Michael Perito: Yes. No, for sure. And then just lastly for me, I understand it might not be the biggest strategic priority here, but with the — some of the technology projects under your belt — a very kind of disrupted and generally broader kind of fintech payments banking market and valuations down, pretty much all sectors. Is there any thought or updated thoughts you’re really to provide around kind of M&A or any opportunities to put capital to work in that arena. Just if the answer is no, that’s fine. I want to — I don’t believe we’ve kind of chatted about it in a little while here. So I just wanted to see if there’s any updated on.
George Gresham: Yes. First, I’d say with respect to the interest rate environment, as has some benefits to us and had some challenges for us. Jess commented on some of those challenges in his remarks. So I won’t repeat them. But from the competitive landscape perspective, obviously, in 2020, ’21, et cetera, in an extraordinarily low interest rate environment, emerging companies, VC level companies could acquire very inexpensive capital and in some cases, be unruly with that capital with respect to how they go to market to acquire accounts. And that kind of behavior is tempered in our current interest rate environment. We view that as a very positive development for us since we’re not generally in the trying to find capital business right now.
So that’s good. And then over the course, whatever your prognosis is for interest rates in ’24 and one of the biggest variables to our planning and budgeting process in ’24 is what to expect for bed interest rates in ’24 that we’re working through. And by the time we can give guidance, we’ll need to take a perspective on that. But should those rates decline in ’24, that could have a relatively significant positive impact on us. But as it relates directly to your question around M&A, I think that we’re really focused on building out our capabilities, the platforms, our distribution capabilities, and focused on our — putting our capital to work there as opposed to layering on more complexity with integrations, et cetera. So I would say, generally, — to the extent we would be interested in M&A, we would be extremely cautious about it.
Operator: [Operator Instructions] And the next question comes from John Hecht with Jefferies.
John Jefferies: First question is just real very technical. What’s the duration of the securities book at this point in time?
George Gresham: I believe it’s around six years.
John Jefferies: Okay. And then second question is in the consumer segment, the GDV and ARPU, like relative to recent quarters, you’re seeing different growth trajectories and different like dollar amounts. And I know that you guys took about different products that you’re kind of — that haven’t renewed? And obviously, within the GO2bank, there’s a sort of a different approach to getting a banking customer in this there. So the question is, can you characterize kind of how the customer is using Green Dot services and kind of the mix of revenue now versus like a year or so ago?
George Gresham: That’s a good question. So as you know, several years ago, we launched overdraft protection for our consumers. We offered that to principally only our direct deposit base. So that has helped drive direct deposit attachment rates is overall more efficient with our customer acquisition costs. And then ultimately, lifetime value because direct depositors are more highly engaged drive higher GDV, higher revenue per active, et cetera. And we’ve rolled that across almost all of our brands. So that certainly has been changed. I think a lot of the product enhancements and things that we’ve done also help drive engagement. We’ve offered credit monitoring products, and we’ve got a full suite of things that we’re focused on in 2024 to continue to drive retention and engagement of consumer base.
And then in BaaS, I would say just the type of partners we’re engaging with, we’ve been very encouraged with the growth of those — sort of the partners we’ve added in the last couple of years. So some of them are — some of them are SMB, some of them are in other sort of verticals, but we’re seeing good attach rates there, strong revenue for active in those particular verticals, et cetera. So, I think what we’ll continue to do is iterate on our product offerings and continue to drive acquisition efficiency and engagement. I’m not sure what my answer your question, John, but let me stop there.
John Jefferies: No. I mean, you talked about the different focuses that is there a way to explain is the standard customer, like the mix of revenue at the customer level? And what’s changed predominantly over the past year?
George Gresham: I mean, interchange though, one of the largest drivers of revenue for any of the products I’d say that’s following, in some cases, by other fees, DPV. So I haven’t seen a dramatic shift in sort of the revenue stream that we have seen, as we’ve mentioned with GO2bank, strong growth in direct deposit, and that will have long-term benefits for us.
Operator: Next question comes from George Sutton with Craig Hallum.
James Rush: This is James Rush on for George. What inning would you say we are in, in terms of running off the legacy portfolios in the consumer business and sort of how we should think about when that process might be over? And maybe when we could see the consumer segment maybe return to growth?
Jess Unruh: Yes, without providing any 2024 guidance as a [indiscernible] following comments. I do think that retailing I think we’re largely in the seventh inning, if you will, on the legacy products and runoff — so there is a possibility that in the second half of next year, we could start to see overall growth in the consumer business.
James Rush: Great. And then congrats on the new being the Service Partners this quarter and last quarter, I guess. How do you describe the banking of the service pipeline today compared to maybe start of the year? And then is the completion of the platform, the conversion sort of helping you close deals or become more competitive?
George Gresham: Thanks, James. The pipeline work — let me start with this. So a year ago, and in fact, I think, yesterday, if I recall, was Chris Ruppel’s one year anniversary in his new role as Chief Revenue Officer. At least prior to my arrival at least for a couple of years prior to my arrival, that position did not exist at the Company. And so Chris’ first job was to embed and form all of our divisions to kind of standard operations with respect to pipeline management using consistent tools, methodology, measurement, et cetera. We’ve gotten that in place. And so now I can fulsomely answer your question. Our pipeline from the beginning of this year has grown considerably. It’s qualified. It’s measurable. It’s stated on a probability-based standard.
And so our pipeline in the BaaS business and, in fact, in several of our business, I think, is healthy and growing. We I would say some areas we need to improve that is we need to improve our ability to onboard expeditiously both small and large clients. We’re going to be very focused on that type of improvement. In 2024, we’ve got a great pipeline. We have a lot of evidence we can close deals. We need to do a better job at bringing those deals into the P&L in a much quicker way.
Operator: With no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to George Gresham for any closing remarks.
George Gresham: Well, thank you, operator. I’d like to focus my closing remarks today on our colleagues and associates at the Company. It’s been a lot of work to go through this process or conversion takes a lot of late nights, a lot of weekends, a lot of effort, and we have a really dedicated team of professionals at the Company, and I want to make sure they understand that they’re appreciated and the work they have done has been extremely viable for us. So let me dose by thanking our colleagues and team members and employees of the Company. And thank you to the rest of you for keeping interested in our story. As we move along this path, very much appreciate it. Thank you all. Bye-bye.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may all now disconnect.
