Synchrony Financial (SYF) Earnings Call Transcript & Summary

Good morning, and welcome to our 13th Annual Fintech Payments Conference. I'm Sanjay Sakhrani, I'm the equity research analyst at KBW for payments and consumer finance. I think this is one of our best conferences yet of the ones that we've presented over the last 13 years. We have a 150 companies presenting. We have 1,200 meetings that we set up and 950 attendees at the event. It's sort of more into significantly more than a card and payments conference, which is what we started 13 years ago, and I think the intent has been to make this more broad in terms of the financial technology conferences. I'll push that goal today. We're obviously excited to bring you the views from leading industry executives, both from public and private companies, along with experts on a variety of different themes and topics that we'll cover over the next few days. So let me just get started with our first session. I guess, I'm going to need this mic here. Joining us from Synchrony Financial are Brian Doubles, he's the President and CEO; as well as Brian Wenzel, who's CFO. Brian Doubles has been CEO for about 2 years now, and Brian Wenzel has been the CFO since 2019. They obviously have been at the company for much longer than that. I'm not going to count the years. You guys can...

Please don't.

But thank you, guys, for attending and supporting us at this conference. So maybe we start with the elephant in the room, in my opinion, because I think everyone's worried about what your views are on the state of the economy and the health of the consumer. We're getting a whole bunch of mixed data points. And obviously, it's had an effect on the way the market is trading and your stock is trading. So maybe we could get some updated views. Brian Doubles, you want to start and then Brian Wenzel will continue.

Yes, sure. So first, thanks for having us. I think we've been at this conference for about 10 years, now I think since we went public. It's a great conference that you and the team put on Sanjay. So thanks for having us. Look, I would say everything that we look at right now when we look at the consumer, the trends, everything looks still very strong. And I think that's what people are wrestling with a little bit right now as you look at current state, you see really good spending patterns, a lot of demand for our products, balanced growth, at least through January was up 15%. So that trend is continuing. When we look at credit, we're starting to normalize like we expected, but very much in line with the outlook that we put out in January. So no matter what you're looking at, things today seem pretty strong. We look at deposit balances for the consumer. They're still very healthy. Consumers still have some stimulus left. I think we are going to see a K-shaped recovery. I think there's growing consensus around that. I think inflation at the higher income levels and higher credit levels is -- it's an annoyance. They're frustrated by it, but it hasn't deterred their behaviors or how they're spending. So I think that's -- those are all positive indicators. I think in the lower income levels, lower credit bands you're starting to see more of that normalization, not surprisingly. But when you add it all up, everything that we've seen so far kind of quarter-to-date lines up with the outlook that we put out in January. I don't know, Brian, if you add anything to that?

I'd just add a little color. On the K-shaped recovery, we do see below prime, actually normalize back to 2019 levels, spending, payments, delinquency. The upper bands are performing much better still than 2019, which is really giving us the positive belief. And Brian talked about [indiscernible] of 15%, really sales-driven, so our purchase volume is up mid-teens. Payment rates still up. Payment rate is up actually in the low teens. So it's still hanging in there, which tells you the consumers continuing to weather the storm fairly well, and that's really a buildup between savings at the higher end as well as wage growth at all levels of the spectrum. So the consumer is robust right now and continues to be as we watch them. And we've had last 3 weeks have been our strongest 3 weeks into the year.

And I guess, you got to look at the unemployment data and it's so strong across the spectrum. In fact, it might be even stronger lower down in some of the service-related jobs. How do we foot that with some of the normalization you're seeing down market? I'm just trying to figure that part out.

One of the interesting things, when I talk to our collections folks, like what are you hearing on the call, what's coming through? And we do not hear at all people have lost our jobs. What we hear a little bit now that we had never heard before is my hours have been reduced. So I think people have jobs, and maybe that second or third job where the hours in the first job maybe a little bit for some of the lower-end folks that are in that space. But listen, there's a structural change in the employment market that it's going to be really difficult to get the unemployment rate up significantly even though the Fed wants it to, but it's going to be a challenge. But I do think the -- when you came through the progress with PPP and the like, hours are being reduced for some.

