Ryan James - The Future of Money and Leveraging Small Businesses
In this inaugural third episode, Lee interviews Ryan James, President and CEO of Surety Bank. They discuss growing small businesses and how forward thinking leads to success. Ryan brings a wealth of knowledge over his two decades of work in banking and his perspective on the future of money.
Connect with Ryan James - https://ryangjames.com/
00:00:01:24 - 00:00:03:24
Lee Murray
Hey. How you doing, Lee? Thanks for coming on board.
00:00:06:09 - 00:00:23:05
Lee Murray
Well, I'm so glad you took the time to be here and share some of your practical wisdom with my audience. I want to give a real quick introduction of you, and then we can jump into our discussion, and we have a lot of cool things to talk about. So, Ryan James is the president and CEO of Surety Bank.
00:00:23:16 - 00:00:45:00
Lee Murray
It's a community bank located just north of Orlando. Ryan and I have been friends and work together for probably about seven years now. And I've been able to watch Ryan grow and change as a person and a leader. And I've seen him make tough decisions behind the scenes to take care of his people, but at the same time still crushing it for the bank.
00:00:45:09 - 00:01:06:01
Lee Murray
And they're doing very well. He is a very unconventional thinker, which is really a lot of the reason that I wanted to have him on, because I think that a lot of small business owners don't know that there are bankers out there that think unconventionally. He has a lot of out-of-the-box ideas that he actually follows through on, which is pretty cool.
00:01:06:23 - 00:01:28:01
Lee Murray
And I've been able to see some of those from inception to fruition. I mean, let's face it, banking is boring, right? I mean, I think to the average person but what's cool and I see Ryan do is he's been able to find a way to make it really interesting. And he's done that, I think, by being a forward-thinking CEO and innovating inside of surety.
00:01:28:22 - 00:01:37:20
Lee Murray
So, he's been a joy to work with. And I'm super excited to have him here. On exploring growth so my audience can benefit from his practical wisdom. So, thanks again, Ryan, for being here.
00:01:37:21 - 00:01:47:22
Ryan James
Ali, thanks for having me. I'm really looking forward to this. You know, you do such a great job of what you do, and I've been able to see you grow at the same time. So, I'm excited for this.
00:01:50:19 - 00:02:12:06
Lee Murray
Yeah, thanks. Yeah, it's been fun, and we got some cool stuff coming on the horizon for Surety, too. So, to give our listeners a little bit of context to the ideas that you're going to share today from where kind of where you're coming from. Give us the short version of like where did you come from in the banking world?
00:02:12:11 - 00:02:15:00
Lee Murray
How did you get started and what are you doing today? Sure.
00:02:15:04 - 00:02:38:10
Ryan James
So yeah, I started out in banking out of college, and so I've been in banking now. This is my 21st year in banking and I've been the bank CEO of Surety Bank since 2009, so a little over ten years and have been bank CEO You know, I didn't know that I wanted to get into banking. I started out wanting to be a stockbroker and I realized early on during internship that just wasn't for me.
00:02:38:10 - 00:03:02:16
Ryan James
So I ended up taking a job at a little bank, Shortie Bank in the land Florida. And from there what was pretty unique to that, the other bankers is, you know, Surety Bank had no training program, so it was hands on learning from day one. You just you had a you had a product, you had something to do and you had to learn it.
00:03:02:16 - 00:03:36:04
Ryan James
You had to figure out how to how to comply with regulations without any anybody telling you how to do it. There was no roadmap. It was a small banks. We didn't have a huge procedural manual manual. It didn't have any of this training program. So even looking back to me, that that really was such a benefit for me personally because I learned that just getting thrown right into something So, you know, that's been my banking career is just being kind of thrown right in the middle of, you know, fires.
00:03:36:04 - 00:03:56:13
Ryan James
When I became CEO 29, we were in the middle of the Great Recession. So, you know, it was sink or swim. And so when you have no other choice, you just march forward. And so that's been a lot of my banking career. So you never thought I'd really act like a banker? Well, I don't know what a bank should act like, so I just, you know, act like myself.
00:03:56:13 - 00:04:01:12
Ryan James
And do what I feel is right yeah.
00:04:03:07 - 00:04:18:09
Lee Murray
Yeah, I've seen that. I've seen you operate that way. And I can't imagine being a brand new bank CEO and 26 I mean, you do that place thinking, oh, OK, you know, it takes some time. You got to learn, you know, I'm sorry.
00:04:19:07 - 00:04:20:21
Ryan James
2009, but you're.
00:04:22:15 - 00:04:40:14
Lee Murray
Oh 2009. Oh, yeah. OK, so even worse. Even, even worse. Yeah. You just, I mean, here you go. Yeah, exactly. You're, you're, you're, you go here's a sinking ship, you know, figure it out.
00:04:41:18 - 00:04:50:09
Ryan James
How it was within months of being CEO, just my capital was getting deteriorated from bad loans right off the bat.
