Erica Bigley: The future of lending isn't just being shaped by technology. It's being shaped by the people willing to rethink what's possible. Welcome to The Link Up. I'm Erica Bigley. I'm Senior Vice President of Marketing and Communications for MeridianLink. This is our very first episode, and I'm so excited to launch this podcast. We're going to talk about financial experiences, lending technology, innovation, what's next with AI, and so much more. And we couldn't think of a better guest to kick us off this week for episode number one. So today I've linked up with Larry Katz, our CEO for MeridianLink To talk about innovation, to talk about leadership and what's on the horizon for everything technology. So, welcome to the podcast.
Larry Katz: Thanks, Erica. Thanks for kicking us off. Excited to do this.
Erica Bigley: Yeah, we're really excited. I mean, this is like the best first guest ever.
Larry Katz: Oh come on.
Erica Bigley: So, you know, I wanted to just take it back to the start, right? I think MeridianLink has been around for almost 30 years. You've been at the helm now as CEO for a year. I think a lot of people would be really interested to know how you got here. What is your backstory? Maybe some people can sense there's a little bit of a Chicago accent there. So You know, maybe you can take us back to the beginning.
Larry Katz: So you're right. I grew up in Chicago. I love hot dogs. I love Chicago pizza. my family was in business. My dad ran a small business, a factory, which I grew up in going to on the weekends and sort of, you know, business was around the family table, that kind thing. I never was the kid who, you know, had the lemonade stand or that you know kind of ran businesses when I was a kid. I thought I was gonna be a lawyer or go into government or something like that. And then I got into business when I was in college. I worked for a consulting firm and that kind of caught the bug. I spent I spent my early days at Disney
Erica Bigley: Yeah.
Larry Katz: in LA and then after business school I went into banking. I went to work for Bank One and which was a regional bank that was kind of a turnaround in Chicago. And I spent about 15 years there working in all kinds of stuff. in mostly in lending though, mostly consumer lending and mortgages and credit cards and home equity and auto and all of those businesses. Also did a bunch of time in payments. and then I got tired of working in banking. It was I loved the journey there, but I felt like I was working for the government. And it was a bit it was a huge, right? It was a huge organization. I never intended to work for a company that big. And I deliberately stepped out of banking. And, you know, it's a funny story. When I was in banking, I always looked at these businesses that were like the technology providers to our company. And I thought, you know, we go these banks go up and down and we, you know, we we hire people and and we fire people and we have problems with our balance sheet and all this stuff. But these technology businesses, they keep going up to the right. They keep doing really well. And I deliberately said, hey, I'd rather be in that business and the technology business than the banking business. And I made a move and jumped into technology about 10 years ago now, moved out to the West Coast from New York City and have been in technology ever since, mostly in financial technology. And I got introduced to the company here. I've always known about MeridianLink, I came in and met with Nicolaas Vlok, the prior CEO about two years ago, and learned about the business and I thought, it was a gem of an asset. And I thought there's a tremendous opportunity to really help our customers and help our community. And so jumped right in.
Erica Bigley: So was there ever a moment in time when you thought way back that you were gonna go into the family business that you and your dad were gonna work side by side?
Larry Katz: So no, there never was be for two reasons. One is he closed that business when I was around 10 years old or so. sort of a crazy story, but government got involved in regulating safety in factories and so they shut down that business. So I never had the opportunity to, but he also had worked with his dad and I learned a lot of stories about that. So it never was on my mind that I was gonna go work with my family. I always knew there would be a pathway.
Erica Bigley: Did you always know that you wanted to lead something or was that something that happened more over time?
Larry Katz: I always had this idea that I wanted to lead an organization. the thing I respected most as I was working and consulting, and even when I graduated from business school, I always looked at the leaders of companies the great leaders were few and far between and it was a really hard thing to learn. It kind of felt like the hardest thing to do was lead a company. And at one point I thought about going into investing and I thought, hey, that wouldn't be that interesting to me I decided I wanted to go into leadership and I wanted to try to learn
Erica Bigley: No.
Larry Katz: that craft because it really used all faculties, right? Everything from selling to vision, to financials, to innovation and creativity and all this, it's just there's a wide range of skills that are needed in leadership. And so it always was what I aspired to be. I never knew that I would have the chance, but it's something that I thought, would be really cool if I could do it.
Erica Bigley: So as you moved through organizations and took the step into becoming CEO, has there been any great influence on you or the way that you lead or the way that you look at navigating a company from a leadership vantage point?
Larry Katz: I've had the opportunity to work with a lot of different leaders and some really great ones. And everybody has their strengths and has their flaws. But the person who stands out to me was Jamie Dimon. I was really lucky to work for him when I went to Bank One and get a good bit of exposure to him. and it sounds trite because everybody like, you know, see says
Erica Bigley: That's great.
Larry Katz: he's incredible but I really saw early on that he had a discipline to how he led companies. He lived in the details of companies, he knew the business incredibly well. he gave it his all. He was able to attract great talent
Erica Bigley: Yeah,
Larry Katz: and I just saw a guy who was like
Erica Bigley: Yeah.
Larry Katz: who knew his craft and applied himself to that. And nothing was too small for him. Anything he asked anybody else to do, he would do himself. and he was incredibly bright and all the rest. I still think about kind of what would he do in this situation.
Erica Bigley: Yeah, it's a giant complex organization that he runs. And, to stay in that role for this many years kind of means you're doing something right.
Larry Katz: You And the crazy thing about him too is today he's known to run, you know, this huge, several hundred thousand person global organization, but he really started in a small lending business. So lending was a business that was called Commercial Credit and built that platform and then he merged it with Travelers and merged it with Solomon Smith Barney and all this other stuff that kind of became Citigroup and then he restarted at Bank One. he's become a huge company leader, but he started leading and running smaller companies and he has that ability as an entrepreneur and really knowing his craft. I think that's a lot of where his DNA comes. It's like he's a business operator. He's not a statesman. He runs the business. And that's something that I really just respect enormously.
