93: Bridging the Bank-Fintech Partnership Gap with Trent Sorbe of Central Payments

Trent Sorbe, President of Central Payments and Founder of Falls Fintech, joins the show to chat about why banks should become more like utility companies who focus on enabling experiences. He shares how his company’s accelerator is helping early-stage fintech startups, why they created a banking-as-a-service open API, and how mature banks and fintechs can best partner to build better customer experiences.

In this episode, you will learn:

• Where Fintech products are most popular
• Why banks should become custodians of value
• How consumers are driving open banking
• How Fintech is taking an IOT approach
• Why Central Payments created an open API platform
• Tips on how to integrate with a bank as a digital product

This episode is brought to you by The Jed Mahonis Group, where we make sense of mobile app development with our non-technical approach to building custom mobile software solutions. Learn more at https://jmg.mn.

Recorded September 7, 2021 | Edited by Jordan Daoust | Produced by Jenny Karkowski

Show Links

Central Payments | https://www.central-payments.com/

FinTech Brews Podcast | https://fintechbrewsnews.sounder.fm/

Falls Fintech | https://www.fallsfintech.com/

JMG Careers Page | https://jmg.mn/careers

Connect with Tim Bornholdt on LinkedIn | https://www.linkedin.com/in/timbornholdt/

Chat with The Jed Mahonis Group about your app dev questions | https://jmg.mn

Rate and review the show on Apple Podcasts | [https://constantvariables.co/review[(https://constantvariables.co/review)

Episode Transcript:

Tim Bornholdt 0:00
Welcome to Constant Variables, a podcast where we take a non technical look at building and growing digital products. I'm Tim Bornholdt. Let's get nerdy.

Before we get into this week's episode, a quick shout out to Wes Denzel for his five star review and rating of the show on Apple Podcasts. We really appreciate you taking the time to do that, Wes. It does seriously help us grow the audience for our show. If you want your name or company mentioned on a future episode of this show, leave us a rating and review on the Apple Podcast app. Just head to constantvariables.co/review and we'll get you to the right place.

Today we are chatting with Trent Sorbe, President of Central Payments and founder of Falls Fintech. Trent joins the show today to chat about how his company and its accelerator are helping early stage FinTech startups. We also talk about the banking as a service open API they created and how mature banks and FinTech startups can best partner to build better customer experiences. So without further ado, here is my interview with Trent Sorbe.

Trent, welcome to the show.

Trent Sorbe 1:17
Thank you, Tim. Appreciate the invitation.

Tim Bornholdt 1:19
Really excited to have you here to talk FinTech today. So why don't you tell my audience here a little bit about yourself and Central Payments and everything Falls FinTech.

Trent Sorbe 1:28
Sure, I'm Trent Sorbe. I'm the president and founder of Central Payments. We started Central Payments in 2014 with Central Bank of Kansas City, a small CDFI Community Bank, a family owned Community Bank, in, of course, the Kansas City metro area. The bank was really kind of at that time coming out of the economic crisis of 2008, 2009 and really thinking about where the future of banking, particularly deposit gathering, which of course fuels the growth of the bank, where that was going to come from for a small community bank serving very low and moderate income areas of the Kansas City metro. And they started looking at the idea of FinTech and payments and the future of really deposit products in banking at that time.

And so reached out to me, we got together, decided we'd start Central Payments, and now operate that as the payments division of CB KC, really responsible for all forms of nationwide payment devices, payment products on behalf of the bank. So located here in Sioux Falls, South Dakota, and have a team of, you know, approaching 100 people that has seen some pretty wonderful growth over the past five years since we sort of started this thing.

As far as FinTech, you mentioned our accelerator program. One of the things we noticed early on, as we approached the FinTech market, was that there exists this bit of a canyon or a gap, if you will, between the way banks do things and the way fintechs do things. And we really saw a need to creatively try to bridge that gap. And so in October 2019, we started Falls FinTech, which is a FinTech accelerator for early stage companies that are sort of at that minimum viable product level, where twice a year, five companies come into Falls FinTech on site for about half the accelerator, remote for the other half. That's moved around thanks to COVID but currently doing about a 50/50 split. And like I said, 10 companies per year coming in and really embedding themselves with Central Payments. And so we really saw Falls FinTech as the way to sort of bridge that gap between banks and fintechs. And figuring out a way in which the two of them together can collaboratively build unique and innovative and wonderful products.