00:04:52:15 - 00:05:24:21
Lee Murray
Mm hmm. Yeah. I mean, that was everybody that lived through that. That was an adult and working experience. That pain and I mean, to be on the banking side of that, you learned a lot in a short amount of time. I'm sure well, so, you know, one thing I wanted to talk about today is the fact that you know, you guys offer so many different things to your customers and you have a lot of unique customers, different than I've seen in other banks.
00:05:25:22 - 00:05:50:19
Lee Murray
One of the major products that you've offered to small growing businesses is this this mechanism of lending. I mean, it is this, you know, historic banking product. It's nothing really new, but which we can talk about some of that here pretty soon. But I wanted to talk about lending because it's still is this mechanism or tool that businesses should be thinking about utilizing properly.
00:05:51:20 - 00:06:13:22
Lee Murray
So let's talk about lending for small business. Right. I know you've seen the good, bad and the ugly, and I'm sure you have lots of stories to tell, which I'd love to hear some of them. But, you know, I think let's start with how should a small growing business be thinking about utilizing debt or leveraging.
00:06:15:06 - 00:06:34:23
Ryan James
You know, the way I kind of look at a small business is you don't want to take on debt when you're just starting out. You know, I feel that business needs to be profitable, small. Before you ever think about taking on debt, the last thing you want to do is take on that. The business doesn't work out and you still have to pay that debt back.
00:06:35:10 - 00:07:08:11
Ryan James
You know, because then the next business you start, you'll be carrying the load of the previous business. So you definitely want to make sure that your business is successful and is producing revenue and has a good margin prior to even thinking about taking on debt institutionally. Now, some businesses you may have that great idea and you know, opportunity winner, you're better off to go to your savings to borrow from family members and to, you know, grow organically from there.
00:07:08:11 - 00:07:31:10
Ryan James
But before you really go on and take on debt from a lender you want to establish income from a place of strength that you have this product, you're whether it's a service, whether it's software, whether it's a physical product, whether you're mowing lawns and you're expanding to get that, you want to do it on a shoestring budget as much as possible.
00:07:32:05 - 00:07:51:14
Ryan James
Mm hmm. I just I can't stress that enough. When you hear people say, oh, well, would be successful, but I need money first. You know, I've heard that a lot over the years. And majority of those aren't successful. If you think debt is going to make you successful or the business is not going to be successful, it has to be successful first.
00:07:52:00 - 00:07:59:20
Ryan James
And then you leverage debt to really expand and to grow definitely.
00:07:59:23 - 00:08:29:05
Lee Murray
It kind of it kind of reminds me of this idea of proof of concept where, you know you know, you want to do you want to go to your banker and say, look, you know, the market has responded and they they really want what it is that I'm doing. And whatever capacity. And now I just need some extra umph behind me to to do more of what we're already doing that's working would you say that's the way they should be thinking?
00:08:29:22 - 00:09:06:24
Ryan James
Correct. And then sometimes you will have where you're let's say you want to start a restaurant. Well, if you've never owned a restaurant, nobody's going to loan you money to start a restaurant. But if you've been a general manager of a restaurant and you've been in that career for years, then you've got a much better sense. The same way, if you're a coder and you're producing and you're working for a company doing well and now you want to expand out and have your own group and you already have expertize, not only in coding and project management, then you have that level set up.
00:09:06:24 - 00:09:28:01
Ryan James
So, you know, sometimes even before starting your business, if you go and work for businesses to give you that expertize before you go out on your own, that too leads to your your credibility, your character of, you know, being more successful later on. You know, you really almost have to be a student before you can be a teacher.
00:09:31:02 - 00:10:04:16
Lee Murray
Most definitely. And, you know, I've seen that in my business too, where I end up getting ahead of myself because I want I'm not being patient enough to for for what I'm doing, learn the craft. Right. And so it sounds like what I hear you saying is people need to spend a little bit more time with their business and with their their their market or their customers and take a little bit longer lead time before they take on this responsibility of of X more more of an exponential growth.
00:10:05:14 - 00:10:31:18
Ryan James
Yeah. Because when you go out on your own and you start their own business, you could be the best, you know, doctor and work for a hospital. Now you want your own practice. Well, even though you may be the best surgeon in the world, you own your own practice. Now you have managing people. Now I have organization. Now you got to make sure you hire the right people that are viable with insurance so you create a lot more jobs for yourself.
00:10:31:18 - 00:10:53:18
Ryan James
And, you know, some people may be really fantastic at one thing, but then now you're being asked to do a lot of other at the same time. So, you know, you need to know that going into it. You need to be agile. You need to know that just because you're an expert in that one specific field now you're going to have ten other hats you're going to have to wear.
00:10:54:12 - 00:10:59:03
Ryan James
And, you know, that is a shock to a lot of people that going on their own yeah.
00:11:00:09 - 00:11:17:02
Lee Murray
Yeah, you're right. You know, you've lent money to businesses, all kinds of businesses over the years. What are some that come to mind when you think about you know, types of businesses that have really done well and utilizing that for growth? And how did they deploy that money?
