‘My number one goal, from a roadmap perspective, is to provide very high levels of customer satisfaction at scale’: Argyle’s Shmulik Fishman

A popular theme for this podcast has been exploring the powerful unlock data has within different financial businesses. That’s particularly true for payroll data which is a more complicated thing to digitze than banking balance sheet and transaction data.

For the past few weeks, we’ve heard the impact modern access to payroll data has had on mortgage banker Draper and Kramer, to conducting background checks as part of hiring like Checkr does, to consumer lender, Regional Finance. Each business had access to payroll data in the past but it was laborious to access, bundled together with other things, and wasn’t made an integral part of digital workflows. 

Argyle is helping to change all that. As Argyle’s footprint grows, the fintech firm continues to mature its products, processes, and people. Founder and CEO Shmulik Fishman has built a powerful team of GMs to lead each of the verticals the payroll data firm participates in. 

And what is fascinating about this conversation about tech- and data-enabled financial services is Shmulik’s focus on the people side of the business. In a market that’s getting frothy in its excitement around generative AI, Argyle has good tech, sure, but it’s the people that are making a difference in its work with clients. It’s what keeps them coming back and giving more volume and products to Argyle to manage. Argyle CEO Shmulik Fishman is my guest on this show.

Tearsheet has partnered with Argyle to create a four part podcast series that explores how different parts of the financial industry are using modern technology and access to new forms of data to power their businesses today and into the future.

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The following excerpts were edited for clarity.

The big points

• Payroll data: a commodity or a data pipe?
• Argyle’s success is measured by specific client outcomes
• A customer-centric approach using payroll data and technology
• Bringing down cost and increasing reliability
• Behind the scenes of a pilot with mortgage banker Regional Finance to get buy-in at branches
• The marriage of great technology and understanding your clients
• What’s in store for Agile in 2024?

Awash in financial data

Shmulik Fishman, Argyle: Yes, the world does not need more financial data, you’re correct. The world does need better formatted, more accurate, easier to access financial data. And that is what Argyle is providing. There are so many ways today to access income information — how long have I worked at an employer? How much money do I make? What is my job title? What are my 401(k) contributions — these are bits of information that you can get by talking to a credit bureau. You can get by asking somebody, by having them give you your W2s or your pay stubs.

The problem is that all of the existing mechanisms to access this dataset have a lot of fraud, a lot of friction, a lot of drop off associated with them. And when you allow a consumer to connect their own payroll account to a lender, you eliminate all of this fraud, all of this friction, and all this drop off. Because the consumer is no longer fetching documents, trying to log in, trying to click 17 buttons, the consumer has an easy flow that they’re very accustomed to with some banking apps. Now that same flow that they’ve gotten so used to for their banking data, they can have that same exact flow for their income information or their payroll data.

Experience layer

Surely for consumers, we’re providing a better experience than going through the mail, finding your W2s, scanning them in — surely this is way better than that. But for lenders, the entire experience is an API. And so for our clients directly, we’re a data pipe. We provide our clients with directly sourced data untouched by humans, updated daily on somebody’s income. And I suppose that leads to better experiences that our lenders create.

Customer-centric approach

Payroll data is a commodity. But payroll data that’s highly accurate, that is not egregiously expensive, that is hard to come by. And that is what Argyle is providing, as much as technology is what we lead with. I think what differentiates us is that we’re very focused on clients. We’ve oriented our entire business around specific client outcomes and specific client use cases.

To give an example, I know you talked earlier with Draper and Kramer. We’re providing them with a product that is made for the mortgage industry, from beginning to end. Both in terms of the customer service we give them, how the data is formatted in terms of reports, how they can use a no code console, how we give training and coaching — we take a very human-centered approach that is unique in this industry. Most of the time, when you’re getting payroll data, it’s coming through a PDF, and it’s up to the lender to figure out what to do with it. We’re providing the exact opposite experience, where the data is provided to you in the format that is mortgage-ready and backed by a team that really cares about a client’s success.

