The following is an AI-generated transcript from NotebookLM by Google
David, uh, thank you so much for joining me in my podcast today. I really appreciate your time. And, um, where are you, um, are you physically right now?
Uh, I happen to be in our Boston office today. Uh, so one Flyw Wire is a global company. We have 13 offices around the world. Uh, I am in our corporate headquarters in Boston, but generally I reside in our Chicago office.
So I see. Okay. So I always like to find out I'm really like the um what uh how entrepreneurs get to where they are and so on. So why don't you give us a little bit of your background, how you came to be associate with Flywire and we'll take it from there.
All right. Well, I'll take you on a a bit of a higher education journey as part of that. So, uh I founded a co-founded a company back in 1997 uh that was focused on solving problems for higher education. Uh so back then uh the internet barely existed. was just beginning to emerge compared to what we know it as today. Uh so what we were doing back then and that company was called Infinet Solutions. Uh what we were doing back in 1997 was online class registration and uh paying a student's tuition bill. Uh but when I say online, I actually mean through the phone. So we're doing and building what were called IVR systems. So interactive voice response systems. So the call trees we all hate today. Press one to do this. press two to do that. Uh but it would basically a student would call in or a parent could call in and nothing was really real time integrated back then because a lot of higher education was still running kind of like mainframe systems. Uh they were just beginning to move to what we what I'd consider modern ERPs today as Y2K was beginning to approach. Uh so you would call in and we'd say key in how much you want to pay uh and key in your credit card number and we would say success, thank you. Uh, and that was basically it back then. And then you would have a modem that would dial out at the end of the day, push all the credit card numbers up to the credit card networks. Uh, and then we would wait until the next day to get a response, did it succeed or not, and figure out how to proceed. Uh, so I've been in higher education building systems like that for for years. Uh, what that led to then is we started to approach and the internet started to start to mature and and even then was still very content heavy. A couple of schools, University of Illinois specifically, uh, back then the executive director, Judy Flink, who we were doing work for, came to me and said, "Hey, this internet thing is starting to grow. Uh, could you take our phone system that you built and make it web enabled?" Uh, and so that was the beginning of us building uh, tuition, billing, and payment plan systems on the internet. Uh, so back then, Infinet Solutions was uh, the first company to bring that to market. So, uh, we launched the the full tuition billing payment plan system in on the internet in 2000. Uh that was like revolutionary back then uh to be able to do a business application on on the internet. We continued to innovate uh because back then too uh everyone ran everything on premise. So we would actually configure servers, ship the servers out, get them installed on campus to to run their tuition and fee billing system. Uh if you had to push updates out to the system, you were burning CDs, shipping those CDs, coordinating with the IT to do the upgrade. Uh both laborious process and cumbersome for both the school's IT and ours. And in 2002, uh we said, "Hey, wouldn't this be great if we just managed everything for the school and hosted it?" Uh today we call that running it in the cloud. Uh back then you were called an application service provider. So we were really the first to also innovate and and bring like take and start hosting the applic ations for universities so they didn't have to manage them. Uh we also pioneered integrating into the as Y2K transitioned or as higher education transitioned from Y2K to modern systems we pioneered doing real-time integration into Peopleoft uh Lucian Banner colleague and all the major student systems. Um roll that forward uh and I I sold the company off to to another company called Nelnet their president. president uh of their higher education division through 2010. I decided to go do a few other things. So, this is the journey to Flyw Wire. Uh and I did some other endeavors. I got several uh old clients calling up and going, "Hey, can you come back? No one's really innovating in the space. Uh we need to modernize our systems. Uh we need to go through a tech refresh." And this was roughly in in 2014. Uh and so I decided to come back in into higher education. Started up another company to back then called OnPlan. Uh we were focused on modernizing the tuition, billing and payment world. Um I bumped into an old friend named Sharon Butler who was one of the originals that founded Flywire. Flywire was primarily focused at that time on doing crossber payments for international students. Uh and they're super successful and their clients were also asking, can you provide a domestic solution? Can you do the full tuition billing and management for all of our students? And then Shar and I decided like hey let's combine uh and solve the entire student ecosystem right so I was just kind of focused on domestic flywire was focused on crossborder and we said like all students should have the exact same awesome experience regardless of whether you're international or domestic and the school should be able to serve you holistically not differently and that's what we've set out to do.