00:11:18:04 - 00:11:39:13
Ryan James
So to and I kind of notice ones that when they come in and I'm commercial, you typically have more down payment on real estate than you do residential and that's a shock to people where they're used to. I bought a house with 5% down. I want to buy this commercial building and you're winning 20%. 30% down and they think of that as a negative.
00:11:39:13 - 00:12:04:13
Ryan James
But the more money you have down, if that commercial property is necessary in your line of business, it insulates you in the future. So if there are hiccups, then you have built in equity, then you have room. If there's a massive recession, in the economy goes down and OK, now maybe your terms could be extend a little. It gives you some room and breathing room.
00:12:04:21 - 00:12:27:03
Ryan James
You don't want to go in there and think of, you know, what's the littlest. I can go in and go down like, you know, it's OK to put more down on that commercial property. I want the success of you not to just you know, always look at leverage and leverage. And you do need to build in some cushions in regards to economy because, you know, not everything is 100% in your control.
00:12:29:21 - 00:12:57:18
Lee Murray
Right now. I know you got some some juicy stories of some businesses you've lent money to over the years. And I know you can't say say names and business names, but, you know, I know everyone. I'd love to hear a good story about either, you know, either how something was, you know, that we utilize in a great way and you saw them grow because I think that's really rewarding for what you do or, you know, maybe where someone didn't do what they should have done with the money.
00:12:58:04 - 00:13:21:15
Ryan James
So, you know, from a commercial lender so I can speak to like that. And majority of our loans over the years have been commercial loans tied to commercial real estate or real estate for the commercial purpose. But one thing I learned really quick, and I've been a lender for many years and underwriting loans prior to 2009, it seemed very easy.
00:13:21:15 - 00:13:45:18
Ryan James
Banks were if I didn't loan this money, the other bank was going to loan. So a lot of banks were just they were going past there. They were doing a lot of exceptions because they're like, well, I have to be in this business. I have to let you know. And so that, you know, as a banker, you cannot do you can't you know, you can't base your judgment based on what your competition is doing.
00:13:45:18 - 00:14:24:17
Ryan James
You have to stick to one, you know, number one. So what I saw in 2009 when the Great Recession hit and property values increased, it was now socially acceptable to be foreclosed on or you know to short sale. It was socially acceptable and so people would hear from their neighbors, oh I got out of this much debt and this and you know commercial loans and you know banks are owned by the government you know Citibank where a business just like any other business we have shareholders and you know businesses think oh well the bank's insured.
00:14:25:05 - 00:15:05:22
Ryan James
Well yes, the deposits are insured and that insurance comes into play after all the owners of bank have, you know, exhausted all of our equity. So, you know, before it ever even would get to that, all the owners would have lose all their equity in a bank for FDIC insurance to ever come into play. So, yeah, during that time when people were saying, you know, I can't make my payment in businesses, what I would do is since I was young, 30 years old, I would just shop plain clothes and go into a retail establishment go there and lay my eyes on it and see.
00:15:05:22 - 00:15:27:12
Ryan James
And a lot of times you could judging see, yeah, they had a little down in the economy, but they were playing it up, so they were doing the opposite than they were years before or saying, Oh, I'm doing so well now. They were saying, I'm not doing very well. And I remember one specifically it was a gas station and I was in there and the guy was saying how good he was.
00:15:27:12 - 00:15:48:04
Ryan James
You know, there was a huge apartment development right behind him. So there was a lot of traffic in there and that was a cash business. So he could, you know, may not report everything on his taxes and so he's telling the bank, I can't make a payment, I can't afford this. But when I went in there just talking to him, he didn't know me from Adam.
00:15:48:04 - 00:16:03:18
Ryan James
He was telling me how great business was doing. And he just called my office was saying he was going to throw his keys at us. And so hearing that, I hand him my card, you could see it in his face. Oh, shit. I go, that's right.
00:16:06:03 - 00:16:30:03
Ryan James
You know, I just and so from then on, it was like, you know, so we took the hands on approach and the people were impacted greatly in 2009, everyone was he was impacted, but he was an impacted to the scale where, you know, I forget what he ordered so I'd say half a million dollars. What he wanted us to do was just say, forgive $200,000.
00:16:30:09 - 00:16:50:09
Ryan James
Well, that's us taking money from our pocket, you know? So no we worked with him, we did lower the rate because he was impacted, but we had to get to that honesty level because really he, he was bluffing he didn't want to get foreclosed on. That's how he made. So, you know, we went, took a hands on approach.
00:16:50:09 - 00:17:15:10
Ryan James
I would go out visit him, it's a retail establishment. I would sit out there, watch the traffic, see you have a good gauge and work with them, you know, OK, at that time, they're getting a four to 7%. Well, could they support 4%? OK, were they interest only? Right. Right. So, you know, just hands on approach. But really, during that time, it really turned socially acceptable to be foreclosed on.
