July: An Interview with Matt Burke, President & COO Of Agora Data

[MUSIC] Welcome to used car news podcast. Use car news is your top source for fast and reliable news that car dealers can rely on for this evolving industry. Hey, welcome everyone to this month's edition of the used car news podcast on your host Jeffrey Blatt. And today our guest is Matt Burke. Matt Burke, you'll be familiar with some of these names. He is a co-founder of President CEO of Agora Data. He's also CEO of Center Street Finance. And the big news, of course, is this year he became president of the National Automotive Finance Association or as we in the business call it any F Association. Welcome Matt to the podcast. Thank you. Thank you for having me. It's been an honor to be on a few interviews, but this one is especially important to talk about the NAF. And really what we're doing this year as a focus. Perfect. Okay. Let's just go a little bit back around you. You're with Agora Data and Center Street Finance. You just tell me a little bit about how you got into finance business. Yeah, you know, so kind of similar to the legacy with NAF. You know, my dad was one of the founding members of NAF. I actually, you know, he got me into this business, the car bug bit me. Being a dealer, a car dealer for decades and then making the move into the finance company industry. And then, you know, that's where I kind of joined in. You know, that's the kind of the bug that bit me was the car business, but even furthermore focusing on the finance company side. It's a great industry to participate in and it was a great way to kind of take some of my entrepreneurialness and throw it into an industry that has it rampant within the car dealer side. That's also in the finance company side. Lots of banks, right? So it was a great focus to kind of for my career. Great. What's your dad's name again? Steve Burke. Okay. Great. Excellent. That's good to know. And now with your experience in the finance side, what do you guys, what do you guys try to do at a Gora and your business there? So at a Gora, we unlock basically capital markets for the car dealer, right? We make them into kind of many finance companies, but really overall, we're really taking all those loans and, you know, we take them to the scourization market and package them together, right? But the cool and uniqueness is that we get the pass back what we call additional loan profit back to the dealer. We make it into a little bit of a many finance company kind of that they get to understand all the secret sauce of modeling and everything so that they can, if they want to understand that modeling, but we really simplify it down, right? We take something that's really technical and simplified into should you or should you not do this loan? Should you or should you not add it into the portfolio that you could earn additional loan profit on? Right? And it's really kind of changing the way that finance works and talking about how can we help these car dealers build wealth? Because, you know, everybody's worried about what is that next chapter? What's retirement look like? How are all these big major brands going to impact what the future is of being a car dealer? Right? And that part of that is should they buy the real estate? Should they start their own, you know, kind of reinsurance company? Should they? What should they do? Well, a gourd is very plug and play with that. They should keep the loans, keep the ultimate profit that they can make on financing those loans. Yeah, that's great because that's the challenge for them as always. You know, you want to you want that? You want the cash flow, but sometimes you need the capital. And so this sounds like you have a little bit of both worlds there. This is a little bit of the both worlds, right? It's not just like standing up your own kind of bank line of credit, starting your own servicing center or anything like that. This is plug and play. You really don't feel the difference on the front end of that transaction. Then how you would sell alone to another lender, right? And so this is really plug and play in that instance. And it really helps these folks build wealth. And that's really what we're about. And do you hear from your your clients, your dealers, wherever about, you know, what they like? What was different about it to them? And what are the good things that you hear from them? One of the best things I think is this error of kind of transparency, right? It's, you know, in this space and we'll talk about, you know, kind of best practice sharing with N.A.F. and all of that. Sure. It's really about that. It's really about the sense of community that we come together with the card dealers. Okay. And you take their opinion and say, okay, do we need to change the program? And really it's about this overall alignment of interest, right? So the very thing this is is that they're building their own portfolio, their own wealth. And it's very similar to like a 401k, right? Some months you won't be able to put as many loans into it. Some months, you know, you don't need as much cash for expenses so you could throw more loans into it. But it's this collaborative effort to build a portfolio. Is there something to you guys have been, I'm sorry, is that something you guys been doing for a bit? Yes, something we've been doing for quite some time. 2020 is when we started. Really focusing on various aspects of the dealer community. In 2017's when we established a Gora, right? In 2020's when we launched what