Why Community Banks Must Rethink AI Strategy to Stay Competitive

Hey everyone. Welcome back here to Techstrong tv. I'm really happy to introduce you to this next fellow.

He is the co-founder and CMO and a guest here on Techstrong with us. His name's Kevin Green. ai.

So you can check that out. Um, but first let's talk to Kevin. Kevin, welcome to Text Drunk tv.

It's great to have you here. Thanks, Alan. Glad to be here.

So, I gotta be honest with you, I interview a lot of founders, a lot of co-founders. I don't often interview co-founder, CMO, and I don't, and I'm not, I'm not ragging on CMOs by any stretch, but when you look at the normal, you get your C-E-O-C-T-O pairing, right? So you get kind of two techie guys sometimes.

And you know, the, the VCs always say, Hey, you gotta go find a sales marketing person, right? Mm-hmm. Um, or sometimes you'll get A-C-E-O-C-R-O, right?

So, and they're a salesperson. Sometimes the CEO's actually the sales or marketing person. So, but it's not often co-founder CMO.

How did, how did this come about? Tell us about your journey. Yeah, So, um, you know, the HAP journey started several years ago, and I've been part of the company since its founding.

So the original concept for the product and kind of what we're trying to do really started with me and a couple of other people. And the story behind why we're doing this is equally as important to the quality of the product itself. So, you know, there's so much happening in the space right now.

There's so much happening, there's so much news, and the hype cycle is so significant that controlling that narrative and making sure our message is getting through and cutting through all of the noise that's out there is equally as important as, you know, the features and capability of the product. So understanding that how we communicate and talk about hapc is, is equally important. That's why we've, we've made it such an important role here at the organization.

I love it. So give us a little of your journey though. What, what did, what did you do before ha hapc, as you mentioned a few years old already, but what did you do before that?

So I've actually, uh, I've kind of started out in communications. Uh, I've always kind of found myself on the bleeding edge of tech, edge of technology. com boom, and then kind of rolled the social media wave through that.

Uh, and then had a bunch of, you know, SaaS startups, uh, then did some time at, you know, fortune 50 organizations leading digital innovation for, you know, global organizations. Uh, and just, you know, the passion that comes from working in a startup and, and building something new and really driving change based on how quickly technology is moving with something I couldn't resist. And, and that's kind of how I find my way back here to hap is to, to kind of do that, that run all over again and, and, you know, bring something new to the market that's truly gonna make a difference.

Very cool. Very cool. Um, you know, I, I was, I actually just wrote an article yesterday.

There was an article in, um, business Insider, in spite of all the talk about AI taking jobs and costing people their jobs and how marketing is one of the hardest hit areas. Communications is one of the most sought after positions. Yep.

From Fortune 50 on down with crazy salaries, right? Mm-hmm. Mid six figures and and above for, you know, chief communication officers and, and people who have that real skill.

Not that they're not using ai, they want communications people who u who can leverage AI but can still, they need to have that human spark, that human creativity, that human, that AI doesn't yet bring for sure. And, and they're in really, really high demand in spite of everything else we're hearing about about these things. It's interesting.

Yep. So every founder, co-founder I speak to, there's always a creation story around, you know, we saw this problem and it wasn't, it wasn't being solved and or it wasn't being solved well, and we think we had a better mouse job. We could build a better mouse job, we could build a better solution.

What was that for Hap Well, hap actually was born out of, um, the recognition that, you know, AI is going to create a lot of disruption for sure. Uh, but there was already a ton of disruption happening in our financial industry anyway. You know, technology and the digital transformation around banking has been significant, you know, for, for years.

Uh, but this new wave, this new cycle was a big risk. Uh, and, and we saw that we got out in front of it because we know that people are adopting ai. It's not going away exactly what you said, you know, the fear of job loss, but the opportunity is significant if it's embraced correctly.

And that's where we saw a huge gap, was in a regulated environment. You know, generic tools that are being built for consumers don't translate well into highly structured environments where governance and accountability and scalability are gonna be critical. And so we felt like we needed to fill that gap because it's absolutely imperative that we maintain consumer choice in our banking structure.

So technology is consistently putting smaller community banks and credit unions at risk. And when that happens, it actually dramatically impacts what happens in these communities. You know, the large global institutions are not going to extend your loan because they know that you had, you know, a bad agricultural season.

You know, they're not gonna give a small business loan to somebody who's, you know, aspiring to open a restaurant that happens at the community level because community banks understand the impact and what that means. And so our standpoint was we have to give technology to these financial institutions that help them compete with less resources, you know, less technical capabilities. So it had to be simple, it had to be easy, it had to be secure.

And that was just a gap that, uh, you know, big tech was not thinking about. Uh, you know, they're looking at, you know, again, it's this, it's the old model of, you know, attract as many users as you can as fast as possible, worry about profitability later, we recognized, you know, we've gotta get, you know, governance systems in place. We need to make sure that there's accuracy in place, uh, and that, you know, we're helping these institutions navigate through this, this wave of, of innovation and come out the other side healthy and strong and able to compete.

