Ep 294- InsightTwin CEO Michael Schank

John (0:00)

Hey, it's the FinTech Newscast, my name's John, and with me, as always, is Steve. Never, never, not tired of you yet, Steve.

Steve (0:07)

Not yet, still here, still around, still down the case higher, still hype as shit.

John (0:12)

Hype?

Steve (0:13)

Excited.

John (0:14)

Okay, all right.

You're, you're sounds a little delayed. I hope you have good internet. Because this week, we're lucky to have Michael Schank, the CEO and founder of InsightTwin, and the author of Digital Transformation Success, which is a little clue on what we'll be talking about this week. Michael, welcome to the podcast.

Michael Schank (0:36)

Thanks for having me, guys. I'm excited to be here.

John (0:39)

Great, great. It's good to have someone finally, someone excited to be here. You know, Steve, I have to slap him awake sometimes.

Michael Schank (0:46)

I heard you're big on TikTok. That's the only reason why I'm here.

John (0:50)

Yeah.

Grandfather time is big on TikTok. Yeah.

All right. Well, our news story this week is all about Buy Now, Pay Later, which, you know what? We scanned the news. It's safe to say we're all newsaholics here. Sure. But I haven't seen a lot on BNP out lately until now, where I see that it's actually grown much. I thought it maybe had been flat lately, and maybe that's why I hadn't been picking up in news, but I've been missing a story here because it's more than doubled in the past two years to $160 billion in loans just last year. And the real story here is that now it's being used not for like an impulse buy, some clothes or maybe concert tickets. A cute outfit. Yeah, and now, unfortunately, I guess a sign of the times, being used for daily expenses and rent. I just heard in the New York Times article that a firm now offers rent as a buy now, pay later option, which is taking off along with always a problem, medical expenses, dental and that kind of thing. Things are really essential. We're having to borrow on. Any initial thoughts, Steve? Do you think normal or?

Steve (2:09)

Not a great sign for sure. I think that anytime you need help to purchase the basic necessities of life, as you say, rent, groceries, etc., that means that you're overstretched. And I know that Americans have had an issue with debt for a while, but it just points to the fact that-

John (2:22)

Oh no, we love it.

Steve (2:23)

We love that debt. But it just means that the economy is actually in poor shape that I think we would give it credit for.

And again, the rise of this BMPO services, although useful for say, a new pair of shoes and all that, the fact that, for example, I heard in a different story maybe a few weeks ago that the majority of tickets sold for Coachella, the big festival here on the West Coast, are actually financed now. So people are just financing their lifestyles.

John (2:48)

The majority of them?

Steve (2:50)

The majority of them. More than 50% of tickets are actually, yeah, are financed now. And the fact that we're enough, that folks are relying on BNPL, or buying a pay later, to do all this stuff, just means that the economy is fundamentally broken, and maybe even credit could be broken.

It's, as you say, huge numbers, and not a great sign of where things are for most consumers.

John (3:11)

A little bit of a credit crunch.

I haven't seen like where credit card defaults, or maybe I've gotten worse, or other indicators besides this one. This one by itself, hard to tell, but overall, yeah, there is a lot of pressure, high cost of, well, everything. It would make it tougher for people. Yeah, good solution, just pay people a living wage so they can live on.

Steve (3:33)

Possibly, possibly be able to afford, it's just, you know, I think it's just oftentimes difficult to actually, as Tony, I used to work in financial health, and I think that most people-

John (3:41)

Oh, you're part of the problem, I see.

Steve (3:43)

I'm part of the problem, yeah, because I did not help fix it. I think that if you actually, if you help people with basically just two paychecks, could help folks break out of the cycle, but it's really hard to break out of the cycle once you're in it, because you're financing, you know, you can default on your credit card to get more BNPL loans, and then get more loans to pay your credit card. So it's just sort of a cycle, right? Or to pay for it for stuff. But in most cases, if we gave folks a lot of money to discover two cycles of expenses, they'll be able to have a bit of a cushion in their finances, and also be able to just sort of escape this cycle of high interest rate loans. So yeah, again, it's not a great look, and it's not a very positive outcome.