we call a Gora capital. And that's what serves the community to allow them to basically take those loans and make more on them. Keep that upside profit. Now that happened around the year of COVID. Did COVID affect you one way or the other or oh, yeah. That was, you know, we started out in 2020 when COVID, you know, everybody was getting kind of COVID money, right? So it was kind of good in the beginning in that sense, but really uncertain times, right? And then we get to, you know, 21, tail end of 21, 22 and 23. When the industry as a whole, you know, had experienced spikes and frauds, spikes and bad loan performance coming off of the COVID years. You know, so we've had a really fun history here at a Gora, you know, jumping in and kind of hitting the gas when, you know, you have to do it really with the right way, right? You have to manage that risk the right way. Really lucky how we kind of got into it. And, you know, kind of continue that evolution every day, right? We call it kind of the evolution of a Gora. It's actually a document that we maintain here, which is kind of the story of a Gora. And it's just not only narrative, but it's this story that shows you kind of change logs. And it's really important because you can see the changes in our business over time and track those. Thanks. And people got to check out a Gora's site because they do, they do give out information. They do reports and things like that that'll give you a little hint of, give you a little sense of what's going on in the industry. So that's the generous part, which is great because I know that's more of a service. I would think the industry and so that's kind of helpful for dealing with keeping eye open to see what, what may be coming or what's happening. Yeah. Definitely. And it's, it's again, playing off into this whole topic of NAF and a national, you know, how on a national basis, how can we collaborate together? And it's again, just the same way. It's about this alignment of interest. How can we together build a better industry? And it's not card dealers and finance companies separately. It's together. How can we together build this industry in the next chapter? Well, that's, listen, that's a great, that's a great transition point here to NAF for people. This is a 30th anniversary of NAF and Matt Burton now is president of the group. Now with all the stuff you got going on, how do you manage this? First of all, let me ask you this, what prompted you to get involved? Because we know that with these trade groups, that's volunteer work. You're getting into it. You're, you're, you're spending time there that you could be spending time in business. Why was it important for you to get involved in any other? You know, not only is it, it was important from, you know, my dad being an early member in the F, but Jim Bass, who has been kind of a mentor to me throughout my, oh, yeah, reader. You know, I've known Jack, Jim, since we live next to him in, in Arlington a long time ago. Get out of town. Yeah, that's great. So, you know, but Jim has, you know, was another reason for me to get involved. But more so, it's about giving back to this community, right? It's again, and I, I'll say it probably too many times, but it's really about how can we together build a better industry? Not, we could be competitors, but the same time share information so that the bad actors don't take us all down. Right. It's about, you know, how together we can best practice share. How can we build relationships, collaborate and learn from one another, right? And that's, that's kind of what I want to focus on, right? And, you know, N.A.F. is a great forum to do that because it's specific for auto finance. That's, that's our sole purpose. And it's, we don't do any lobbying, right? It's the main driver is, is collaboration. And it's the best practice sharing. It's, you know, how can we stay informed, connected and prepared for what's next in our industry because, you know, technology is really going to take us to that next level. And are we really prepared as an industry? And, and you're obviously, the members involved in N.A.F. are good. How do you get that? people who are in members to get involved because we see it on the independent dealers side with N88 or other groups that they don't a lot of them when they're outside don't appreciate and when they inside they never leave they like they they realize what they've been missing. How do you how do you when you talk to guys maybe your businesses that aren't in the NAF is this the way you pitch it? You know this is the way you pitch it right and so a lot of folks come to the national you know the annual conference that we hold here in the DFW area but even though the conference is over the conversation shouldn't stop right and that's where that's one of my focuses you know a few years ago we developed something called the NAF networks and what I would like to do is to continue to push that right the staying connected doesn't just have to be from a compliance aspect because compliance is ever moving right has to be across the entire business right if if my head of risk here wants to say hey I'm seeing some weird noise I want to go ask the community they need a community to reach out to not just the folks that they've worked with in the past but the community of folks to say you know what do you guys see how can we say this and it was really interesting because the other day I forget what news outlet had it but somebody was saying that is the car dealer now the