First Up: Our CEO

Erica Bigley (00:06)
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 (00:54)
Thanks,

Erica. Thanks for kicking us off. Excited to do this.

Erica Bigley (00:57)
Yeah, we’re really excited. I mean, this is like the best first guest ever.

Larry Katz (01:02)
Oh come on.

Erica Bigley (01:03)
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 (01:28)
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 (02:01)
Yeah.

Larry Katz (02:02)
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 (03:30)
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 (03:39)
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 (04:03)
Did you always know that you wanted to lead something or was that something that happened more over time?

Larry Katz (04:11)
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 (04:42)
No.

Larry Katz (04:43)
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 (05:05)
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 (05:23)
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 (05:39)
That’s great.

Larry Katz (05:40)
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 (05:56)
Yeah,

Larry Katz (05:58)
and

I just saw a guy who was like

Erica Bigley (06:00)
Yeah.

Larry Katz (06:00)
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 (06:13)
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 (06:23)
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

And he merged with Citigroup. And then he restarted at Bank One and became the CEO there. And then they went public as JPMorgan Chase. And today it’s just one of the best run companies in the world, right? So yeah, it’s kind of remarkable to see the evolution of his career and how he kind of grew the business. And also built a tremendous organization full of really talented people. And it was such a pleasure to work for him

And I think about that all the time. So that’s a great question.

Erica Bigley (07:32)
Yeah. So I want to dive into what you’re doing today as the CEO of MeridianLink. What are you most focused on as you think about the coming year?

Larry Katz (07:48)
There’s a lot of things going on at MeridianLink. But the thing that I think about a lot is how do we give back. How do we build an ecosystem where the consumer is at the center of it all? And the way I think about that is we want our customers, our mortgage lenders and credit unions and community banks, to be able to better serve their consumers.

I mean, if you think about it right now you have a fragmented ecosystem where you have point-of-sale systems, you have LOS systems, you have doc management systems, you have eSignature, you have disclosure, you have to stitch together and integrate all of these systems together to deliver a consumer experience. It’s very complicated.

And what we’re trying to do at MeridianLink is stitch together the consumer experience so the lenders can deliver that all from one place. So the consumer is not dealing with five or six different portals or different services. There’s a unified experience and it’s very simple and it’s secure and it’s fast. That’s really what I’m thinking about.

And then on a second piece, I think about a lot of innovation. And when you think about innovation, I think about what’s coming down the line from an AI perspective. So a lot of people are talking about AI today. But I think the real impact on our industry from an AI perspective is just at the beginning and I want us to move very quickly and be very thoughtful about how we build and deploy AI in a way that’s responsible and helps our customers.

Erica Bigley (09:28)
So I love that you’re focusing on the consumer and the experience. I love the idea of having like one unified experience versus going through multiple platforms and providers. I think when you and I have talked about this before, it does seem like the mortgage industry is a little bit fragmented. But as it relates to AI, I think a lot of organizations are in this planning and development phase. So when you say move very quickly, I’m curious, what does that actually look like for MeridianLink?

Larry Katz (10:08)
So we have AI initiatives across all of our products. We’re being very thoughtful about how we deploy it. You know, one of the things that we’ve launched is an agent called Millie, which is an AI agent that helps a member or a consumer with a mortgage related inquiry. So we launched that last fall and we’ve deployed it with multiple customers and we’re learning a lot from them and it’s really helping us. And then we’re rolling out this fall, an agent called Doc Agent, which is similar to what Millie does but for document management and underwriting.

And so what we’re doing is we’re building all of these agents that are being deployed in a responsible way. And we’re taking a step by step approach. We’re learning as we go. We’re getting feedback from our customers. And I think over time, this is really going to help us deploy more and more AI across our products in a way that’s responsible and helps our customers.

And I think what’s interesting is we’re building out what I call an agentic framework. And the reason why I think that’s important is because we need to figure out how to govern all of these agents. How do we make sure that permissions are set correctly? How do we make sure there’s explainability? How do we make sure that agents can talk to agents in a secure way? And so we’re putting a lot of energy into building that framework out.

And then on another piece of innovation, I’m really excited about what we’re doing with what we call Access, which is a consumer engagement layer. And what it does is it ingests all of your consumer data and delivers a fully personalized experience. So in a world where there are a lot of different products and services, we’re able to create a unified experience that’s personalized for each consumer.