So okay okay well that's uh brings back a lot of memories about what I went through uh in academia my entire career and uh in fact u the thing about the modems dialing up believe it or not I'm I was such a geek when uh the when the ATMs first started u and you could dial into them I actually programmed in basic my TRS80 computer how to dial into that and I I would type in you know the codes from my the vendors and how much money and it took more time to do that than it did actually do it by hand, but I know exactly what you're talking about. So, um you know, moving forward and uh seeing what um your business must be like now, times have changed and uh why don't you um just briefly tell me about some of the major challenges that universities have today and and what's changed in the past couple years.
Yeah. Um so, several things, you know, first and foremost, one of the ways we design and build our products is We go into the market uh interview a bunch of our clients, prospects, listen to the market on what their challenges are and that really sets the pillars of what our innovation is going to be uh for our product team and we've been hearing a lot of key themes coming from higher education. Uh one of the first one is they got to do more with less, right? So there was kind of the great resignation that was a byproduct of COVID where a lot of uh the student financial services staff retired uh and then no one's really backfilled those roles. There's been budget cuts So the student financial services office is basically having to deliver the same level of service uh but with a lot less staff. So we have to help automate that right uh because this expectation from the students and families is high level of service right but without the necessary staff we provide software to help improve that process. Reduce the call volumes coming into the institution so that the institution can really focus on those students that have the real need and have the real challenges not just the the day-to-day uh questions that can come in. Uh so we're focused on helping institutions do more with less through the automation of our software. The other area where institutions are beginning to face pressure on is pressure on student recruitment and retention. Right? Everyone's been talking about the enrollment cliff. And so you know uh one of the things we always like to say and focus on is like the financial journey of a student is just as important as the academic journey, right? And as the market changes, people will be looking at like how easy is it for me to understand what I owe, how easy is it to navigate my financial experience so that I can move on and go to my academic experience, which is primarily why I'm there, and go and get my degree. Um, so we're focused on on helping them solve those problems, like how do we make that financial journey extremely easy? How do we help them with recruitment and retention? Uh, on the retention side, it's even dealing with students that may have left the institution due to some financial burden. And so, they've left the institution with a balance Right. And so we want to help that school collect on that institution, on that student. Uh but also do it in a friendly fashion versus throwing them off to a collection agency. Um and we're focused on making education more affordable too. Uh and we're doing that with our our payment plan offering. And I would say that even impacts more so nowadays in international students, right? As higher education institutions are looking to address the the enrollment cliff. One way to begin to do that is recruit he more heavily from international students. So what that means is you're now kind of going downstream in the international student say from upper class to like middle class where your upper class international student traditionally had no problem making a massive one-time tuition payment. Uh but the middle class international students also need a payment plan but they haven't domesticated in terms of setting up a bank account yet. So you need to be able to offer a payment plan uh that allows them to pay from their country with methods that matter to them. Um, and then we're also working on just, you know, transforming the overall financial experience through modern technology. Most of the systems that are out there, uh, I can claim it from my old system were built in circa 2000, right? Uh, and so higher education needs a technology transformation in this area and we're helping drive that.
Understood. Yeah, there's a lot of moving parts and, uh, I know part of it is certainly the uh, technology itself has probably probably made it easier or less expensive to do uh what you do these days compared to the uh even 5 10 years ago uh all the the cloud processes and so on. Uh where does uh financial literacy come in? Um is is it an issue now? The parents are usually the ones involved although the students especially in graduate school can be quite involved and how uh how does that present a problem and how how do you go about uh educating uh students and parents?
