Sunrise BanksChief Information Officer Brett Cooksey is focused on digitization, strategic fintech partnerships and automation for improved customer experience.
The $1.96 billion bank counts more than a dozen fintech partners, including credit builder solution Self and document automation platform Anvil. The bank has “several more partnerships in mind,” Cooksey said.
Bank Automation News recently caught up with Cooksey to discuss Minneapolis-St. Paul, Minn.-based Sunrise Banks’ digitization strategy. What follows is an edited version of that conversation.
Brett Cooksey, CIO, Sunrise Banks
Bank Automation News: How have you prioritized digitization?
Brett Cooksey: Digitization is one of Sunrise’s highest priorities. We are in the last innings of our core system migration to our vendor’s hosted platform. We are in tandem moving our infrastructure to the Microsoft Azure cloud in order to modernize our infrastructure, increase our resiliency, and benefit from the software industry’s shift to cloud investments in products and services. We are implementing a new digital commercial loan origination system.
BAN: What is the bank’s fintech partnership strategy?
BC: Mission alignment is the most important consideration. We are a Community Development Financial Institution (CDFI), Certified B Corporation and member of the Global Alliance for Banking on Values. We strive to be the most innovative bank empowering financial wellness and want our partners to share our belief in values-based banking. We look for innovative partners that can help us offer affordable and accessible products that support consumers and their communities.
Secondarily, financial viability of the fintech is important. Since they are taking Sunrise banking capabilities to the market, we are responsible for their customers’ experience and the fintech’s ability to maintain our standards and levels of customer service.
We are partnering with several fintechs and have even more potential partnerships in mind.
One example is our collaboration with Self, which offers small credit builder accounts for people who want to build or re-establish their credit. In 2021, Sunrise helped originate 262,995 Self Credit Builder loans for a total of $189.9 million. The average loan size was $722.
BAN: What role does automation play in your approach to digitization?
BC: Automation is a key component but, more importantly, understanding the end-to-end process versus siloed automation leads us to better outcomes. We work with our users to understand their function and activities within the overall process. Once defined, we review with a broader group and our business leadership to better align the digitization with strategic direction. Automation enables our users to handle far more volume by only focusing on exceptions and customer service versus mundane, repeatable tasks.
BAN: Which technologies are you excited for in 2023?
BC: The vendor landscape has pivoted from platforms to ecosystems. Software development kits, fintech development environments and marketplaces are available on most major vendor platforms. With our cloud and core migration projects wrapping up in 2023, we are already exploring opportunities to leverage out-of-the-box integrations with fintechs, strategic partnerships and even publishing our own developed capabilities.
BAN: How would you describe your leadership strategy?
BC: Hire the best, allow them to bring their experience to bear and level up the incumbent team. Clear the path to decision-making and accept that making decisions is more important than being right. But if you learn something new, don’t hesitate to change direction. And if you do fail, make sure you learn.
While we continue to measure the economy by market strength, we can’t forget that for many, financial security means affording the basics like shelter, food and gas. There’s a lot of talk about democratizing finance, but how do we move our society forward if we don’t reach the masses in a meaningful way? The underserved market — with one of the biggest populations being the middle class — requires access to a financial system that can service them responsibly.
The opportunity
There is a massive opportunity in providing financial services catered for the middle class. Although commonly overlooked, this segment fuels two-thirds of the world’s consumer spending. With about two of every five consumers having a credit score under 700, there is a massive population of people facing financial rejection and financial services are not meeting them where they are.
Linda Brooks, chief technology officer at Atlanticus
Being “underbanked” starts with banks, but doesn’t end there. It impacts all aspects of people’s lives, including their ability to buy or rent a home, acquire insurance and utilize affordable services that can help get them off their feet. With millions of Americans having limited options when it comes to financial services, there is an urgent need for banks and fintechs that have a deep understanding of this demographic and can cater their offerings to them prudently.
The challenges
Despite a large consumer need for banking services catered toward the middle class, financial institutions are not capitalizing on it because of the challenges presented when working with those with a less-than-perfect financial history. This segment is underserved because it’s not easy to serve middle-class Americans responsibly; it’s serious work that requires deep expertise and a long track record of success to do it properly.
