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  • Podcast: 6 criteria for choosing a backup loan servicer | Bank Automation News

    Podcast: 6 criteria for choosing a backup loan servicer | Bank Automation News

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    The 2023 collapse of Silicon Valley Bank reminded fintechs and financial institutions of the importance of having a backup loan servicer in the case of a trigger event. 

    Examples of trigger events could include a bank collapse, a change in leadership or a servicer being unable to keep up with the level of collections needed to fund a portfolio, Blythe Lawton, senior vice president of marketing and business development at Vervent, tells Bank Automation News on this episode of “The Buzz” podcast. 

    “A lot of people sell backup servicing, but they don’t necessarily have what it takes to fulfill on the backup servicing if something should happen to the portfolio,” Lawton says. 

    In looking for a backup servicer, Lawton says, a fintech or bank should consider:  

    Hear about the increased demand for backup servicers in the wake of Silicon Valley Bank’s collapse in this episode of “The Buzz,” and as Vervent’s Lawton discusses how to select a backup service provider.  

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 12:38:15
    Hello and welcome to the buzz of bank automation news podcast. My name is Whitney McDonald and I’m the editor of bank automation News. Today is April 2 2024. Joining me is blind lot in Senior Vice President of Marketing and Business Development at lending as a service provider bourbon, she will discuss the increased demand for backup Loan Servicing providers post the SBB collapse and share what people are looking for in backup service providers. Hi, blinds. Welcome to The Buzz.

    Blythe Lawton 12:38:41
    Thanks for having us. I am Blythe Lawton, I am the SVP of marketing and business development for vervets. I’ve been with a company seven years and we are a fintech. Who offers primary strategic services, things like credit card servicing, loan servicing capital markets, services, as well as backup servicing and credit card programs under our vent card division. So we’ve been around under our current CEO since 2008. And under the vent brand since 2019. And we’re excited to continue to be part of this industry. We’re a credible player, and we’re glad to be here and talking to you today.

    Whitney McDonald 12:39:25
    Great, well, thank you again, and welcome to The Buzz, we’re going to take a step back to 2023. And we all remember what happened in March of 2023, the banking crisis SBV collapsed, which triggered this importance of a backup service provider. So I would like if you could talk us through this, this new demand and this reminder of having a backup service provider following that collapse in March.

    Blythe Lawton 12:39:56
    Absolutely. So backup servicing provides security. And, as we saw last year, when you have a collapse, you have a large portfolio or a large bank, and you have a lot of portfolios and a lot of loans that are out there floating and not being managed by a servicing company. So you’re not you’re not collecting, you’re not you’re not collecting dollars, accounts are getting delinquent. So as you look forward post the SVP collapse, we see a lot more interest. verbund has been around for a lot of years, and we have a strong presence and capital market services. And as this collapse happened, we see more people becoming aware of the backup servicing need. And the service. Portfolios tend to be less educated, especially if they’re new or their startups, whereas the capital providers, all the big banks are very strong advocates of backup servicing because it protects their investment. And their goal is to have the insurance, if you will, on the money they’re lending to the portfolio so that if a trigger event or a you know, some sort of action were to happen, that they can protect their investment.

    Whitney McDonald 12:41:10
    Let’s talk about those trigger events. What might be an event that would have a startup or company saying Well, I’m glad I have this in place?

    Blythe Lawton 12:41:21
    Absolutely, it’s a great question. It’s not always dramatic, like a bank collapse, it could be, you know, a change in leadership, it could be a current service or a primary servicer who’s managing the portfolio but not really being able to keep up with the SLAs and the the levels of collections that are needed to continue the funding of the portfolio. That’s the most common reason for a trigger event. So let’s say you need to collect X percent, but you’re only collecting y, obviously, that’s going to be a concern to the capital provider and they are going to look to course correct. And of course corrections can be made, they may decide to trigger and move to a transition on the successor service or where the backup partner would come into play.