Yeah, so financial is literacy is really important topic in higher education for students to understand what they're signing up for, what their commitments are. Uh our our product uh offers like what we call a financial responsibility agreement. Uh so when they student is coming in and you can this institution can configure it but like what are they really agreeing to when they begin paying the institution? Uh in terms of like overall training and education that isn't an area we're solving directly yet but institutions have be asked us like what can we do to help them? So, we are researching like what type of education or training tools that we can offer in terms of improving financial literacy uh again both for international and and domestic students.
How has uh the pandemic um how's that affected uh your operation and what the schools are going through? I know there's a lot of u in fact my own institution that was like the um straw that broke the camel's back. Uh we were 200-y old institution and uh we uh apparently they uh in fact I helped them build their latest online uh systems but uh they couldn't really make it and they eventually merged with another university here in Philadelphia. Um so it's it's kind of sad to see some of these old institutions go. Um there was another um Catholic university here in the Philadelphia area that I I did some moonlighting with and and taught and they also went under were merged into a Villanova University. Um, how has that affected your business? You have fewer fewer customers, more demand for for different kinds of services. How does how's that happen?
It's we we haven't had fewer customers as a byproduct of it. Though, as you mentioned, you do see some of the smaller private institutions struggling a little bit, right? Uh, but from our side, it's helped driven uh drove innovation for us. Again, going back to you kind of had that great resignation that happened as a byproduct of co institutions of up their budgets. So, schools have to do more with less. Uh, and so that's why they're relying on us to deliver that technology to improve improve the service. Uh, allow students to to self-s serve and answer all the basic questions themselves. I do think it also, you know, forced and as you said in your case, forced institutions to take a look at their technology, right? Because they're forced to go online. A lot of schools were not prepared for that. And as a byproduct, they're thinking like, how do I address and do overall technological transformation. I need to modernize my systems from the ground up, whether that's doubling online courses to an improved financial experience all the way through. Right. Uh and so a lot of institutions are are coming to us to help uh help them with that journey.
So it sounds like you've do a lot of custom work. It's not just they buy software software off the shelf so to speak and uh and plug it in. It sounds like you need to do a lot of handholding with each institution.
Uh so we don't deliver custom software. Uh so I'll roll that that back. We do deliver uh the our student financial services software is a product that is configurable. We do business process mapping within the product uh to accommodate some of the institution workflows, but we do have a standard product offering that we can go in and streamline and operationalize a lot of their student financial services aspects.
Uh what happens when a I think what 50% of students uh don't graduate from the college they started at um how does that complicate matters? Do do they carry debt then from one institution to another? Do they stick with your product? Um do you do you do you sort of hand off to another kind of financial system when they switch colleges? How does that work?
Yeah. So if a if a student moves on to a different college, uh they'll they'll enroll in the new college and if that uh institution is running our software, that student will begin paying paying through us. Um The best case scenario is the student leaves university A to go to university B and doesn't owe anything to university A and they just start their journey over. Uh the beauty of that with our software if both of those universities are running the software that student already knows I know this experience I know how to set up a payment plan. I know how to manage all my account right uh because they've already had that experience. Additionally uh in many cases what we call our authorized users or parents that help pay for that. Uh if that student had set up an authorized user at university A, that authorized user would just carry over with that student to university B. So the parent doesn't have to do anything new. Uh in in a not so great of a case, maybe the uh student leaves university A with a past due debt and goes and gets enrolled into university B. That's where university A can use our collections management software to begin engaging that student in a friendly fashion to get them repay their past due debt uh without having to send that student to a collection agency. Uh which is just a better experience for that student because collection agency doesn't hit your your credit score. Uh you're not having someone that's not associated with the institution calling you. And traditionally collection agencies will charge either the student or the school somewhere between 20 and 30% to collect on that debt. Uh so it's not a a great experience for for either. And our software allows institutions to collect in a firstparty fashion that's friendly and and no charge. and no no you know credit scoring damage to the student. So uh what we see for universities that run that is a pretty significant reenrollment uh process as well because it's a friendlier fashion right most most students will leave a school with uh because of some financial impact that hit them in a moment they correct they repay their debt in a friendly fashion and then they can go back to the same institution.