Erica Bigley: So in the year since you became CEO, I think that you maybe have chalked up the most miles of any employee at MeridianLink. I think we would all like to see your delta miles at this point, but that you've traversed the country and visited so many of our customers, of our community banks and our credit unions, to talk to them about their experience with MeridianLink, about what they'd like out of their technology and where they're going. What are those kind of common threads that come through all of those conversations that you've had?
Larry Katz: it's so fun to be with our customers and I find it the most valuable time. and there are a few things that are really noticeable. One is this is a relationship business, right? this is a human business. The credit union and community banking market it's a relationship business like no other. Trust matters, knowing you matters, knowing your kids, knowing what you do on the weekends, like those relationships really matter. And their business is knowing their members and their customers in the same way. And so it's no surprise that being in person with them, hearing their story, hearing their their journey, hearing what they're thinking about every day is like really, really important to we all want to do this and spend more time with our customers. the second is
Erica Bigley: Yeah.
Larry Katz: they know the market is changing quickly and there's consolidation going on in the market. there's a lot of technology innovation going on in the market. Youth is moving more towards other alternatives whether it's universal banks like Chase and Bank
Erica Bigley: Right.
Larry Katz: of America and Wells or to digital competitors like SoFi and Chime and Upstart and folks like that. So they know they need to change and they know they need to invest and they're committed to doing that and they want partners who are committed to that same agenda. What that means is they want products and services that are simple and that are engaging and that are personalized both for their members and for their workforce, right? It's both sides of that. So they're really interested in delivering financial experiences that, will engage their communities and their members. And so those are the things that are on their mind. They're very focused in how they acquire new younger
Erica Bigley: What's in a whole
Larry Katz: members. That's always an area of focus, right? Membership growth has slowed and it's aged a bit over time. And so they're finding ways to digitally engage younger members. And that's a big push, and whether that's through the technology platform or through that's other products that are more appealing to younger generations, like Buy Now Pay Later, merchant financing and solar financing, student lending, whatever it is, they're interested in offering new and different products that younger generations
Erica Bigley: Okay.
Larry Katz: are interested in. So Those are kind of broad themes that I hear consistently from our customers all over the country, no matter what their size.
Erica Bigley: People always talk about the pace of change and the pace of innovation, right? I feel like, you pick up any newspaper or any magazine or you flip on the TV and everyone and every commercial almost it feels like there's this conversation about the pace of change, the pace of innovation. How do we stay at this pace of change? And I think a lot of it right now, everyone's talking about it in the context of AI, but I think you're talking about it in even the context of these experiences for younger generations or for workforces. Compare this in your mind to what we saw in the late nineties and early O's, when everything all of a sudden moved to, the internet moved out of just a thing. that you like went to the library and you logged into a computer, you know, it became like ubiquitous to use email. We started talking about web pages and things like that. And all of a sudden this mobile conversation, is this kind of where we are in your mind in terms of this pace Like what is the pace that we're at right now?
Larry Katz: I remember, having my first email account which was the old like AOL, like you got, mail, right?
Erica Bigley: Same.
Larry Katz: We're dating ourselves. But and that was like in kind of ninety-four, ninety-five, maybe by ninety-seven when Amazon was getting going and Yahoo was going going public. You felt like this was going to be a different world that we were entering into, and you knew it was going to affect a lot of things. And we talked about different retail stores and everybody's going to have website and business purchasing was going to change. We all knew that the world was going to be different, but it didn't affect everything all at once, right? It wasn't existential in the same for all in the
Erica Bigley: Right.
Larry Katz: same way. Like The conversation is just so much bigger and broader and more impactful today. And I personally find this is the most exhausting period career-wise of my life in the sense that it's just moving so fast. And that the pace of innovation and adoption... I think this is, you know, infinitely bigger and faster today.
Erica Bigley: It almost feels like that period of time in the 90s and early O's was about how you connected with people. It was about you no longer had to look up for an encyclopedia to figure out some fact or figure. Everything was at your fingertips. You didn't have to wait for a letter to be sent from across the country. You could get onto AOL and have a chat with someone immediately. And so it almost felt like it was opening these doors to connection. Fast forward to now, we're talking about our customer base that is trying to figure out how to strengthen relationships with their members, despite kind of all of this technology. when we think about financial services and financial experiences, in your mind, when you go out and you talk to our customers and they're talking about relationships. Are they just talking about like the application? that's like click button, get mortgage, and it was promised that you would get this thing in 30 minutes, right? Which was not the fact and that there's this process. Is that kind of what we're thinking about in terms of experiential innovation for financial services?
Larry Katz: I was just having this conversation with a customer that yes, technology is part of the answer, but our customers, community financial institutions, don't think it's all going to technology. I don't think it is either. I'll talk about my view and then talk about how it impacts our customers. I think the impact of all these technologies is making information so much, I'm so much more efficient. I've so much more access to information. But the skill that it's always going to persist, as long as they're humans around, is people skills, right? It's sales skills, it's relationship skills. Like those skills aren't gonna happen by a computer, in my opinion, anytime soon. the ability to influence, the ability to build relationships, the ability to know somebody and have judgment about that person, right? That's timeless to me. And I think our customers see it similarly, which is, yeah, technology is going to help them deliver better experiences. And technology will deliver parts of those experiences better than humans can, right? Because it just will be simple and automated and easy to use and we'll have all the data at our fingertips. But particularly in financial services, more than in buying books or buying a movie or something like that. Like people want advice. These are big life decisions and, you know, am I gonna be able to pay for my house? How do I buy this car? How do I pay for my medical bills? Whatever it is. They want somebody who they trust and who knows them. That's always going to be around. And I think that's why I believe in community advice, banks and credit unions will be here and that's what they're investing in. So technology will be there, but it's all in support of them building relationships with their consumers and with their members. And that's going to be actually an unlock for them, like to act to to build those relationships better.
Erica Bigley: So I want to talk a little bit about our own innovation at MeridianLink and where we're going. And I wanna start with some news that we have had over the last couple of weeks. We announced the acquisition of Credit Mountain. It's the first acquisition that we've made in four plus years. so kind of a shift in our business. What was it that made Credit Mountain the right fit and why now?