    Whitney McDonald 12:42:12
    Now you’ve shared with me these these six elements of backup servicing, maybe you could share with with our listeners, what those six elements are. Sure,

    Blythe Lawton 12:42:20
    things that are very important to have our asset experience, experience in a world of backup is huge. You know, a lot of people sell backup servicing, but they don’t necessarily have what it takes to fulfill on the backup servicing, if something should happen to the portfolio. So experience with asset classes and experience with adverse conditions is very, very important. So that’s one and also the people in play to manage those so they understand the nuances of what are happening and they can make smooth transitions. Scalability is another one if you don’t have scalability to support the servicing. So if you have a backup agreement, and your selling backup, but you don’t have operation centers, you don’t have a place to put the servicing if a trigger event would occur. So having scalable ality and the ability to scale quickly because no one wants to have their portfolio sitting on service without collecting. So having those open seats and that capacity, in order to take on the transition, the successor servicing immediately is critical. If you don’t have the recruiting flows, the seats, the it the setup, you can’t it’s like buying an insurance and not being able to pay a claim. Um, response time is also huge. Every day you’re not collecting as every day you’re not meeting the financial needs of your portfolio. So being able to transition if there is an event, quickly within 30 to 45 days is a key element of this and something that really drives credibility for those players who have had experience with trigger events and have been able to successfully transition within reasonable timeframes. Another one, I think I’m on for is the relationships. So having relationships with the investors with the warehouse providers with all the capital markets, participants are invaluable. You need to know the people, you need to know have the asset experience, but you need to also know the people and how to get things done. Because again, when you have an event with a backup servicing contract, and you’re trying to transition time is money. And so those relationships help clear things. And they also make sure that everything’s being done credibly and correctly. Advanced Notice you also the relationships also help a lot with knowing what’s coming down the line. You know, many times you have questions about a portfolio or corrections, things that need to be made. And there might be some conversation that happens upfront. But with those relationships, triggers usually aren’t a surprise. And that’s that’s a very important element. You want to know what’s happening before you have to make a formal industry notification. And then compliance compliance is the last thing. Anything in loan servicing or lease servicing has so much to do with compliance. There’s so many rules and regulations and having a solid oversight plan, you know, a plan of action, if you will, with the prospective backup if there’s a trigger event and having the oversight and the people to make sure that everything is handled in a legal and regulatory compliant way is critical. And the only way that you’re going to do that is by really understanding what is needed, you’re understanding the laws, the nuances of what loans the portfolio contains, and moving things through regulatorily and within the correct data security so that you’re compliant, and you’re able to take your servicing from one shop into the new shop seamlessly and seamless as a word I would strongly emphasize here. And then there’s also risk mitigation, having risk groups within your organization to oversee and really make sure that you are mitigating risk appropriately. It ties in a bit to compliance, but that’s also a very important component of transition.

    Whitney McDonald 12:46:39
    Now, with all of those elements in mind that you just broke down for us, which thank you for doing that. How does a FinTech really select their backup servicing provider?

    Blythe Lawton 12:46:51
    Well, they should be looking for experience, credibility capacity. And I’m gonna say response time swift timing, you know, but it really depends on the experience of the portfolio holder. So a lot of times it’s the capital providers who are driving the decision not driving the decision, but prompting the decision on whether or not there should be backup servicing and offering broad recommendations of organizations that are credible backup services. It’s ultimately the choice of the portfolio owners to get that backup servicing. But a lot of times, well, not a lot of times, depending on the experience level of the portfolio owner, they’re either going to know what to look for, or they’re going to need more guidance. And so there’s a lot of information about there on backup servicing, if you know where to look. But a lot of times newer portfolio owners or startups don’t always know where to look. And so there’s a lot of good advice within those industry relationships.

    Whitney McDonald 12:47:56
    Now, post SBB and we’re into a new year here. Have you guys seen an uptick in demand for bourbon, what are your clients really asking for or even prospective clients? What are those questions that are coming up?

    Blythe Lawton 12:48:12
    Oh, Mervyn’s, quite a stab left in the capital markets service space. So we have, you know, a lot of capital markets business across the thing, whether it be you know verifications custody backup, there’s a lot of services that we offer there. So we’re a very established incredible player within this mid space. So I would say we’re seeing a small uptick, but what we’re really seeing is increased scrutiny in ancillary services, things like our annual readiness assessment, where people are maybe doing more prep on certain portfolios to make sure that they’re even more prepared. With a contingency plan. We’re seeing people we’re seeing clients move from warm to hot back up, and then maybe back down to warm back up a little bit more. And we’re seeing more interest in the topic of backup servicing overall, if you’re in the space, you know, about backup servicing, and you know how important it is. But it’s one of those things that you don’t know about until you you don’t know what you need to know, kind of things until you need to know. So that’s what we’re really seeing a lot of.