I love it. I, I, and I don't disagree with you. You know, my experience is, is when you get these waves right, like surfing waves, and you look at the surfers in the wave, the smaller guys, they kind of fall into two buckets.

There's a group that are more nimble than the really big guys. And so they are able to outmaneuver out agile, if you will, and ride the real, the bleeding edge of the wave. But, you know, when you ride the bleeding edge, it's, it, it could cut both ways, right?

And, and you get that, and then you get others who say, look, we just aren't gonna have the resources to compete with those bigger guys, especially in an unknown wave, right? And let's, let's see, let's see how that wave develops before we go all in, if you will. But they gotta do, you know, the thing about this AI is, it, it's different if you, I don't know if you could wait on ai.

Agreed. You know what I mean? You can't, I mean, there's absolutely no waiting on it.

And, you know, if you go back to 1999 when everybody was, you know, rushing and they had to have a website, you couldn't wait then. But at, in 1999, we had no idea what was coming, you know? Yeah.

I mean, if you think about where we were and everybody was standing up a website and we were measuring success based on eyeballs, you know, we, we couldn't tie that back to real revenue. There was no, you know, it was just, it became a race for how much traffic could we get. And we're kind of in the same place with AI where, you know, we don't know what's coming yet, but in 1999, you knew you couldn't not have a website.

And where we are today is, you know, you can't just ignore ai. It's not going away, um, where it's going to go that, you know, anybody who can predict that, I, I mean, I'd love for them to tell me the secret, but, uh, you know, it's moved. You're probably not on the show talking to you and I they're out, you know, resting on their island somewhere.

Exactly. But, um, you know, Kevin, it's interesting you bring it up. com and we did all of that good stuff.

And I, you know, I do see a lot of parallels. A lesson I learned back then was the bubble bursting wasn't because the technology didn't work. The technology was great.

The, the, the bubble bursting was a financial technology. com mm-hmm. Right?

com. com, I mean, they were attracting crazy money Now with, with ai. I, so I, I try to say, where are we in that cycle right now?

And as near as I could tell, I think we're still in 96, 97. Yep. Right now, we're probably a while out from, you know, that that financial bubble bursting, if you will.

Um, that doesn't mean it won't, it doesn't necessarily mean it, it will in two years or three years either. But that, that's kind of how I, how I, you know, peg it when I look at that timeframe to, to, to this timeframe. But, you know, the other things that we're seeing here, you know, and Kevin, the, the first, this first three years, three, four years of this AI boom has been financed on the hoards of cash that, you know, the, the hyperscalers the big tech guys have been sitting on.

Yep. Just, I mean, they've been sitting on it since before COVID, they were building up war chest. And so all of these AI data centers and buying all these chips and, and a lot of the research and the, the circular investments has been, you know, off of that hoard.

But now we're seeing that second wave of companies that are financing AI with debt, with VC money, with other people's money, as we say, right. OPM. And, um, you know, it's a different, it's a kind of a different space.

It's a different rhythm, right? That money has to re have returns, have dividends within a given amount of time. You, it's not free money.

Certainly. Um, and it's going to be interesting because there will be a reckoning. I'm, I'm not saying the bubbles are gonna burst.

I'm not saying it's gonna be exactly like the dot coms or, or some of the other, look, we had a real estate bubble in 2008. Right. Um, a mortgage bubble.

I'm not saying it's gonna be exactly like that, but what I'm saying is there, the financial side of this is so overheated sooner later, the music stops and someone doesn't have a chair. Yeah. And, and you're exactly right.

And I, and I think even your timeline is right in terms of from the financial aspect. You know, the interesting is, you know, societally and, and where kind of the technology is, you know, it's very reminiscent. com Super Bowl, where 20% of average Yeah.

com companies. Did You watch, you saw it this year? Did you watch this year?

Yeah. Now I gotta tell you the, the, uh, what's her name? Claude?

Well, it wasn't the, the lady was from OpenAI. The, uh, the old, you know, the, the, uh, I guess Android, whatever you wanna call it, but the Claude, I thought the Claude commercial was great, but it got panned. Yeah.

A lot of people didn't like it. I I thought it was a great commercial. I, and, and they all were.

com. Dot com. So this is now the AI bowl.

This is The AI bowl. Uh, But here's one thing I found out. The Budweiser commercial with the Eagle's wings flying over the horse, not ai.

Yeah. Not ai. It was real, all natural done.

They just caught it. Right? Yeah.

Hey, I love that. That was my favorite commercial, but Yeah, me too. Um, you know, but it's, you know, we're seeing kinda the same, the technology is moving so much faster, but even in that, you know, that correlation, to your point earlier, the internet didn't lose, you know, like the, the bubble may have burst financially, but the internet still won.

Yep. And when the music stops, there will be less chairs. And that's kind of what we think about from hap point of view, is the ones who won were the infrastructure, you know, the ones who transitioned to, to, uh, you know, not just thinking about new features and new functionality.