Got it. Got it. My wife just uh attended her college reunion and uh of course uh They go through a lot of uh you know uh awards and give them certificates and this that and of course the ultimate goal is to get them to donate. Are you also hooked hooked into the alumni systems since you're about collecting money?
Yeah, as I like to say uh we streamline the financial journey for for a student from enrollment to endowment. Uh that's that's my I like to say. Uh so yeah, we can uh we have outside of just what I'd call core tuition and fee. Uh we do a lot of ancillary payments around campus. Uh we have an estore product uh and schools can use that estore product to set up like a donations page and alumni giving. Uh it's used often for like student services that want to sell t-shirts and things like that. Uh as an example, one of our large customers that runs our estore product has uh 650 storefronts set up. So those are like different departments on campus. Each storefront can have a variety of product s and they've got like north of 3,000 products that they're selling through us. So, uh yeah, so as I say, enrollment to endowment, uh we'll help them with.
So, how does it look? Um what's the typical experience of uh and I assume it's mostly parents that are going to be using your product. Um um unless maybe the graduate students uh do it themselves. Uh I know students these days, some of them don't even seem to use a desktop computer. They want to do everything on their phone.
Are the parents getting to that point too where they they want to have that convenience of just doing everything on the phone? Is that something you've seen?
Yeah. Yeah. So our system, you know, when we design our systems and begin, you know, our our work on everything, we always take a mobile first approach. Uh because our assumption is and we know that the world is moving there. So most people begin designing on the web. We say what is our experience going to be like on the phone? That's where we start our design and then we expand. Okay, what's the next? What's it going to be like? on the iPad, what's it going to be like on a on a desktop? And we'll even go as far as to like what's it like on a PS5 or an Xbox because we know that like you see it in our system, uh, you know, I always make the joke at like 2 a.m. you see someone jump on from a PS5, make a tuition payment. My joke is they probably came home from the bar, started playing Fortnite, uh, realized they owed a payment, stopped Fortnite, launched a browser on PS5, made their tuition payment through our system, and went back to playing Fortnite. Uh, as an example. Yeah. But but our statistics in in our system, we run north of a 50% mobile utilization uh of people making viewing their bills, making payments through us.
Do you update your software on a you know um quarterly basis or something that you put out uh updates as they happen? Um how does that work?
Yeah. So unlike the old days of burning CDs and putting them in Hale uh and that would happen like at best once a quarter more like once every six months to once a year. Uh we are follow what's called continuous integration continuous deployment processes. So these are modern processes. Uh our we do anywhere from call it one to probably 10 releases of our product a day. Uh so we're continuously releasing our product building up features behind the scenes through feature flags uh with small increments. Uh the benefit of that is it allows you to go from test and to slowly build it up into production and measure it before you're ready to fully release it improves reliability significantly. And we do that without the system ever going offline. So we deploy multiple times a day with no downtime and it just slowly builds up and then when we're ready to say publish the feature, it's already been out there for months and we just turn off feature flags and it's published to the community.
I like the technology behind some of these things. Do you care to tell us um what platform you built on? Is it Is it AWS or some other technology?
Yeah. Yep. So our core hosting infrastructure is in AWS. Uh so we have uh we run in uh so within AWS you have a region and then within region you have avail availability zones. Uh so we have our production region is what's called AW uh uh AWS east. So uh the east region and we run in two availability zones there. So in theory like if my availability zone in the east region one failed, I could roll to availability zone two in the east region. Uh because they are in the region but separate. Uh if the whole east coast went dark for some reason as an example, then I would roll to my west uh region and in my west region I have two availability zones too.
