Kyle Enright Of Freedom Financial Network On The Future Of Money and Banking
An Interview With David Liu
Be trustworthy. In banking and payments, a lot of your success depends upon trust: trust from the consumer, counterparties who do business with you, vendors who support you, and folks who buy your loans if you’re in a lending business. It is essential to do what you say you’re going to do and be consistent in your approach to life and to business. Without that, your business will not succeed.
The way we bank has changed dramatically over the last decade. It was not too long ago when you had to wait in line in a bank to deposit money. Today things are totally different. You can do your banking without ever walking into a bank. In addition, the whole concept of money has changed. In the recent past, money usually meant bills and coins. But today, the concept of money has expanded to include digital currency and NFTs. What other innovations should we expect to see in banking in the short and medium term?
To address this, we are talking to leaders in the banking, finance, and fintech worlds, to discuss the future of banking and money over the next few years. As a part of this series, I had the pleasure of interviewing Kyle Enright, President of Mortgage Lending, Freedom Financial Network.
Kyle Enright is the President of Mortgage Lending at Freedom Financial Network, a digital personal finance company. Previously, he was Chief Strategy Officer at Sindeo, a venture-backed mortgage startup. Prior to that, Kyle spent more than 20 years in venture capital investing and business development, creating new products in the financial services and technology industries and helping to start and grow major businesses at Google, Intel, and First Data, as well as at numerous startups. Kyle received his MBA from Stanford Business School and B.A. magna cum laude from Harvard College, where he captained the varsity water polo team.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started in this industry?
For roughly 25 years now, I’ve been at the intersection of finance and technology, long before it was ever called fintech. At some points, I focused more on the finance side while at others I had more of a technology emphasis. My career started relatively traditionally in investment banking at Lazard Frères as a financial analyst in mergers and acquisitions. I later went on to become the COO at an asset management company, which had about $300 million in assets under management. I ran that company in my 20s and learned a lot about investing, risk and consumers’ financial needs. Since then, I’ve spent the last 20 years in Silicon Valley working at companies such as Intel, Google, First Data Corporation, and a variety of startups — all looking at the convergence of finance and technology. Then in late 2017, I joined Freedom Financial Network as the president of the mortgage business.
Can you share the most interesting story that happened to you since you began your career?
During my time at Google from 2008 to 2012, I was on the early founding team of the Google Wallet project, now known as Google Pay. Our goal was to make contactless payments safe for the masses, which had been attempted for over a decade and was primarily pushed by Visa and MasterCard. Google decided that it was the right time to try to push mobile payments forward themselves.
Despite Google’s technology capabilities, brand status, and buy-in from merchants, the innovation initially failed to launch. Our strategy was sound, but the timing and the external environment wasn’t right. We realized how difficult it was to time the launch. You needed the existing legacy payments industry, merchants, mobile carriers and consumers to all converge around such a significant step-function change. It’s very hard to get something like that precisely right and very easy to get it wrong by three to five years. That window of time can be the difference between a business that completely fails, is slow to launch, or catches fire and changes the world.
The Google Pay project was a surprising and eye-opening experience that I carried with me in future ventures. It’s also part of what brought me to Freedom Financial Network. I had a thesis that the consumer experience for mortgages was broken. It was excessively painful and imposed many unnecessary burdens on the consumer. I realized the time was right to build a different type of mortgage company — one that is much more consumer-centric. That’s what my team and I are doing Freedom, and it’s incredibly exciting.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“If you want to make an omelet, you have to break some eggs.” If you want to make a significant impact in the world, you must force change. It can often be uncomfortable both for yourself and for those around you, but it’s vital if you really want to make a tremendous impact.
Ok wonderful. Let’s now shift to the main focus of our interview. Can you tell our readers about the most interesting projects you are working on now?
At Freedom Financial Network, we’ve developed a proprietary home equity product that enables consumers to responsibly access their home’s equity in order to consolidate and pay down high-interest debt. The majority of the mortgage industry doesn’t offer home equity lines of credit (HELOCs), and the few banks and credit unions that do typically only make them available to consumers with super-prime credit scores who really don’t need the money. In addition to serving everyday homeowners that the rest of the mortgage industry tends to overlook, Freedom’s approach is unique in that we’ve designed our HELOC offering to help people address the most significant pain points in their day-to-day finances and get on a sustainable path to a brighter future.