Tim Bornholdt 4:16
One thing you mentioned was going back to Central Payments, you mentioned different payment products and devices. I'm curious if you could kind of explain those to me of what would be different services or things that you offer to help people better, maybe lower medium income there?

Trent Sorbe 4:32
Yeah, of course. We really look at FinTech and our role in fintechs as effectively, money movers. And so we try to remain at all times as agnostic as possible to the end device, we call them appliances, sometimes, to the end appliance that's actually triggering a transaction. So whether it's a debit card, a prepaid card, a money remittance, an ACH, a payroll card transaction initiated with a watch or a phone, you know, for us, it really doesn't matter that device. It's really about funds movement. And we really see that, you know, really going back to the days of payroll cards, that many of the products in FinTech have been particularly popular among low and moderate income folks. And we always, we always refer to them as folks of modest means. And it's really those folks that we're here for. And so we really try to take a concerted effort at any product we get involved in to make sure it's affordably priced. It's fair and transparent. And it has an opportunity to improve the financial lives of low and moderate income people.

I mentioned with in response to your first question, Central Bank of Kansas City is a CDFI, a community development financial institution. There's about 135 of them that are also banks nationwide. And so really, a CDFI, right true to its mission, our core to its mission is really serving folks who historically haven't really enjoyed the full breadth of affordable financial products and services. And so when we started Central Payments, and even as we started Falls Fintech, we saw that as an as an opportunity or a natural extension of, you know, some of the great things CBK see was doing in inner city, Kansas City, all of a sudden, you know, doing those same things on a nationwide scale. So it's really, you know, it has expanded the footprint and availability of great products nationwide, you know, that CB KC could have never done kind of under its older model.

Tim Bornholdt 6:42
it's really cool to hear that. You think of banking. And I think a lot of Americans specifically have a lot of feelings about banking, especially coming out of the crisis you mentioned back in in 2008, 2009. It's interesting to hear like that there are banks out there that are trying to help, you know, people that are of modest means that are trying to navigate what is often a very opaque and complex system, giving them the tools and the education and the ability to enjoy the full breadth of tools that banks can offer. What a great mission to be proud of, to be a part of.

Unknown Speaker 7:18
Yeah, it's been a wonderful ride, really catching stride here in the last few years. As you know, I always say we kind of grew up with FinTech. And so a lot of financial institutions may be wary of sort of the FinTech revolution, if you will. When we started Central Payments, we started it right about the time FinTech started to really explode. And so it was very much a natural extension for us. And so we really think of ourselves as a technology platform, with banking capabilities embedded in the platform, if you will. And I think that's really, that's really worked as we build, you know, really what I think are pretty interesting partnerships with, you know, I think pretty cutting edge products and technologies out there.

Tim Bornholdt 8:02
We've been kind of dancing around FinTech and kind of talking about the history of it. And I think it's probably a good idea to jump in and go over FinTech because it is a pretty new space. New in the grand scheme of things, I suppose. Technology moves so quick, but maybe talk a little bit about the history of FinTech and how innovation has evolved the space, especially in the last few years here.

Unknown Speaker 8:23
Sure, I think one of the things you're noticing is that a lot of companies, small startups, entrepreneurs, and sometimes very, very established companies have found very interesting ways to embed financial products and services into their core business model. And so we really look at FinTech sort of in two distinct, although, you know, similar verticals.

Trent Sorbe 8:48
One of them, we always call the application layer. And this is where you find fintechs building fantastic user experiences and attracting customers organically through in many cases, their mobile application. And so if I think of those as almost like untethered fintechs, not part of a big brand, but really out there designing attractive UI, UX at very affordable costs, and building a customer base that way. And there's lots and lots of examples, we read about them all the time. And we have great clients that follow that vertical.

