How does one go from the investment banking world to the role of CFO? In Ralph Leung’s case, he didn’t take the more common path by nabbing a job in corporate development. Instead, he took a CFO position at a small company, a route he calls “super humbling.” It meant learning about 80% of the role on the job, and making many mistakes in the process.
However, the experience was critical for his leadership growth. Leung now runs a full-fledged finance team — including strategic finance, FP&A, treasury, accounting, capital markets, and procurement — at Achieve, a growing fintech with 3,000 employees. Most of the company’s business is debt resolution: helping people, who have fallen out of grace with creditors, manage their overwhelming debt by consolidating it and reaching settlements.
But like any good company, Achieve has decided to expand its focus. It now offers personal loans to its debt resolution program members who have demonstrated consistently good payment behavior. That has brought finance into areas most organizations don’t touch — like talking to institutional investors who want to buy the loans.
I spoke to Leung in December about the company’s mission, his approach to finance team-building, and whether higher interest rates have affected the business.
- First CFO position: 2016
- Notable previous companies:
- Morgan Stanley
This interview has been edited for brevity and clarity.
You’ve said Achieve aims to be the first “liability management” company. What does that mean?
RALPH LEUNG: We are trying to create the equivalent of an asset management company, but on the liabilities side. We want to manage your liabilities, optimize your cash flow, reduce your debt, and improve your credit.
We want to focus on that side because, frankly, most of the U.S. is stuck on the liability side. And it's a real problem. There hasn't been the proper attention at the right companies focusing on an all-encompassing liability management solution.
What has been the most significant challenge as CFO of Achieve?
LEUNG: Whether it's investment banking or my current role, I focus a lot more on how we solve problems than the job title. How do we think about things the right way? How do we make better decisions? How can I leverage my experience and how I think to help colleagues do that [themselves]?
I think less about what a CFO is supposed to do. That happens to be my job title. I do whatever companies need me to do to get better at those things.
I built a strategic finance team for the first time. These are my “Navy SEALs” that parachute into projects.
What does Achieve need going forward? It is a business that looks very different today than it did five years ago, pre-COVID-19. We have invested a ton of money into a transformation program. We went into the pandemic as a debt resolution business. We've come out of it as a consumer fintech, the whole liability management thesis. We have more products and a more sophisticated way of thinking about capital and cash payback.
Part of my challenge is to get this all stood up. And just like everything else, we want it done yesterday. Because the world is moving quickly.
With the business’s growth and the addition of another product area, has the constitution of the finance team had to change?
LEUNG: The changes also apply to the type of talent we need. I built a strategic finance team for the first time. These are my “Navy SEALs” that parachute into projects. They're trying to troubleshoot and problem-solve with the business leaders to figure out how we can make better decisions. We’re introducing to the broader business how finance can help instead of being a backward-looking reporting function.
We're also spending a lot more time in capital markets to sell the loans [we originate] to investors. My capital markets team talks to investors every single day, multiple times a day, to understand what kind of returns they are looking for and what kind of assets they want to buy. They then have to make sure the messages reach the credit side: ‘You’re originating great loans and there’s solid demand for them.’ Or, if the credit standards are too loose, ‘Some of our loans are not great, and investors aren’t buying them.’ The feedback mechanism is important.
How do you scale the finance team and build the right skill sets?
LEUNG: I don't hire based on job descriptions or titles. I am trying to solve gaps and mapping them to strategic priorities.
I try to zoom out and say, ‘What capabilities does the function have to deliver that are a strategic priority for the company?’ Then, I do an internal mapping exercise to list the top 10 capabilities, ranking them in importance. Do I have the capability currently in one of the team members? Do I have enough capacity? I may have the capability, but that person could be drowning in work. Or I may have the capability, but it's not up to the standard we need. At that point, I can say for the next job, I don’t need to hire a ‘director of X,’ I need to hire to solve these gaps I just identified. And that is a different way of thinking about team-building.
It's not like I'm hiring someone in procurement and expecting them to do capital markets work. The traditional job titles don't quite work for me.
What is a more traditional finance challenge that’s arisen as a result of the company's growth?
LEUNG: For debt resolution, the biggest bulk of the business, we pay on day one to acquire that customer. But we don’t recognize revenue right away — it occurs over the next three, maybe four years. So, the more we grow, the more money we spend upfront to acquire customers.
How do you do that without spending yourself into bankruptcy? You work to find ways to optimize how much cash you can bring forward. What we have been able to do with our back-end systems and creditor relationships is to try to get a member’s first settlement with a creditor within the first month to three months, much sooner than we did in the past.
Whether it's investment banking or my current role, I focus a lot more on how we solve problems than the job title. How do we think about things the right way? How do we make better decisions?
It's like when you join a fitness training program or weight loss program, you want to see the results early. It’s the same for our members. But it also benefits me as a CFO, because as soon as there’s a settlement, I get my first clip of revenue. We only charge you when you have a successful settlement. In debt resolution, something that is really good for the customer is also good for our working capital.
How have the higher interest rates caused by the tightening of U.S. monetary policy affected the business?
LEUNG: Interest rates have 100% impacted us on the lending side. We need to be more strategic about acquiring and partnering with investors. The investors buying the loans can be pickier about who to invest with. You have to increase the interest rates that you're charging borrowers to make that spread worthwhile for the investor to take the risk.
But, we also need to be more thoughtful about the rates we charge people and our credit box. You don't want to overcharge members because that defeats the whole purpose of our products.