Larry Katz: Well, first of all, we're really excited that Nathan Pinto and his team have joined us. Love Credit Mountain Now Pathways. Love the business that they built. It's going to be incredibly impactful for our customers and our communities. So very excited that they're part of the team. And M&A has always been part of our strategy here. The company's done lots of deals in its history, It did roughly six deals over a five-year period, hadn't done, deals in a couple of years, and that was a function of market and a function of pricing and a bunch of stuff and that's while we were going private. But it's always been part and will continue to be part of our strategy as we build a platform and deliver capabilities. But to real question as to why Credit Mountain and why that was the first one. Look first of all their mission is 100% aligned with what we want to do and what our customers want, which is support financial wellness of their members. Right? That's number one. What credit mountain does is it helps customers who are members who are not credit worthy today, on a path back to financial wellness. It helps them ultimately on a path to yes and access to credit. And that's what we all want to help our members and customers do. So perfectly aligned with the mission of us with our customers. And it's also just a great business that will help our customers, our credit unions and community banks grow, which is attract customers. That's really their number one goal is growth. And so what Credit Mountain does is really attack
Erica Bigley: Yeah.
Larry Katz: the top of the funnel, so to speak, right? Which is when members are looking for credit, they may not be ready today, but those customers are, future members of the credit union. And when you say no, when you decline them right away, you can lose that relationship for life. So instead let's engage them, let's help them, let's coach them back to financial wellness. And that's what Credit Mountain does. Also when they're existing members and they apply for credit and then they are declined, that can be an awful experience, right? You can lose a member who you otherwise you would have had a very good relationship with. So being there at that moment of decline and being there to say, Hey, not now, but here's what you can do to get there is a way of building that loyalty over time and building that depth of a relationship. So for all those reasons, what they're doing is perfectly aligned with credit unions where they want to go and therefore where we want to go. So that's why it was the first deal.
Erica Bigley: I think that when you think about financial moments it's always like getting handed the keys, getting ushered into the new house and getting approved to build that addition on, and very rarely is there a moment in which you think about it Not being the right moment for you and getting that turn down. And that's such a make or break moment in your business's reputation, how you handle that. because if someone has a negative experience with you, they're not gonna come back when they're ready, they're gonna try someplace else, right?
Larry Katz: That's right. I think Nathan team had an incredible vision about a way to really deliver a very high value service at a point of need, right? And a real moment in their financial journey. And that's the way that you can build real engagement and real loyalty, right? Is by helping folks where they need help. it's a great platform and really excited to see where we take it together.
Erica Bigley: Let's talk a little bit about AI. I think to kids like ours who are in school and they're learning how to use these tools, but a lot of their time is being spent being taught what not to do, right? When not to use AI, how to not cut corners with it. And there's a lot of talk about approaches to AI and where you should be cautious and where you should sort of jump in. What do you think makes MeridianLink's approach to AI -- and the way that we're looking at MeridianLink Intelligence, Millie -- What makes that different from other companies that are talking about AI and financial services?
Larry Katz: The problems that we're all trying to solve are similar, right? Whether it's us as a trusted proven scaled player or the disruptors who are trying to enter our market, we're all trying to crack the same problems. The world of loan origination and lending experience is going to be automated action, right? Instead of it being
Erica Bigley: Right.
Larry Katz: today where you have a workflow process where a human's in the loop and a human needs to decide, something comes into their queue, a processor or an underwriter, and they action it and need to send it on to the next. And that's going to go away. And the systems will automate and not just take that event and act at it but ultimately make the decisions for humans and then bring humans in when they need human judgment essentially that's what everybody's trying to solve. Why do we have an advantage there well there's a couple things one is we have all of the experience and the workflows and all the corner cases within our platform and the trust of our customers and trust matters here, right? And we also have all of the compliance and regulatory logic and all the rules-based logic built into our platform today. So that's a very strong place
Erica Bigley: Yeah.
Larry Katz: to start as we think about building the agentic platform for the future and that automated action platform for the future. The second is that we have all of the governance and permissions and explainability and all of that built into our platform. And that is as critical as the actual workflow orchestration. And so having that experience and that knowledge and that trust is really important. What we're gonna do is build some agents, as you said, Millie will be our intelligence platform. We're gonna build some branded MeridianLink agents, and we're starting with Doc Agent, but there could be communication agents or task automation agents or whatnot. And those agents will be integrated into our core operating system, MeridianLink One. But it could be our agents, it could also be third-party agents, right? It could be customer homegrown agents as well. All of those agents are going to integrate into our platform and into an event architecture that allows us to plug in whatever meets our customers' needs. And so that's really where we're going.
Erica Bigley: The longer your organization has been in business. the more data you have, the more that the platform is ingesting. don't you think one of the things that's gonna make MeridianLink stand out is the fact that we have twenty eight years worth of data that's flowed through our system that makes it smarter? When you're looking at norms, right? When a customer is looking for where should I set the standards, the guardrails on my systems for decisioning? Like
Larry Katz: Yeah. For credit decisioning or fraud decisioning or whatever it is, yeah.
Erica Bigley: There's that piece where we're giving you better guardrails for your organization.
Larry Katz: When we think about what's the value of data? And the value of data is that it's gonna help do two things. One, help our customers, meaning credit unions, make better decisions, right? That's one.
Erica Bigley: Right.
Larry Katz: And make better credit decisions, meaning underwriting decisions, make better fraud decisions. that data is high value. And the second is that allows us to present offers at the point of sale, at the point of need. You know, think Amazon when they present we know you, and therefore you we recommend you buy this book or this movie or this home gardening thing, whatever it is, they know you and they're able to present those offers. So it's both sides of it. The data that's needed to drive those, a lot of that data sits within our system, but not all of it. We integrate to some and we will continue to, but there is a real opportunity for somebody to bring, that data together to support life cycle marketing on the one hand, right, at the point of sale, and to make better decisions, and to understand how our credit models can be refined or our fraud models can be defined based upon the decisions we made and how they actually performed. And so those are real capabilities that will drive real value to our customers and that's the path we're on.