And then I kind of look at another set, another group of fintechs. In this case, we often refer to them as imbedded FinTech, where there is a well known brand that is offering a product or services they offered. The brand is known for their particular product or service, but they're finding ways to embed financial services into their core offering. And so you think about wireless carriers and you think about appliance manufacturers and television streaming services, and, you know, ride share companies and, you know, the list goes on and on and on, that have a core product that is particularly attractive to consumers and are finding unique ways to embed financial services inside of that.

And so I think a lot of times we think about FinTech, we think about early stage, you know, Silicon Valley, you know, rapid growth, new brands, that's the vertical I think we hear about most often. And I think that vertical is going to be around for a long time. But I think what we're starting to see is an emergence of, you know, embedded FinTech where very, very established companies are using financial technology to, you know, improve relationships with their customers, to streamline purchase activity, you know, all the things, you know, to speed up payments, all the things where FinTech really comes in handy.

And so, you know, I oftentimes get asked, what does that mean for banks, and, you know, we really believe that banks, really, they're going to have to focus on the true pipes of payments. If you rail the rails, we always say sort of the guts of payments, you know, figuring out ways to move money, and then finding ways for consumers to seamlessly and easily attach their application of choice, their financial app of choice to their bank account. And so I really think banking is going to turn into sort of, not turn into but really is going to begin to emphasize, you know, being custodians of value and letting consumers out there, you know, go out and do anything they want with to manage finances, or to transact or to invest, or to save and budget, you know, all those things. Consumers don't want to be held down by their financial institution; they want their financial institution to come with them, and have the capabilities to let them do whatever they want with financial applications.

Tim Bornholdt 11:58
It's really interesting you say that, because as a developer, I've interacted with many different kinds of banking platforms and interacted with implementing payments of various different ways. And it's really interesting that banks are finally like, in 2021, starting to see that light, because I mean, most banks, have, you know, for well-intended reasons, they're pretty conservative, right? They're pretty set in their ways, and try to keep things going the way that they're going. But with all of this rapid change in technology, for the longest time, people would really kind of point out banking as being like behind in technology. So how do you see banks actually working with these fintechs and being true partners in this as opposed to kind of trying to keep things going the status quo?

Trent Sorbe 12:47
When I get asked this question, the first thing I ask, especially if I get asked by another banker, the first thing I asked is, if you were going to build a mobile app, who would you call in? If your first answer is one of your core processing providers, you have a vulnerability. And I would recommend that you take a hard look at that vulnerability. Because there are about five, four or five core providers for banks, large, not particularly agile companies that banks have operated on for years and years. If a bank is thinking I can only go as far as my core will let me go, I think that's already a limiting factor. And so I think banks need to think about this idea of untethered cores where you don't have one core processing platform, you have a number of them for whatever the application happens to be in. You're not particularly beholden to any of them. Banks that see that, and recognize that that's where they need to be and recognize that, you know, they need to open up their services to companies that maybe they don't have a lot of experience, or maybe no experience with. Because the consumer is expecting open banking now. Europe has had open banking for some time. The US is way behind on this, but but everybody can sense the move. And I think ultimately, it's consumers that are going to drive that, because they're going to expect like, I don't want to have to change banks all the time. I want my bank to be able to let me do all the things I want to do, you know, in that application layer above them.

And so I think banks recognize that maybe some of them have to think about, should I be in the product game anymore? Should I be building product? Or should I be thinking about, you know, how can I integrate with all the companies out there moving a whole lot faster than me, building cutting edge products? It would be a big bet for a bank, particularly a community bank to say, Look, I'm going to go build product and compete with Chime or Varro or Dave or any of the challengers, that's a big bet. Or is it possible for you to say, look, in the end, the consumer wants me to be the safe spot for their money, and they want to go out and do things with all those companies I just mentioned. So how can I I create an environment where financial data moves in a more open environment? And I think that's often where many banks are going to, have found themselves, which side of this am I going to be on long term?