Okay. I guess to the extent that we're looking out and thinking there's more volatility on the economic front, how are you guys adjusting the way you're underwriting loans? Are you making adjustments? Are there certain verticals that you're more cautious of? I mean, how do we -- how are you guys behaving with this K-shaped recovery assumption?

Maybe I'll start on this one and then turn it to Brian. I think one thing that's a little different about our business is just how important consistency is and how we underwrite to our partners. And so as you see us go through cycles, you don't see dramatic pullbacks, like when we entered the pandemic you didn't see us really start to cut like some others did. And when times got really good, we didn't dig a lot deeper. We didn't underwrite a lot deeper. We tried to stay as consistent as possible. And I think that's really important because if you look at our portfolio right now, everything that we're seeing is in line with the normalization trends that we expected. So we don't see a need to really pull back. With that said, we -- our credit teams are all over it, right? They're looking at this 1,000 different ways, ingesting data points, and they're always making little modifications, little tweaks, could be by program, could be by geography. We look at it a lot of different ways in terms of the trends that we're seeing, but they're really modest tweaks at this point. Go back to what we said in January, if credit goes, which we think it will charge-offs to 4.75% to 5% this year, that's still below our long-term target of 5.5% to 6%. So if that plays out the way we think it will, we don't see anything right now that says, oh we really got to go dramatically, pull back. But part of that is because we tried not to really dig deeper in the last couple of years that were best ever credit trends.

The one data point I'd add on to that to just illustrate Brian's point is, if you look at our new account origination, '18 through '22, it's been between 20 and 25 million accounts. We have not gone up or down. If you look at the industry, right, the 9 months in 2021 from April through December, highest ever originations in 9 months, 22 highest originations and B-21. And what people did, they try to make up for lost digit. They add a whole bunch, they dug deeper, they did things, which is why I think you're hearing for some, hey, we're making adjustments on the margin because we didn't do that. We played through the strike zone, we didn't have to do that. So I feel really good about our credit box. And listen, we have to because the origination model bring more data into our decision account management process, which I think gives us a competitive advantage versus lot of other folks.

I'd say that's one of the biggest surprises, I think, over the last 3 years as we've been heavily investing in data analytics and data share with our partners. It's something that I frankly underestimated how impactful it can be when a partner shares data with you about their customer, simple things like just matching a ship to address for one of their long-time customers to who they put on the credit application, like, okay, it's a great way to eliminate fraud and really know a lot more about that customer as you're approving them. It allows us to give bigger line sizes, allows us to approve more with the same or actually less credit risk. And so I think that's also a big advantage.

That's great. Have you guys updated that stat as to how much information you get? I know you used to give us some statistics around SKU level data and such. I mean, is there an updated number on that or...

Yes, it's funny. That was -- it used to be all we talked about... I forget what it is...

It's north of 80%. So -- I'm not sure I want to update it because it hasn't moved that much, but it's over 80% so.

And what's -- that always helped us with kind of what they were buying. But now what we really want to understand, we want to understand that individual. So how do they shop? How often do they go in store, what do they buy online? What are they buying through the app versus what do they go into the store to try on, like that. That -- putting that kind of mosaic together is really impactful, both from a marketing and growth perspective, which is how we thought about it originally. But now it's really become more than that. It's also how do you approve more, how do you give bigger lines to meet what they're going to buy in that calendar year, and how do you do it at an equal amount or less credit risk.

Got it. I guess if we were to think about a scenario where things do go bad or worse than what we think they might do, how are you guys positioned in terms of making adjustments if necessary? Like how should we think about expenses? Where are levers that you have -- what levers do you have at your disposal?

Well, look, I'd start with the credit levers that we have. And we've been, again, investing a ton over the past 5 years. If I go back, way back, past 5 years ago, it took us like a month to get a new credit model in production. Now it takes us like a couple of minutes, right? So like the tools and the information we have are just a lot more reactive, a lot more responsive. If you look at what we had to do in the great financial crisis, I mean that was just a hatchet. You just -- it was a very blunt instrument. Now what we're doing is a lot more surgical. You can go in and just tweak a dial here or there based on the performance that you're seeing and the data that you're ingesting. So just a lot more responsive, a lot more reactive, which is also a better way to operate, frankly, with our partners because you're not going in just saying, hey, we're going to just have to take off the bottom chunk, right, that we were approving. You're going in and saying, hey this is the data that we're seeing. This is the dial we're going to tweak to get the result that we need to get. And then I don't know, anything you'd add on credit?