last line of defense against fraudulent you know and such right that's great and you know that's an interesting thought because they've been kind of that frontline right they're kind of responsible if there was any fraud that happened in that beginning you know or misrepresentations I'll call it because misrepresentations is better word because you don't really know what happened and where it's kind of hard to prove yeah yeah and so these misrepresentations you don't know what happens and is that car dealer really that last line of defense well yes and no it's a partnership right and that's something that naf should help with right and how can we bridge that gap you know we have some car dealer members um you know which is is great and it's important because it's that partnership so how do we continue you know is after the conference it doesn't stop it's about continuing with that community and that's really what I want to help drive home this year is that these naf networks which meet about three times a year what is the naf network what is the naf network and for people don't know so the naf networks are just separate little smaller groups smaller networks right of folks like for example we have a leadership network okay folks will from leadership can focus on leadership topics you know how are you motivating your employees and sense of you know remote work hybrid work how are you recalling folks back to the office if you're recalling them back to the office right that's an example it doesn't have to be secret sauce it's just in general how can you solicit a group of folks for example you know one of the big things that I was a big believer in and you know I've had a few life events that haven't let me go to it yet but this year I get to go which is the executive exchange in September right okay and that's the thought process it used to be called the C-Suite retreat now it's about the executive exchange and it's all about exchanging ideas what are you seeing what is going on you know and that's one level level to keep people engaged is how can we get some of the younger leaders in their organizations experience quicker yeah how can we get them directly with the folks in one of those networks such as the the leadership network right where they get to talk to all these folks that are you know titles all over the place from C-Suite to VP level to maybe even director or an analyst level right how can you bring them into the room and and all have good ideas and all build off each other all right and that's really what it's about again given back to that community best practice sharing and and kind of innovating together perfect that's great you know it's funny talking about the dealers last line and an idea had a Houston auto fraud police officer in there a few years ago and he talked about similar type of thing where they work with dealers the dealers would say listen I got this thing here this looks kind of funky and I remember they they arrested this person and then like three years later I guess the first I got a job for the first of friends then I've come again because the dealers said yeah this I don't know this this paper looks kind of funny even though it looks straight and you know straight up but he's he got a bad vibe from it and as a result they were able to make an arrest on that yeah I mean again partnership community it's all about that that's what I mean that's what businesses really all about the end of the day profit and you're like at a grower our mission statement is to basically make the transaction profitable for all well that doesn't mean that it is it's one sided it's making it profitable for the consumer well how do you charge a interest to make it profitable we eventually charge them less interest right you know profitable for the dealer profitable for our investors the capital markets all stakeholders right and that's that's really what we try to drive home is profit for for all is there anything at any of members you know I hear things like you know I always think of like sometimes lenders will either anything but I guess I maybe bigger lenders sometimes they're kind of late getting into the rush in early getting out are you seeing any trends that or hearing concerns from your members about stuff they're looking at and be one more specific a little bit more specific when you say that you're talking about just trends that they're seeing in the industry yeah yeah and on their ends whatever I mean I don't know or or even trends that they're concerned about it could be like compliance can be something else I mean the hot topic right now is AI okay yeah yeah for sure in hot topic is how can we stay ahead of the regulation meaning we know eventually regular take regulation will come how can we stay ahead of the regulation and do things the smart the ethical way you know using models for the good right because you know if you use an AI model how do you know what biased are in there you really have proper model governance on these AI elements that people are allowed to use right how are you implementing into your business right now that's a really heavy deep conversation right sure you know but that's a you know you're starting to see folks how can I implement it now there's been kind of this trend of how can I do it in a secure way yes the recent headlines have kind of driven folks into okay well maybe I need to pull back a little bit right you know and that's a big deal right validating that the information that the models give back