How do you think this might change the world?
Unlike my previous experience at Google Pay, we know the macro environment is exactly right to grow our HELOC business right now. Millions of homeowners were able to refinance and lock in historically low rates during the pandemic. They don’t want to lose that low rate by doing a first-lien refinance. At the same time, home values continue to soar due to years of underinvestment in new residential construction, growing demand from younger Americans who are finally ready to become homeowners and older generations of homeowners who are choosing to age in place. These forces were already in play before the pandemic, and they’ve only gotten worse since. Unfortunately, there are no overnight solutions to these issues, either.
Even though current homeowners are sitting on a huge amount of home equity, many are reluctant to cash in by selling their homes. They’re worried about the difficulty of finding a new place to live and spending a lot more to buy a new place. At the same time, they can’t access the equity in their homes without losing the incredibly low interest rate they got when they recently refinanced. That’s where we come in.
We provide real offers for real people to consolidate and pay off high-interest debt utilizing the equity in their home. We’ve custom-designed this program to serve consumers across a wide credit spectrum in a highly effective way, and we know from direct experience with borrowers that it’s incredibly beneficial. Our product helps consumers reduce their monthly payments significantly, lower their cost of interest and often benefit from a meaningful increase in their credit score, as well.
There’s a synergistic relationship between how we deploy technology in our mortgage business and our core philosophy of trying to be the most consumer-centric company in the industry. We’ve designed an end-to-end system from the ground up that delivers both a unique mortgage product and an enhanced consumer experience. We start with the consumer journey in mind, and then we’ve built technology to bring that consumer experience to life.
We’re always delivering potential customers an authentic offer that we stand behind, unless some information they have given us turns out to be inaccurate. Our goal isn’t to bring people in the front door, ask them a bunch of questions, force them to go through a bunch of hoops, only to tell them, “Sorry, you’re actually not eligible.” We don’t play those games. We do a lot of work behind the scenes to determine eligibility upfront, deliver a very beneficial offer that we stand behind and close on that offer quickly, usually in 12 days or less.
What most excites you about the banking or payments industry as it is today? Can you explain what you mean?
The rate of change in the financial services industry has never been greater than it is right now, and that’s exciting in itself. The next 10 years are going to bring more innovation to the financial services industry than has happened in the prior 100 years. All of this is being driven by technology, consumer expectations, and competition. Today, people can almost automatically have results from a credit decision, so they know right away if they’re approved or not. That encourages consumers to be more engaged with their financial situation and have a greater understanding of the options available to them. They will not be solely reliant upon the human intermediaries and facilitators that have always existed in the financial services industry but who aren’t necessarily needed when consumers have the right technology and information to do it themselves.
What most concerns you about the banking or payments industry as it is today? What would you suggest needs to be done to address that?
Some of the newer lending products coming to market are not necessarily going to benefit the consumer over the long term. I think some of the consumer lending products — specifically buy now, pay later — could lead to people buying a bunch of things they can’t afford and therefore accumulate a bunch of debt that’s going to stick with them for a long time. The other concern I have is student loan debt, which is a multigenerational burden. The student loan crisis is showing no signs of slowing and has a massive impact on consumers’ financial stability and outlook. It’s inevitable that the U.S. government will have to step in to bail these consumers out or else these folks are going to have a significantly poorer quality of life than they otherwise should, and our economy and society is going to be much worse off.
How would you articulate how the concept of money has changed in recent times? Is it really a change? How is it still the same? Can you explain what you mean?
One of the core functions of money is to represent value and be a medium of exchange. Traditionally, payments were in some physical form — whether that be paper, gold, a stone or something else — and involved an in-person transaction. Over time, the in-person part has gone away, but the physical nature has only recently gone away. As most of us have also noticed, digital currencies are on the rise. I’m interested to see what stance sovereign nations and institutions will take on the concept of digital currency. Personally, I think its adoption is inevitable.
Based on your vantage point as an insider in the finance industry, what innovations should we expect to see in banking in the short and medium term?
Over the years, and especially at Freedom, I’ve seen firsthand how technology can transform traditional industries for the better. In a sense, there’s no industry more traditional than financial services, nor one as large that has changed as little from a consumer experience standpoint. From improvements to infrastructure to increased automation and scalability, there’s been a massive amount of innovation on the back end. But changes to the fundamental consumer experience are still very nascent in financial services. There’s a massive opportunity going forward to allow people to engage with a variety of financial services in a more personalized, seamless and consumer-friendly manner.