Yes. On the credit side, the one important thing I did to go back to is the fact that we're less hours, right, our line structure. And what Brian talked about the actions we can do because we have low lines relative to our peers, you're able to control that exposure at the far better than some because we don't give out 25,000 odd lines. So it helps us manage through that. So the actions you could take, whether it's reducing people to balance, but it's reducing authorization on certain transactions really helps to mitigate so you don't get that situation where you're a long way through your targeted loss rate. It's really helpful in that means. And that's the kind of key for us to manage. And as soon as we start to see it, Brian said earlier, we're doing refinements in certain places where we see performance maybe deteriorate a little bit, but it's not across the board. So once we start to see that, we can most certainly make changes very quickly.

So one of the, I think, misconceptions that when you think of kind of managing credit, you think about it first is, okay, this individual, this credit profile, we're no longer going to approve, right? But that's really not where you go first, you go to line size, you go to, if we needed to see 6 months of consistent payments before we upgraded somebody from a private label to a co-brand with a bigger line, maybe we pushed that out to 12 months or 18 months. That's still a very customer-friendly way to do it. You're not taking something away. You're just making them. You're getting more comfortable with them before you give them the bigger line. So there's a lot of different tools in the kit. It's not just, okay, anybody with this credit profile that we're approving yesterday, we no longer can because of what we're seeing in the economy. The second part of your question, we can control expenses and bring that down, whether it's -- obviously, employment is one of our bigger ones. We can flex that. And I think our plans for this year is we're continuing to grow headcount. We can most certainly slow that down if needed. There's other expenses we can take out. We have a tremendous team that understands the cost base and can really attack that cost base if we hit a patch where we need to take other actions. And listen, we've demonstrated that hopefully through the pandemic and before.

Great. Two years ago you guys shifted your focus to 5 segments. And I'm just curious if you could talk about the impacts of the reorganization, what impact it had on business, going forward how you might look at things differently?

Yes. I think, look, the reorg has been a big success from our perspective. And as you know, Sanjay, one of the things that was really important is to get that kind of deep industry domain and it really was more of an observation that we had around health and wellness. Like that was always a business where we were so deep in terms of relationships and how we understood the market and our ability to anticipate what those providers wanted from us. What we had in the rest of the business was not always similarly aligned. So we'd have we had lows with PayPal. What those 2 partners want from us tends to be very different, right, and Amazon and JCPenney. And we had -- we had time big partners group together, but what they were coming to us for in terms of products and capabilities and solutions tended to be very different. And how we were integrating with them was also very different. Think about what we do with PayPal and Venmo inside the app is really kind of cutting edge where if you're in the Venmo app, you don't know what we built, and you don't know what Venmo did, just completely seamless to the customer, and that leverages our API platform. We have really small merchants as well who just want to plug and play something very simple. And that industry alignment is really helping us kind of get out in front of what our partners want because we're hearing it from one, we're going to hear it from another. And we're building the products now in a way that they're very scalable. In the past, we had too much customization. We would go in and a partner, would say, this is what we want and we yes, let's go do it because we're always a yes first organization. We say, yes, we're going to go build that for you. And we would build it very customized and we couldn't translate it across the enterprise. We're not doing that now because that we're aligned by industry, we're building the things that we know they're going to need ahead of wins, they're telling us they need them. We take it to them. They say, yes, that's great, and we scale it across the enterprise. So that's what's really resonated. And the second thing that we did in the reorganization though is we built a growth organization and a product organization. And that really underpins everything I just talked about because the product organization, one, their goal is to anticipate what our partners need from us, but also build it in a scalable way. So they're that control function to make sure that we're not out here customizing something and spending money in investment dollars on something that we're not going to be able to transport to the rest of the organization. So those are really the 2 big tenants. And I think it's really resonating with our partners. They're highly engaged with the multiproduct strategy. They're looking at their point of sale and saying, okay, is there a way to rationalize this? Is there a way to kind of optimize both the growth for them, but also the economic impact of that growth throughout their financing.

And that tactical change on the platform, was that a technology change? Or was that a strategy change?