    Whitney McDonald 12:49:25
    Okay, and what are, what are some of those considerations that that you don’t know, unless, you know,

    Blythe Lawton 12:49:33
    um, you know, just really understanding that backup servicing is something that that’s needed, you need the knowledge and experience to protect your assets. So, you know, you want the backup service thing, whether you’re in a time of strong performance, or when something that’s like an unexpected challenge happens with your portfolio. So, you know, in bourbons case, we’re ready to step in with solutions, that are proven solutions to preserve the investment, regardless of what happens, you know, it’s kind of I liken back of servicing to insurance quite a bit. And some of my peers have driven every once in a while, I’ll give a chuckle because I think I sound a little like a broken record. But it really is like insurance, you want it all the time, because you don’t know when something’s gonna happen, you can have an indication but you know, you don’t just buy car insurance for the day that you get in the accident. And backup servicing is very, very similar. Yes,

    Whitney McDonald 12:50:29
    and I mean, we’ve all been there, maybe not specifically on the on the backup service side, but yes, insurance or fleet insurance or wishing that you add something that you don’t have. But I like your point there too, about having it and when times are good, too, just to just to have that readiness in case an event does does come up. Now, we kind of talked backwards, we talked about 2023. And we talked about March of last year, but now we’re into 2024. I’d love to get your insight on what you’re watching for this year, when it comes to trends and keeping up with with what’s going on in the industry. So what are you watching for, as you as you get into deeper into 2024? I should say? Absolutely.

    Blythe Lawton 12:51:19
    So verbund Like everyone else is watching the macro economic landscape to see what changes they’re, you know, how the economy is faring, if it’s going to improve or deteriorate. So we’re watching that. And we’re since we are a business who works a lot in the b2b space, with the loan servicing on the capital market services. But we also have our fervent card division, where we work direct to consumers. And those are kind of weighted businesses where when one is is doing really well, the other is not. So we’re watching both sides of that on to see where we go and where we can add value for either our clients or for our DTC customers. On the back of on the capital markets, services front, you know, we’re really looking at ways to provide more coverage and more preparation for our clients. So ancillary services that we have always offered, but maybe we weren’t broadly marketing, because not as many people were taking advantage of them. But with the events of 2023. And everyone having a more conservative view going into 2024 and probably beyond. We’re looking at how we can add services farther up the capital markets funnel to make sure that people are protected, like I said, and those good times and bad times, and that could be anything from inventory backup, to the annual readiness assessment, to all the things with onboarding verifications, collateral management, we do a lot of different things, and we’re here for our partners and so we’re trying to help them be aware of all the steps they can take to keep their investment safe.

    Whitney McDonald 12:53:08
    You’ve been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn and as a reminder or you can rate this podcast on your platform of choice thank you for your time and be sure to visit us at Bank automation news.com For more automation news

    Transcribed by https://otter.ai

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  • Mastercard developing gen AI tool | Bank Automation News

    Mastercard developing gen AI tool | Bank Automation News

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    Payments behemoth Mastercard this year plans to launch a generative AI tool that will cater to businesses.  

    Entrepreneurs looking to start a business or organize operations will be able to ask the gen AI tool questions and it will provide solutions, Jane Prokop, executive vice president for small and medium-sized enterprises at Mastercard, tells Bank Automation News on this episode of the “The Buzz” podcast.

    Questions could include “I’m in this industry and what’s the best form of organization? Is it a partnership, is it an LLC or corporation or sole proprietorship for this type of business?” Prokop says. 

    The gen AI tool will be trained on Mastercard’s existing dataset along with information provided by media partners including Newsweek, Group Black and Royalty Media, Prokop says, adding that AI-driven solutions provider Create Labs will help build the tool. 

    Purchase, N.Y.-based Mastercard is also using AI to fight fraud, Prokop said. Mastercard has built AI solutions that help SMBs find vulnerabilities in their online operations along with using behavioral biometrics to fight fraudulent transactions and provide a frictionless payment experience. 

    Listen to Prokop discuss how Mastercard is creating solutions to help SMBs and how the company aims to use new technologies like AI to drive business growth.