00:17:15:10 - 00:17:27:14
Ryan James
And that was detrimental to everybody as a whole, you know, so people didn't realize how that trickle down, in effect, property values throughout the whole nation right?
00:17:28:08 - 00:17:59:23
Lee Murray
Yeah. You know, and that makes me think of I think it makes me think of fraud, right? We've talked about fraud a lot. And in fact, it's probably a good time to plug your your new podcast that's about to launch called Paper, where you talk about fraud and you talk about cryptocurrency and FTC and Bitcoin exchanges and all kinds of fun, new future money type of things, defi related things.
00:18:00:04 - 00:18:24:00
Lee Murray
And I'll link that in wherever this is posted a link out there. A lot of really cool conversations that are happening there. But this this makes me think of some of our fraud conversations. You know, where you basically have a whole team, I would say, you know, have a whole floor at Surety that is dedicated to fighting fraud for money service businesses.
00:18:25:12 - 00:18:39:23
Lee Murray
I mean, I would be interested to get some of your thoughts on fraud, as you know, in context to small growing businesses. You know, because I think a lot of the businesses are B2B, but a lot of them are B2C, and they have a lot of fraud both ways. Yes, that is true.
00:18:39:23 - 00:19:02:19
Ryan James
And that is the you know, what you see in the media all day long is, you know, consumers being defrauded. And that, of course, happens. And there has to be consumer awareness and there should be a lot of these consumer protection laws that help. But really, it's a two way street, you know, just in that effect, you know, that person they were trying to defraud us.
00:19:03:23 - 00:19:36:24
Ryan James
And consumers are creating, too, a whole lot of fraud in the industry that was created, you know, so all of that fraud is kind of built into the pricing in regards to your small business owner, depend on what you sell. You know, you're going to accept payments and many different areas. You know, my brother in law, he builds in manufacturers in closed and trailers you know whether to a store if somebody wants to store their motorcycles, their lawn equipment, that kind of stuff.
00:19:36:24 - 00:19:56:13
Ryan James
So these are high ticket items. They run from a few thousand to tens of thousands custom made. And, you know, he of course is going to accept check cash money workers get paid as it goes. But, you know, there was a year where he, you know, took a credit card transaction. That person was there and everything. It was nearly $10,000.
00:19:56:22 - 00:20:34:09
Ryan James
And then later chargeback and he had to fight that in loss lost 10,000 so he did everything on his end. So that is a huge cost to that small business. Luckily they were able to get that trailer back and have that chargeback but now yeah he can't sell that trailer for $10,000. It's now used and impactful but you know, if he wasn't in a good position in strength, that one thing could be a domino effect and cause cash flow problems and you know, businesses a lot of times don't go under because they're not profitable.
00:20:34:09 - 00:20:58:10
Ryan James
They go under because of cash flow. You know, they have to buy the raw materials. They have to pay their employees before they're getting paid. So there's a lot of upfront cost goes in until they get paid. So, you know, and that's where there could be a lot of benefits to accepting cryptocurrency as opposed to a credit card for larger ticket items because you don't have that chargeback.
00:20:58:10 - 00:21:25:12
Ryan James
Right. Right. It's putting that ownership then on the consumer, vetting the business. So it's kind of a swap. So there's applications to that so really, yes, you know, the paper podcast, you know, will dove in into different areas of what is true. You know, you have fraud on both sides and you know, what protections are there yeah.
00:21:25:13 - 00:21:51:03
Lee Murray
You know, and I want to touch on the cryptocurrency side of it, but for business owners who are not really in tune with Bitcoin and the blockchain and all the different, different things that are coming that are going to be beneficial to a large degree for them, you know, in terms of fraud, how can they what should they be thinking about how to limit the amount of fraud that comes through their business and in their dealings?
00:21:51:03 - 00:21:55:08
Lee Murray
I mean, I think that story about that your brother in law is a great, great example. I mean.
00:21:55:08 - 00:22:25:22
Ryan James
Little things, too. If you're accepting credit cards, understand your rights and what the risk is, you know, whether it's, you know, early on, everybody should obviously have that chip reader. But, you know, there's different levels of degree if you're accepting online payments, then as a merchant, there's a level of degree of fraud that you may be accepting, whether it's a presentment or whether it's covered by the phone and you're getting the CV on the card.
00:22:25:22 - 00:22:44:16
Ryan James
So you you kind of need to know those things because it's not if you're going to get it and it's win because in this day and age, right, the consumer could have received your get your goods. Maybe they were just unhappy with it. They have buyer's remorse, you know, and they go in their app and dispute the charge, their credit card.
00:22:44:16 - 00:23:06:12
Ryan James
And now that's affecting your livelihood, right? You know, right. So be proactive, be upfront. You know, if somebody has an issue with your product, you know, know those things, maybe it easy is easier to say send me the brought it back or refund your money as opposed to them. Then doing a chargeback and affecting your percentages and ratios later down the road.
