In this episode
Matt Michaelis, Chairman and CEO at Emprise Bank, sits down with Rory to discuss the company’s journey in the financial industry and their focus on embedded finance. In the family since 1965, Emprise continues to grow and evolve. Matt shares his perspective on going digital, and the challenges and opportunities that come with it in the fintech industry, particularly in relation to regulatory compliance. He emphasizes the need for trust and building strong relationships with customers. Matt believes that the future of finance lies in the intersection of technology and financial services, and that embedded finance will continue to grow.
Key takeaways
- Emprise Bank has been in the Michaelis family since 1965 and has grown from a $20 million bank to almost $2.5 billion.
- The company is focused on bringing digital solutions to its customers and is on a journey to support embedded finance.
- The regulatory environment is a major challenge for Emprise Bank and the industry as a whole.
- The future of finance lies in the intersection of technology and financial services, with embedded finance continuing to grow.
- Building trust and strong relationships with customers is crucial in the financial services industry.
- Emprise Bank prioritizes serving their communities with integrity and delivering the best experience.
Transcript
Rory Holland
Good, Matt Michaelis, good to see you.
Matt Michaelis
Great to see you.
Rory Holland
Welcome to Austin, Texas.
Matt Michaelis
Thank you, it’s great to be here.
Rory Holland
Have you been here, I assume, a few times?
Matt Michaelis
A few times.
Rory Holland
A few? Just to say a few?
Matt Michaelis
Yeah, just a few. Not as much as I’d like; I love Austin. It’s a great place.
Rory Holland
And where’s home for you?
Matt Michaelis
Wichita, Kansas.
Rory Holland
Born and raised?
Matt Michaelis
Born and raised.
Rory Holland
Really?
Matt Michaelis
Yeah.
Rory Holland
Okay, cool.
Matt Michaelis
Yeah, it’s a great place.
Rory Holland
And you’re a Jayhawk?
Matt Michaelis
I am. Went to the University of Kansas.
Rory Holland
Okay.
Matt Michaelis
Huge Jayhawk fan.
Rory Holland
My daughter is eyeballing Kansas, so it’s a great school. That’s what I hear. I haven’t visited yet, but that’s on the list of things to take a look at.
Matt Michaelis
Yeah. So, let us know when you visit.
Rory Holland
I will. I will. So, tell us a little bit about Emprise Bank.
Matt Michaelis
Emprise has been in our family since 1965. My grandfather got involved, and it’s been my dad’s sole professional pursuit, which is beyond impressive to me. I’ve grown it from a $20 million bank to now almost $2.5 billion dollars. I stepped into the leadership role about six years ago. I have really tried to bring digital to our customers in a really meaningful way. And now we’re on a journey around supporting embedded finance.
Rory Holland
Yeah, I saw that. That’s cool. So, I think this is a fun fact. For me, it was. I think I saw that you have an art collection.
Matt Michaelis
We do.
Rory Holland
Okay.
Matt Michaelis
That is my father’s passion. And it’s all Kansas art, right? We’re a Kansas company and a Kansas family, so all the artists have ties to Kansas. So it’s a great story, it’s a great theme, and the best part about it is when our employees move to a new office or a new location, they get to choose the art that goes around them. So they have real input into what their work environment looks like.
Rory Holland
Oh, that’s cool.
Matt Michaelis
They love it. That’s cool. Yeah, they love it.
Rory Holland
How is it like? Peppered around the corporate offices or like, is it?
Matt Michaelis
Oh, corporate offices, our branches, everywhere.
Rory Holland
Okay. I got to come up and see that.
Matt Michaelis
Yeah, you have to. Well, he will take you on a tour, block off as much time as you have. He’ll take half a day easily. So he loves it.
Rory Holland
That’s cool.
Matt Michaelis
And he’ll tell you all the backstory. He’s met many of the artists and for him, that’s the real passion piece is the people.
Rory Holland
Yeah.
Matt Michaelis
And so he’ll tell you about each of the artists. It’s fun.