Erica Bigley: And then for people to handle the edge cases, right?
Larry Katz: Exactly.
Erica Bigley: And you're probably talking to 10 different credit unions and community banks this week. So as they're looking at the year ahead and what to focus on in terms of AI in twenty twenty seven, where are you telling them to go with their decisions?
Larry Katz: They are more focused on back office productivity than they are on front office today, than on the sales side.
Erica Bigley: And And why? What's the value there? Because if they're looking to grow, then wouldn't you put your efforts into into the front?
Larry Katz: Yeah, it's a Good question. I think they see it as a more immediate ROI. You know, there's roughly six dollars of spend in a credit union on people, on labor to every dollar of technology. It's six to one. So if they can use some of these tools to increase automation in the back office, then they can reallocate capital, reallocate their spend to do the things that they actually want to do, which is drive growth. But it starts with creating some capacity and to invest in the business. I think they just see a quicker payback on it. I think what they're worried about is all of the governance and compliance and controls that go with that, all the permissioning, right? When you really start thinking about it, if you have agents working on your back office, like how do you make sure that those have help them a lot. to access the data and that when the regulators come in that you have the explainability so that you know they don't get in trouble. So those are the kinds of things.
Erica Bigley: Okay.
Larry Katz: So they're working on kind of the high value but low risk use cases. And that's really where we can help them a lot.
Erica Bigley: We talked a little bit about the workforce experience and about the member experience and AI. What's the thing that you're most excited about from an innovative perspective? As you look into your crystal ball for the next twelve to twenty-four months, what are the things you're most excited where MeridianLink is going in terms of innovation?
Larry Katz: Look, we have a lot of innovation going on. I'm really excited about what we're doing with Access and that will continue to evolve and I think really lead the market in capabilities. I really believe that the consumer engagement layer is a very, very important strategic frontier for us. I think we're making lots of progress there in terms of innovating that platform and making it a market leader. And I think that's important to me because more and more of the automation over time is gonna happen in that. consumer engagement layer. Some people call it the point of sale. And frankly, the point of there's an artificial definition between the point of sale and the LOS. I think over time those two are going to converge because more and more of the vanilla decisions are going to happen in that point of sale. And so only the exceptions will actually go back to the
Erica Bigley: Okay.
Larry Katz: LOS. So I really love what we're doing in that. I really love what we're doing with Millie and with the Doc Agent. The pace of delivery there has been so fast and so cool. And we're gonna be in the market with it in the fourth quarter, and then we'll move on. We're starting a Mortgage and we'll move to Consumer. And there's lots of agents that are coming behind that. I think the other thing that I'm really excited about is building this agentic framework where we are governing the permissions and access for all agents that are within the lending. You think about humans have permissions, agents are going to need to have permissions, agents are going to need to have governance and explainability. And agents are going to be talking to agents. And so building that layer that allows all of those agents to interact with the platform is a big, hard, super important problem to solve. And that's really where we're focused.
Erica Bigley: So I'm gonna ask all of our guests on this podcast a couple of questions because I'm just interested to see how people answer it. So the first one, if you could finish this sentence for me, the future of lending is.
Larry Katz: I'd say personalized. Even with all of the advancements of technology, I think that risk is still too generic. And I do think products and pricing and offer presentment is all going to be much more customized because we have all of this data around consumers just like Amazon does, right, or Netflix does, delivering that personalized offer is gonna be the future here.
Erica Bigley: A hundred percent. I feel like I should be right for the picking for so many financial services organizations to be marketing me, everything from cars to paying for college education, which we're thinking about, that's not too far off in the distance for us. Meanwhile, on one hand, my Netflix is telling me, here's every show that you should watch and Amazon is sending me offers every day on all of these things that I need for my household. so why can't it be the same way?
Larry Katz: Yeah, it's always been the holy grain of financial services that you have like personalized offers, right? Like Amazon or like Netflix has. And some of the bigger banks and some of the digital folks have made progress on it, but nobody's really cracked it. I just opened a a bank account at a credit union for my son, who's ten years old, so that he could deposit his allowance. I have a daughter who's seven. If they had a full 360 view of our life. at their fingertips, they would know that they should open a bank account for my seven-year-old too. But they didn't have that information, right? So they didn't build a relationship. So there's just all this missing context around the 360 relationship. And I think that's where this world is going. And we need to help them do that.
Erica Bigley: So my second question is when you are not thinking about work, what are you doing outside of work?
Larry Katz: More than likely I'm spending time with my family. As I said, I've got a ten and seven year old. So I am like many young families, I'm an Uber driver on the weekends going to sporting events and so that's where I spend a ton of time with my wife and friends and stuff like that. And then I try to exercise as much as I can. I swim. I'm on the Peloton. I lift weights. Just try to stay healthy. So between work and family and exercise, that pretty much uses my time.
Erica Bigley: I So my last question for you is what are you reading, watching, or listening to? So it doesn't have to be all three, but if you're reading something good, you're watching a great show or you're listening to something amazing.
Larry Katz: I'll do two of the three, what I'm watching and what I'm reading. I am watching The Quarterback on Netflix. They profile NFL quarterbacks from last season and they pick three or four quarterbacks. Peyton Manning directs it, and it's about the quarterbacks from last year. A few of them through the season in their home life on the field, in the training facilities, all that kind of stuff. So it's a reality TV about quarterbacks, and I watch it with my son because he's a big football fan, fantasy football fan. What I'm reading right now is a book called Play Bigger by Chris Lochhead, which is a business book. It's about how companies create categories. And it's very much helping me think about the future of where we MeridianLink are going and what the opportunity ahead is. But it's about how companies like Uber, for example, or Netflix created new categories that we didn't even know that we needed, right? And filled the demand that was unmet. It's about how that process and the science behind What it takes to build a category and then what it takes to actually lead a category in terms of to operationalize and build the talent and the marketing and the product and the systems all to make that happen. So I love the book. Chris Lockhead played bigger.
