BM Technologies, Inc.

as our primary driver it's also our mission but you know we want to make sure that our students know what options are available to them and we definitely believe that our account is a really great option for them and so we're going to continue to focus on the experience between when their school lets them know that they have money waiting for them and how can we make that as frictionless as an experience for them to receive that money in any of the choices that are available to them and and hopefully highlight and make our product better as we respond to what our customers are looking for. So it's an obvious choice to want to go with us. And so that then is also about engagement and then keeping them on as we expand our products roadmap over time for retention. So it's really being able to convert more upfront, engage them and get more activities through things like the cashback rewards and other products and features. and then keeping them over a lifetime by being able to expand the different products that we offer them that could align to the different stages of life that they would be going through.

Thanks, lovely. And continuing with the student side of the business, you referenced that the average spend was up. It was also up, I believe, in the BAS side of the business also. The question is, given the macroeconomic data that is out there, there's some indication, recent indication, that the consumer may be slowing, other indications that the consumer may be holding up. But what's your belief as to why your average spend is up in both of those verticals?

Yeah, Bill, this is Jim. There's a couple of factors going on. Number one, I can't discount the influx or influence of inflation, right? That's certainly a driver and our spend for across the board for both verticals. But I think also, I think it's to the elements that Loveline spoke to of increasing the usability and features, right? As our Particularly within our, our higher ed vertical as students find it easier to use our services and our products is they end up spending more and we're seeing that come through and not only pretty much all of the measures, right? Whether we look at the new account signups, which is not only. Q3 year over year, but also full nine months year over year as well. But then also the increases we're seeing coming through in spend as well. So I think it's a combination of both of those factors. There's a natural lift coming from the inflationary environment, but I think there's also the lift coming from the increased usage from our existing user base.

That is helpful. And also in the opening remarks, you all noted that your focus right now is higher ed and and a little less so on the bass vertical. What opportunities do you see in the bass vertical when you are ready to push that direction again or you feel like there's been some permanent change in that industry that will lead it to not ever be what we all may have thought that it could have been?

Yeah, I think it's a good question, Bill. And I would say that we're going through a transitionary period where there's a lot of different opinions on how it will all shake out. And so I just want to highlight, number one, we're really grateful for our business and how it's set up because we have such a great sort of diversification between having sort of the opportunistic based fast business that we're set up to capitalize on. if that industry continues to prosper. But then simultaneously, we have a beautiful business in the higher ed space that's not going anywhere, that's a continuously replenishing market. It's a large market. With the existing schools that we have in place, we're barely penetrating the opportunity. Forget about selling another school. and what opportunity that could bring. And then on top of that, we're only selling one product to our colleges and universities today. And we gave a sneak peek that we're rolling out a fraud tool, an ID verification tool. A lot of schools are struggling with enrollment fraud, which has downstream effects of really making schools lose a lot of money. So there's just so much untapped opportunity in higher ed, and it's also our higher margin business where we're not splitting any of that business with any partners. So we're really excited. But to answer your question about Bass in particular, you know, what we want to kind of tell the market is that it's a transition period. You know, you read in the news every single day, there's like a news story about Bass. And it's just clear that there is regulatory sort of oversight and pressure that is coming on the industry. There's also Bass banks that are really becoming stronger competitors in the space and kind of creating this disintermediation threat to sort of just technology-based players. So we're just mindful of that. That being said, if you have the technology and if you have scale and you have access to capital, I think you're very well positioned to play in this space. So I think that the door is very much open for us. To me, it's more of the unsexy deals. It might not be the brand names because brand names take a long time to implement these programs. And it's sometimes more of a headache than a benefit. And it can be unprofitable when you have that much sort of negotiating power being a big brand. So I think that the opportunity, if we do decide to take advantage of it would really be more niche use cases where a lot of deposit opportunity is flowing through, some sort of disbursement similar to our student business is flowing through, and there's a large enough customer base that the scale is there to make it a profitable endeavor for us, and that's what we're well positioned to capitalize on if and when those opportunities come.

Great. Thank you both.

Thanks, Doug. And we have no further phone questions. Brian, do we have any web questions?

Yes, we have a web question going back to the higher education business. Of the over 700 college partners that you have, how many of the 200,000 new account signups were from existing versus new colleges? And what are your overall plans to increase the number of colleges and universities that you are working?

Yeah. So I would say number one is I just want to emphasize, I really do love this point, not to diminish the opportunity on the sales side for universities, but it's more to highlight that it's amazing how unpenetrated we are in our existing ecosystem. So with the schools that we have relationships with today, that's primarily where those account signups are coming from. It's not the new schools because new schools take time for implementation and for the First, cohort to get used to signing up through the process, et cetera. So it's really our existing base that we're benefiting from the new signups to answer that part of the question. Second is, let me just go back to the point of our existing market share. So today with the schools that we have relationships, we are touching about a third of the market of the eligible students that can get a refund. Again, we're dispersing about $11 to $12 billion for those schools that we're doing business with today. And less than $2 billion or about a billion and a half only of that is flowing into our checking accounts. And so there's great opportunity as we improve our product, as we respond to what students are saying that they need, as we get that upfront conversion funnel more frictionless and easier to kind of work through, you know, we can really penetrate more of that opportunity. And then we've already talked about the engagement and the retention side. As it relates to new school opportunities, even though we already are the market leader with about a third of that market opportunity, there is still a strong pipeline for us to go after. And we are looking at how do we, you know, continue to stay strong from a competitive offering standpoint, where today we offer full service refund disbursements. We want to be able to offer a value add where that full service disbursement number one can be better integrated within the existing ERP systems and partnerships that schools have on campus so that it's an easier choice for them to pick us because it's just easier to roll it out. So we're really working on behind the scenes, how can we become an easier sort of technology rollout so that schools, it's an easy decision to pick us. And then second, we're looking at how do we kind of go from a monoline product of full service disbursements that we offer as the main product today to being able to expand to products that are relevant to our universities and solve another pain point for them to just create a stickier relationship, a more value additive relationship, and potentially a more revenue, you know, generative opportunity for us as well. And an example of that is what I already mentioned before, the fraud tool, the IDV, identification, verification tool and product that we're expecting to roll out to new opportunities, new schools and existing schools sometime in Q1.

Thank you. I see no other questions on the webcast, too.

So, Levline, I'll turn it back to you for closing remarks.

Great. Thank you. So thank you again, everyone, for joining us today. And it is the holiday season, so I hope everyone really enjoys the holidays, and we'll see you next quarter. Thank you. This concludes today's conference call. Thank you for your participation, and you may now disconnect.