Measuring success

First and foremost, I’m guided by net dollar retention or having our clients use us more month after month as a key metric. I want to make sure that the Argyle product is best in class, and is the first go-to choice across mortgage, across lending, across background check, and all the verticals that we operate in. And what that means is that our clients prefer to use our product over the competitors.

The other part of this is that we’re trying to bring down costs and increase reliability of this dataset. The cost part is a bit easier for us — we’re something like 50% to 70% less than what you would get from a credit bureau. But the accuracy is really where we’re starting to shine. When you can get reliable datasets about somebody’s base pay or somebody’s hiring date delivered to you in real time, that’s a huge differentiator. We want to make sure we keep on providing that to the market.

Consumers should have more say in permissioning

The truth is that consumers don’t have enough say in who sees their income data or who sees their data in general. Much of this data that we’re discussing, unfortunately, can be accessed without a consumer’s permission. Credit bureaus are mopping up a lot of this data set and selling it to the highest bidder as often as they possibly can. I think that that’s a conversation for the credit bureaus to have — I don’t want to get inside of their business.

But what I can say is that Argyle makes sure that the only time a consumer’s information is shared is when they’ve allowed it and they’ve expressly said that a specific entity, let’s take Draper and Kramer or Regional Finance, that that specific entity can have access to it for a specific reason. We make that very front and center in all of our flows, that if you work at Starbucks, if you work at Target, and you’re trying to permission your data, you know what data is being permissioned and who it’s being permissioned to.

I actually think that this leads to better outcomes on both the lender and on the consumer side. And it actually leads to less drop off. Consumers don’t like lending experiences where they don’t feel in control. Argyle makes consumers feel in control. And that actually leads to more of them submitting applications for a loan, or filling out the full application that you’re presenting to them.

The human element and making it very easy

We meet clients where they’re at. It’s really easy to give clients a huge handbook and say do 100 different things and then talk to us again. It also doesn’t lead to success. We want to make sure that our clients have a set of tools that they can use on day one, and what we’ve done with all of our clients, we startwith a no code solution where we are on the phone with them, teaching them how to send out their first email, send out their first text messages, get their first consumers to connect to their payroll account, showing them how they can download this dataset, download a formatted report with their logo on it, and getting reps in place and going day after day, week after week. We go on site with them to make sure that they understood what was possible.

What’s so exciting is you start to get clients to want to have that process of modernizing their operations. They see the power of having the Argyle platform by their side. And that means that they start to lead with like, Hey, here’s this other operational workflow. Here’s how we can integrate with you further. It’s not us pushing — it’s them.

That’s about humans. I know there’s so much talk right now about AI and how computers are going to automate everything. I’m seeing the exact opposite thing be true here. And yes, we have a great set of technology, for sure. But the fact that we have GMs and success managers, technical implementation, team members side by side with clients on the phone in their office working through issues, that’s what makes the difference. So I’m a big believer in humans. I am investing heavily in them.

Consumer lending: Regional Finance

Let’s start with Regional Finance, because I think it’s just a great story of the untold part of lending. Regional Finance has about 350 storefronts with foot traffic where people walk in with their pay stubs and their W2s. Just think about that for a second because it’s a big idea. Humans go into a store to get a loan.

We started a pilot with Regional all the way back in Q4 of last year, a small pilot in just a few of their branches, so instead of having to scan paper onto a computer, they could send out a text message and ask some of your consumers to log into their payroll account. We did that. After expanding the number of branches we worked with, we got enough momentum at those 10 branches to say we should build a custom Regional Finance report that calculates data the exact way that they were doing manually in an Excel file.