Tim Bornholdt 15:15
Yeah, I think it's interesting thinking about banking more as like the banking as a service. And being more of just the rails by which money is moved. And there is some, there's, I think that that, a lot of times I see this a lot with building software myself is that everyone wants to be like the hot new app that everyone uses, and everyone's so proud of having their app on the App Store. But more often than not, where you actually make money in life is in the stuff that nobody wants to do or see. And it's all behind the scenes. And it's interesting to see banking kind of moving that route, like you said, kind of trying to decide whether they're a product business, or whether they're kind of more helping support, being the secure, trusted store of value. It's fascinating that that's the look that banks are finally taking, because I think it just makes sense.

Trent Sorbe 16:07
I think one of the things, we use the comparison all the time that, you know, should banking become more of a utility? And what I mean about, if you think about your utility company, you probably don't know what their logo looks like. You didn't necessarily search them out among lots of providers on an app store. So what do you expect from a utility company? You expect that they're very stable, very dependable, they stay out of your way. And when you plug your toaster in, it doesn't matter what kind of toaster you buy, the toaster is going to work. And so that's the analogy we use about the future of banking is should it become a little bit more likely utility, a little bit more about the rails and leave the toaster manufacturing to someone else.

And look, I know there are a lot of banks that would say, you know, that's crazy. But I think particularly smaller banks that are going to see younger customers, we always ask banks, like, you know, what's the average age of your deposit? Or how old is your money in the bank? If you're finding, and I hope banks track this, they should track, you know, how much of my money is sitting with younger folks or older folks, and what's the trend bent over time. If you see it trending towards the older generation, it means that the younger generation is going somewhere else. And the degree to which you open up your platforms to allow them to go somewhere else, but not really leave you, it's again, I go back to it's a lot like the utility

Tim Bornholdt 17:40
With banks specifically, if I am a bank, let's say I'm a bank, that would be awesome. Pretending that I actually had that power, what challenges would I face trying to move from that model to the other? It seems like from what I understand banking, and the banking industry, is still pretty heavily reliant on very old technology. Is that something that you still see as a problem like today in 2021?

Trent Sorbe 18:09
I believe it's the number one problem. I go back to what I said, if you feel beholden to your core, if every time you look at new technology, you ask yourself, I wonder if my core provider can support that? And if they can't, then I can't look at that. Man, I think you're setting yourself up for some difficult times 10, 15 years from now, maybe sooner. And so yes, I think the number one challenge is making an investment and sort of untethering from your core, and looking for ways in which you can expose that platform, middleware, API's, bank as a service, new cloud based core providers. All those things that are going to allow for much easier open banking activity. That's the investment, you know, Central made six or seven years ago. That's the investment I think a lot of banks are faced with now. Of course, the question now, is it too late? I don't think it is. But I wouldn't want to be facing this decision five years from now, let's put it that way.

Tim Bornholdt 19:21
Right. Yeah, you don't want to be behind at this point. If you're not thinking about it, it's it's probably already too late. You should probably jump on that train pretty quick.

Trent Sorbe 19:28
Absolutely.

Tim Bornholdt 19:29
With regards to FinTech, so I one thing I think about a lot with technology is how when kind of new and modern sensibilities meet older technologies, you get kind of this weird period where it's everyone's kind of trying to put out the same types of apps and the same types of software. I think of like when augmented reality first became a thing and everyone made the the app that kind of like you held it up to a store and it showed you the hours of the store or something. You know, just a basic kind of an initial scratch at the surface. Being that you're involved with an accelerator and that you're pretty tied into the FinTech scene, what kinds of apps and technologies have you seen that have gotten you super excited?

Trent Sorbe 20:14
I really think a lot of this is going to follow, you know, sort of an IoT, sort of an Internet of Things approach. Payments will be as embedded as technology will take them. And so some of the things I really enjoy listening to, and I love to talk to some of our startups about, you know, they're very rarely card based. One of the things you know, we have talked oftentimes about in just four cohorts, you know, we're on our fourth set of companies coming through Falls FinTech. It's been interesting to watch in that short period of time, the change in products. Products are becoming very wallet based, very app based, very virtual. And we rarely talk about cards anymore. The plastic card is sort of a, something I need to have, but it's really not my desired way of transacting.