It was really led by a strategy, right? And the strategy was to get -- to replicate what we're doing in health and wellness, which really was, I think, best-in-class. It's a fantastic business. And if you see how that -- how our front-end team, the sales leaders and the business leaders, they've known these providers forever. They know exactly what they need. They're able to connect the dots across the CareCredit network and anticipate what they need. And we said we don't really have that in the rest of the business to the same extent. We certainly have the relationships. But what we weren't doing because we had big partners with small partners in digital with multichannel, it just -- it wasn't as strong as it was in healthy model. So it really was a strategy shift led by strategy.

And the product you have for PayPal, which is sort of embedded finance type stuff, are other merchants asking for that type of product? Is that something that's going to be used for other partners?

Well, they are different -- they're just a different partner. They're not a merchant in the same sense that our other partners are. But I can tell you that what all of our partners are looking for is a very seamless financing experience, and one in which they don't have to do any work to integrate. So we're trying to take where we can take them out of it and put all of the development and the build on ourselves so that it really is a plug-and-play for them. One of the things when we acquired a company called GPShopper, way back when we launched or we integrated SyPi, which is our financing products inside of the partner's app. And we could do that in like 30 minutes for them. And they could be up and running and you could service your account, you could do all of the kind of credit functionality inside of their app. And they loved it. They're like, great, okay, wait, so I don't have to get you into my IT prioritization backlog. You just give me this saying, I plug it in and I have all the credit functionality there. That's now what we're trying to do kind of everywhere.

Makes a lot of sense. Another question from a couple of years ago. You guys provided a long-term financial framework back then. As we sit here 1.5 years later, has anything changed around those targets? And what are you most optimistic or pessimistic about over the next couple of years?

Yes. So nothing has changed in our view. We were very -- Brian and I are very bullish on the platforms and the growth of the platforms. Listen, it's a different environment than it was 18 months ago with losses lower, interest costs a little bit higher. But I think when you get back to what we think will be a mean interest rate environment, meaning loss environment, everything should be generally in line. We'll see efficiency continue to come down as a revolver. But we're very pleased with that framework. We're very focused on the return on tangible common equity and the return of this business. We think that's a really compelling value for our company as investors look at it. So we're still on those goals and those -- that framework longer term.

So maybe we shift gears and talk about another sort of elephant in the room in terms of the CFPB's recent proposal on card late fees. I guess it definitely goes at the private label model a little bit more because of the lower lines. I'm just curious, I know you've spoken a little bit about it at previous conferences, but maybe just walk us through how you're thinking about it and what are the next steps?

Well, I think I'll start, and Brian can add. I think the -- what we're talking a lot about internally is just the unintended consequences of the proposal as it's written today. And I feel like maybe that wasn't all is kind of well understood as it could have been. We immediately went to -- well, late fee is a deterrent. Without the deterrent, $8 not a deterrent. What I worry about is consumers are just going to roll delinquent. That's going to impact their credit, and that will make things like auto loans and mortgages and things like that more expensive for them. I also think that this could restrict credit to a chunk of a population that needs it without any offset, obviously. And I just -- I don't feel like those things were maybe fully understood or contemplated. I don't think they were studied. I do think the industry does view the late fee as a deterrent. And I think as we look at it, and there is some data out there, $8 is not a deterrent. And then what kind of behavior change does that drive in the consumer? So obviously, we're talking to our partners about this. We want to try and minimize the impact to them. So they're engaged with us. And it's still early. I think there's the comment letters and things like that. I think the industry through the trade groups will put their arguments forth on why something should change in the proposal as it's written. But we've also had a team that has been looking at this since probably back into April. And they're focused on looking at, okay, what kind of behavior is this going to change and then how do you -- we still want to approve all the people that we're approving today. We think that's good for the economy. We think that's good for our partners, and we want to do that. But in order to do that, there may have to be offsets in other areas.

Yes. I would just echo Brian's point, the unintended consequences, credit will be constrained to certain populations of people. The cost of credit for other individuals will have to go up in order to support some of that per se. There is a ripple effect in every other form of consumer finance. It's going to be in autos, it's going to be mortgages because everyone's risk models will get impacted when you have that higher delinquency. And so now people are going to have to price through in these other forms of credit, the uncertainty of that. So unfortunately that those unintended consequences will impact actually everyone or a good chunk of folks, not just what they're trying to create literally for as a certain subset of individuals potentially. And again, this is the most transparent fee in all of banking and has been for over a decade. So it's disappointing, but we'll work through it.

