Speaker 1:
From the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, welcome Inside the ICE House. Our podcast from Intercontinental Exchange is your go-to for the latest on markets, leadership, vision, and business. For over 230 years, the NYSE has been the beating heart of global growth. Each week, we bring you inspiring stories of innovators, job creators, and the movers and shakers of capitalism here at the NYSE and ICE's exchanges around the world. Now let's go Inside the ICE House. Here's your host, Lance Glinn.
Lance Glinn:
Earlier this summer on July 31st Synchrony, that's NYSE ticker symbol SYF, marked a significant milestone by ringing the closing bell at the New York Stock Exchange, commemorating a decade as a publicly listed company. Over the past 10 years, Synchrony has been a pivotal financial partner for millions of customers across the United States, facilitating everyday purchases through its credit card offerings, and helping individuals achieve their financial goals with high-yield savings accounts and CDs. Longtime listeners of the Inside the ICE House podcast may recall Synchrony's earlier appearance when former CEO Margaret Keane joined us virtually in May 2020 for episode 177.
Whether you are familiar with Synchrony as a customer or a podcast listener, the company plays an integral role in driving economic growth for businesses of all sizes. Through his innovative technology, diverse product offerings and robust capabilities, Synchrony creates a dynamic ecosystem that seamlessly connects partners and customers. Four years after our first in-depth look at Synchrony, we revisit the business this time with President and CEO Brian Doubles. A seasoned leader in the financial services industry. Brian has been at the helm since 2021, steering Synchrony towards rapid growth both culturally and financially.
Today, Inside the ICE House will delve into Synchrony's evolution since its inception in 2014, celebrating its achievement of reaching a decade as a listed company. We'll explore how Brian's leadership has transformed Synchrony into one of the most desirable workplaces and examine key partnerships and acquisitions that have delivered substantial benefits to all stakeholders. Our conversation with Brian Doubles, president and CEO of Synchrony is coming up right after this.
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Lance Glinn:
Welcome back. Remember to subscribe wherever you listen and rate and review us on Apple Podcast so that others know where to find us. Our guest today, Brian Doubles, is the president and CEO of Synchrony, that's NYSE ticker symbol SYF. Brian was named CEO in 2021 after serving as president for two years. And prior to that, executive vice president and CFO. A graduate of Michigan State with a degree in engineering, Brian spent time with GE and GE Capital Retail Finance before playing a pivotal role in Synchrony's IPO in 2014. Brian is a member of Rhe Business Roundtable and Bank Policy Institute.
Brian, thanks so much for joining us Inside the ICE House, welcome to the New York Stock Exchange.
Brian Doubles:
Thanks for having me.
Lance Glinn:
So on July 31st, 2014, Synchrony made its debut on the NYSE. A decade later, the company returned this summer to ring the closing bell, celebrating a 10-year milestone since its IPO. Let's begin by reflecting just on the journey leading up to the initial listing in 2014 and really the immediate aftermath of it. Just what are your recollections of the challenges faced leading up to the spinoff from GE, the preparations, of course, for the IPO, and then the excitement of the listing day, and all the success afterwards?
Brian Doubles:
Yeah, I'll tell you, I remember that day like it was yesterday. And just walking in the building today, I was flooded with memories of that day and the culmination, all the work that went into it. We're a regulated bank, so to do an IPO like that and separate from GE, we had to have approval from the regulators. That was a massive process. Getting the company rated, building out the public company infrastructure, building out our own technology infrastructure. We were part of a much bigger company, and so we leveraged a lot of those processes, a lot of those platforms. It was just a massive effort.
And I remember that day because we had just come off a two-week road show selling the IPO to investors, and we were exhausted. We were a little stressed out.
Lance Glinn:
Much sleep in the two-week road trip?
Brian Doubles:
Not much sleep at all. Two, three cities a day every day for two weeks. And great experience, but I remember waking up that morning. I woke up early, I couldn't sleep four o'clock in the morning and there... Something happened in the market, I think it was something related to Argentinian debt, and the pre-market was down 3 or 400 points that day. And I was like, "Oh, we picked this day to do the IPO, like come on." And I remember initially thinking, "I really want the stock to trade up." And I saw what the market was doing. I was like, "Man, I really want the stock to be flat." Flat would be a great answer. And I think that's where we ended up.