Providing banking and lending services to non-prime lenders presents risks, but with 58% of Americans living paycheck to paycheck as inflation spikes, ignoring the changing environment can be detrimental.
The solutions
It starts at the top: to provide services to an underbanked market, you need executives, business leaders and product developers that understand that market. Focusing on diversity, equity and inclusion within our financial institutions will continue to push us forward in our evolution and understanding of the needs of all demographics.
More tactically, we must lean more heavily on tech, analytics and data to inform our understanding of the middle class better. A track record of data on consumer behavior, repayment patterns and spending habits can help banks and their partners tailor their offerings to the middle class, but data is only as good as the conclusions that can be drawn from it.
Banks should lean on technology that can empower them to more comfortably provide services to this demographic. Deep historical data informs many financial institutions’ decision-making engines, and analytics can be tapped to better predict outcomes and minimize risks that come along with lending for both the consumer and the bank. These tech tools are readily available, however, there is not a broad enough adoption to give the everyday consumer the options they require. Banks should leverage fintechs for predictive and risk mitigation solutions that prioritize reaching these consumers in a way that provides a positive outcome for both the bank and the banked.
The middle class plays a critical role in our economy’s growth, and yet financial services are leaving this segment underserved. The technology needed to provide banks and lenders with the security and confidence to help the middle class exists, but there needs to be a desire from the top to implement them. It starts with us, with building diverse leadership teams of individuals who want to make a change.
Linda Brooks is the chief technology officer at Atlanticus, a financial technology company powering more inclusive financial solutions for everyday Americans, and was previously a developer at IBM for more than 16 years.
Banks can onboard and meet the evolving needs of business customers when they integrate and use data analytics to tailor the customer experience. Understanding what the data reveals about clients— and the gaps financial institutions can fill through partnerships or vendors’ digital products — is paramount, Dean Jenkins, vice president of product marketing at e-banking […]
Perhaps the Nasdaq’s doldrums will turn the attention of the nation’s top IT talent from tech to a banking industry in dire need of their services.
Kris Kowal, global retail banking lead, SAP America
Perhaps, but don’t bet the company on it. In a banking business rolling out steady streams of innovative, technology-dependent products amid a massive cloud transformation, that’s what you’d be doing.
The safer wager is that banks must continue to work hard to attract and retain the best of the best. Banks can do so in four ways:
Promote what you have to offer;
Change the culture to one that puts IT on even footing with business units;
Delineate your tech strategy to workers interested in interesting work; and
Develop a comprehensive talent plan.
Promote what you have to offer
Banks are technology companies, and they are finally making a point of trumpeting that fact. It’s more than talk: Gartner has estimated this industry’s annual IT outlays to be in the $600 billion range. That’s roughly the combined state budgets of California and New York — with Ohio thrown in for good measure.
Those investments are pouring into the backend cloud transformations that the industry now recognizes will be necessary to compete, much less thrive. But that money is also going into new products that depend heavily on technology from the customer-experience standpoint on through analytics. Which brings up a key point: IT talent in banking is about more than software developers; we need diverse skills. In addition to developers, banking lacks automation specialists and analytics experts. Each of these fields involves many subspecialties that a potential hire can evolve into over time.
Among other areas, those diverse skills are necessary to develop the products that can meet — and ideally exceed — customers’ increasing expectations. A few examples include browser plugins that find coupon codes, personal financial management and financial literacy tools, automated interest rate rebates based on payment behavior or product bundling and carbon scoring and suggestions for offsets based on transactions such as airline-ticket purchases.
That’s in addition to ongoing — and increasingly demanding — banking-industry needs related to customer interfaces, cybersecurity, fraud detection, risk management and countless other areas. Also, banks are at the forefront of the environmental, social and governance (ESG) movement, a fact that aligns with the sensibilities of young tech professionals in particular.
Oh, and don’t forget that banking is, as before, generally profitable and stable — and it pays well.
Change the culture
A recent Deloitte report on the challenges of tech hiring in the industry noted that tech workers in banking bemoaned their status as “second-class citizens.” Fair or not, an industry deeply dependent on technology can ill afford such sentiment to perpetuate. Fortunately, it’s just not true anymore. American Express CEO Steve Squeri’s rise to the top from the chief information officer job may be the clearest example of technology’s importance to this industry, but examples abound of recent high-end banking industry hires from the likes of Google, Microsoft and others.