Erica Bigley: Well, Larry Katz thank you so much for linking up with us today and for being our first guest. We appreciate you. And we know we'll have you back.
Larry Katz: Appreciate you. Thank you for doing it. Glad we're doing this podcast. Thanks for taking the lead.
Erica Bigley: Thank you.
Larry Katz: Thanks, Erica. Thanks for kicking us off. Excited to do this.
Erica Bigley: Yeah, we're really excited. I mean, this is like the best first guest ever.
Larry Katz: Oh come on.
Erica Bigley: So, you know, I wanted to just take it back to the start, right? I think MeridianLink has been around for almost 30 years. You've been at the helm now as CEO for a year. I think a lot of people would be really interested to know how you got here. What is your backstory? Maybe some people can sense there's a little bit of a Chicago accent there. So You know, maybe you can take us back to the beginning.
Larry Katz: So you're right. I grew up in Chicago. I love hot dogs. I love Chicago pizza. my family was in business. My dad ran a small business, a factory, which I grew up in going to on the weekends and sort of, you know, business was around the family table, that kind thing. I never was the kid who, you know, had the lemonade stand or that you know kind of ran businesses when I was a kid. I thought I was gonna be a lawyer or go into government or something like that. And then I got into business when I was in college. I worked for a consulting firm and that kind of caught the bug. I spent I spent my early days at Disney
Erica Bigley: Yeah.
Larry Katz: in LA and then after business school I went into banking. I went to work for Bank One and which was a regional bank that was kind of a turnaround in Chicago. And I spent about 15 years there working in all kinds of stuff. in mostly in lending though, mostly consumer lending and mortgages and credit cards and home equity and auto and all of those businesses. Also did a bunch of time in payments. and then I got tired of working in banking. It was I loved the journey there, but I felt like I was working for the government. And it was a bit it was a huge, right? It was a huge organization. I never intended to work for a company that big. And I deliberately stepped out of banking. And, you know, it's a funny story. When I was in banking, I always looked at these businesses that were like the technology providers to our company. And I thought, you know, we go these banks go up and down and we, you know, we we hire people and and we fire people and we have problems with our balance sheet and all this stuff. But these technology businesses, they keep going up to the right. They keep doing really well. And I deliberately said, hey, I'd rather be in that business and the technology business than the banking business. And I made a move and jumped into technology about 10 years ago now, moved out to the West Coast from New York City and have been in technology ever since, mostly in financial technology. And I got introduced to the company here. I've always known about MeridianLink, I came in and met with Nicolaas Vlok, the prior CEO about two years ago, and learned about the business and I thought, it was a gem of an asset. And I thought there's a tremendous opportunity to really help our customers and help our community. And so jumped right in.
Erica Bigley: So was there ever a moment in time when you thought way back that you were gonna go into the family business that you and your dad were gonna work side by side?
Larry Katz: So no, there never was be for two reasons. One is he closed that business when I was around 10 years old or so. sort of a crazy story, but government got involved in regulating safety in factories and so they shut down that business. So I never had the opportunity to, but he also had worked with his dad and I learned a lot of stories about that. So it never was on my mind that I was gonna go work with my family. I always knew there would be a pathway.
Erica Bigley: Did you always know that you wanted to lead something or was that something that happened more over time?
Larry Katz: I always had this idea that I wanted to lead an organization. the thing I respected most as I was working and consulting, and even when I graduated from business school, I always looked at the leaders of companies the great leaders were few and far between and it was a really hard thing to learn. It kind of felt like the hardest thing to do was lead a company. And at one point I thought about going into investing and I thought, hey, that wouldn't be that interesting to me I decided I wanted to go into leadership and I wanted to try to learn
Erica Bigley: No.
Larry Katz: that craft because it really used all faculties, right? Everything from selling to vision, to financials, to innovation and creativity and all this, it's just there's a wide range of skills that are needed in leadership. And so it always was what I aspired to be. I never knew that I would have the chance, but it's something that I thought, would be really cool if I could do it.
Erica Bigley: So as you moved through organizations and took the step into becoming CEO, has there been any great influence on you or the way that you lead or the way that you look at navigating a company from a leadership vantage point?
Larry Katz: I've had the opportunity to work with a lot of different leaders and some really great ones. And everybody has their strengths and has their flaws. But the person who stands out to me was Jamie Dimon. I was really lucky to work for him when I went to Bank One and get a good bit of exposure to him. and it sounds trite because everybody like, you know, see says
Erica Bigley: That's great.
Larry Katz: he's incredible but I really saw early on that he had a discipline to how he led companies. He lived in the details of companies, he knew the business incredibly well. he gave it his all. He was able to attract great talent
Erica Bigley: Yeah,
Larry Katz: and I just saw a guy who was like
Erica Bigley: Yeah.
Larry Katz: who knew his craft and applied himself to that. And nothing was too small for him. Anything he asked anybody else to do, he would do himself. and he was incredibly bright and all the rest. I still think about kind of what would he do in this situation.
Erica Bigley: Yeah, it's a giant complex organization that he runs. And, to stay in that role for this many years kind of means you're doing something right.
Larry Katz: You And the crazy thing about him too is today he's known to run, you know, this huge, several hundred thousand person global organization, but he really started in a small lending business. So lending was a business that was called Commercial Credit and built that platform and then he merged it with Travelers and merged it with Solomon Smith Barney and all this other stuff that kind of became Citigroup and then he restarted at Bank One. he's become a huge company leader, but he started leading and running smaller companies and he has that ability as an entrepreneur and really knowing his craft. I think that's a lot of where his DNA comes. It's like he's a business operator. He's not a statesman. He runs the business. And that's something that I really just respect enormously.
Erica Bigley: So in the year since you became CEO, I think that you maybe have chalked up the most miles of any employee at MeridianLink. I think we would all like to see your delta miles at this point, but that you've traversed the country and visited so many of our customers, of our community banks and our credit unions, to talk to them about their experience with MeridianLink, about what they'd like out of their technology and where they're going. What are those kind of common threads that come through all of those conversations that you've had?