How has the pandemic changed the way banks interact and engage with their customers?
I think the pandemic will have an incredibly significant and enduring impact on financial services. A lot of things that have historically needed to be done in-person can now be done digitally. Some examples of this are getting a mortgage or opening a bank account. Many of these changes are going to endure and probably even accelerate. Consumers and workers fundamentally have much greater access to work and to earnings than they ever did before. That’s going to remain in large part going forward and it’s great to provide people with more opportunities to use their skills to get paid a fair rate for those skills to increase their earning power.
In your particular experience, how has the pandemic changed the way you interact with, and engage your customers?
Overall, the pandemic has brought us closer to our customers. We’ve used the past two years to build out our digital capabilities in order to ensure we’re providing high-quality services and customer engagement. We are also seeing more interactions with customers taking place remotely. Through all of this, our goal remains the same — to provide personalized technology, insights and products that help our customers achieve their individual financial goals.
In my work in the telecom space, I’m very interested in the importance of user experience. How much of your interactions have moved to digital such as chatbots, encrypted messaging apps, phone, or video calls? How has this shift impacted the user and customer experience? What challenges do these apps present when used as a customer engagement tool?
Approximately three-quarters of our consumers’ transactions today involve a digital experience. The extent of that digital experience varies widely and can include any combination of channels, including email, text, phone, chat, video calls and interactive websites. We aim to engage with customers in whatever combination that works best for them. For some people, it’s simply starting an online application and then interacting with us over the phone or via video for additional help. Other folks follow the application in a self-serve manner and never talk to a representative. Then there’s a portion of people who feel much more comfortable with traditional interaction models and we support them via phone-based conversation.
If you could design the perfect communication feature or system to help your business, what would it be?
Adding the human touch to digital experiences is a major driver of consumer satisfaction. So, it’s incumbent upon us to ensure our digital touchpoints feel empathetic, personalized and high quality, no matter what communication channel the customer wants to use. We really want to provide a highly personalized interaction that is based on empathy. Our dedication to understanding consumers and meeting them where they are with the needs that they have, whether that be digitally or manually, is what differentiates us from our competitors.
Fantastic. Here is the main question of our interview. What are your “5 Things You Need To Create A Highly Successful Career In The Modern Finance, Banking and Fintech industries?
- Be trustworthy. In banking and payments, a lot of your success depends upon trust: trust from the consumer, counterparties who do business with you, vendors who support you, and folks who buy your loans if you’re in a lending business. It is essential to do what you say you’re going to do and be consistent in your approach to life and to business. Without that, your business will not succeed.
- Have a vision. There are thousands of banking and financial service providers, so being able to differentiate yourself in a meaningful and sustainable way is a challenging undertaking. To accomplish that, you must have a real vision of how you’re going to be different and how you’re going to serve and delight the consumer.
- Excel at strategic execution. For this, you must have both a solid strategy for what you’re going to do and the ability to execute on that strategy. Of course, you’ll also need the appropriate resources to support your strategy.
- Persevere in the face of adversity. It’s important to realize that things never work out perfectly. Frequently things that are going to work, especially big impactful ideas, have a gestation period and they take a while to come to fruition. At many points along the way, it’s not obvious that you’re going to be successful. In fact, if you were an intelligent bettor, you would bet against yourself at many points along that journey. But if you still have conviction in your vision and are making at least some progress, then it’s important to keep pushing ahead, no matter how difficult the circumstances. As an entrepreneur, if you want to build a successful company, or as a company executive, if you want to grow a modestly successful company to be wildly successful, it takes a lot of perseverance.
- Embrace innovation. For me, the willingness to innovate means being thoughtful about how you can change an established approach, how you can look at things differently. Sometimes it’s just a minor change, but at other times it’s a tremendous change. You shouldn’t be afraid to do things differently. You’ll want to run controlled experiments in advance, but you must be willing to take some risks and do things differently.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I would like to provide positive and enduring inspiration for kids. I want to help them recognize their gifts and potential and inspire them to have the confidence to go and pursue that potential in a way that helps the world.
How can our readers further follow your work online?
Thank you so much for the time you spent doing this interview. This was very inspirational, and we wish you continued success.