Banks want to operate like tech companies, so they’re hiring tech leaders who are shaking up old hierarchies. The long-brewing transition of banking technology from back office to customer-facing is leading to a dismantling of traditional banking pecking orders, breaching silos and embracing the sorts of flexibility and collaboration that is good for banks in general and, specifically, for tech workers.
Delineate your tech strategy
Yes, banking still involves paper, which to a prospective hire from a top computer science program or tech company may as well be a stack of cuneiform tablets. Yours and every other bank is working to change that, and you’re going to need tech talent to do it. Your core technology may seem outdated (another complaint in that Deloitte report) — that’s why you’re moving to the cloud, and that’s where tech talent can engage in a mission-critical way.
Tech talent doesn’t want to be feel like they’ll be shunted off in a coding shop working on patchwork solutions for finicky business users. Your technology roadmap is much more exciting than new hires would guess; don’t be shy about sharing it with them.
Develop a comprehensive talent plan
Talent planning requires looking at your existing workforce as well as the needs to be filled through hiring. What skills do you need now? What will you need two years out? How can you cast the widest possible net and eliminate the sorts of hiring biases that reduce an organization’s cultural diversity and cause excellent candidates to be overlooked? These are some of the core questions of talent planning.
Technology can help in many ways, among them, through talent-assessment platforms that can automate the screening process and match applicants to jobs better than the old resume-based approach. But the reality is, if you haven’t put considerable thought into what talent you need and how to develop it, you probably won’t find it.
The tech industry’s dipping fortunes won’t last forever. Now is the time for banks to exploit what’s sure to be a temporary advantage in the long-term competition for tech talent.
Kris Kowal is the Global Retail Banking Lead for SAP America.
Raleigh, N.C.-based First Citizens Bank is leveraging the services of a fintech to offer search personalization and improve the customer experience. The $108 billion bank has a search bar in the middle of its homepage for easy navigation. The search option brings answers to client questions “without clicking a bunch of blue links,” Shane Closser, […]
Financial institutions (FIs) looking to securely store data amid rising cybersecurity threats and open banking regulations can look to confidential computing, a technology that encrypts sensitive cloud-based data while it’s being processed. Confidential computing is a fairly new technology that performs computations in a hardware-based, trusted execution environment (TEE), according to tech giant Intel Corporation. […]
The importance of customer experience has increased exponentially over the past few years as people bring more aspects of their lives online. This year, more than 65% of Americans are using digital banking as their preferred banking method, according to a May 2022 survey published by Statista. So, what does this mean? Financial institutions must adapt and follow suit by prioritizing a digital customer experience in order to thrive.
Juan Vela, global head of market strategy, Cisco Meraki
With an accelerating shift to a digitized world, customers are increasingly foregoing the traditional bank branches and are instead conducting transactions, depositing checks, opening accounts and more online. There are even some banks that provide an online-only experience, eliminating physical branches entirely.
As the popularity of digital banking rises, financial institutions must consider how they can stand out in a crowded market to not only attract new customers, but also retain old ones with an experience-led approach.
To maintain their competitive edge, banks must prioritize a tech-driven experience for their customers. By implementing enhanced connectivity, security and intelligence across their infrastructure, financial institutions will be able to future-proof their business and improve the customer experience.
1. Cloud-first approach for unified, connected experiences
For the financial services industry, digital transformation calls for end-to-end augmentation of processes, business practices and methodologies for financial service delivery. In fact, some may say it’s essential for financial institutions to take a cloud-first approach to unify the physical and digital worlds. This is due to the fact that greater visibility can be achieved into all aspects of a network, not to mention the physical aspects of a business when IoT and cameras are introduced, providing valuable business insights into customer behaviors.
With those insights, a cloud-first approach then helps businesses iterate faster on new customer experiences and quickly pivot as the behaviors of customers change over time. It also becomes easier to rapidly implement updates to address newly detected cybersecurity threats while prioritizing and securing application experiences, as more and more customers transition to a purely digital banking experience.
One important strength of a cloud-first approach is the ability to scale a business in near real-time to meet customer needs as they happen. Whether it’s adding new branches, features or applications, a cloud network can implement these in minutes without disrupting other operations on the network. Because of this, cloud migration has become a priority.