You know, we have a company in Falls FinTech right now, the founders are from Russia. And of course, in Russia, there was really never a plastic card time. it went straight from cash to digital. And so it's been interesting to watch, you know, folks that look at the plastic card as the same inconvenience as the paper check. And watching products now become, you know, completely virtualized and digital. That's where I think everything is going to go and I think you're going to find wallets embedded in cars and refrigerators and everything else because those are all places that you constantly find yourself and a need to transact. You're buying groceries. You're going through the carwash. You're filling your car up with gas. All those sorts of things, that payments are going to find themselves very embedded among products that are very, very interesting and attractive to consumers like their car. I always joke, nobody wakes up in the morning and says, I can't wait to go banking today. No one does that. What they're saying is, I can't wait to go buy a new car today, or I'm going to go get a new mobile phone. I'm going to go with the latest Apple phone or whatever it happens to be. That's what consumers want. That's what they enjoy. So they really expect their financial product to just sort of be there because I want to go do the things I really enjoy doing. And you know, how flashy and cool your debit card is, doesn't really matter to me. Can I use my bank account everywhere I want to use it digitally? That's where consumers I think, ultimately are going to insist their bank be or they're going to lead them.

Tim Bornholdt 22:44
Yeah, I mean, I can't tell you how many times I watch banking commercials or anything where it's, they always try to pump up like check out our free checking accounts or whatever. Like it seems like the stuff that they're promoting about themselves is not really anything as a customer that I'm interested in. But then there's the banking commercials where it's like, you can go and get this beautiful house on the side of a mountain and all. It's like people want experience, especially you know, my generation wants experiences and the more that you can kind of take your ego out of it as a business owner, like this kind of applies as a blanket statement to everyone, but like if you can take your own ego out of it and really find a way to appeal to your customer and be that like you know, just be the plumbing, be the utility, be that core service that enables all of those experiences. That's what's going to get you to have like huge consumer loyalty and keep people wanting to come back and do more business with you.

Trent Sorbe 23:38
I always joke like nobody loves your mortgage. They love the house that your mortgage facilitated. And I think that goes along those same lines you know that back to the utility example you know, you never think about your utility until something goes wrong, right. And so that's where I think, that's the mentality that I think banks need to need to really try to embrace over the coming four or five years.

Tim Bornholdt 24:00
Another kind of example that made me think about when you were talking before was I have been, luckily, I have a five year old daughter and I've been driving her back and forth for different reasons lately and they have the the MNpass lanes in the Twin Cities here that you can just drive through and if you're in a carpool you can use them for free but then they have the actual MNpass where they're kind of scanning your toll as you go through. And it's those kind of applications where nobody's thinking like, oh boy, I can't wait to pay to drive on this road today. Like what people are thinking is, Hey, I can't wait to get to work 10 minutes faster, cause I'm not stuck in traffic this whole time. And, it's again, those kinds of, you don't think about how many times you transact and especially with the birth of mobile phones, now there's all these microtransactions it's like, it's so nice to have a device that you don't have to constantly be fishing out cash and change and checks and all that stuff. It's like you just tap your phone and you're done.

Trent Sorbe 24:58
My son, my youngest son turned 18 in late August. And for his birthday, we included some cash. He's 18, he never has enough cash. We included some cash in his birthday card. And the next day, I got a text from him and it said, Hey, Dad, can I just give you this cash back and you Venmo me the money instead? And I was laughing with some co workers, I said, you know, there used to be a day that there was nothing more liquid than cash. And here's an 18 year old kid saying, boy, what an inconvenience, the last thing I want to do is hold this cash, because I don't want to go to the bank. And I don't want to, you know, and then last thing I want is change back. So, you know, please get rid of this very inconvenient method of tender and give me something more digital.

Tim Bornholdt 25:50
I was driving my daughter to my parents house today for daycare. And she was asking me, you know, why do you have to work? I just want you to play with me. Like, well, I need I need to work because I need to have money. And we were talking about how, like, you know, you have to pay for a mortgage, and you have to pay for food. And she's like, well, I never see you taking any cash out. Because in her world as a five year old, it's her piggy bank is her central source of wealth. And so it is funny how quickly we've evolved from, you know, not really having any tender to pass back and forth to all of a sudden, like, when you have cash being this great thing that was centralized in like the 1800s or 1900s, then all of a sudden, that's antiquated. And yeah, like I could see, like we were cutting checks to our neighbor for her graduation gift. And it's just laughable now it's like, she just pulls out her phone and takes a picture of it. It's done. She doesn't even have to think about it. But yeah, dealing with cash, like what are you going to do with cash?