Erica Bigley (11:28)
Yeah. I mean, I think that’s really impressive. And I understand we have another CEO of a lending platform company, right? There’s someone on the call. Are they able to speak or…?

Larry Katz (11:46)
Yeah. So Russ, you want to hop on?

Erica Bigley (12:03)
Great. So, Russ, I’d love for you to kind of chime in on some of the things that Larry has mentioned, right? As you’re thinking about AI as a leader in the lending space.

Russ (12:16)
Thanks Erica and Larry, yeah great to be here. So I think from the lending side, the industry is still developing what AI can do and should do in the lending space, right? I mean, we’re at an early stage and I think everybody is experimenting with different use cases, right? Some lenders are thinking about member experience, some are thinking about lending ops and underwriting, some are thinking about sales and lead generation. And there’s so many different areas that you can apply AI.

And I think, you know, one of the things that we’re also seeing is that regulators are going to be very involved in this process. And I mean, at this point in time, the Fed has kind of created some frameworks where they’re looking at AI and they’re thinking about how do they regulate AI, what are the risks?

And I think that’s actually a good thing. And I think lenders and companies that are building AI need to be thinking about those things as well, right? Like, what are the regulatory expectations? What are the controls? What are the permissioning? What are the explainability? And all of those things. So I think lenders are going to be much more thoughtful about deploying AI and that’s going to slow down deployment, but it’s also going to ensure that it’s done in a responsible way, which I think is good for the industry.

And then on another note, you know, we’re also seeing that the bar for AI is getting higher, right? Like at this point, if you talk to most lenders, everybody claims they have AI. So how do you differentiate? And I think the real AI value is going to come from, you know, solving real business problems. So whether that’s increasing automation in underwriting, or helping with lead generation and sales, or improving member experience, you need to solve real problems. And you need to make sure that you have real ROI as well.

Erica Bigley (14:48)
Right. So I’m curious, are there any concrete use cases where you’re seeing real ROI that’s happening today?

Russ (15:03)
Yeah, so from what we’re seeing with our customers, some of the biggest uses cases are around simplifying and automating document management and underwriting. And I think what’s happening is, you know, with doc automation and document classification, you’re reducing manual work. And with underwriting automation, you’re reducing manual touches and speeding up the process. So you’re definitely seeing some ROI there.

And then, you know, on the engagement side, we’re seeing some member experience improvements. Some lenders are deploying chatbots and they’re seeing some good engagement metrics. So there are definitely some use cases that are working out there.

But I will say that you also need to be realistic about where AI can help and where it can’t. So there’s some areas that are really well-suited for AI, like document management and classification, like simple chatbots for member engagement. But there’s other areas where AI is not as well-suited, like if you’re trying to make a credit decision or if you’re trying to assess fraud. Those are areas where you need to be much more careful. And I think lenders are learning that.

Erica Bigley (16:07)
Yeah, that makes sense. And I also think that there’s a level of trust that’s required, right? You’re dealing with people’s finances and their homes. So it’s important that you get it right. So, Larry, I want to ask you about the customer base and who your customers are. What are they focused on?

Larry Katz (16:35)
So our customer base is predominantly credit unions and community banks. And they’re a large portion of the lending market. If you kind of add up the mortgage originations from credit unions and community banks, it’s a significant piece of the pie.

And what’s interesting is that they’re all dealing with the same challenges, right? They want to deploy AI in a responsible way. They want to improve their member experience. They want to simplify and automate their ops. And they’re thinking about how do they compete with the larger banks and the digital-only lenders.

And so that’s kind of the customer base that we serve.

Erica Bigley (17:06)
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 (22:22)
They are more focused on back office productivity than they are on front office today, than on the sales side.

Erica Bigley (22:29)
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 (22:36)
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 (23:30)
Okay.

Larry Katz (23:31)
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 (23:37)
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 (23:59)
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 (24:39)
Okay.

Larry Katz (24:39)
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 (25:26)
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 (25:42)
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 (26:03)
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 (26:31)
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 (27:07)
So my second question is when you are not thinking about work, what are you doing outside of work?

Larry Katz (27:15)
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 (27:39)
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 (27:53)
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 (28:56)
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 (29:04)
Appreciate you.

Thank you for doing it. Glad we’re doing this podcast. Thanks for taking the lead.

Erica Bigley (29:10)
Thank you.