Rory Holland
It’s funny, I share that same passion for people, hence our conversation today. So Fintech House, crazy, lots of great conversations. It’s been wonderful to hear people’s backgrounds. And I asked you this, I want to ask how you got started in it, but I kind of have a sense because your dad was in it. But like, what was it like growing up with a dad leading the business that now you’re leading?
Matt Michaelis
I’m not sure I appreciated how wonderful it was until I actually got involved in the business and had a chance to work with him directly. You know, I think he knew; he worked hard, but I didn’t. I think he did a nice job when he was home. He was home and so, I didn’t, I didn’t have a lot of direct Insight into the business as I was growing up. I worked there a couple of summers then as I was in High School and college and I was a teller and got to see what that looked like and that was fun I loved being a teller because you got to engage with people all day.
Rory Holland
Yeah.
Matt Michaelis
And then I actually, when I graduated, I had an opportunity to go work in New York. And so I took that and enjoyed what I did there. And that turned into 20 years. So, I wasn’t sure I was actually going to work in the family business. And then, as I mentioned, kind of 2000, 16, 17, I made a decision, I started to transition into the company. It’s been terrific to get to work with my dad. I mean, that’s really been a highlight, something that if I would have known that it was that rewarding, I would have done it much, much earlier.
Rory Holland
What a gift. I think. I would love one day for my kids to want to work with me. We’ll see. But that’s what a gift that you guys get to spend that kind of time together, not only as father son on a personal level, but then in the family, but then in a business, particularly a business like Emprise Bank.
Matt Michaelis
Yeah, it really has been a gift. It’s been incredibly rewarding. I know not all father son combinations work well in family business, but for us it’s been terrific.
Rory Holland
And what, what role are you like, when you guys think about your roles, what’s your dad’s role these days compared to where you are? Have you completely taken over the bank?
Matt Michaelis
Well, he’s, I mean, he’s still, you know, very involved and will always be my dad. He’s on our board. He’s the Vice Chair. He still joins the loan committee when he’s around. But he also travels. He and my mom travel more now. And when he travels, he’s pretty good at disconnecting. And that’s great.
Rory Holland
Good. He should. He’s earned it. Right?
Matt Michaelis
He’s earned it.
Rory Holland
So, you mentioned embedded finance. As you think about all the word fintech and the industry we work in, how are you guys using fintech to better serve your customers?
Matt Michaelis
At this point, they will give us a much greater reach. They’ll allow us to impact far more people than we would just out of our physical footprint. We’re pretty constrained geographically. So we think about using our embedded finance platform to empower, whether it’s consumer brands, fintechs, whatever the platform may be to expand our reach and our impact dramatically.
Rory Holland
And what are some examples when you talk about reach and impact and maybe some of those, some of those relationships?
Matt Michaelis
Well, there are many, many, many examples, but one, one that comes to mind and I’ll use one that’s kind of out in the, out in the industry. We’re relatively new in this journey, right? And so we’re hoping to build some of these relationships and add these partnerships, but one that is commonly referred to as like the Uber driver experience, right? Where they’ve embedded financial services into the driver dashboard. And then that allows them to get paid quicker and manage their finances. Right? So, that has a real impact in a positive way on those employees.
Rory Holland
Yeah.
Matt Michaelis
So we think about doing that more broadly. You know, in other examples, other other companies, other tech companies and there are other platforms where that makes sense as well.
Rory Holland
Yeah. And are there particular when you think about helping more people and more businesses, do you have particular verticals you guys try to serve or like you mentioned in this case, transportation?
Matt Michaelis
You know, we’re not specific to a vertical. We support consumers, we support small businesses, and we’ll kind of push products into any vertical. We don’t have specialized products yet for specific verticals and often that’s what the fintech or the platform they’ll take our products and they’ll customize them or they’ll integrate them into their existing products so that they add capabilities and features.
Rory Holland
Yeah. What do you think it is like with what you’re seeing going on in the industry? What are some of the biggest challenges Emprise is facing right now? What do you say?