Larry Katz: it's so fun to be with our customers and I find it the most valuable time. and there are a few things that are really noticeable. One is this is a relationship business, right? this is a human business. The credit union and community banking market it's a relationship business like no other. Trust matters, knowing you matters, knowing your kids, knowing what you do on the weekends, like those relationships really matter. And their business is knowing their members and their customers in the same way. And so it's no surprise that being in person with them, hearing their story, hearing their their journey, hearing what they're thinking about every day is like really, really important to we all want to do this and spend more time with our customers. the second is
Erica Bigley: Yeah.
Larry Katz: they know the market is changing quickly and there's consolidation going on in the market. there's a lot of technology innovation going on in the market. Youth is moving more towards other alternatives whether it's universal banks like Chase and Bank
Erica Bigley: Right.
Larry Katz: of America and Wells or to digital competitors like SoFi and Chime and Upstart and folks like that. So they know they need to change and they know they need to invest and they're committed to doing that and they want partners who are committed to that same agenda. What that means is they want products and services that are simple and that are engaging and that are personalized both for their members and for their workforce, right? It's both sides of that. So they're really interested in delivering financial experiences that, will engage their communities and their members. And so those are the things that are on their mind. They're very focused in how they acquire new younger
Erica Bigley: What's in a whole
Larry Katz: members. That's always an area of focus, right? Membership growth has slowed and it's aged a bit over time. And so they're finding ways to digitally engage younger members. And that's a big push, and whether that's through the technology platform or through that's other products that are more appealing to younger generations, like Buy Now Pay Later, merchant financing and solar financing, student lending, whatever it is, they're interested in offering new and different products that younger generations
Erica Bigley: Okay.
Larry Katz: are interested in. So Those are kind of broad themes that I hear consistently from our customers all over the country, no matter what their size.
Erica Bigley: People always talk about the pace of change and the pace of innovation, right? I feel like, you pick up any newspaper or any magazine or you flip on the TV and everyone and every commercial almost it feels like there's this conversation about the pace of change, the pace of innovation. How do we stay at this pace of change? And I think a lot of it right now, everyone's talking about it in the context of AI, but I think you're talking about it in even the context of these experiences for younger generations or for workforces. Compare this in your mind to what we saw in the late nineties and early O's, when everything all of a sudden moved to, the internet moved out of just a thing. that you like went to the library and you logged into a computer, you know, it became like ubiquitous to use email. We started talking about web pages and things like that. And all of a sudden this mobile conversation, is this kind of where we are in your mind in terms of this pace Like what is the pace that we're at right now?
Larry Katz: I remember, having my first email account which was the old like AOL, like you got, mail, right?
Erica Bigley: Same.
Larry Katz: We're dating ourselves. But and that was like in kind of ninety-four, ninety-five, maybe by ninety-seven when Amazon was getting going and Yahoo was going going public. You felt like this was going to be a different world that we were entering into, and you knew it was going to affect a lot of things. And we talked about different retail stores and everybody's going to have website and business purchasing was going to change. We all knew that the world was going to be different, but it didn't affect everything all at once, right? It wasn't existential in the same for all in the
Erica Bigley: Right.
Larry Katz: same way. Like The conversation is just so much bigger and broader and more impactful today. And I personally find this is the most exhausting period career-wise of my life in the sense that it's just moving so fast. And that the pace of innovation and adoption... I think this is, you know, infinitely bigger and faster today.
Erica Bigley: It almost feels like that period of time in the 90s and early O's was about how you connected with people. It was about you no longer had to look up for an encyclopedia to figure out some fact or figure. Everything was at your fingertips. You didn't have to wait for a letter to be sent from across the country. You could get onto AOL and have a chat with someone immediately. And so it almost felt like it was opening these doors to connection. Fast forward to now, we're talking about our customer base that is trying to figure out how to strengthen relationships with their members, despite kind of all of this technology. when we think about financial services and financial experiences, in your mind, when you go out and you talk to our customers and they're talking about relationships. Are they just talking about like the application? that's like click button, get mortgage, and it was promised that you would get this thing in 30 minutes, right? Which was not the fact and that there's this process. Is that kind of what we're thinking about in terms of experiential innovation for financial services?
Larry Katz: I was just having this conversation with a customer that yes, technology is part of the answer, but our customers, community financial institutions, don't think it's all going to technology. I don't think it is either. I'll talk about my view and then talk about how it impacts our customers. I think the impact of all these technologies is making information so much, I'm so much more efficient. I've so much more access to information. But the skill that it's always going to persist, as long as they're humans around, is people skills, right? It's sales skills, it's relationship skills. Like those skills aren't gonna happen by a computer, in my opinion, anytime soon. the ability to influence, the ability to build relationships, the ability to know somebody and have judgment about that person, right? That's timeless to me. And I think our customers see it similarly, which is, yeah, technology is going to help them deliver better experiences. And technology will deliver parts of those experiences better than humans can, right? Because it just will be simple and automated and easy to use and we'll have all the data at our fingertips. But particularly in financial services, more than in buying books or buying a movie or something like that. Like people want advice. These are big life decisions and, you know, am I gonna be able to pay for my house? How do I buy this car? How do I pay for my medical bills? Whatever it is. They want somebody who they trust and who knows them. That's always going to be around. And I think that's why I believe in community advice, banks and credit unions will be here and that's what they're investing in. So technology will be there, but it's all in support of them building relationships with their consumers and with their members. And that's going to be actually an unlock for them, like to act to to build those relationships better.
Erica Bigley: So I want to talk a little bit about our own innovation at MeridianLink and where we're going. And I wanna start with some news that we have had over the last couple of weeks. We announced the acquisition of Credit Mountain. It's the first acquisition that we've made in four plus years. so kind of a shift in our business. What was it that made Credit Mountain the right fit and why now?