And I guess you mentioned the trade groups. I mean what steps is the industry taking to convey this to the CFPB so that maybe there's some consensus that's arrived at?

Yes. I think everybody in the industry is working largely through the trade group so that we're kind of a collective voice. And I think there are some good arguments that will pull together, will be part of the comment period. And so there's a lot more to come, but I think there's good -- there will be good cooperation is my guess.

Okay. Anything else that you guys think should be on the radar from a regulatory standpoint, like capital, I mean, Brian Wenzel, I'm looking at you. Maybe is there anything that we need to think about that are not touching on that front?

Yes. Listen, we're very pleased with our capital position. Sanjay, when we started this conference, Brian talked about 10 years ago, our CET1 was 18%. Now we're sub-13%. We're on a journey.

Good job. I remember how many questions we asked about... I think that was the only topic first. Question number one, like 9 out of the 10 years.

Yes. For now, it's really about -- there's one final piece of legislation that comes through that we expect in the summer, and we'll see how that impacts us. We're going to enter back into the CCAR world later this year. So we'll go in that process. But that's the greatest uncertainty and to be honest with you, when we look at potential outcomes it shouldn't be that bad for us. So we're very pleased with our capital. And Sanjay, you know in February we completed a sub-debt offering to maximize our Tier 2 and get our risk-based capital. We have a little bit more work on our preferred structure. So we feel good from a capital perspective. From an overall regulatory perspective, what we encourage when we talk to the Federal Reserve and others is just level the playing field, right? We want a level playing field with our competitors, both in transparency and simple things like ability to pay. Like everyone should ask, that shouldn't be -- I have a bank charter, I have to ask you, you don't have bank charter. You don't have to ask. Just love the playing field so the consumer is treated equally in offsetting.

Great. I'm going to move on to another topic from some years ago, which is the competitive dynamics, which was -- it was very intense some years ago, and it seems like things have leveled out some. Is that a good characterization of sort of where we're at right now? Or do you -- I know it's always competitive, but I'm just curious what the opportunities are at this point in time?

Look, I think it's always competitive. What surprised me a little bit is, I think the industry stayed pretty disciplined throughout the pandemic. I kept waiting for that deal to kind of cross our desk that just looked ridiculous, like everybody's pricing in losses that are half of what they would be through the cycle. And we didn't see as much of that, which I think is good because we still -- we renewed a ton of deals. We won a ton of deals last year. But that was something that I was on the lookout for. I was like, okay, it's a frothy environment, best ever credit, and there's always a tendency for the industry to price that in. And we didn't see that to the extent we thought we would. And I think now what I would expect to see, and we're seeing it in some of the new deal flow is continued discipline, but for kind of different reasons. I think the uncertainty actually helps in this regard, right? So in an uncertain environment people are going to be a little more cautious if you're pricing a 7- or a 10-year deal. And we're seeing that. We pride ourselves on our discipline. We price everything through the cycle. We stress the P&L 19 different ways. We look at a lot of different risks, both on -- if we don't grow as fast as we think we're going to. If we grow faster than we think we're going to -- we try to make sure, and I think we do a pretty good job of this, making sure that our interests are aligned with the partner, so that there's never a period of time where one of us doesn't like the deal, right? That's so important, and it's easy to get -- it's easy to overlook that. But when -- I always look at a stress period when we're looking at a pro forma, I say, okay, do we still like this deal? Yes, are they still going to like this deal? Or are we going to be up against each other. And that alignment in this business in our space is super important. So I think competitively it's still competitive, but good discipline, and I would expect that to continue. We didn't see it when I thought we might go astray. And I think the uncertainty is keeping people pretty reasonable right now.

The one thing I'd add, Brian, and we go back over time, if you look back over the last 15, 20 years, when the economy gets tough, where you started, Sanjay, about the economy, if it gets tough, a lot of people because it's not necessarily the main part of their business pull back and reevaluate. This is our business. So we're going to stay in here. So that actually may be an opportunity if things get a little tougher because we're committed to the space. We're committed to a distribution model that resonates in our partners, merchants, providers know we'll be there. So there could be opportunity down the road.