Trent Sorbe 26:47
I have a rental home, in the community where my first son went to college, and we still rent it out to college kids there. And every year I said, well, you can mail us a check, or you can Venmo it. And when we say mail a check, they just look at me like I'm an alien. So I can guarantee you never once unless their parent is making the rent payment for them never once have I received a check from a tenant.

Tim Bornholdt 27:11
I could see next time, switch the order around and say you can Venmo me or mail me a check. And there was one thing that when we were kind of doing some research and looking into what you've been doing with Central Payments, we've been kind of talking about what enables all of these and one thing we came across was open CP, which is an open API that gives access to the whole payments ecosystem. Why don't you kind of go over the reason like why you, I mean, we kind of talked about why you're doing that. Right? That's kind of where we see the future. But what types of companies are you seeing using that API access?

Trent Sorbe 27:51
That's a great question. It's interesting, I go back to what I said early on about the two verticals of FinTech, sort of untethered applications, product companies, and then, you know, very embedded FinTech inside a very established big brand companies. We are seeing an equal mix of both utilizing open CP. What we looked at, and it goes really, it goes as far back as when we started this thing, where we said, Look, we've got to be technology forward. We see what's going on here. And, you know, our competitors have been in business longer than we have. They certainly, you know, speed to market, they're there. They were there before we were. What's going to be our, you know, characteristic that distinguishes us? And we said, Look, it's got to be technology; we've got to be technology forward. And then we saw these bank as a service platforms begin to pop up where, you know, any company could very seamlessly and easily go in, take a look at an API catalog and begin to build product on top of it. And we said, you know, there's no reason why we can't do that. None of the other providers or banks absent a couple. What if rather than be, you know, a spoke, why don't we be a hub? And so we built open CP with the idea that you know, there are a lot of bank as a service platforms out there. But the one thing most all of them and I actually posted this on Twitter this weekend, I said, I had a chart. Somebody had designed a chart about bank as a service. I said, Okay, here's the quiz. What's the one thing that's missing? One of the things that's always missing is the actual bank. And so we said, you know, it's interesting that you have all these capabilities and functions and cool product features, that's all important. But in the end, it's still got to be offered by a bank. And so we said, you know, what if we embedded our bank charter as one of the services inside of the platform, and so not only do you get the full breadth of access to all of the financial ecosystem of FinTech, but you get your bank partnership too. And that's where we found a lot of our competitors have fallen short over the years, is that that bank relationship is not embedded in the API platform. It's this third party thing sitting out there. That's a point of vulnerability. And so we like to refer to open CP as real bank as a service, because it's from a bank. And that's been very popular with a whole lot of companies that don't want to have to, even though the other bank as a service platforms, you know, rightfully point out that they are a one stop shop for a whole lot of services. The one service that's not in there is their issuing relationship, whatever the product happens to be. And so open CP is really resonated with the companies who say, look, I want a true one stop shop. When I talk to my technology provider, and I get access to all these services, I want to talk to my bank at the same time. And, you know, that has really changed our business as we started to really let fintechs and established companies build on top of us, make us the hub rather than the spoke. And then they get the benefit of having their bank relationship as part of the part of the connection, if you will.

Tim Bornholdt 31:03
Have you had a lot of like cool products end up adopting that API?

Trent Sorbe 31:09
Oh, yeah, very much. So it's only two years old. You know, we have a couple great partnerships we like to highlight. One of them is with one of the largest payroll companies in North America. I believe their largest in Canada and top three or four in the US, a company called Ceridian. Ceridian built a product called de force wallet. And it allows employees of companies that are clients of Ceridian, in other words, where Ceridian is doing the payroll processing for all kinds of different types of companies that allows the employees of those companies to basically trigger a payday whenever they want. And so they go on to their Ceridian app, they look at their accrued wages, because it's all time and attendance based, it's all right there. Ceridian's the payroll processor, and they can basically make their own pay frequency. They could get paid every other day if they wanted to. That's all pushing into what's called de force wallet, which is a fantastic application that Ceridian built on top of our entire API base. And so I think that's been a really interesting one.

