the last 20 months or 18 months … but what I hear as I reflect on the thinking and the writing that we’ve been doing on, is this fact that it is changing.

And whatever we were describing at the beginning, even of these 40 minutes ago, is a recognition as you rift back and forth between the two teams that it is changing in the market at the moment, that the expectations and the questions that lenders should be asking of their vendors and of themselves internally are changing.

The role and the whole concept of what it takes to buy versus build is changing. And even those terms may be less appropriate now than before. They might be masking this tendency to, as the title says, throw the baby out with the bathwater get rid of the…it’s an all or nothing world. And really what we’re saying is no, it’s a bit of everything world, and you need a better way of looking through that.

So does your sense…that the title still holds, that the thinking has changed over now and even in this discussion, or what would your response to that be?

Solutions Engineering: So I believe the title itself still holds, but the definition of the baby is changing over time. Because there is this mix of now the baby being both the business process and programs, along with some of those areas that are still being held and maintained in-house from a technology standpoint, and really understanding when you should continue to do those things versus when does it make more sense to go out and allow a vendor to start to handle those aspects for you. That to me is what has changed.

It’s not necessarily the title or the meaning of it, but the definition of the baby itself as time goes on.

Strategy: And, over to the product team, your closing thoughts on this same question?

Product: My perception of what it is has not really changed. I think when you look at it from a historical perspective, I think the meaning of it has changed over time. Again, I think it’s less about kind of a wholesale replacement of the monolith and more about understanding specific pain points and needs and being able to identify solutions that close those gaps.

So it’s okay to reset and look at products, but I don’t know that you’re looking at things in the total, the way we would have been doing as recently as 5, 10 years ago.

Strategy: Great. Thanks. I want to thank both teams, as I said, a minute or two ago for taking on these roles. It’s a topic that’s challenging to kind of get your head around. But as we’ve said a number of times, it’s at the core of every discussion we’re having and not just with large lenders, but across the spectrum of the segments and the sizes of lenders out there. And I think this will only intensify.

And so, I would encourage the lenders who were part of today or listening [our reading] to this post facto, to think about those questions on this topic and really push existing vendors, your internal IT crew, as well as other people that you’re out speaking to in the market about how you should be thinking about this, looking for their responses on it.

Because I think we talked about differentiation at the beginning and how that’s really in the business process, often more than the technology and the technology enabler. But so, too, is differentiation in the partnerships that you create.

And those questions ought to illustrate who best you should be working with for the future platforms that will drive your business.

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