I'm going to roll in a buy and now pay later question as well.

Excellent to this...

I know I saw it 2 years ago. But I'm just curious, inside of the products your customers are demanding, inside of this competitive dynamic that you were talking about, how prevalent is buy now pay later today? Like are people requesting that? Do you feel like there's an opportunity to take share now that some of the fintech's have been marginalized some?

Yes. Look, I think the product itself is not going away. I mean the product, though, has been around for like 100 years. I mean it's an installment loan for the most part, there's different tenors and things. But I -- the product will be part of our multiproduct suite, and it does serve a purpose. I would tell you that the partners that we're talking to are taking kind of a pause to reevaluate what has become a complicated point of sale, where you've got some buyout pay later, you might have multiple riders, all at different costs and they're looking at, okay, am I really for the cost of whatever this product is, by now pay later, am I getting the incremental growth to offset the cost of it. 2 years ago, that wasn't even a discussion. There was like, hey, I'm putting logos on my website because I need sales, and I'm in the middle of a pandemic and I'm just going to grow. They're taking a step back now because some of those products in a rising interest rate environment have gotten really expensive. And now they're saying, okay, when it wasn't that bad I was just willing to take the extra growth. Now that growth comes at a real cost. I got to figure out how to rationalize that. I think that's where our multiproduct strategy really pays off because in the context of a broader program we can offer a Pay in 4 as an acquisition tool, right? We're not getting that customer to keep them in a Pay in 4. We're getting that customer to get them into Pay in 4 for a longer-term installment upgrade to a private label card, dual card down the road. I think that strategy wins over the long term because it's not just -- you can't just be a one product company, right? Because depending on what you're buying and depending on where you're buying it, you need different financing options. And 2 years ago at Investor Day we talked about exactly that. We saw that. We started to hear our partners say, okay, everything just got too complicated, how do I rationalize? Well, the best way to rationalize is to go, we think to a provider who can offer you all of those products and balance the economic equation to the partner and to us, frankly, in a way that we're both winning.

So you talked about getting more information on the customer and having that marketing angle to some extent, it seemed like that was one of the value props that the fintech buy now pay later companies provided. Has that proved to be successful to the merchants from your discussions with them?

I don't think they know. I don't think they know. That was certainly the belief. And we're having a lot of conversations around our marketplace. We're investing in our marketplace. There is something to it that, hey, look, if you can bring them net new customers, right, and more growth, that's a positive. Where they get a little uneasy in some cases is, okay, of course, I want you to bring me new customers. I don't want to give you any of mine to go to your marketplace and go somewhere else. So I think that's always the rub. We have to do it in a way where we make sure that the partner is getting more than they're giving up. But we do plan to continue to invest in our marketplace. We've seen really good growth just over the last year since we've been investing. And we're having really productive discussions with our partners about what it can do for them over the long term. And it is fundamentally different than how we ran the business for 80 years. We ran it program by program. We didn't necessarily look across the Synchrony enterprise. And that was done for good reasons. That's how our partners wanted to interact. But now they've started to see some of the benefits that Synchrony can bring to them outside of just what we're doing for them and their program. Okay, can we bring you Synchrony Mastercard customers. Could we do a val prop on the Synchrony Mastercard that benefits the partners. So there's certainly something there, but it's -- you got to almost go have individual discussions with the partner. It's not a one size fits all.

And while we're on the topic of fintech's, I mean, obviously, valuations have come down quite significantly. You still have a decent amount of excess capital. Are there acquisition opportunities, capability type deals? Or do you feel like you've built most of what you need?