But just being here today brings all of that back and how proud we all were of the company that we had built and really optimistic about what was ahead, about the future. And I'll never forget that day, it's probably the highlight of my career still looking back on it, and to be sitting here 10 years later is really special. It's really special. I'm as proud of the company we've built. Today, I'm even more optimistic about the future as I think about the next 10 years. I think I was telling our team that was here, we had our senior leadership team here. I was telling them, I was like, "Look, we just had a great decade, but the next one's going to be even better. Going to be even better."
Lance Glinn:
So day one, July 31st, 2014. We're now approximately 3,700 days after that day right now. Ten-year anniversary, again, July 31st, 2024. You just mentioned it in your last answer, but how would you describe your sense of pride and the enthusiasm and the excitement of reaching that ten-year milestone and you leading the company into it and then obviously into the future for the next 10, 15, 20 years?
Brian Doubles:
Yeah, I couldn't be more proud of the team and what we've accomplished, the business. We've seen really good growth, I think really good performance. We have partners that are happy. We've added a lot of new partners, we've renewed a lot of existing partners. I just feel like the franchise is poised for that next chapter. I feel like when I took over in 2021, one of the things that we did was we reorganized the company. And this was a company that hadn't been reorganized in over a decade. So it was a big change, but we felt it was the right time and it would prepare us for the future. So we aligned our business units by industry. We created a growth organization, we created a product organization.
And one of the things we were trying to do was get more nimble. We're a big regulated institution, but we compete with FinTechs, and they're fast and they're nimble, and they get in a room and they decide and they go and they put things in market, and they test and learn, and that's what we needed to create. So really starting in 2021 is when we built out a lot of those agile processes. We reorganized with the product and the customer experience teams, and it's really paid off. When I look back, starting with the IPO, we grew receivables by 20 billion in our first seven years. After we reorganized, it only took us two years to grow 20 billion.
Lance Glinn:
So you go from spinning off from GE to a now global company with thousands of employees. And you mentioned the team, you mentioned culture. Synchrony has one of the best... Earning recognition as one of Fortune magazine's Best Companies to Work For. What do you believe has been the key to achieving this great cultural success and having your employees really love to come to work every day and love to come to work at Synchrony?
Brian Doubles:
We've always had a very strong culture, and we've had a great culture and we pride ourselves on that. The biggest thing that we've done, particularly through the pandemic, is really listen to our employees. And that sounds simple, but a lot of our best ideas in terms of how to support our employees unique and special benefits, they come from our teams. And during the pandemic, we did something, we did an ask us anything call. Myself, the leadership team, we would just stay on this call as long as there were questions. And that was really great because we got to hear directly from our employees on what were they concerned about, what did they need in terms of support, what were they looking for from us? And that helped us develop wellness programs and different support infrastructure.
But one of the things that they also said was, "Wow, this remote work is really working." I even saw it myself. I was surprised. I was wrong. If you said in March of 2020 we could get 20,000 people home fully operational and the business would still be humming, I would've said, "You're crazy." But that's what we did. And as we got into this rhythm and we built new processes and we moved to more agile stand up operating rhythms, the business was performing really well. And we started to listen to our employees and I said, "Wow, this really helps me balance the demands in my personal life with work." Employees were happier, they felt better supported.
I saw it myself. I have two young girls, 12 and 13, so they were 9 and 10 at the time. For the first years of their life, I wasn't around to get them on the bus in the morning. It was a good result if I could get home in time before they went to bed. I wasn't getting home for family dinners. And all of a sudden we're spending 24 hours together, which has its own set of challenges. That's not perfect either.
Lance Glinn:
Trust me, I know that.
Brian Doubles:
So I got to feel a little bit myself. And as we started to listen to employees and employees that they're taking care of elderly parents or sick loved ones, and just how this helped them managed through that time period, we said, "We should make this permanent." And we did that in October of 2020, which was very early, we're still in the throes of the pandemic, but we knew we could operate the business successfully like that. And we haven't gone back on that, and I don't think we will because if the business is performing and our customers are happy, our partners are happy, we're growing, we're meeting our deliverables, we're delivering projects and products on time and on budget, then I don't see a reason to change. We took an already great culture and then by just really focusing on listening to our employees and making sure that they felt supported, I think we're able to take it to a whole new level.
Lance Glinn:
So Brian, on July 31st, again, the date of the 10-year anniversary since the IPO, you penned a letter titled A Decade of Partnership: Celebrating Synchrony's People, Growth, and Impact. And in it, and I'm going to quote you here, you wrote, quote, "We know creating a world-class culture doesn't happen overnight. It takes patience, it takes intentionality, it takes investment, and it takes a commitment to partnering with people." So while its clear Synchrony has achieved a culture that many others aspire for, do you believe that the words perfect culture exists? Or is it something that's constantly needing to be worked on, something that's constantly needing to be changed and evolving, and asking those employees on a regular basis, "What can we do for you?"?
Brian Doubles:
Yeah, it's definitely a living, breathing thing, and it is constantly evolving. You never get to perfection. We're not perfect. We're far from it. But I'll tell you what you need is the commitment of all the employees. It's a priority. That we value culture, that it's a differentiator, that it helps us better support our partners and our customers. And I think all 20,000 people truly believe that. And so we're focused on it, but you have to be willing to change too. And that's always one of the challenging parts. When you think you have a great culture, it's easy to say, "Okay, let's just not break it." But if you just say that, you say, "Let's just not break it," then you're not evolving. And the world around us is changing every day, and you have to respond and react to that. That means you have to do that for the business and respond to those external dynamics, but it means you have to do it for the culture as well. We've been through a very difficult few years as a country, and that means that you need to support your employees differently given those circumstances.
Lance Glinn:
So I want to talk about you. You're a Michigan native, a bachelor's degree in engineering from Michigan State. How does one go from graduation day as an aspiring engineer to GE's financial management program to a long career with the company as well? What pushed the move away from that at one-time engineering aspiration?
Brian Doubles:
I'll tell you, I didn't select engineering with a whole lot of forethought, if I'm honest. I was in high school, I was good at math and science, and so engineering felt like a natural fit. But as I got through college, I got a better sense for what the day in day out would be for an engineer. And I said, "I'm not sure this is right for me." In my senior year, I took a whole bunch of business courses and finance and I said, "Okay, I'm drawn to this. I like the idea of charting a company's strategy and seeing the whole operation, not just a piece of it."
So when I was interviewing for jobs after college, a management development program was really what I was looking for because I didn't know exactly what I wanted to do. I was self-aware enough to know that I didn't know a lot. And this program was great. It was four six month rotations where I got to see different parts of the business, and I got to feel out a little bit about what interested me, but also where did my skills align. And that was great. And then I did another series of rotational programs, management development programs where, again, I was moving every six months. A big international component to that in Europe and Asia. I got to see different business units. This is back when GE had NBC. They had plastics, aviation, healthcare, energy, transportation.
Lance Glinn:
So there was a ton of diversity for you to see?
Brian Doubles:
Ton of diversity. And I ended up cycling through a lot of those businesses. But I landed in financial services. And I did a short-term role in financial services and I was really drawn to it. I can't tell you exactly what it was, but I was very drawn to it. And that's where I ended up spending the rest of my career. And I moved around a little bit within GE Capital at the time, commercial finance, commercial real estate, but the consumer finance business was really interesting to me. It just felt different, different strategies. I loved being close to the consumer and the experience and how they're using our products. And so that's where I ended up.
Lance Glinn:
So we just spoke to how Synchrony's adapted since the pandemic going and doubling down on that flexible work environment, that work from home. You just touching now on all the various management trainings you've been through. You've run divisions, you've obviously run companies running Synchrony now. How have you seen the executive, the CEO, the leader adapt over the course of your career, not just from 2020 on going through the pandemic and now out of the pandemic, but over the course of your career, both at GE and now at Synchrony, how have executives and the CEO level adapted to all the changes?
Brian Doubles:
Yeah, it's a great question, I think. If I go back, it seems like when I was earlier in my career, let's go back 10 years, everything was very methodical and felt very slow compared to how we're operating today. I remember putting together a strategic plan, which took a couple months, and then you would revisit it a year later. You'd put together your operating plan or your budget for that year and you'd revisit it once a quarter and see how you're doing. And just looking back on it felt very slow. And I think the biggest change for me is just how dynamic the CEO and the leadership roles and companies have had to be, not just because of the pandemic, but because things are changing so rapidly. Instead of building a plan and then set it and forget it for the year, you're in there every week looking at what's changing in the external environment, what's changing with our partners and our customers. Consumer dynamics are changing every day, how they want to use financing, how they want to pay for things.
And it just requires a leadership team just to be a lot more responsive, a lot more nimble, a lot more agile. And so over the past five years, we've overhauled all of our internal processes. You'd have like a weekly staff meeting. Now we meet three times a week, stand up, go around the horn, 30 minutes, everybody's informed, we make some decisions and we go. It's just a totally different operating model because things are coming at you from all angles and it just feels... It's such a dynamic environment. You have to match that with being very nimble.
Lance Glinn:
So let's get into Synchrony, works with iconic brands like Lowe's, Sam's Clubs, Dick's, Verizon among many others, as well as local and small businesses that build America's economy. How do you and your team tailor the individual products and services to make sure that Synchrony helps both those large brands that I mentioned before, as well as the mom-and-pop shops, as well as those that really form the backbone of America?
Brian Doubles:
Yeah, it's not all that different actually than how I talked about supporting our employees. You have to listen. You have to really understand what they're trying to achieve. You have to understand their strategy and then figure out how we can support it, how we can complement it with our financing products. The big partners, those tend to be very customized solutions. We're highly integrated at their point of sale. We're highly integrated in their mobile app, online. We're everywhere. They're communicating with their customers and people are purchasing. That's a different model than what we would use for a mom-and-pop electronic store where it's a little bit more, "Here are the financing products, here's how to offer them." We do some training.
But I'll tell you, it's really to listen to that cohort because their needs and the pressure that they're under is very different. And that's where I think we add a lot of value. And we add a lot of value to those partners even outside of the credit program. We can actually help them on other topics, HR, finance, other things that we do where we have a more established process will help our partners. And we do that just in the spirit of partnership. But it means a lot to that group because they do have a totally different set of demands.
And one of the things we did in the reorganization is we realized that a lot of what they need, and a lot of what we needed to do to support our partners was common across industries. So we have a health and wellness platform. We have a home and auto platform. A lot of what they were asking us for was common. So one of the things we did as we launched the product organization was now we create products for the enterprise. Build it once, deploy it everywhere. And that's made us much more efficient, but we're also getting speed to market times that are a fraction of what they used to be. And so I think you really have to understand the dynamics in the industry, what your partner's trying to do, and then being really creative about how you can support it.
Lance Glinn:
And you mentioned listening to the mom and pops, listening to that cohort of small businesses that, as I said, are America's backbone, really help build America's economy. And Synchrony is out there impacting those communities, both obviously working with the local and small businesses, but doing philanthropic work, doing charitable work. Stamford, Connecticut Mayor Caroline Simmons recently announced $100,000 grant from Synchrony to the Stamford Parks Community Partnership. What do you see as Synchrony's role in just fostering brighter, more resilient communities? And how do initiatives like this one with Stamford align with the company's broader corporate values?
Brian Doubles:
Yeah, it is a huge part of our culture. We love giving back to the communities in which we operate. Our employees are passionate about it. I think in the last 10 years, we've logged 120,000 volunteer hours across the company. And I'll tell you, our employees are passionate about it. We give people paid time off to do it. We love it when they support the charities that we're very involved in, but also ones that they're really passionate about. And so it's always been a big part of who we are. And I think we've accelerated some of those investments. One of the exciting things we did around the 10-year anniversary was we gave 100 employees $10,000 each to invest in the charity of their choice. And I was flooded with emails on just how meaningful that was to give them that money to support charities that were personal to them. They might not have aligned perfectly with our corporate philanthropy, but they're important to them personally. And it was just, I think, a real testament to how committed we are to giving back to the communities we operate in.
Lance Glinn:
And one that I know aligns with your personal beliefs and personal philanthropy, the Doubles Dive, a annual global polar plunge event that raises money for various organizations. Now, full disclosure, I've done polar plunges myself, that water, Brian, in the winter in whatever ocean you decide to do it in, it hits different. Let's be real.
Brian Doubles:
It does.
Lance Glinn:
It hits different. Where did this idea spawn from? Where did it sprout from? Why a polar plunge, and why has it or how have you been able to grow it since that initial inception in 2015 to now what it's become almost 10 years later?
Brian Doubles:
So the first one was actually in 2014. We don't really count it as part of it because I did it by myself.
Lance Glinn:
Okay. That's tough, I'll say, to do it yourself. It's always good to have a buddy next to you.
Brian Doubles:
I had plenty of spectators. I was the only one that went in the water. I was the only one crazy enough. But I remember reading an article a couple of days before New Year's about just creative ways to bring yourself luck in the new year. And one of them was a polar plunge. I had never done one. So I started... I was talking a good game with my wife, "I should do this, I should do this." And I said, "If there was ever a year where we needed some good luck, some good fortune, it was the year of the IPO." So we got a lot of things that are going to come together this year that need to come together for this to be successful, and I'm willing to sacrifice myself to get that done. So we went to the beach. I did it. Fast-forward to July, we had a successful IPO, company is doing well.
And at that point I said, "Oh man, I'm going to have to do this forever because-"
Lance Glinn:
[inaudible 00:26:08].
Brian Doubles:
I'm very superstitious. I'm very superstitious. I said, "If I don't keep it going, bad things could happen." I was like, "Okay." So at that point, I was anchored in it probably, I don't know, for the rest of my life. We'll see. But it was really heartwarming to see the momentum that built as I started to describe that story. And the next year, I think we had 25 employees that came out, then 50, then 100, then 150, and that's just in Connecticut. Then we started doing it across all of our hubs. And to your point, Lake Michigan is a lot different than doing it in Florida.
Lance Glinn:
I did mine in Coney Island.
Brian Doubles:
Okay, that's real. That's very cold. Very cold.
Lance Glinn:
Yeah, you're right. No, Lake Michigan definitely hits a little bit different than if you were to go down south and do it in Florida. I would think actually hits a lot different
Brian Doubles:
Yeah, [inaudible 00:27:04]. You only get half credit if you're doing it in 65 degree water.
Lance Glinn:
Yeah. When you think of the temperature difference and then obviously the water temperature difference. But it is, I will say... It's the water that gets you right when you walk in, but it's getting out of the water that really makes it colder than really anything you've ever felt before because you get the wind, there could be snow on the ground, obviously the water's cold itself, and then you have to rush to get a towel around you because otherwise you're going to freeze as you're sitting there soaked in water. So it's definitely different depending on where you do it. But I think no matter where you do it, whether it be in Florida or Lake Michigan, the point of doing it remains the same.
Brian Doubles:
Minneapolis was probably the toughest one where they actually have to cut a hole in the ice.
Lance Glinn:
Oh my God.
Brian Doubles:
And then you run through and... That one I still think about.
Lance Glinn:
Yeah, I couldn't imagine doing that. I give those in Minneapolis who did it a lot of credit. Again, I did mine in Coney Island, which definitely was cold. But to have to cut a hole in the ice or a block in the ice to just be able to do the polar plunge, I give them a lot of credit those who participated in Minneapolis. So shortly after you began as president and CEO, Synchrony launched an initiative to advance education equality called Education as an Equalizer. How do you see the role of corporate responsibility in general evolving in the context of education and workforce development? How has this initiative just helped empower students and build a stronger future, both in Stamford as well as around the globe?
Brian Doubles:
Yeah, it's all part of that giving back to the communities, and we've been very focused on communities that are frankly underserved and looking at what else can we do in addition to just donating money, how can we actually help people lift themselves up, build the skills that they need to compete for jobs? We launched a skill center in Stamford, Connecticut, our headquarters. It's been very successful. We were trying to figure out a way to do more. It's easy to write a heck and we'll continue to do that, that's an important part of the strategy. But we said, "Look, we have people, employees who want to donate their time to this outside of work, they want to coach and mentor and teach, and we have a facility that we can leverage." And it's been really powerful. And it's been great to see our employees give a lot of themselves to this cause and really help train, help develop skills for the underserved community.
Lance Glinn:
So to go back to employee wellbeing and listening to your employees during the pandemic, those ask any question calls. You're constantly asking, I'm sure, in your mind, obviously asking your employees, "How can we make Synchrony a better place to work?" You talked about it that there is no such thing as a perfect culture, it's an ever-living thing, an ever an ever-evolving thing. The annual employee survey that a lot of companies set out, it's something that's common. It's not really unique to any one company. It gets sent out usually once or twice or three times a year. Employees choose whether to or whether to not answer. And then obviously those companies make changes to differing degrees, of course. Some make drastic changes, some only make slight changes.
But outside of those employee surveys, you mentioned, again, obviously one, those ask me anything calls. What are other ways that you are actively soliciting feedback from your employees and making sure that those lower level workers, those on the front lines, you could say, are having their opinions heard and that they're seeing those opinions then put into action by you and your leadership team?
Brian Doubles:
Yeah. And I should start by saying, for our surveys, we leverage Great Places to Work. It's a phenomenal organization. We were lucky enough to make it into the top five this year. We're incredibly proud of that. I would tell you the most important part of that survey and that process is the write-in comments. So everybody scores all the questions, but what they actually write in and tell you is by far the most impactful. And I read all those comments. I go through them. We sort them by category. We look at them, we discuss them as a team. We do that by business unit, we do it by function, we do it by geography, which is important now that some of our hubs are more remote than others, and how are they feeling and what do they need that's different than what our employees are feeling maybe in Stamford, Connecticut where they have an office to come to? Those are just fantastic insights.
We take all of that data and we look at it, we try to make it actionable. And then we compliment it with regular roundtables. So I get out to our hubs and I meet with groups at all levels in the company, and we really just ask them, "What could be better? What's not working? Be critical, be honest." And our employees are, they're very forthcoming. I always walk out of those with a long list of things that we have to go work on. But the part that you said is the most important, which is what did you do with that? What did you fix based on what I told you? And look, you can't fix everything. You try and get at the items that are consistent themes across the company and focus on those first. We have an annual process to do that when we get the survey, but then we do it continuously throughout the year.
We'll do, we call them pulse surveys, which is just, we got five questions we want to ask you just to see how this is going and how it's impacting you and how you're feeling. And we'll push those out. It's quick realtime data. You get that back from the employee base and you analyze it and you move because it can't be... It can't be just an annual event. I think back to the earlier discussion, the environment is so dynamic, it's rapidly changing. How our employees feel about the world and the company, themselves, their families is changing all the time. And so getting that quick market intelligence on how are employees waking up today, how are they feeling, and what do they need is super important.
Lance Glinn:
So that's how you hear feedback from an employee. Shifting it to a customer perspective, excuse me, specifically regarding innovation. Innovation happens when customer wants and needs evolve and they progress. How do you engage the customer base? We talked earlier about listening to those mom-and-pop shops and hearing the feedback from them and what they need, but how do you really engage the customer base to identify a problem and then go about devising a solution, devising a new product, devising a new service to ultimately address that problem that they're having?
Brian Doubles:
Yeah. For the big partner programs, we're highly integrated. Our teams, they sit together, they meet on a regular basis. And then what I do is I will try and go out and meet at the very senior levels, and I really just ask them one question, which is, what could we be doing better? And they'll tell me. We have a very honest dialogue about it. I don't come in and say, "Isn't everything great?" Because that's not that helpful. I think we have great partnerships, great relationships, but I want to know what can we be doing better? So that's a whole listening campaign with our partners.
And then with the end customers, we do NPS and look at how they think about our products, ease of use, the customer experience. The customer experience has never been more important than it is right now. There is very little friction costs to moving to another product. It's relatively easy to do, so you need to make sure that the customer's having a good experience. And for us, that means it was easy to apply for credit, it was easy to make that first purchase, easy to pay their bill. If they have a question, it was easy to resolve. And we look at that entire lifecycle of the consumer to make sure that we're making it as seamless and as frictionless as possible. Our business is a little more complicated because we've got two sets of customers. We have our big partners [inaudible 00:35:28] customers, we have our small to mid-sized businesses that are our partners, and then we have their end customers. And that whole value chain needs to work and feel like they're getting real value from the services and the products that we provide.
Lance Glinn:
So I want to get into recent investments made by Synchrony. And in March of this past year, Synchrony completed the acquisition of Ally Lending, the point of sale financing business for Ally Financial, it's NYSE ticker symbol A-L-L-Y. This acquisition enhances Synchrony's reach and scale in home improvement and health and wellness financing. Just how does this deal align with Synchrony's short and long-term strategy and also obviously end up providing value to all the stakeholders involved, investors, shareholders, customers, etc.?
Brian Doubles:
Yeah, we're really excited about the acquisition of Ally Lending. I'll tell you, it's a business that we had looked at from afar. I got to know the CEO at the time, JB, pretty well. And that business for Ally was always subscale. It wasn't the core of what they did. I had asked him a couple of times if they'd have any interest in selling it. And finally he called me and said, "Yeah, okay, why don't we talk and see if we can get something done?" Because that business, while subscale for Ally, is exactly what we do. It was a perfect fit. We're in health and wellness already, we're in home and auto. They had some different product capabilities that were attractive for us, but when we looked at it, there were big synergies on the revenue side. We thought we could grow this business, we can leverage our existing merchant provider base to grow it. And so it was just a perfect strategic fit it. Frankly, I wish I could find more of those out there. It was one of those like, "Hey, this is a no-brainer. We should go do this."
Lance Glinn:
And what's your process when determining the right time and the right company for M&A? I'm sure there are tons of prospects that you see, that you look at, and obviously you can't acquire them all. You're not going to acquire them all. But what's your process in determining the right ones to acquire and when the right time is to make a deal?
Brian Doubles:
Yeah, we have a very active M&A screen that we're looking at constantly, we know the types of companies that we would like to acquire. And they're typically smaller companies where we can leverage our scale to grow them. Those are the types of deals that we like to do, those are the types of deals that we've done. You can't put opportunity on a calendar. You can't say, "We're going to go buy this company then." There's so many different variables. What's the bid ask on valuation? When are they ready to sell? When are we ready to buy? What kind of economic cycle are we in? Can we get a good handle on how the business is actually performing or will perform through a cycle? There's a lot of variables, but we do a very rigorous process where we're constantly looking at companies out there and determining who we'd like to acquire.
We also have a big strategic ventures arm that's making very small investments in startups and FinTechs. That's a pipeline for us as well. So we'll get to know those companies. We're not making a big investment, so there's not a lot of risk. We're learning a lot along the way, but those companies, as we help them commercialize their products and capabilities, those are acquisition targets for us as well at some point.
Lance Glinn:
And to Synchrony's great culture, I'm assuming that in this M&A decision-making, one of the biggest focuses is on does this company fit the culture?
Brian Doubles:
Absolutely. Absolutely. That can make or break a deal. It can look great on paper, it can look great on paper, the numbers can all work, but if it's not a cultural fit, it's not going to work. And so we spend time there. We try to get our team at all levels heavily integrated with theirs during the due diligence process. So we're not just seeing the senior executive team. We're seeing-
Lance Glinn:
From top to bottom.
Brian Doubles:
From top to bottom across many different functions and business units. So we get a good sense for that. And I'll tell you, the Ally team and our team, it was a cultural fit right out of the gate.
Lance Glinn:
So in May of this past year, Synchrony, Virgin Red, and MasterCard announced a multi-year agreement for the new Virgin Red Rewards World Elite MasterCard credit card program. It's a mouthful to say.
Brian Doubles:
That was a mouthful.
Lance Glinn:
The partnership will make Synchrony the exclusive US issuer of a multi-category travel credit card program for Virgin Red. In what ways does this partnership help differentiate Synchrony within the industry, and how does aligning with Virgin Red and MasterCard benefit company goals and ultimately objectives?
Brian Doubles:
First, we're really excited about the partnership. It's an incredible brand, and we're just thrilled that they selected us to partner with them on the financing products. I'll tell you, it's unique in the sense that there are plenty of airline cards out there, there are plenty of hotel cards out there, there are cruise line cards or financing products. This combines all of that under one umbrella with an iconic brand. And so we couldn't be more excited about it. We're looking forward to launching it and growing it. Any program like this we would consider groundbreaking, PayPal is a good example. Then we launched the Venmo card. And on Venmo we had the technology to optimize your rewards. So it just automatically put the customer in the highest reward category, and you didn't have to go in and select everything. At the time, that was pretty groundbreaking. So we're always looking at ways to do that. We want to find something that's unique and exciting and different because, one, we learn a lot from that, it helps build our brand, but we can also take some of those learnings to other places in the portfolio.
Lance Glinn:
So our guests Inside the ICE House are constantly bringing up the impact of AI. Ever since really November of 2022 and this AI boom has happened, it's really been integrated into every business in some way, shape or form. It could just be as simple as day-to-day work from employees, it could be into products and services. Is Synchrony investing in AI? Are you implementing it into what you do on a daily basis? What role does it play within your company?
Brian Doubles:
Yeah, no, it's a big opportunity for us. We are playing there today, whether it's through machine learning, data analytics, chatbots, that's been a big investment over the past four or five years. I think when it comes to GenAI, which has become more recent, getting a lot of attention, we're investing in use cases there. We've got teams stacked against it. The thing I would say, though, we are a heavily regulated institution, so we will likely not be a first adopter. We're happy to learn from others' mistakes. But it's very powerful. It's very powerful whether you're looking at coding or writing press release or pulling reports, or... It can make us so much more efficient. I would tell you most of our use cases at this point still require human intervention and human touch. So I think about it as it gives you a great first start, it gives you a great first draft, but you still need a person at the end of the day to review it and tweak it and edit it. That's fine. So we're super excited about the opportunity. We're moving a little bit cautiously.
Lance Glinn:
So Brian, you're a veteran in the financial services industry, a career that spans multiple decades. As you've seen the sector evolve and now think 5, 10, 15 years down the road, what do you view as the most notable trends and even the most notable challenges that you see impacting the sector moving forward?
Brian Doubles:
Yeah, I think specific to consumer finance, it really all does come back to that experience. And that's where we've seen the biggest change over the past five years. That's where you're seeing the FinTechs compete is that just make it easy. Just make it easy. Whether it's Apple Pay, which more and more, it's so easy to use. I use it all the time. We want our cards loaded in Apple Pay, so they're getting used. And how you make it just really easy for the customer to apply for your product, to use it, to select it if it's in a wallet like Apple Pay, because they want to maximize their savings. And there are different financing products that the customer will use depending on where they're shopping and the purchase that they're making. Today, I think we have the most comprehensive product suite in the industry. We do general purpose cards, private label, co-brand, buy now pay later, secured card. We've got the banking products, high-yield savings and deposits.
Depending on the partner and the customer, they want to choose from that menu of options depending on how they're shopping or how they're feeling that week and what they're buying. And I think we provide that. And I think that's the trend that you're just going to see continue to accelerate, and we are all over it. We have to continue to be all over it, because like I said, the friction costs of moving to something else or just not using it are higher than they've ever been. So it all comes back to that experience and just making sure that every time a customer pulls out their digital wallet with a Synchrony card in it, they have a good experience.
Lance Glinn:
So Synchrony, as I said at the start, celebrated 10 years as a listed company back on July 31st, 2024. Of course, that first day, July 31st, 2014. How are you plotting out Synchrony's future so that when we get to July 31st, 2034 and 2044, Synchrony has not only sustained its current success, but obviously grown with it and continue to evolve as a leader in the industry?
Brian Doubles:
Yeah, look, I couldn't be more excited about the next 10 years. I think we're positioned really well for what's to come. I think we built out the right infrastructure, the right processes with a growth organization combining operations and technology. We're delivering products faster to market than we ever have. I think that's going to be a trend that is just going to continue to accelerate. We have to be quick to market. We have to test and learn. We're leveraging MVPs. All of those things that we've done over the last three years, we're going to have to do all of that, but we're going to have to do it exponentially better. And at the end of the day, it comes back to listening to our partners, listening to our customers, and listening to our employees. That's how you run a successful business. If your employees are happy, you probably have happy partners and happy customers, at least that's what we believe. So far, that's proven true. I think it's going to be even more important as we chart our way through the next 10 years.
Lance Glinn:
Brian, I look forward to 10 years from now when we have you once again Inside the ICE House to celebrate 20 years of Synchrony as a listed company here at the New York Stock Exchange. Thanks so much for joining us.
Brian Doubles:
Thank you. I look forward to it.
Speaker 1:
That's our conversation for this week. Remember to rate, review, and subscribe wherever you listen, and follow us on X @ICEHousePodcast. From the New York Stock Exchange, we'll talk to you again next week Inside the ICE House.
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