00:23:08:07 - 00:23:44:21
Lee Murray
Yeah. So it's thinking through on the front end. Then you know, how are people going to receive my product or service and how are they going to use it and what could be going through their mind during those that that time, you know, I've seen on Amazon comes to mind. You see the product descriptions are changing now where they're much more involved around how they're explaining what your experience is going to be so that it's they're setting your expectation for when you receive this product we don't want you to send it back because essentially when you read through the lines, that's what they're saying.
00:23:46:08 - 00:24:05:19
Lee Murray
And so you know, maybe maybe for businesses it's it's about whether it's a product or service. It's about thinking about that interaction and the experience that they're going to have. Because, you know, as a marketer, I know, you know, we talk a lot about this is a lot of it is about experience these days. And that's what people are are spending their money on.
00:24:05:19 - 00:24:33:10
Lee Murray
And I think that even goes to to when they buy products or when they buy a service from a traditional type of business like a lawn company. I mean, I think that people want to have a certain experience and they have an expectation in their mind. And if that's not satisfied, then they just charge it back or they just say, you know, I'm going to take it back to Target or Walmart or Amazon or wherever.
00:24:33:15 - 00:24:51:20
Lee Murray
And I think they're sort of starting to apply that that that thinking across the board, which can damage businesses in their cashflow because now they have all these chargebacks. They have product that they either don't have on their shelves now or do have and can't sell so I think that's that's that's good advice.
00:24:52:16 - 00:25:25:11
Ryan James
Too. When you start out and if you're a one person shop, you can be profitable and smaller margins but then you have to realize, OK, now I want to expand and I'm moving from my house to a facility and I have other employees as your business grows, you have to have more margin in your product to make as much money because now you're adding on a lot of additional cost more taxes, more payroll taxes, and it just keeps adding on.
00:25:25:11 - 00:25:56:19
Ryan James
And I remember the I heard or listening that a very successful business owner and he said every time my business tripled, I had to learn a whole new set. So where they went from one employee to three employee was completely different. 927. And so and I can see that too, because where we're at now at about 36 employees OK, if we're to triple, then I'm going to have to have, you know, more different titles of bank employees.
00:25:56:19 - 00:26:22:19
Ryan James
So now I've got additional other costs. We're going to have more, you know, maybe someone specific now to h.R. Maybe someone specific to this to where, you know, outsourcing portions of it through payroll providers fine now this size. So a lot of times as you grow, if you're not getting less there and your cost of building your product or getting that, your other expenses are going to expand.
00:26:22:19 - 00:26:33:09
Ryan James
And so sometimes growth is not always the best because there are a lot of additional expenses you're adding yeah.
00:26:33:19 - 00:26:54:13
Lee Murray
I see that, too. And I think that's really the biggest struggle that I see CEOs having from my vantage point going from a smaller company to maybe a midsize company is not being able to change their thinking about how they're taking their business to market. And that's across the board as you're saying, you know, for three employees, the 27 employees, your company looks different.
00:26:54:24 - 00:27:25:08
Lee Murray
You have different titles, different roles, they have different policies, different trainings. You know, you have to start putting systems in place. You know, your business becomes it's a growing organism. You know, it becomes something new. It's like a an infant is ultimately going to become a teenager. And those are two different stresses for a parent, right? But you have to be able to adapt and change with that growing organism so you can serve it well and have it serve your customers well.
00:27:26:06 - 00:27:51:19
Lee Murray
So, yeah, I think that's great. Let's talk about cryptocurrency because I think you have an interesting perspective on banks and how they what their relationship is with crypto. How how do you see banks adapting to the use of Bitcoin or other cryptocurrencies? As money changers in the future?
00:27:52:16 - 00:28:19:14
Ryan James
You know, when I am out and I, you know, I'm talking to other bankers, the majority consistencies, I just don't understand it. I just this and you know, you don't have to necessarily understand it 100% as a banker, but you got to understand it's there. It's real. Even though you may not have a customer that's an exchange. You're going to have consumers that are going to be purchasing it.
00:28:19:14 - 00:28:41:10
Ryan James
So you know, it is going to hit their bank whether they like it or not. It's either going to be drafted out and go to a Coinbase exchange. They may see deposits coming in through crack in, and they need to be aware, of course, that this does exist. It is mainstream. And, you know, it's going to happen throughout their institution.
00:28:41:21 - 00:29:01:14
Ryan James
So, you know, banks have a level of monitoring that we have to do. So, you know, sure, any bank we know that we have compliance. You know, we're in a highly regulated industry. So my approach is I take compliance. To me, compliance as a profit center. You have to do it. So you better be as good and as efficient at it.
00:29:02:03 - 00:29:30:07
Ryan James
And so that's where I have really set my. And culture is compliance. Yes, we have to do it we're going to be better than everyone else. You don't have to have a large size. You don't have to be a $3 trillion bank to have good compliance. You just have to know what is going on in your business, who they are, and ultimately follow the transactions and follow the money and make sure people aren't up to nefarious activities.