I think we've built most of what we need. With that said, there's always things that we're looking at a buy versus build. And to your point, valuations have finally gotten attractive in that sense. We've got a very active M&A screen. We've got a team that looks at that every day, evaluating opportunities. And that's usually the -- that's usually the decision that can we buy it? And does that get us to market faster than if we build it? And what's that kind of present value of that timing advantage that you get if you just go out and buy something. The thing that we never underestimate, though, is you got to buy it and you got to integrate it, right? It's not just -- I always had -- I remind the team, like you can't just buy it and all of a sudden you're in market with it -- tomorrow you got to integrate it into our platform because we want all these things to kind of tie together and be seamless to our partners. And the other thing I would say is just we're very disciplined around M&A. We look at the EPS impact of that. We want it to be accretive. We -- 2 of the best acquisitions we've ever done, our Pets Best -- the pet insurance company, bought that back in 2019. We've grown at 5x since we bought it. Allegro in health and wellness, great acquisition. We've doubled the size of that business since February of '21, I think we bought it. I mean, it's -- those are the types of acquisitions that we love, really small capital outlay, but we can leverage our scale to grow them and do it in a EPS accretive way.

The one thing, Brian, we talk about this all the time when we look at deals is the scalability. A lot of times you look at these fintech's and it could be a great price, great product. But you say, take our company, we actually are the largest credit card is the United States by a number of accounts. So now if you want to put it on and try to bring it to scale, sometimes it doesn't work, and that's where our teams do a great job of trying to analyze on the buy versus build, does it have the scalability to meet our needs across the spectrum.

Seems like you would have monetization opportunities with all these or additional monetization opportunities with all these accounts. Like do you guys even look at that, like revenue per account or how to optimize that? Or is that not...

Like actually selling some of the...

Selling your installment products and other verticals, like we don't talk enough about nonprivate label products. But do you guys think about it in those terms?

Yes, absolutely. I mean we look at a number of products per customer. We look at revenue per customer, lifetime value of the customer, absolutely. One of the things, though, back to how we used to run the business 5, 7 years ago, it was very program by program, right? I mean here's a good example up until a few years ago, you couldn't go to one place and service all of your Synchrony accounts. And that was done, again, for good reason because we go to market as our partners brand. But you can do that now. And as you start to do that, you can think about things like, okay, how do I promote other partners? How do I promote some synchrony products? How do you tie in savings and the Mastercard. So there's definitely an ecosystem there that we're investing in and nurturing.

That's great. That's great. So we got like 1 minute left. I figure -- I'll see if the audience has any questions.

How generous. He left him all a whole minute.

There's one right there. Sorry, right there.

Now it's 55 seconds by the time you...

Sorry, audience.

Thanks. You talked earlier just there may need to be offsets with regards to the late fees. And just how much of the late fee decline if it was to go through, how much of that do you think you can mitigate and sort of how what would the process be for that mitigation?

Yes. Listen, what I would point you back to is when the Card Act went into place back in 2010, 2011, we were able to mitigate the whole impact to that. That's what we -- our goal will be as we start here. It's unclear with how the proposed rule will come into effect. There are a number of levers that you can do. I mean the biggest thing for us is the turns, and whether or not you can lead the turns in there either through pricing, credit bureau reporting, et cetera. But there are pieces -- it will force, I think, unfortunately, a lot of folks potentially into a cost-based model, which will give the consumer very different experiences across credit card providers, which I think is unfortunate for the consumer, why it's late fees x dollars here versus y dollars there, but that will be a big piece as well. So our goal is to try to mitigate. The biggest thing is the turns, right? We just want people to pay us back. And I think Sanjay talked about it. There are a lot of models out there. You ask the consumer at various levels. The consumer will tell you it has a deterrent effect to certain levels. So that's what we'll try to do. And again, Brian said, we had a team on this since April last year. It's a little bit broader now, and we'll continue to work through it with our stakeholders.

And do you see yourself as a participant in sort of fighting the late fee decrease? Or do you see yourselves more as a spectator?

Well, we would hope that didn't turn into a fight. We would hope for a very constructive dialogue with the industry around what's the right answer. And so we're preparing for that with the rest of the industry through the trade groups like ABA and BPI. And I think there are some compelling arguments to be made. And I do think that a more thorough study of the unintended consequences is important. I just do. I think it's -- the individuals who are going to get a benefit here are the individuals who have paid late. And I would hate to see that cost transfer to the consumers in the same credit bracket who pay on time. But you can easily see how that could result from this. And I think that's just a good discussion for us to have in a very transparent way with the CFPB and the industry, frankly.

Any other questions in the room? We'll have -- we have time for one more. No. All right. Cool. Thank you, guys. Really appreciate it.

Thanks, Sanjay.

Thank you.