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Vaidik Trivedi 10:59:09
    Hello, and welcome to The Buzz, a bank automation news podcast. My name is Vaidik Trivedi and I’m the associate editor of bank automation News. Today is March 26 2024. And we will be talking to Jane Prokop. The Global Head of small and medium sized enterprises at MasterCard. Jane has been in the financial services industry for over two decades, working at multiple companies in a variety of roles, like as an investment officer at AIG, and as the chief executive of principles capital, a privately held speciality finance company that provided financing to small and medium sized businesses in US and Canada. Today, we will discuss what challenges small and medium sized businesses are facing how MasterCard is working to resolve those issues. Where does generative AI fit in the picture? And what’s in store for MasterCards SME division for 2024. Welcome, Jane, thank you so much for jumping on the podcast today. Can you give a little bit of introduction about yourself and what you do at MasterCard?Jane Prokop 11:00:16
    Absolutely. Hi, Vaidik, thank you for having me on the podcast. It’s very exciting. So briefly, my background, I’ve had over 20 years of experience primarily in the financial services sector, and in various areas of financial services. And about half that time, I’ve spent really deeply immersed in the small business financing space, where I ran a company that did unsecured high risk lending to small and medium sized businesses in the US and Canada. And what I discovered during that journey was just, you know, the magnitude and diversity of the challenges that are faced in the small business space, but also a great deal about the promise of growth that lies within that space. That’s very exciting for me, and I’m coming to MasterCard. My role here is to lead our global strategy for supporting the small and medium enterprise segments. So we drive innovation, we drive strategy and product development for that space globally. And of course, in doing so we we build on and leverage MasterCard strengths in card and non card that is multi rail payments, as well as a full set of assets across the data space, cyber, software and network assets. So our goal in the in the group is to develop high value, easy to use products that meet SMEs, key needs, across payments and a number of other areas.

    Vaidik Trivedi 11:01:49
    That sounds really exciting. Small businesses are the backbone of the US economy and a lot of economies. Can you tell me? What’s the state of small and medium sized businesses?

    Jane Prokop 11:02:04
    Absolutely. It’s been really an interesting experience over the past several years, I would say, if you back up a little bit, and go back five to 10 years, you’d see, you know, a huge proliferation of new technology and new tools, abilities to customize. And those tools and really an expansion, massive expansion and alternative data. And these are general tailwinds, I think that have driven innovation and improvement in the small business space, then you go two years forward and hit the pandemic. And there we saw that it was, you know, it really drove a lot of businesses to go online, and to enter the digital world if they had not already at that point, because it was a matter of survival for many companies. So the the issue was that, in the case of SMEs, many of them weren’t fully able to embrace these new new tools, for a number of reasons. You know, fear of fraud, transaction costs involved, lack of bandwidth, to evaluate some of the new tools. And so I think the result of the pandemic was mixed in that we saw a number of companies become stronger and, and really, greatly expand the way they did business. Others were unable to survive. So now we move into post pandemic time. And we’ve seen very recently that 2023 was a was a tough year for a lot of small businesses. And I would say that was that was driven by all the different threats we’ve seen right geopolitical threats, with the various conflicts that have sprung up in the past couple of years. macro economic factors. We saw inflation, we saw disruption of supply chains that created uncertainty for many of the small businesses. And although we did see a big recovery in sentiment, some of these factors still I mean, in the economy today,

    Vaidik Trivedi 11:04:09
    that makes sense pandemic was really a massive disruptive for almost every sector of the economy and our lives in general. Can you tell me what was the biggest pain points that SMBs felt in going digital? In the types of pandemic?

    Jane Prokop 11:04:30
    Yeah, absolutely. I would say that there are a few different things. One is that there has been a surge, as I mentioned earlier, in companies that are developing point solutions for SMEs over the past 10 years. So there are lots of different new software’s to handle accounting, or invoicing or marketing or website building, and so on and so forth. And, you know, that’s, we’ve tallied the count at being hired than 750 new companies that have emerged in the past few years. But in fact, that creates a management problem for SMEs. So first, they have to learn about the tools they have to get educated on, then they have to learn how to use them, and they have to teach their, you know, their, their staff to use them. And then they have to figure out how to pull together the data that’s been generated by these tools. And of course, the data that the tools need to consume as well into a holistic view. And that’s been a challenge for I would say, most SMEs right up through the lower middle market, because, you know, they have a fragmented landscape of tools today. So at the same time, they’re facing and many of them now have aspirations that go beyond their local markets. So they look to both source product internationally and to sell internationally. And the, the tools including payment methods, that enable that are often not fully developed. So they face a number of issues in in actually be able to sell and be able to source globally. So some of the needs that we see are really about simplifying that experience for SMEs. And that’s really critical to serve the sector sector is to bring together the critical tools that they need to manage their business operations into one place and make them relatively easily consumable. Then to provide the intelligence that results from those tools, to the owners and the executives of, of small and medium businesses, that gives them the intelligence to understand how to prioritize their activity, you know, they have limited, as I mentioned earlier, limited bandwidth to spend. So they need to spend it quite precisely, you know, and have a laser focus on what they need to do to move the needle for their business. So those are a couple of things that have kind of come out of this push toward rapid push toward digitization, in the past few years. That makes

    Vaidik Trivedi 11:07:15
    sense. Fragmented tools are really difficult to work with. Can you tell me what is MasterCard doing to help small and medium sized businesses?