00:29:30:20 - 00:29:38:21
Ryan James
So, you know, that's what you have to do. So, you know, we went into compliance and we are experts in anti-money laundering.
00:29:41:15 - 00:30:00:16
Lee Murray
Do you what's your take on like the landscape of banks? And let's just talk about community banks, you know, the smaller banks, not the big banks, because I think most business owners would agree that having a smaller bank is a good, good thing because there's a personal connection there. You know, they know your business, they know you that kind of thing.
00:30:02:10 - 00:30:25:23
Lee Murray
Do you see when you look at community banks and this adoption or non adoption of crypto and the related sort of defy conversation, do you see them certain banks that they're going to sort of be weeded out over time because they're not paying attention to it? Or how do you how do you think it's going to change how banks, you know, approach lend lending.
00:30:25:23 - 00:30:54:00
Ryan James
And deposit that's going to be the same banks that will be weeded out regardless of crypto just because of change, because they're not evolving and adapting with their you know, they are stuck in their ways and they don't want to change. You know, we've always done it this way and they're not changing. So whether it's crypto or anything, they're not going to adapt regardless so I think they would get weeded out from something else.
00:30:54:15 - 00:31:25:13
Ryan James
And inherently, bankers don't like crypto because there is no centralized Asian. You know, banks process everything through centralization, but also in theory, like individuals are not going to completely go away and be 100. Not everybody is going to go into 100% decentralization either. You know, there's a risk to that, too. So, you know, there is a way that banks can maintain their aspect, centralization, be responsible.
00:31:25:13 - 00:31:59:13
Ryan James
It is still, you know, you have your money in a bank you do have insurance, OK, you don't. And cryptocurrencies you don't. Right. So you've got that aspect. So, you know, banks aren't going away. You can transfer and I can. Yeah, I can see. You know, there's definitely going to be a lot more regulations as it comes with cryptocurrencies and you know, whether the FCC wants to get on it's store value, isn't it the stock or selling so much of the transaction is the state by state.
00:31:59:13 - 00:32:29:04
Ryan James
So it really needs to be a little bit more centralized for the ready for them. So they're not having to comply with each individual state so I see some standard across the board and yes, I can see where banks can play a major part and to possibly even hosting wallets and having this secured. And, you know, why can't we level up later on and even have insurance on products later on you know, why isn't that possible?
00:32:29:13 - 00:32:57:09
Ryan James
So I think there's a lot of technology and it all, you know, interconnect because, you know, crypto is not there's a ton of transparency in crypto. It's not completely anonymous. There are those things. And ultimately when crypto and especially large amounts, once it's touching the financial banking system, the banks have to know that that money generated was from legal means.
00:32:57:11 - 00:33:26:09
Ryan James
I mean, that's right. It's always the way when we open up accounts, we have to have a reasonable belief of who that individual, who that business is and whether or not this money is from ill gotten gains. I mean, we have to and that's fine. I don't think anybody can really dispute that. I think individual was, you know, if he wants to majority of people and consumers, they just don't like the price.
00:33:26:09 - 00:33:47:21
Ryan James
And I of the government. So they like that aspect. And I can understand that would get out of my business. You know, if I want to buy X, that's my business. Leave me alone. And I get you know, but overall, I think everybody can have a consensus of you don't want you human trafficking you don't want terrorist activities.
00:33:47:21 - 00:33:59:01
Ryan James
You don't want my large scale money laundering operations and cartels like I think we all agree we don't really want that and we need to do our best to keep that out of our financial systems.
00:34:01:06 - 00:34:29:15
Lee Murray
Yeah. So it sounds like I mean, it sounds like to me banking if it innovates and and really thinks about the consumer, it can become it can stay relevant long term. I think in the short term, I agree that banking is still very relevant. But in the long term, I think you can stay relevant by being part of the mechanism that supports a truly supports the consumer through compliance fraud, you know, and possibly transactions as well.
00:34:29:15 - 00:34:53:12
Lee Murray
Continual contingent going on. But I think it's going to take bankers to rethink their business model to a large degree. As time goes on. Otherwise, I mean, just like any other business there, you know, customers are going to go where they want to go and what suits them. So they have to have a value in the market, what's the value?
00:34:53:13 - 00:35:04:20
Ryan James
And it's going to need advancements and the federal government and this centralization as well. So, you know, you know, they've got to do some upgrading.
00:35:04:20 - 00:35:35:21
Lee Murray
Yeah, so that's that that I have another question about that. I think more of a broader question, I guess, is that how should small businesses be thinking about their relationship with a bank these days as we're talking about this bigger picture of all these different things that are coming and happening with banks and with the, you know, the economy, how should they think about a healthy relationship with a bank and what can a bank do for them?
00:35:37:16 - 00:36:05:03
Ryan James
Yeah, that's a really good question. And you got to think of where do you want to go from there. There's a lot of options you can open up accounts. Very rarely does it make a difference if they're in your neighborhood or online. You know what is important to you? To me, ultimate Ali, what is important is, you know, banks generally sell the same product marketing anyway, all the same bank accounts.