We worked with the Regional Finance team to really figure out how we take this manual calculation process and digitize it so Argyle can just spit out the Regional Finance VOIE report specifically made for them. We worked on that, and at the end of Q1 of this year, we released that. We trained more branches on it. Little by little, we got more people using it. I’m really excited to say that last week, we’re now in all Regional Finance branches. And this was huge excitement, but also the results of a ton of really good work by humans, by the Argyle team that spanned nearly a year, of going step by step, branch by branch, making sure that we’re actually fixing problems on the ground. That’s what’s happening in lending.

Employment verification: Checkr

I think Checkr is frankly another great example. Checkr sends a lot of volume to credit bureaus to run income and employment verification on your previous employers. And only about 50% of the time are they able to get the data they need from a bureau, which means 50% of the time, they have to do it manually with phone banks and paper. So we started with Checkr just saying, can we just take all the junk you can’t do today? Keep doing what you’re doing with credit bureaus — we’ll take the other 50%. And so earlier this year, we started to take the overflow volume. And what we saw is really high success rates at 1/20 of the cost that they were paying to credit bureaus.

As Checkr got more comfortable with this credential-based model of receiving income information, they then started to ask the question if can we do this to the other 50%. You’re achieving lower costs, better consumer satisfaction — that’s what we’ve done. But again, something that’s happened over multiple quarters where we’re talking with a client, meeting them where they are, understanding their first priority needs, which is the manual component of the operation, and then working our way to replace a credit bureau.

Mortgage Banking: Draper and Kramer

Draper and Kramer has a very similar story. They send a substantial amount of their volume to a credit bureau. It’s expensive. There’s some missing data elements, but it does work. The conversation with Draper and Kramer started in the same place: give us the volume, give us your workflow that’s highly manual and really expensive, no one wants to deal with it. We’ll deal with that part. And we worked for Draper and Kramer in a no code solution, no APIs to log in. Tell us who they’re trying to verify. And we do all the work of sending out that email, sending out that text message, doing push notifications, reminding people to connect their account. And Draper and Kramer has seen so much success with that, that now they’re talking about integrating the Argyle API into their own back end service. Again, this is a multi stage approach that we’re taking with every single one of our clients.

Landing and expanding with new clients

it’s core to the business — showing success with clients in the first innings, within a month, where clients can say, hey, I used to be doing a lot of things with paper, and now I’m doing less with paper, not eliminate, but less with paper. I get a quick win. I used to do a lot with phone banks. I used to do a lot with fraud services. And now I’m doing less with that, and starting to iterate and the dirty word is incrementalism. Working with our clients to show incremental progress day after day, week after week, talking with them about it, figuring out other ways that we can optimize and being a coach. These are the places where we’re investing because we’re seeing that leads to better outcomes.

2024 plans

My number one goal, from a roadmap perspective is to be providing very high levels of customer satisfaction at scale. It’s one thing to be able to deliver income data for 20 gig platforms; it’s quite another to deliver income data for all of the United States workforce, regardless of platform. There’s over 250,000 registered payroll service providers, and we need to have connectivity to all of them. That is a ton of infrastructure under the hood work that people don’t see. But we want to be putting as much of our investment as possible and making sure that when you ask for income data, Argyle can give it to you in a tailored approach for these different verticals.

I always get a little bit too concerned, when people start giving a 10 point roadmap: our roadmap is to make sure we have really high service at scale. The place that we’re going to invest from a client perspective is definitely in the mortgage vertical. We’re seeing such big pull for a modern approach to income verification. And we’ve been working for quite some time now to have a mortgage ready product that is compliant with all the security and regulatory frameworks that exist specifically in mortgage.

I know that a lot of people like to talk about different certificates and different letters that you can put together to mean that you have other right certs. Very practically, most mortgages in the United States of America are sold to Fannie Mae and Freddie Mac. And in order for those mortgages to be sold to Fannie and Freddie, you need to have something called Day One Certainty guaranteed by Fannie Mae. This is a very hard certificate to get. My understanding is that there’s only six other entities that have this certificate. We’ve been working really tirelessly to have this cert as well — we think it’s going to be a huge differentiator for us into the US in 2024.