Think Differently: Is Debt the Greatest Innovation of all Time?

We’ve talked at length about how consumers are in the driver’s seat. What is Kredit doing to help consumers resolve their debt? Dave Hanrahan, co-founder and CEO of Kredit, discusses the following with Erin Kerr:

• How debt shaped the society with live in today
• Why digital accessibility is a need, not a nice to have
• What role consumer empowerment will play in the future of the ARM industry

Transcription below:

[Erin]: Hi everyone. And thanks for joining us for another installment of think differently. Think differently is a feature of the insideARM innovation Council, where the most innovative minds in the ARM industry converge. I'm here today with Dave Hanrahan, co-founder and CEO of Kredit. Great to be here with you, Dave, how are you?

[Dave]: Doing well.

[Erin]: I am doing well. Glad to hear you're also doing well. Before we talk about Kredit since maybe some of our audience doesn't know you well yet, why don't you tell us a little bit about yourself?

[Dave]: Sure. So first off, thanks so much for having me. It's always great to talk to another technology enthusiast as well. You know, the three things that you need to know about me are: I'm engaged, I have two golden retrievers, and I recently made the transition from New York to Miami for the near future. So between those three things, that's, that's taken up all of my limited, free time outside of Kredit, but super excited to be down here and lots on the horizon on the personal front.

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[Erin]: Yeah. Great. Well, congratulations on your engagement and the move and golden retrievers are the best dog to have. They are great. We had a golden retriever for a very long time and she was just so chill and relaxed, so that's great to hear. Thanks for sharing all of that. So let's talk about some individual thought questions from your kind of personal philosophy. What do you think is the greatest innovation in history?

[Dave]:  Sure. So outside of the, the wheel and rockets and really cool things like that, the greatest innovation in my mind is actually the introduction of debt as a mental framework. A lot of people think in terms of kind of monetary theory, you know, that, you know, dollars and gold coins kind of came first as a medium of exchange. And that, you know, those really evolved as a function of people sitting around and not wanting to trade, you know, chickens for corn. And, you know, they came up with this happy medium in the middle that was, you know, a currency as we know it today. Um, but in reality, IOU's drastically predated actual money and they really serve as the bedrock for the free markets today and capitalism as a whole. So in my mind that's really one of the greatest innovations that's ever come to be.

[Erin]: Wow. That's an interesting answer and not one that I've heard before, and not something I've thought of. So that's, that's super interesting and obviously super pertinent to the conversation that we're going to have today and your business and my business. So that's great. Another personal question for you. What's the bravest decision you've ever made?

[Dave]: Yeah, so brave is very subjective. I would say that one of the decisions that's required the most conviction personally, is the decision to go and start Kredit. It's no small, you know, mental decision to be  willing to, you know, take your career and put it on hold to try to go build something that you think an industry needs or consumers need and that they're ready to adopt. So for us, you know, we have a lot of conviction in what we're building and we think it's worth that effort and time, but it is very, you know, risky personally. But you know, it's something that we think is worth that risk.

[Erin]: Yeah. And I would say that's objectively a brave decision. So I absolutely think that, you know, that's a, it's an objectively brave decision to sort of pause what you're doing and start something new, no matter what that is. And that's a great segue into our business line of questioning. Why don't you tell us a little bit about Kredit and talk me through the thought process that led you to creating Kredit?

[Dave]: Sure. So, at its core, Kredit's platform is a messaging and payments hub for the ARM industry, different organizations, whether they're debt buyers, collections agencies, law firms, creditors can all invite their consumer bases to Kredit, to interact and set up different repayment plans. We eat all the costs of the payments processing, and we give the platform away, really in an effort to help consumers get out of debt faster and try to help different firms in the ARM industry make that digital leap as quickly as possible.

[Erin]: That's really interesting. It's definitely a novel concept at least from my experience. So that's great. So, a little bit more about your organization. Does your organization like to experiment and if so, I mean, I'm assuming so since it's a pretty new concept, how?

[Dave]: Yeah, so we view our role as enabling compounding creativity. So we want to make things like communication and payments, so seamless and such a no-brainer that operators in the ARM industry can focus on being creative in other aspects of their business. So how are you available to consumers? What different payment options can you provide them? What different types of payment plans can you entertain so that, you know, the people who are really, really good at operating businesses can focus on doing just that. And they don't need to worry about, Hey, is our software going to be something that the consumer was really delighted by and enjoyed interacting with.