00:36:05:03 - 00:36:10:15
Ryan James
They all go through the same system at the end of the day.
00:36:10:15 - 00:36:13:02
Lee Murray
Function in terms of function. Yes.
00:36:13:13 - 00:36:41:02
Ryan James
So, you know, banks themselves, they may have a different differentiator on their marketing on the front end. But, you know, we're all selling pretty much the same thing. But I can tell you in 2009 when the shit hit the fan and that business was broken, you know, the f the federal government, when they came and examined us they wanted us to foreclose on everybody that was defaulting.
00:36:41:08 - 00:37:06:07
Ryan James
So they made it very difficult. If we had a loan in December, and they could afford that but they 45% they gave it was more insensitive incentives for us to foreclose than it was to work it out. Because when you worked out that loan it one of our books is a troubled debt and more trouble debts increased our insurance and you know increased our cost.
00:37:06:07 - 00:37:29:08
Ryan James
So but in spirit that's not a good thing even though if that property did have enough equity where we were going to remain hall from foreclosure, we weren't going to foreclose on that person if they could afford that, you know, it just plain insensitive. But when you do go with a large bank and they paint with a broad stroke, that's what you're going to get.
00:37:30:06 - 00:38:02:10
Ryan James
You know, Wells Fargo eliminating lines of credit and businesses, you know, over the past year. So a lot of people that, you know, in the practice. So, no, you need to know who you're dealing with upfront. So we don't do that. We're not going to paint a wide brush and say, you know, I'm going to eliminate all of my lines of credit because we individually looked at those lines of credits and we base those lines of credits now on whether they deserved it or whether they had a need to utilize it.
00:38:02:13 - 00:38:31:20
Ryan James
We're just not selling products to add to our quota, you know? Right. My staff, we're not doing that. They're not going to hit a quota for selling six accounts to one individual you know. Right. We don't do that. We're never going to do that. And so when there is an issue whether we made a mistake or whether some inadvertently happened, they come you're going to be able to talk to somebody very quickly, hands down.
00:38:31:21 - 00:38:51:00
Ryan James
So maybe, you know, on the front end, is it going to cost more? Is it more time? Maybe, you know, because, you know, we have to make a certain percentage so we can maintain that level of service because we're going to be there for you with good times.
00:38:51:00 - 00:38:52:18
Lee Murray
It's just like anything else in the world.
00:38:52:18 - 00:38:54:19
Ryan James
We're not going to run away from you during the bad times.
00:38:55:14 - 00:39:24:13
Lee Murray
Right exactly. It's just like anything, any other product in the market, if there's a there's a premium on it, again, it's a slight premium to the quality, right? I mean, if the quality is not there, was it really worth that extra half a point you got off on that loan? I mean, I've dealt with big banks from a customer service standpoint just as a consumer in the past, and it's like dealing with the government.
00:39:24:13 - 00:39:47:00
Lee Murray
That's the best analogy I can give because if it doesn't fit in their box, it's just you're completely shut down. There's absolutely that, you know, the branch manager, the regional manager, the whoever, they'll straight up tell you, I can't I cannot do anything about it and I won't my boss cannot do anything about it. And they won't and so on and so forth.
00:39:47:01 - 00:39:58:02
Lee Murray
This is a policy for this reason, and we just will not do anything. And to me, I find that just like that is that's just crazy that how that how they're able to offer.
00:39:58:11 - 00:40:38:07
Ryan James
That business point difference on that loan is going to make the difference in your business. You shouldn't be business you know, and if that's the biggest thing for you is that right now, obviously, if there's a huge rate spread, that's a different story. But you know, if that half a point is going to make a difference in your loan on that rate for you to go to a, you know, on a top for largest banks or community bank, you know, you don't believe in relationships because then the day in three in two years, three years if you wanted to modify that loan, they're not going to do that.
00:40:38:14 - 00:41:04:23
Ryan James
You know, and modifications that say you have three pieces of collateral and you're going to sell a piece of collateral and substituted for another, that big bank is not going to know how to do that. They're going to say pay us off, right? We'll redo it. And then you've got a whole nother level of costs. So where we're going to look at that, we can modify that, you know, charge appropriately just for that.
00:41:04:23 - 00:41:11:05
Ryan James
And then that saved you so much time and saved you docs arms and tangible taxes and you know, is just.
00:41:11:23 - 00:41:12:07
Lee Murray
Yeah.
00:41:13:04 - 00:41:36:05
Ryan James
Yeah. And I'll tell you, people that have done have dealt with that have had many commercial closed and have dealt with my staff and they have dealt with a large distinction they'll tell you, oh, my goodness, you guys are smooth, you're on top of it. You looked out for our interests. We reviewed that appraisal, actually, and looked at and said, this doesn't make sense and have that conversation with our customer.
00:41:36:21 - 00:41:55:17
Ryan James
And, you know, we actually look at the surveys. You know, we go through those steps and all the closing and are there we have an employee at that closing. You're not going to get that at another bank. And so if that half a point is important to you, you know, we're just not the right fit.