Larry Katz: Well, first of all, we're really excited that Nathan Pinto and his team have joined us. Love Credit Mountain Now Pathways. Love the business that they built. It's going to be incredibly impactful for our customers and our communities. So very excited that they're part of the team. And M&A has always been part of our strategy here. The company's done lots of deals in its history, It did roughly six deals over a five-year period, hadn't done, deals in a couple of years, and that was a function of market and a function of pricing and a bunch of stuff and that's while we were going private. But it's always been part and will continue to be part of our strategy as we build a platform and deliver capabilities. But to real question as to why Credit Mountain and why that was the first one. Look first of all their mission is 100% aligned with what we want to do and what our customers want, which is support financial wellness of their members. Right? That's number one. What credit mountain does is it helps customers who are members who are not credit worthy today, on a path back to financial wellness. It helps them ultimately on a path to yes and access to credit. And that's what we all want to help our members and customers do. So perfectly aligned with the mission of us with our customers. And it's also just a great business that will help our customers, our credit unions and community banks grow, which is attract customers. That's really their number one goal is growth. And so what Credit Mountain does is really attack
Erica Bigley: Yeah.
Larry Katz: the top of the funnel, so to speak, right? Which is when members are looking for credit, they may not be ready today, but those customers are, future members of the credit union. And when you say no, when you decline them right away, you can lose that relationship for life. So instead let's engage them, let's help them, let's coach them back to financial wellness. And that's what Credit Mountain does. Also when they're existing members and they apply for credit and then they are declined, that can be an awful experience, right? You can lose a member who you otherwise you would have had a very good relationship with. So being there at that moment of decline and being there to say, Hey, not now, but here's what you can do to get there is a way of building that loyalty over time and building that depth of a relationship. So for all those reasons, what they're doing is perfectly aligned with credit unions where they want to go and therefore where we want to go. So that's why it was the first deal.
Erica Bigley: I think that when you think about financial moments it's always like getting handed the keys, getting ushered into the new house and getting approved to build that addition on, and very rarely is there a moment in which you think about it Not being the right moment for you and getting that turn down. And that's such a make or break moment in your business's reputation, how you handle that. because if someone has a negative experience with you, they're not gonna come back when they're ready, they're gonna try someplace else, right?
Larry Katz: That's right. I think Nathan team had an incredible vision about a way to really deliver a very high value service at a point of need, right? And a real moment in their financial journey. And that's the way that you can build real engagement and real loyalty, right? Is by helping folks where they need help. it's a great platform and really excited to see where we take it together.
Erica Bigley: Let's talk a little bit about AI. I think to kids like ours who are in school and they're learning how to use these tools, but a lot of their time is being spent being taught what not to do, right? When not to use AI, how to not cut corners with it. And there's a lot of talk about approaches to AI and where you should be cautious and where you should sort of jump in. What do you think makes MeridianLink's approach to AI -- and the way that we're looking at MeridianLink Intelligence, Millie -- What makes that different from other companies that are talking about AI and financial services?
Larry Katz: The problems that we're all trying to solve are similar, right? Whether it's us as a trusted proven scaled player or the disruptors who are trying to enter our market, we're all trying to crack the same problems. The world of loan origination and lending experience is going to be automated action, right? Instead of it being
Erica Bigley: Right.
Larry Katz: today where you have a workflow process where a human's in the loop and a human needs to decide, something comes into their queue, a processor or an underwriter, and they action it and need to send it on to the next. And that's going to go away. And the systems will automate and not just take that event and act at it but ultimately make the decisions for humans and then bring humans in when they need human judgment essentially that's what everybody's trying to solve. Why do we have an advantage there well there's a couple things one is we have all of the experience and the workflows and all the corner cases within our platform and the trust of our customers and trust matters here, right? And we also have all of the compliance and regulatory logic and all the rules-based logic built into our platform today. So that's a very strong place
Erica Bigley: Yeah.
Larry Katz: to start as we think about building the agentic platform for the future and that automated action platform for the future. The second is that we have all of the governance and permissions and explainability and all of that built into our platform. And that is as critical as the actual workflow orchestration. And so having that experience and that knowledge and that trust is really important. What we're gonna do is build some agents, as you said, Millie will be our intelligence platform. We're gonna build some branded MeridianLink agents, and we're starting with Doc Agent, but there could be communication agents or task automation agents or whatnot. And those agents will be integrated into our core operating system, MeridianLink One. But it could be our agents, it could also be third-party agents, right? It could be customer homegrown agents as well. All of those agents are going to integrate into our platform and into an event architecture that allows us to plug in whatever meets our customers' needs. And so that's really where we're going.
Erica Bigley: The longer your organization has been in business. the more data you have, the more that the platform is ingesting. don't you think one of the things that's gonna make MeridianLink stand out is the fact that we have twenty eight years worth of data that's flowed through our system that makes it smarter? When you're looking at norms, right? When a customer is looking for where should I set the standards, the guardrails on my systems for decisioning? Like
Larry Katz: Yeah. For credit decisioning or fraud decisioning or whatever it is, yeah.
Erica Bigley: There's that piece where we're giving you better guardrails for your organization.
Larry Katz: When we think about what's the value of data? And the value of data is that it's gonna help do two things. One, help our customers, meaning credit unions, make better decisions, right? That's one.
Erica Bigley: Right.
Larry Katz: And make better credit decisions, meaning underwriting decisions, make better fraud decisions. that data is high value. And the second is that allows us to present offers at the point of sale, at the point of need. You know, think Amazon when they present we know you, and therefore you we recommend you buy this book or this movie or this home gardening thing, whatever it is, they know you and they're able to present those offers. So it's both sides of it. The data that's needed to drive those, a lot of that data sits within our system, but not all of it. We integrate to some and we will continue to, but there is a real opportunity for somebody to bring, that data together to support life cycle marketing on the one hand, right, at the point of sale, and to make better decisions, and to understand how our credit models can be refined or our fraud models can be defined based upon the decisions we made and how they actually performed. And so those are real capabilities that will drive real value to our customers and that's the path we're on.
Erica Bigley: And then for people to handle the edge cases, right?
Larry Katz: Exactly.