Matt Michaelis
Well, I think we’re all as you think about banking as a service. The regulatory environment right now is at the top of the list. I think we’re all learning what the expectations are and working hard to meet those. But clearly, the regulators are taking action in a lot of places. And so we’re trying to learn from each of those and continue to build our capabilities.
Rory Holland
Yeah. So you’re having to work directly with the regulators in a sense to thinking about the capabilities, what you want to build, how you build it, how you go to market with it, I assume, all those things.
Matt Michaelis
Right. I mean, what we really want to understand is what their expectations are. We think we know. We learn with each consent order. We learn a little bit more and a little bit more. But it really is trying to make sure that we’re able to live up to those to the expectations that they have.
Rory Holland
Yeah, you can imagine that’s pretty challenging, right? Because they’re the regulators aren’t in the enterprise business, but they have knowledge, might have some knowledge, but are they not counting on? And Emprise and other financial companies to help the regulators understand based on consumer and business needs, what can be built, how to build it, how to regulate it, and how to protect everybody?
Matt Michaelis
Well, I think the regulators are learning to yeah, I mean they’re. And we’ve seen progress in that direction, but they’re learning along with everybody else around what does this mean? What are the expectations? What should they be? And so I think we’re all trying to work through this together.
Rory Holland
Yeah, it’s tough. I’ve heard a lot of that in the conversations this weekend, working with the regulatory bodies and making sure everybody’s on the same page. We’re all dealing with the same uncertainty I think of ever changing technology, ever changing consumer and business needs and then working within the infrastructure of the financial system like it has to work. And that’s one thing that I’ve been hearing a lot about. There’s no room for error. You can’t make a mistake. So innovating while you’re flying down the road so to speak without making any mistakes. That’s hard. It’s got to be very difficult.
Matt Michaelis
It’s very hard. But, again, I think we have a view of what we believe the expectations are, right? And so we’re building to that. We’ll continue, I’m sure, to get feedback, whether directly or indirectly. And to me, it’s critical to maintain that relationship with the regulators in a positive manner. And I think to the extent that we continue to do that, they do understand that not everything is perfect all the time. And then you have some opportunity to correct that.
Rory Holland
Thank goodness we’re people, right? We do make mistakes from time to time, right?
Matt Michaelis
Right. And I always say, while much of what we do in the sponsor banking business is very similar to what we do in our core business, right? I mean, it’s still deposits and lending and payments. It’s some of the same activity. It is different when you have a different entity in between yourself and the end customer. And so that’s really the piece that we’re learning how does all that work. It worked well to support the fintech or the consumer brand and the end customer, but also do it in a way that’s regulatory, regulatory compliance.
Rory Holland
Yeah. And where do you see? It’s hard to predict. None of us have the magic balls, but where do you see this go in the next three or five years? Do you have any, I can say predictions unless you want to call it that, but like just, any thoughts somewhere this might be leading us?
Matt Michaelis
Well, I think as I’ll say, as an industry, I mean, when I think about embedded finance, I think that will continue to grow. I think there’s all sorts of rationale for financial services to be more and more embedded in where people live, work and play digitally.
Rory Holland
Yeah.
Matt Michaelis
I think that will likely lead to consumers having more and more accounts at different places, but they’ll be in places where they are already from a digital perspective, right? From a regulatory perspective, we’ll get through this; the industry will get through it. You know, as it continues to mature, there will be clearer expectations around what banks have to be able to do to offer the service compliantly. And I think it’ll be that that will actually help adoption that will help that certainty will help everybody know exactly what they have to do. And I would anticipate that we kind of continue to see more banks moving into the space as there is more clarity around what they need to do.
Rory Holland
Yeah, we’ve seen a lot of, we talk about the term neobank, a lot of interesting new ways of banking coming out. Anything about Emprise Bank that you wish more people knew?
Matt Michaelis
It’s a great question. We continue to lean heavily into our sponsor banking growth opportunities, but we’re also a really strong community bank, and we won’t give that up either. We continue to invest in our established business. I mean, it’s important for us to serve the communities that we’re in and serve them with the best experiences we can possibly deliver to our customers.