to you is correct right it's been around in risk forever right well AI is really a model right are you driving it through your risk organization or are you driving it through just you know slot almost like with you know you at the very basic levels say college students or kids doing reports or okay it's one thing they're using it to help you for research as another thing do you know what you're getting you know and and yeah and for you guys it's it's money and fines and everything and it's wrong right but it's you know it's it's there's a good side there's bad side right so you use it correctly right so for example you know one of the one of the you know one of the models that we use is it actually caught misrepresentation of income it's said that it's seen the pattern of transactions multiple times over a course of a couple months right so that's a that's an example of good AI right catching good but bad AI is like I said the starter call you know is that dealer or earlier is the dealer last line of the first line of defense right right if they got brought all stuff that was created by AI and it's pretty good how do you know it's real or fake for sure yeah that's great yeah that's a great and that's the topic everybody's talking about and I don't think that's gonna be going away anytime soon and that's where that's where you know as an N.A.F. we have to grow together as a as a whole industry and I mean that again with the car dealers and with finance companies together obviously there's there's you know things that finance companies need to focus on more and things that dealers need to focus on more but together you know as a hope as a as a community with an a.f. how can we you know this year how can we create more opportunities for folks to engage and connect right and and that comes through you know holding events and getting folks of all different levels together very good and it always comes like you're you're fired up for your year is president which is really what you want when you have a leader of a trade group like that oh yeah definitely and I Jennifer who's the head you know who's the director she's does an amazing job she has made that conference almost like this you you want to be there and you want to be there the whole time because there's these events every single evening that are like a big party but it's it's a desirable event to stay at and it keeps people engaged the entire time from saying oh I fly in for a day and I leave it keeps them there the whole conference right and now it's how can we take that and keep that going the whole year that's great and yeah exactly right those networking things you know that it's not just drinks in order that really is you're you're talking to the people you're gaining knowledge you're gaining wisdom from your fellow folks, your fellow members. - Yeah, I think the folks back at the office here joke a little bit every time I go to one of them 'cause I'm messaging them saying, "Hey, I'm out of this." - Right, yeah. - It comes from a conversation, whether it's over food, cocktail, or whatever, that's going on, it's really comes from the conversations and what the conference actually puts on. That's a big focus of what I think is, people have been hearing from the industries. How can we stay ahead with technology right now, and how can we stay ahead together with the car dealers, right? Everybody's talking about how fraud is rampant with AI, but how can we stay ahead together? - Right, excellent. Boy, this has been great conversation, Matt, and folks. These are the Asians, your leader, your association, NAA, Finland, Jennifer, executive director, correct? And while the conference is gone, you do have these upcoming things. You can ask Matt or Jennifer going to the NAA association looking up than the NAA networks find out what they're about. This upcoming executive exchange that Matt was talking about here in the podcast, anything else that you wanted to leave our listeners with especially people interested in NAA? - Not only do we have that executive exchange, but we have some of our compliance workshops, compliance champions workshops coming up in October as well here in the DFW area. So definitely register for those, but become a member. Join a community that really wants to give back to this whole space. We really got to grow together. We got to adapt together, innovate together. Stay ahead of everything that we can, because if not, it will be big tough markets and big major headlines and we'll all hurt. We've taken some hits recently over the last 12 months as an industry, so how can we stay together? How can we stay ahead? And that's really important. That is what NAAF is here to bring us, which is keep us connected and learning. - This is great. And folks, we're listening to our members. Definitely check it out. And those two are listening to our members. Definitely spread the word. Matt's got some ideas and obviously the NAAF is trying to build out these networks to work with you folks. Like he said, not just the ones a year, but multi times a year. So check out again, those compliance seminars as well. Matt Burke from Agorah Data Center, Center Street Finance and of course, NAAF. Thanks a lot for joining us on the UseCaronoos podcast, please. - Thanks a lot, Jeff. (upbeat music) Thanks for listening to UseCaronoos podcast. Each month we'll bring you fast and reliable news that car dealers can rely on for this evolving industry. For a free subscription to UseCaronoos, please go to usecarnoos.com.