[Erin]: Great. I'm assuming I know the answer to this next question too, given the fact that what you do is different, but have you ever looked to a completely different field to inspire innovation at your company? And what do you have an example of that if you've had

[Dave]:  Totally. So there's, there's a lot of different examples, you know, on the messaging front, we look at slack and other platforms like that, that are consumer focused on the payments front, you know, Venmo, PayPal, you know, a bunch of different brands have innovated there. One of the areas that we think is the most interesting is the IT services space. As you think through IT services, there's many, many different companies that will handle everything from database management to security and things like that. And all those different systems take their own specialties and combine them with other vendors to really develop an integrated hub. And that's really the vision we have for Kredit. You know, we think that we can come in and provide some assistance on the digital interface that consumers interact through. We don't want to go rebuild the entire collections ecosystem. There's lots of existing vendors who have done a great job. So, figuring out the right way to build that ecosystem of integrated solutions to meet everyone's needs is something that we really try to bring into our own business that other people have done in other industries.

[Erin]: Yeah. And you mentioned, there's a lot of great, sort of software that exists now within the industry. And so kind of dovetailing off of that, what kind of future do you envision in the ARM industry and what role does Kredit play in that future?

[Dave]: Yeah, in our minds, the future is digital. There will always be phone support and things like that. But, with reg F you know, there's a lot of limitations placed on traditional outreach methods compared to what's been possible in the past. And if people are able to make the digital jump, not only it's going to be higher ROI, but consumers have shown that they really, really prefer those methods. So we view our role as helping as many firms as possible, make that digital leap without having to incur major costs to get there. And once everyone's on the other side, you know, the world's your oyster and there's so many creative things you can do to interact with consumers and drive success for your clients. But re we really want to help people make that simple but complicated, you know, leap to get there first.

[Erin]: Yeah, definitely. So speaking of customers preferring a digital experience, do you see any risks or limitations and following a process of innovation that's sort of centered around listening to customers and consumers?

[Dave]:  So I wouldn't say there's issues with it. Anytime you ask a question and you get an answer there's associated work there, but if you're willing to put in the work to answer any questions that consumers bring up, or the feedback that they give, or that your customers give, it's only going to benefit. So it, it takes work and it takes resources, but in our minds, if you go in and you fix those problems that are raised, or you're answer those questions, it's really going to create a lot of competitive moats for you, given that, you know, your systems and your processes will be really, really efficient. So frankly, that's, you know, some of the things that we're trying to help with is we can go talk to consumers. We can centralize best practices. We can help a lot of different organizations think through problems that other organizations have had to think through, and centralize those learnings. But the exercise of talking to your customers and talking to consumers is irreplaceable in terms of figuring out what the best next steps are on the digital front.

[Erin]: Absolutely.

[Dave]:  And we're definitely seeing a lot of conversations around that. At the Innovation Council, we saw it, and at strategy and tech earlier this year, and that's really where the discussion is happening in the industry right now. So what current industry challenges do you think will require the most innovative solutions? Yeah. So when we think through, you know, how we've structured our platform, it's really about empowering consumers to be able to take control on their own and drive conversations forward. If you don't have someone to talk to about an account, there's not much you can do there. You have to have the consumer to engage with. So I think the biggest challenge and also the biggest opportunity is finding creative ways to engage consumers on their terms and put them back in control so that, you know, they're not just going to come and resolve the account that has been replaced with one organization. They're going to come and use that as a catalyst to start, you know, getting their financial life on track and being able to make a full recovery so that all organizations who they might have accounts with are going to get those resolved and there'll be in a much better position going forward. So that presents a lot of work, but also a lot of opportunity to help consumers.

[Erin]: Yeah, absolutely. And like I said, that's a huge part of the discussion, ongoing discussions in the industry right now. So it's great that you guys are on the forefront of that, and I'm interested to see how you guys grow in the next, you know, year, two years, five years, 10 years. That's awesome. So again, thank you Dave so much for joining me today. Do you have any final thoughts, any closing words you'd like to leave with the audience?

[Dave]: No. I mean, if you're looking for help with your digital strategy, uh, you know, obviously you can, you can reach out to me, uh, and, and we would love to talk to you. Uh, but I would say don't be scared of the digital push embrace it and, you know, drive it forward. Uh, it's going to benefit any organization that can make the jump over the divide. And, you know, if you can't, then it's going to be really, really difficult to succeed. Long-term

[Erin]: Yeah, definitely. And I, a hundred percent agree with that. So again, thank you so much, Dave, this has been another episode of Thinking Differently. This is a feature of the insideARM Innovation Council, Dave, and Kredit are member of the Innovation Council. And that's where industry leaders converge. Thanks so much, Dave.

[Dave]: Great. You too. Thanks. Bye.

iA Innovation Council is a collaborative working group of product, tech, strategy, and operations thought leaders at the forefront of analytics, communications, payments, and compliance technology. Group members meet in person (and lately, virtually) several times each year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish guardrails for new technology, and educators, entrepreneurs and innovators from outside the industry who inspire different thinking. 

2021 members include: