Banking Reimagined As A Social Entrepreneur

Introduction, in this interview, Alan Olsen, CPA, MBA discusses banking as a social entrepreneur with David Reiling, CEO, Sunrise Banks.

Transcript (software generated)

Alan Olsen

Welcome to American Dreams. My guest this week is David Reiling. David, welcome to today’s show.

 

David Reiling

Thanks, Alan. Great to be here.

 

Alan Olsen

So David, you have a very unique background. You know, tell us a little bit about the, the picture your your background in, you know, the the meaning that it has.

 

David Reiling

Sure. So the picture that sits behind me is what’s known as lower town in St. Paul, Minnesota. And it is the place where my Italian grandparents landed and lived when they immigrated to the US. And it was a place where it was literally elderly at the time. And so it’s near the Mississippi River it flooded doesn’t smell so great from time to time. But that was the origin of, of me and my heritage here in St. Paul, Minnesota.

 

Alan Olsen

And so you’re still up there and St. Paul to this day. Yes, I am. Yep. All right. Well, let’s roll into your, your path in life. You grew up in the area, and then tell us about your college and then what you did after that?

 

David Reiling

Sure. So yeah, my journey has been Gosh, started out working for my uncle in construction. So every summer I can remember, except for one I worked construction and the one I didn’t I was a teller at a bank. And I loved being a teller and it was here it was in Minneapolis. I thought it was so exciting the people in the money and the bank that I was in that year, got robbed twice that summer. And I thought it was super exciting. I really did. I just thought this is where the money is. And there’s action and people rob it.

And so it was really kind of my first foray into into banking. But from there it was on to college, I went to the University of San Diego had a absolute wonderful experience, and started a business while I was in college. And just had a marvelous time growing that business of selling T shirts and sweatshirts and hats and all sorts of things. So fraternities and sororities in the business really took off and had contracts with businesses around the San Diego area.

And so it was cool. I ended up selling that business after I graduated, and my passion and love for banking took me to Los Angeles as a trainee in a bank that was known as first interstate bank in Los Angeles. So it was near downtown. And, you know, robberies kind of stuck with me the first two weeks of being a trainee there, the bank I was in got robbed three times. And so it, it was on that third time, that was kind of a career changer event for me. And that was the manager who was in that branch had stepped out for a moment to have a smoke.

And I kind of led the recovery of the of the bank robbery. And so you know, you’d put the tellers aside, I knew the FBI agents by name by that time. So it also happened to be the district manager’s office and she got wind of this. And lo and behold, the next week, I found myself in South Central Los Angeles, the bank robbery capital of the world at the time, in banking. And so I learned an absolute ton.

They gave me more responsibility than they probably should have from a banking standpoint, but I learned about gangs and drugs and riots and cops, earthquakes, I mean, it was a full fledged experience. But I’ll tell you, I had third time I had a gun to my head. I’m like my luck, just will, may not hold. So I, manager mentor of mine in the past at first interstate. Reeled  me in, I went over to work for Citibank in downtown and had a wonderful marvelous experience there.

And built a really nice portfolio it was was having some success and climbing that corporate ladder until my father called and he said, You know, there’s a bank for sale. It is about to fail. But it is something that we could possibly buy if if you’re interested. And so, lo and behold, a really I discovered there as I’m really more of an entrepreneur because I jumped on it right away. And so we bought this bank that was that was failing.

And boy, I got married, bought a bank, went on a honeymoon and move back to Minnesota all in the span of about four months time. So it was a quick turnaround. But it was great, great transition. That’s what brought me back to Minnesota.

 

Alan Olsen

Yeah. Going into the new model with your dad, what was it that you thought you could do differently than the prior owners dead?

 

David Reiling

Yeah, this bank had actually quite a history to it. In short, not the people that we bought it from but the prior one, he did federal prison time twice for fraud in this bank. And then the owner said we bought it from really He ignored the community around it. So the typical bank redlining, this was just a textbook example of you take deposits from the local community, but you only make loans in the suburbs. And so this was an immigrant community, and at the time, it was location or Hmong. And but it has always been in the immigrant community.

And so it was just like the picture behind me, the Little Italy, it’s just kind of where the immigrants would settle, they’d work on the railroad, etc. So when I thought, though, in this in buying this bank was really, it was clear to me that the value proposition was one of a shared proposition. If the community succeeds, the bank would succeed, if the community failed, the bank would fail. And that just seemed to be how close it was tied. It just, it needed to be that way.

And so that’s really where I think when you think about the business model, or the mission, particularly, it grew out of this need to engage in innovate with the community, new products and services, how to adapt to the environment, hire Hmong employees, understand the culture and really begin to engage and prosper in it worked. I had among bank for actually a number of years where the majority of of our customers were among in in a little over 30-40% of our staff for a month, it was great.

 

Alan Olsen

So we roll forward to then the Sunrise business model, which are currently overseeing what it is you run Sunrise, what’s what’s your good client? What’s the target market for your, your bank?

 

David Reiling

Yeah, so I’d have to say that Sunrise is it’s opportunistic. When you think about it kind of its business model. It’s really an entrepreneurial bank. So for those listeners who know the Entrepreneurial Operating System, we run on that system as well. So but the the business model of the bank is really twofold. And so it is placed based what you would think of a community bank, we have four branches in around the Twin Cities metro area, our headquarters is here. But we also have an office in Sioux Falls, South Dakota.

So the first business model has to do a lot of commercial lending to small businesses and real estate in and around the Twin Cities area, but really focused on low and moderate income communities here. In order to do economic and community development. That’s really our specialty and and affordable housing. The other half of our business model is really what’s known as called many things, but banking as a service.

So we’re a fin tech partner bank, we enable financial technology companies to offer bank products and services in a compliant manner. So maybe to give you an example of that, we partner with a company called self out of Houston, Texas, they help people either establish their credit for the first time or repair their credit if they have bad credit. And it’s a cash secured loan. But we do this nationally, and it’s through a digital platform. And last year, we did, I think a little over 236,000 loans for about $175 million.

It just kind of shows the power of digital and the power of scale in the FinTech business. And so you may not know it, but some of the gift cards that you have may have Sunrise Banks listed on the back of that card. Those are the types of products and services that you may not know you’re working with us. But you could be

 

Alan Olsen

well, I’ve sent you see how you ever you jumped in? Are you involved with FinTech as a rolled out? And following this trend? Where do you feel the banking systems will be in 10 years from now? Wow, well,

 

David Reiling

that that’s not much time you have today, but it could be summed up in a lot in terms of it is, is being disrupted now by digital, but it’s even going to transform even faster from the standpoint of, it’s not just digital, but it’s artificial intelligence, it’s automation. It’s the ability to really engage with your customer or business on a new level in using that data.

But there’s also a piece to this that is revolutionary, it allows you to well, let’s say automate the ordinary, but it allows you to customize and personalize to be extra ordinary, so that you can really serve your customers well, by knowing where they are in who they are, you may know even before they do is to certain products and services that they’re looking for. I also think there’s another aspect of it of it.

That’s I’m maybe a little biased in this but I think it’s going to be more than a consumer is going to be more in tune and engaged with not only the bank they do business with but the businesses they do business with where they consume as to what they’re all about. And so transparency I think becomes a real forward issue as to where does the bank do business who does it finance and in why does it do that? What’s its position?

 

Alan Olsen

When you when you’re you have a podcast called Next Gen Banker. Let’s go through the podcast, How did it originate? What do you focus in… guests that are coming on?

 

David Reiling

Yeah, thanks. Well, the next gen banker podcast is really I think about building the community of what I would say do well by doing good bankers. And so Sunrise has a couple of certifications one, it’s known as a CDFI, Community Development Financial Institution, it just means that the majority of our loans kind of day in and day out are to low and moderate income people or places. We’re also a B Corp, which is more of a triple bottom line focused of people planet and prosperity.

And lastly, we’re also members of an organization called the Global Alliance for Banking on Values. So values based banks, but globally, so 70 Banks, 40 countries. So the podcast itself is really about not only engaging that community of bankers, that who are socially environmentally kind of motivated and driven, but it’s also to expand and educate others who are in the finance or in the banking business, that here’s a possible career, you can have more of a purpose driven type of a career when it comes to banking and finance.

And this is a community that you can engage with. So it’s really how do I and I’ve really targeted in some cases towards maybe that younger career professional, who, you know, has choices still in terms of where they may move, and educating them about what’s out there. But our guests are from all over the world, from the environmental side, to the social side to the tech side. And so we range the gamut there, we try to stay on the edge a little bit, and also feature a musical guest at the end.

So if the podcast is very good, maybe the musical guest is.

 

Alan Olsen

So at the end of life, David how do you want to be remembered by others.

 

David Reiling

You know, I, I think the memory that people will want, or I will want for others to have, as you know, he kind of proved the fact that you can own a business and do well and do good at the same time. And you can prove that when it wasn’t so popular, but it set the stage maybe for others to carry on and to think of a business not only as a standalone on its own but a part of society, in and of itself.

 

Alan Olsen

David, it’s been a pleasure having you with us on today’s show and best wishes to you and Sunrise and into the future success.

 

David Reiling

Sounds good. Alan always great to see you.

 

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