Got it. Yeah, you've got all the bases covered. That's the way you do it these days. U how has uh the advent of AI in the past couple of years, how's that affected at your your road map or things that may maybe you've already implemented either as a company or for your product.
Yeah. Uh so we use AI today as part of our help desk. Um so you know as an example for international payers that are paying through our systems uh they will communicate directly to us on behalf of you know we'll help support the school. Uh and so we have integrated AI into our help desk. So a student can come into international student if they have questions about what's going on with their international payment or how to do something do a bank transfer as an example. Uh they can go to to our help desk arena chatbot which is AI powered will drive uh the interaction and answer their questions. So that's really helped driven our like overall response time and and improve contact rates uh with our with our international payers that are coming through. Uh behind the scenes without saying too much uh we we do a lot of fraud monitoring and transaction monitoring and and p looking for pattern recognitions. uh and we use AI in a in a large variety of ways for monitoring our payments in terms of matching uh fraud detection, pattern detection, things along those lines.
I remember discussions uh you know from admissions saying you know we don't want to see that credit card number, we don't want to see a social security number. We that's all on the somebody else's system because uh really take on a lot of uh responsibility there I can imagine.
Well listen are there any other um big changes coming down the pike and any um future um improvements or or products that you want to tout before we sign off?
So, a a couple of things uh one, you know, what we was really innovative and revolutionary that we launched just a couple of years ago and is now really gaining traction is we were the first company to uh digitize 529 payments. Uh again, we we listen to to our our customers. Uh we have a what we call our a fab which is our Flywire advisory board and and several years ago they came to us and they're like, "We love all your other technology. It's great." But they're like, "529 payments are just painful. We just keep getting checks." And not kidding, they took pictures, videos, just showed us people like stacked behind checks or opening them and then manually like updating the student system. Uh, and you know have to was a two-sided problem which are the kind of problems we like. So it was a problem for the school for the number of inbound checks that were coming in. Uh, And it's also a problem for for students and parents uh because through your typical 529 provider, if you're doing a check, you have to know where to mail it. So, you don't always know where to mail it to. They put the mailing address in. And so, a lot of times the check would end up somewhere else other than a student financial services office, which then could lead to they never found it and you didn't make your payment and now you got a class registration hold put on or it does take time to liquidate a 529 account and get the check in the mail. So, someone that's kind of like no or is a procrastinator. Like their students are always getting registration holds because they're trying to make a payment at the last minute, not realizing it takes two days typically to liquidate a 529 account and another seven days for the check to show up, right? Uh so we set out to solve that problem. We've partnered with several of the largest uh 529 providers and they've tied into our payment network. And now if you go into a Flywire partnered 529 provider, you can choose pay electronically and we digit that payment. and update the student system in real time. Uh our our customers have been like it's life-saving. Uh we've moved dispersed over three billion electronically. Uh and we've like saved like thou hundreds of thousands of checks which is which is great.
That's great.
Another new thing we are rolling out uh we've got beta clients running on it now and it's picking up a lot of traction which is another big pain point is our thirdparty invoicing uh product. So this is where it there is a sponsor uh of a variety of students at an institution. Saudi Arabia as an example. So like some government a agency is paying for a bunch of students to go could be Boeing, could be some large company. And typically the third parties are saying like I want to be invoiced this way and I want the students to be line items and so forth. And so it's it's typically most schools have two to three FTEEs just managing the invoicing of the sponsor because it's the sponsor party that's making the payment for all the students and a variety of and the majority of them are international uh agencies. Um and so we've built a product now that is helping automate that entire thirdparty invoicing and payments uh process again solving the it's painful for the third parties and it's painful for the school and solving both sides of that equation.
Ah very interesting. Yeah, sounds like a great product. Well, listen um been a pleasure talking to you. I I learned a a lot um and and uh I want to thank you for spending some time with me here today.
All right. Thank you, Rodney. Appreciate it.
Thank you, David.
---