Uh, but they went directly into how do you start to get measurable, ROI, how do you, uh, you know, really build something that's scalable, uh, you know, and move just again, beyond the, the next feature. And, and we're even seeing it, I mean, if you think back to again, that timeline, there was a race on features. You had, you know, the Yahoo versus Google, uh, you know, now we've got OpenAI versus Anthropic, uh, which we saw in there in the clouded commercials, specifically going after chat GPT.

So we're seeing these same parallels. And you know, for us, we wanted to pivot to how do we make sure hap pix becomes infrastructure before, you know, instead of getting caught up in the, in the feature race, because Right. Even, even at GPT, if you, I mean, how many people are actually using OpenAI's Atlas browser?

You know, not, not a ton that launched in October. Yeah. Last year.

Well, the, to be fair to them, how many people are using Perplexities or some of the other ones? I don't know if, and, and I'll tell you why. So I'm a geek.

Just probably like you are too. That's why we do what we do. Right?

You probably downloaded Atlas, you checked it, didn't you? Yeah. So of course.

Yeah. Because that's what we do. That's why you and I are on here.

But you still using it? No, Me either. Yeah.

Why? Because it did, it wasn't, it wasn't a killer app. There wasn't, I didn't see anything that said, oh my God, I'm gonna stop using Chrome for this, or Safari or whatever it is.

Mm-hmm. Um, but that's, but that's tech, you know, it, it, you know, you gotta, you gotta kiss a lot of frogs until you find your s here or princesses or whatever you're looking for. Without a doubt.

And, and, you know, you could even make the correlation to the mobile movement, you know, remember, yeah. Everybody was mobile first and there was a new app on the number one on the app store that you had to have. And then, you know, now, I mean, was the average person uses less than 20 apps consistently on their phone.

Yeah. You Know, but I still have 150 on there and I'm, and whenever I go to delete, when I see, but I, I might use it. I might use it, right?

Oh, totally. I got six months later, I, yeah. Discipline is the word there, Kevin.

Yeah. Yeah. I've got some that are like older than my kids.

So Yeah. I, I, you and me both let, let's talk, let's look at six, 12 months. com, the rate of evolution here.

Like, we used to talk about internet time, remember the crunching of internet time. Well, AI time crunches, internet time, right? Mm-hmm.

So the maturation is, is just crazy looking out over the next six to 12 months. What do you see, what's in story? I mean, are we gonna have little banks, community banks?

Yeah. I mean, you know, from our standpoint, absolutely. Um, you know, we think that, you know, this technology allows smaller organizations to compete in that community.

Banks and credit unions are well positioned because one of the biggest challenges that comes with AI is the operationalizing of it. You know, it's making sure people are educated and, you know, we've done surveys, you know, 57% of banks say that they are AI mature. Um, a ma AI maturity is not, well, everybody has a license to chat t or copilot.

That's not maturity. So, no, what we're trying to do is help people operationalize AI and truly kind of reimagine some of the workflows, uh, that currently exist to do them better. And to our earlier conversation, smaller, more nimble organizations are going to find success faster as long as they operate with discipline.

And that's the thing. I mean, Amazon survived all of that. I mean, remember, they were losing billions of dollars a year and everybody was criticizing everything they were doing, but in the background, they're building logistics infrastructure.

You know, everybody thinks they're an online bookstore, and that's not what they were doing. Right? Right.

And so, and I'm not saying we are the next Amazon by any stretch of the means, but that mentality, it's, you know, thinking about it that way, as organizations think about how this is infrastructure and how it changes their operations versus it being assistance and chatbots, those are the ones that are gonna win. Uh, and I think smaller organizations are gonna be able to, to pivot, um, you know, pivot to that type of approach faster. Love it.

I love it. ai. Uh, what advice would you give people?

How, what's the best way to engage with y'all? Yeah, so I mean, certainly, you know, people can reach out. Uh, we've obviously can multiple contact methods on the website.

Um, but one of the things that we did do is recognizing that enablement component. Uh, we did build a free AI certification specifically for bankers that's also accessible on the website. You know, our mission really is AI only works when people truly understand it and embrace it from the top down.

Um, so, and, and it has to be, you have to understand it through your own unique context. So your role, your industry, your business, you know, general education and training, while helpful doesn't translate into execution. Um, so, you know, obviously through the website is the best way to reach out to us.

Uh, you know, taking advantage of the tools and the resources that we put up there, uh, hopefully will help people start to pivot away from, well, we have a chat chat bot. So we're, we're AI native to, uh, we're organizationally structuring ourselves to make sure that we can operationalize around ai. I love it.

Hey, man, 15 minutes goes so quick. I'm sorry, but we're outta time, Kevin, come back, keep us posted what's going on here with ha with, uh, hap and I wish you all the best. I I appreciate it.

Great conversation and definitely look forward to coming back. ai. Check it out.

We're gonna take a break here on text on tv. We'll come back, we'll be right back.