00:41:59:01 - 00:42:18:03
Lee Murray
So I got one last question for you before we sort of wrap this up. That is, if you could change a small growing business owner CEO's mind about anything and it doesn't have to be lending, it could or financial it could be anything that you've seen what would that be?
00:42:18:12 - 00:42:51:03
Ryan James
You know, I don't have an ego and just know because it works today, it may not work tomorrow and it's OK to go back and scrap it and start over. And I think in the life of any business, you have to do that no matter what it is, whether it's hiring procedures, whether it's how you're verifying your cash flow, every part of your business, you know, always take a step back and think, you know, do I need the changes do I need to scrap it and start over?
00:42:51:03 - 00:43:11:02
Ryan James
And it's OK to do that and watch out for a big thing. A loss aversion. Just because you've had X amount of money into it doesn't mean you should keep throwing more money after it. Don't throw good money after bad. And that's really hard because if you have, you know, $10,000 into something, you're like, oh, another thousand dollars at work.
00:43:11:02 - 00:43:36:00
Ryan James
And, you know, sometimes it's better just to scrap it altogether and start over. And that's very difficult. Once you have money into it. And I've seen that with people as they almost make decisions of how much money they already have into it as opposed to where they can go forward. So, you know, paid ten attention to that. People are more afraid of losing what they have.
00:43:36:20 - 00:43:39:04
Ryan James
So watch out for that loss. Aversion principle.
00:43:39:04 - 00:43:39:11
Lee Murray
Right?
00:43:39:19 - 00:43:42:06
Ryan James
You know, it's OK to start over.
00:43:46:08 - 00:44:12:12
Lee Murray
Thanks for being on here again and all the practical wisdom, you know, the banker can give because I can't think of another banker that would be able to, you know, relate with a small business owner as much as you can. As we kind of wrap this up, do you have any resources that you could recommend books podcast whatever it may be that you've come across, that you found value in, that you think it would be beneficial to rework?
00:44:13:18 - 00:44:33:15
Ryan James
I love that. It's got practical, quick little college you know, the creators of Basecamp on there how you know, they you know, they created an app that worked and had small functions. And even though they had all this input of, Hey, can you do this and this, they realize that like I can't do a million things crappy. I just need to do a few things right.
00:44:34:22 - 00:45:02:01
Ryan James
And I think that, yeah, pretty awesome. And then a lot of times, Megan, I've gotten better ideas outside of my industry. Of course, like, you know, I've never really had a unique idea at a banking convention, but, you know, I've gotten better ideas in other industries and how it can carry over, you know, I've been I've gotten more information from Wired magazine, you know, so you can find inspiration.
00:45:02:01 - 00:45:26:22
Ryan James
And there's this fact that always podcasts are great to listen to. You know, I like Tim Ferriss on how he digs into different things. He's got a wonderful business mind. I mean, even if you listen to Joe Rogan and the experts he puts on there, you know? Yeah, no, they don't have to be an expert in business. They can be an expert in martial arts.
00:45:26:22 - 00:45:33:14
Ryan James
And how they take care of that and how can carry forward into your life. And so, you know.
00:45:33:15 - 00:45:34:03
Lee Murray
Most of what.
00:45:34:03 - 00:45:44:17
Ryan James
You're interested in, I think, you know, it's great to hear your business because, you know, banking is boring. So I've had to make it more exciting for me to keep my attention.
00:45:46:02 - 00:45:49:09
Lee Murray
Yeah. I banking's boring, but the business of.
00:45:49:09 - 00:46:14:07
Ryan James
Banking is because it touches everybody, every business and commercial consumers and so it can be very exciting and it's really neat when, you know, we're in a small town. So a lot of loans on lending in downtown, you're seeing flourish that those businesses, you know, wouldn't be there if we didn't lend them the money years ago and now they're successful.
00:46:14:07 - 00:46:22:15
Ryan James
So that's really cool to see that's great.
00:46:22:18 - 00:46:46:04
Lee Murray
Well, thanks again. So if people want to find you, they can go to Ryan G Jane's dot com they can find your paper, the paper podcast there, which is really exciting that you're launching that pretty soon a lot of you could hear lots of Ryan's ideas much more in-depth. They're just really exciting. Thanks again, Ryan, and I hope to have you back here.
00:46:46:05 - 00:47:15:16
Lee Murray
We'll just get going hey, I really appreciate you tuning in to this episode of Explore and Growth. I'm trying to get this in the hands of as many growing businesses as possible so they can take this practical wisdom and deployed in their companies or with their teams. If you're getting some value out of this show and know someone who should listen as well, would you consider sharing it with them or leave a positive review on the platform in which you're listening or watching YouTube audience leave a comment below something you liked or your perspective on what we discussed.
00:47:17:01 - 00:47:20:01
Lee Murray
I'm grateful for everyone that tunes in every week let's keep exploring.