One of the really exciting new FinTech challengers out there is a company called First Boulevard. Don Hawkins and Ossia Bradley have a fantastic new challenger bank really focused on the challenges African Americans have had in accessing great financial services. And First Boulevard is an early stage company came through Falls FinTech, is building some really interesting banking services through their app. And again, ingesting all of open CP in order to facilitate that, and this really goes on. We have companies doing ACH activity through it. So again, it's really an opportunity for almost any use case to come in to us and get access to the whole ecosystem.

And one of the reasons why we're particularly fond of it is that it not only is attractive to the marketplace, it improves our overall risk management. You know, we're a heavily regulated business. And so by being the hub, you're in the middle of all the activity. And so it does allow us to demonstrate to all of the regulatory bodies that have an interest in our business or that regulate us as to say, look, before, we sort of sat out here on the fringes, watched out from above and said, Yeah, everything looks to be working okay, with all these pieces and parts that have been put together. Now, we're the platform, and we can see everything that goes through it. And we can identify anything that is happening that we didn't expect to happen or shouldn't happen, or whatever, we can react much more quickly. And so it's really changed the overall risk management structure too, which is anytime you can, you know, see your business expand and at the same time, do it in a way that puts you in a better risk position than before, that is a banking win win for sure.

Tim Bornholdt 34:10
And it goes back to the whole philosophy, I think of being a technology first company, as opposed to being a bank that's kind of trying to be techie, where it gives you that opportunity to really evolve using technology and put you in a better position overall in the long term and be able to adapt to changes and adapt to, if you know there's regulatory changes, or if someone on your platform is doing something that you didn't anticipate, you know, for a bad reason. There's, I'm sure, there's a lot of good reasons people use your platform for things you never even would have considered. But if somebody is to do something nefarious, you being at the middle of it all have a much better opportunity to react to that and make changes in a positive way.

Trent Sorbe 34:54
Absolutely. The two biggest employee groups at Central Payments, technology and compliance. And that's what we believe is going to be the future of payments and banking, risk management and technology. Now we have lots of folks that do lots of different things. But those are the two areas where we think investment is prudent. And we think change is constant. So we're really proud of, you know, we employ a whole lot more technology people than bank tellers, that's for sure.

Tim Bornholdt 35:29
I love it. Last question that I just thought of, you know, I think a lot of times, we as developers can kind of point at how, you know, not fun it is to integrate with banking providers and solutions, for a bevy of reasons, right, just traditionally speaking, but I wonder being on the other end of the table, are there things when, you know, a lot of our audience are people that are building apps, or thinking about getting into technology, or finding ways to adopt it into their Corporation a little more easily. Are there things or tips that you give to those types of people to make it easier to be a partner with a bank?

Trent Sorbe 36:12
I always ask for a little bit of grace. And what I mean by that is, it is a complicated business that is heavily, heavily regulated. Therefore, you have to come into it with an understanding that, you know, it is not going to be the easiest of all integrations you've ever done. It will be a whole lot easier to integrate with, you know, Netflix's API's, then our API's. And that's not a knock on anyone. It's just the reality of it. And so, we tell, particularly early stage companies, is like, come in with a little patience. Don't try to boil the ocean, build your proof of concept, show your investors that you can acquire customers. And then let's continue to enhance and modify and tweak along the way.

I think one of the things, we find this, particularly in our Falls FinTech cohort is, you know, we know you have a vision. We know you've dreamt about this product for two or three years. But if you can't prove you can acquire customers, and your product is stable, and it works, you know, the glitz and the glam isn't going to do a whole lot of good. And so, you know, I always say, you know, a bit of a walk before you run, which is a hard hard message to deliver to a startup, particularly a FinTech startup is to walk before you run, because they're usually running at 100 miles an hour, all the time. But that's, you know, we think that's the prudent approach to building new products and services in a heavily regulated environment like banking.