2. Enhance experiences with machine learning
Customers have a near infinite choice of banking options and expect a secure digital experience every time they make a transaction; they need it to be executed quickly and completed with greater accuracy than ever before. Machine learning has the ability to see how a network is behaving and transform that information into insights and recommendations to make a network run at its best, so customers get the most reliable and consistent experience.
For a financial institution, it takes the guesswork out of optimizing a network to create the most efficient network possible. This not only saves money by making the best use of resources available, but also provides the insights needed to better plan for the future. In many cases, machine learning can be automated for the network to make the recommended changes itself.
Automation can be taken one step further by leveraging APIs to automate many of the manual tasks within a network such as deploying new locations and features, or to gain specialized information regarding how customers use certain banking assets such as ATMs. The point is to provide staff with the ability to accomplish more in less time while gaining the information needed to make intelligent decisions about future network needs.
3. The internet of things powers branch transformation
While many financial institutions may already implement technology-driven aspects into the in-person banking experience, banks on the laggard side of the digital divide are losing customers and managed assets. This has resulted in a tremendous push to bring digital banking to life inside the branch to accommodate evolved banking expectations.
Banks are leveraging Wi-Fi connectivity and the internet of things (IoT) to enhance in-person customer experiences. Upon walking in and signing into the check-in kiosk, customers are transported to a customized app-like experience in the branch.
Bank managers are utilizing heatmaps and people-counting capabilities within cloud-based smart cameras to optimize staffing and reduce queue wait times. Smart cameras outside can optimize the drive-thru experience for customers, keeping track of the number of cars and wait times, and alerting banks when additional staffing is required to speed service and improve the customer experience. Behind the scenes, environmental sensors are monitoring and protecting the critical IT infrastructure powering these outcomes. As physical security is also automatically monitored by the aforementioned cloud-based smart cameras, the bank has become a welcoming and safe environment.
4. SD-WAN network protection
With cybersecurity attacks on the rise, financial institutions are allocating upwards of 10% of IT spend in order to deliver best-in-class security for their stakeholders and customers alike, according to Deloitte. According to the U.S. Federal Reserve, cybersecurity events are one of the top risks to financial stability. As financial institutions are entrusted with sensitive customer information, and the quantified costs of security incidents is high and growing, endpoint and network security becomes even more important.
Endpoint and network security are poised to become the largest components of cybersecurity spend in the industry, having grown in share over the last several years. As such, firms need a converged security and SD-WAN approach that can scale security, performance and resiliency across regions, devices and technologies in the simplest manner—one that leverages the power of the cloud.
A cloud-managed SD-WAN architecture keeps customer and institutional data secure across networks. Cloud-managed SD-WAN also facilitates the commensurate data flow and communication that enables financial services organizations to serve their customers’ rapidly evolving needs. With networks touching more nodes than ever before, it becomes paramount to leverage the cloud in order to manage devices, flows and policies from a common decision-making platform.
Cloud-managed SD-WAN architecture also adds context-specific visibility into operations, employee locations and data flows that help IT leaders act on new insights while continuing to optimize for security, accessibility and performance that help improve employee and customer satisfaction. As financial institutions increasingly advance in their respective digital transformations, they’re also now storing information across regions, devices and storage centers that span on-premises and the public cloud. A cloud-managed SD-WAN architecture enables IT leaders to deploy common security policies across networks in order to thwart cyberattacks and maintain security across both private and public clouds.
Enhancing security both within an organization and at the service edge will require a strong cloud-managed SD-WAN architecture capable of handling increases in connected networks, regions, physical sites, applications and devices. With this in mind, financial institutions will not only stand out from the competition and develop differentiation built on security, but also future-proof their business by building in flexibility and scalability with common, deployable cloud-managed policy.
Juan Vela is the Global Head of Market Strategy at Cisco Meraki.
Financial institutions looking to mitigate manual data entry and increase efficiencies are turning to automation for their document-heavy operations. Document processing allows banks to capture data and filter it for employee use, compliance needs or audits, Joe Labbe, vice president of product development at intelligent document processing firm KnowledgeLake, said today during the webinar “The […]
