Richie Smith

Richie Smith asked about the growth in BNPL sales volume, the potential for a dual BNPL proprietary card, and opportunities to leverage point-of-sale to bring more customers into Bread Financial's platform. He also inquired about the longer-term impact of AI and automation on efficiency ratios in the credit card and banking space.

Answer

Ralph Andretta (President and CEO) clarified Bread Financial's focus on partnerships, providing diverse credit products (co-brand, private label, pay-over-time, proprietary cards) to drive loyalty for partners' customers, rather than solely building its own ecosystem. Perry Beberman (EVP and CFO) and Ralph Andretta (President and CEO) highlighted AI's role in accelerating operational excellence, driving efficiency, and enhancing customer/employee experiences. They noted Bread Financial's 'fast follower' approach, existing use of over 200 machine learning models, and expectation for AI to contribute to growth and positive operating leverage.

Richie Smith asked about Bread Financial's BNPL sales volume, noting a potential significant increase, and inquired if the company offers a dual BNPL proprietary card or sees opportunities for a blended dual-purpose card. He also asked about Bread Financial's strategy regarding AI and automation, specifically how the company views its potential impact on efficiency ratios and longer-term benefits, given reports of triple-digit basis point impacts in the industry.

Answer

Ralph Andretta (President and CEO) clarified that Bread Financial offers a full suite of products including co-brand credit cards, private label credit cards, pay-over-time products (installment loans), and proprietary cards, catering to consumers at various stages of their credit journey. He emphasized that the company's main focus is on partnerships, providing the right credit products for partners' customers to drive loyalty, rather than solely bringing customers into its own ecosystem like Klarna or Affirm. Perry Beberman (EVP and CFO) and Ralph Andretta (President and CEO) both agreed on the significant opportunity with AI, viewing it as an accelerator for operational excellence, driving efficiency, deploying new capabilities, reducing risk, and enhancing customer/employee experiences. They highlighted Bread Financial's 'fast follower' approach, focusing on impactful use cases with immediate business value and platform scalability, while ensuring regulatory confidence. They noted existing use of over 200 machine learning models and robotic process automation.