Tim Bornholdt 37:51
That's the same advice I give everybody. I think a lot of times first time entrepreneurs especially come in and think that you can, again, sprint when everyone else seems to be kind of at a leisurely saunter at best. And for good reason. When you're established and you have regulation and you have precedents and you have like a lot of money and risk that you're taking on, you can't just change things on a dime. You really have to do things the right way. So I think that's brilliant advice, not just for anyone that's trying to get into FinTech, but I think anyone that's trying to build software in general.

Trent Sorbe 38:30
It's been fun because, you know, like I said, at the very, very beginning of the interview, there are two different mindsets, oftentimes, between bankers and FinTech entrepreneurs. And so it's been fun to find ways in which we can pull, you know, sort of the old school banking mentality more towards the FinTech mentality, and then pull the FinTech mentality a little bit more towards the banking mentality, and then make product work. I try to tell folks, like, Look, you're building a business on top of Central Payments and our open CP platform. You want it to be stable. And so us exercising a little bit of patience, a little due diligence, some strong risk management, that just allows for a stronger foundation for your company to grow. You want that from your bank partner.

Tim Bornholdt 39:24
Yeah, you definitely want to have that voice of reason. And especially somebody that's been there before and has to deal with all of this stuff. I would imagine a lot of the people in your cohorts are not established, you know, 50 year industry vets of banking. It's probably like you said, people that have a vision and an idea and you kind of have to go through some rude awakenings at first when you are jumping into any new venture, but especially banking. I'm sure there's things that people just would not even consider when they jump into this space that all of a sudden hits them.

Trent Sorbe 39:54
We have to teach compliance to engineers. That's the reality of it. You know, in many cases, startup founders are engineers. And they come at things with an engineer's mindset. They haven't thought about regulatory compliance and subjective rules and regulations, you know, where sometimes the meaning isn't entirely clear on the surface. We have to translate those things in a way that an engineer can understand them and build product with that in mind.

Tim Bornholdt 40:28
Well, it's probably a mutual road on that regard, being an engineer myself of giving grace, and you probably have to do that a lot of helping to teach engineers how to, you know, they see a problem and they're given a certain set of constraints, but then you drop 1000 more constraints on them and say, Here you go. Good luck. Trent, this was awesome. Do you have any final words for anyone listening or maybe how they can get in touch with you and learn more about Falls FinTech and Central Payments?

Trent Sorbe 40:58
Yeah, absolutely. So of course, you'll find us on the web. We did just drop a new podcast called FinTech Brews where my co founder of Falls FinTech and I sit around with most of the time a coffee but once in a while, a cold beverage. And talk about really what we're seeing in FinTech and bring in some great guests and talk about the company's coming through Falls FinTech, talk about partners at Central Payments. And so, FinTech Brews has been great. And then, you know, follow us on on Twitter and LinkedIn,

Tim Bornholdt 41:27
I might have to ask to be on that show, especially if the brews part is the cold variety. That sounds like a really fun conversation. So I'm glad you're jumping into the podcasting space as well and Trent, I'm really glad that you came on the show today. Thanks for being on here.

Trent Sorbe 41:42
Thank you, Tim. I really enjoyed it.

Tim Bornholdt 41:45
Thanks to Trent Sorbe for joining me on the podcast today. You can learn more about Central Payments by visiting central-payments.com.

Show Notes for this episode can be found at constantvariables.co. You can get in touch with us by emailing Hello@constantvariables.co. I'm @TimBornholdt on Twitter and the show is @CV_podcast. Today's episode was produced by Jenny Karkowski and edited by the open hearted Jordan Daoust. As I mentioned at the top of the show, if you could take two minutes to leave us a rating and review on Apple podcasts, we'll give you a mention in a future episode as a thank you. Visit constantvariables.co/review and will link you right there.

This episode was brought to you by The Jed Mahonis Group. If you're looking for a technical team who can help make sense of mobile software development, give us a shout at jmg.mn.