Rory Holland
Yeah, that’s great. That’s great. And you have a unique perspective because you are a community bank, but yet you’re doing these other interesting things. For someone that might be interested in getting into the fintech or financial space with all the experience and all the exposure you’ve had to it, any advice you might share with them?
Matt Michaelis
I think it’s a great space to be in. I mean, it’s, uh, I think it’s the intersection of financial services and technology is exploding and will continue to. You know, everything, you know, I’ve spent a couple of days now wandering around Austin, listening to a bunch of people talk about and evangelize around technology. It’s not slowing down. Yeah, right. It’s only speeding up. And what I always tell our team is the world will never again move as slowly as it is today. And I just think the opportunities will continue to present themselves in interesting ways at the intersection of technology and financial services. So get involved, jump in.
Rory Holland
Yeah. And people, I hear people think when they think about finance, particularly when I talk about it with them, they think they use the word sometimes boring or stodgy. I’m like, you have no idea. It might appear that way because of the stability of the systems that we’ve built, but it’s so untrue when you crack it open like what we’re doing here this weekend and the folks you’re talking to.
Matt Michaelis
Well, I think we’re at a great place, right? Because we are regulated. There are things that we, as we were talking earlier, that we can’t do and shouldn’t be doing. But at the same time, we’re engaged in the technology world, which is moving as quickly as anything. And so I feel like we’re in a great, again, kind of this great intersection of innovation, yet some security and predictability.
Rory Holland
Yeah. Yeah, it’s interesting times. The next five years, whatever they look like with the embedded finance, that seems to be a theme I’m hearing a lot about. That’s going to be pretty interesting. So, last question. This is something that I’ve been thinking quite a bit about when we think societally from a trust perspective. Trust has never been an all time low in my lifetime. And I think about the work that we do in the financial system, so critical that people trust the financial system. And I’m curious about your thoughts on how we could do a better job as an industry or maybe at Emprise or as individuals build trust back into the work that we’re doing and to restore some of the faith I think that folks have lost.
Matt Michaelis
Well, I couldn’t agree with you more. You know, I look at the Silicon Valley bank failure as
Rory Holland
This was last year; we’re glad we’re not talking about that this year.
Matt Michaelis
Yeah, me too. That was this weekend last year. I remember many of the conversations I was having that weekend, but I think that was incredibly damaging from a public trust perspective in our industry that whole series of events. So, the only thing that I can say is, you know, we continue to serve each customer the best we can, continue to try and regain that trust and engage proactively with them. I think systemwide, you know, that’s a question for somebody with a bigger job than I have. But the way that we think about it is, again, just serving our communities, whether they are the towns that we have physical locations in or whether they are our technology partners and programs, serving those communities with integrity and deliver again, delivering the best experience we can.
Rory Holland
Yeah, I think it’s a wonderful answer. Relationship is like the theme I’m hearing, and it’s if we understand each other, we have our best interests in mind and that that’s what’s been so warming to me is to hear all of folks like you that are leading these companies that theme of doing the right thing, serving the customers, being authentic, building that relationship and really caring about it. And serving them in a meaningful way really feels good to know that I’m in an industry and I get to support companies like cool companies like Emprise that are trying to fulfill on that every day as hard as it is, but that’s good stuff.
Matt Michaelis
We’re a relationship business. We value that. That’s what we’ve been built on since 1965. And you know, that is just who we are and how we do business and whether that’s in person, whether that’s through a digital channel. We extend that relationship model into the fintech partnerships and our banking as a service business. That’s just how we do business and that’s important to us.
Rory Holland
That’s good stuff. I want a couple of them to see you.
Matt Michaelis
Please do. Anytime. We’ll get an art tour for you.
Rory Holland
Yes! Alright. Thanks, Matt. So much fun.
Matt Michaelis
Thank you. Appreciate it.
Rory Holland
It’s great to see you.
Matt Michaelis
Thank you for the conversation.
Rory Holland
Good to see you, too.