Erica Bigley: And you're probably talking to 10 different credit unions and community banks this week. So as they're looking at the year ahead and what to focus on in terms of AI in twenty twenty seven, where are you telling them to go with their decisions?
Larry Katz: They are more focused on back office productivity than they are on front office today, than on the sales side.
Erica Bigley: And And why? What's the value there? Because if they're looking to grow, then wouldn't you put your efforts into into the front?
Larry Katz: Yeah, it's a Good question. I think they see it as a more immediate ROI. You know, there's roughly six dollars of spend in a credit union on people, on labor to every dollar of technology. It's six to one. So if they can use some of these tools to increase automation in the back office, then they can reallocate capital, reallocate their spend to do the things that they actually want to do, which is drive growth. But it starts with creating some capacity and to invest in the business. I think they just see a quicker payback on it. I think what they're worried about is all of the governance and compliance and controls that go with that, all the permissioning, right? When you really start thinking about it, if you have agents working on your back office, like how do you make sure that those have help them a lot. to access the data and that when the regulators come in that you have the explainability so that you know they don't get in trouble. So those are the kinds of things.
Erica Bigley: Okay.
Larry Katz: So they're working on kind of the high value but low risk use cases. And that's really where we can help them a lot.
Erica Bigley: We talked a little bit about the workforce experience and about the member experience and AI. What's the thing that you're most excited about from an innovative perspective? As you look into your crystal ball for the next twelve to twenty-four months, what are the things you're most excited where MeridianLink is going in terms of innovation?
Larry Katz: Look, we have a lot of innovation going on. I'm really excited about what we're doing with Access and that will continue to evolve and I think really lead the market in capabilities. I really believe that the consumer engagement layer is a very, very important strategic frontier for us. I think we're making lots of progress there in terms of innovating that platform and making it a market leader. And I think that's important to me because more and more of the automation over time is gonna happen in that. consumer engagement layer. Some people call it the point of sale. And frankly, the point of there's an artificial definition between the point of sale and the LOS. I think over time those two are going to converge because more and more of the vanilla decisions are going to happen in that point of sale. And so only the exceptions will actually go back to the
Erica Bigley: Okay.
Larry Katz: LOS. So I really love what we're doing in that. I really love what we're doing with Millie and with the Doc Agent. The pace of delivery there has been so fast and so cool. And we're gonna be in the market with it in the fourth quarter, and then we'll move on. We're starting a Mortgage and we'll move to Consumer. And there's lots of agents that are coming behind that. I think the other thing that I'm really excited about is building this agentic framework where we are governing the permissions and access for all agents that are within the lending. You think about humans have permissions, agents are going to need to have permissions, agents are going to need to have governance and explainability. And agents are going to be talking to agents. And so building that layer that allows all of those agents to interact with the platform is a big, hard, super important problem to solve. And that's really where we're focused.
Erica Bigley: So I'm gonna ask all of our guests on this podcast a couple of questions because I'm just interested to see how people answer it. So the first one, if you could finish this sentence for me, the future of lending is.
Larry Katz: I'd say personalized. Even with all of the advancements of technology, I think that risk is still too generic. And I do think products and pricing and offer presentment is all going to be much more customized because we have all of this data around consumers just like Amazon does, right, or Netflix does, delivering that personalized offer is gonna be the future here.
Erica Bigley: A hundred percent. I feel like I should be right for the picking for so many financial services organizations to be marketing me, everything from cars to paying for college education, which we're thinking about, that's not too far off in the distance for us. Meanwhile, on one hand, my Netflix is telling me, here's every show that you should watch and Amazon is sending me offers every day on all of these things that I need for my household. so why can't it be the same way?
Larry Katz: Yeah, it's always been the holy grain of financial services that you have like personalized offers, right? Like Amazon or like Netflix has. And some of the bigger banks and some of the digital folks have made progress on it, but nobody's really cracked it. I just opened a a bank account at a credit union for my son, who's ten years old, so that he could deposit his allowance. I have a daughter who's seven. If they had a full 360 view of our life. at their fingertips, they would know that they should open a bank account for my seven-year-old too. But they didn't have that information, right? So they didn't build a relationship. So there's just all this missing context around the 360 relationship. And I think that's where this world is going. And we need to help them do that.
Erica Bigley: So my second question is when you are not thinking about work, what are you doing outside of work?
Larry Katz: More than likely I'm spending time with my family. As I said, I've got a ten and seven year old. So I am like many young families, I'm an Uber driver on the weekends going to sporting events and so that's where I spend a ton of time with my wife and friends and stuff like that. And then I try to exercise as much as I can. I swim. I'm on the Peloton. I lift weights. Just try to stay healthy. So between work and family and exercise, that pretty much uses my time.
Erica Bigley: I So my last question for you is what are you reading, watching, or listening to? So it doesn't have to be all three, but if you're reading something good, you're watching a great show or you're listening to something amazing.
Larry Katz: I'll do two of the three, what I'm watching and what I'm reading. I am watching The Quarterback on Netflix. They profile NFL quarterbacks from last season and they pick three or four quarterbacks. Peyton Manning directs it, and it's about the quarterbacks from last year. A few of them through the season in their home life on the field, in the training facilities, all that kind of stuff. So it's a reality TV about quarterbacks, and I watch it with my son because he's a big football fan, fantasy football fan. What I'm reading right now is a book called Play Bigger by Chris Lochhead, which is a business book. It's about how companies create categories. And it's very much helping me think about the future of where we MeridianLink are going and what the opportunity ahead is. But it's about how companies like Uber, for example, or Netflix created new categories that we didn't even know that we needed, right? And filled the demand that was unmet. It's about how that process and the science behind What it takes to build a category and then what it takes to actually lead a category in terms of to operationalize and build the talent and the marketing and the product and the systems all to make that happen. So I love the book. Chris Lockhead played bigger.
Erica Bigley: Well, Larry Katz thank you so much for linking up with us today and for being our first guest. We appreciate you. And we know we'll have you back.
Larry Katz: Appreciate you. Thank you for doing it. Glad we're doing this podcast. Thanks for taking the lead.
Erica Bigley: Thank you.