    Jane Prokop 11:07:24
    Yeah, that’s a that’s a great question. A couple of things. One is that we’re introducing all sorts of means to drive the ability of small and medium businesses to accept payments, you know, because one of the first things they need to do when they’re going online is figure out how to collect payments. So we have tools such as our tap on phone functionality, which enables small business owner to use any smartphone that has near field communications, enabled and use that to accept payments, digital payments ran on the phone. And we’ve seen we’ve really grown that network enormously. we’ve more than doubled those locations since 2016. And so that’s been that’s been an important part of ensuring that the capability to accept payments online is extending out beyond areas that are you know, have very good sort of legacy broadband wiring, and so on that that under underlay the traditional POS terminals. We are also doing things like creating a program called click to pay online, which is a streamline guest checkout that spans across merchants so that solutions, consumers can use the solution to securely checkout instead of entering their data in every different website, every different portal separately. So it’s a very simple and secure checkout experience. And that is helped quite a bit. To make consumers more comfortable about buying from small businesses online. The other we’ve also done some work to simplify cross border payments for SMEs. So there are pain points around Cross Border Services. And I would say that the biggest ones there are that, you know, there, there’s fear of data security, when when SMEs are making or accepting online payments, across border, fear of fraud. There’s also a lack of transparency about the costs and the timing, when of when these payments are going to be made. So we have a solution called cross border Express, which we introduced last year, which enables any financial institution or FinTech, any player basically, to embed our functionality into their online presence, whereby the, their small business customer can click on a link, and then make a payment very securely to an international receiver. And they get full transparency about the fees at the time, they’re arranging the payment, and they they have full transparency of when the payments going to hit. Most of them are virtually instant. So it’s it’s very close to real time. And they know exactly how much money has been received on the other end. So this is this is really critical to helping them drive, you know, they’re they’re built, they’re sourcing and they’re selling internationally,

    Vaidik Trivedi 11:10:41
    having cross border solutions in a globalized economy is very essential. Have you seen at MasterCard that a lot of businesses, they don’t want to expand beyond a certain geography, because they there’s a lot of friction in accepting payments and going through regulatory compliance for a different geography.

    Jane Prokop 11:11:04
    We actually see, I think that a lot of the companies would like to be able to, to have scope of operations beyond their local economy. And, you know, 75%, our research are showing that 75% of them agree that sending online cross border payments has helped there has helped our business to grow post pandemic. So we do see, generally speaking, a, a a need and a desire to act on their local markets. You don’t see many businesses who are saying no, I want to stay local specifically. You mentioned

    Vaidik Trivedi 11:11:46
    that macro economy has been a bit harsh in the last year. And I wanted to know, how is MasterCard working with financial institutions or fintechs to expand capital access to these SMBs?

    Jane Prokop 11:12:04
    Yeah, that’s a great question. Lack of access to capital is probably the number one problem that SMEs face. So number one pain point globally, and the World Bank has estimated that there’s a gap of about 5.2 trillion between annually between the amount that the small and medium businesses would like to get any amount, they actually get some received none at all, and many others received less than they would like to receive. So really, I think the solution to unlocking that is to bring together some of the innovations that have happened in the FinTech space, with the financial institutions that serve as the conduit for the vast majority of funds that are flowing to you via lending in the world today. So when you think about syntax, and what they’ve done over the past, say 10 years to to revolutionize lending, what they’ve done is they have greatly simplified the front end experience. So they’ve made it digital. And they’ve made it very easy for a small business to apply. And that’s step one. Step two is they’ve been able to harness not only traditional but alternative data of all different kinds than having to do with transaction flows of the business, for example, or their their business banking transactions. There are a lot of sources of the alternative data, they brought those together to be able to create, I would say an algorithmic approach to lending which is instant. So rather than going through the traditional weeks or months long process that a small business would do with a bank, wherein they have a loan officer who receives an application, ask them for more documents, creates a model representing a forecast and so on. Looks at their audited financials. The fintechs have been able to say let’s let’s pull in all the different data gives us an idea of the risk involved. And let’s use scoring to give us the stratification of the risk of those applicants. And based on that scoring, then there can be an automated decisioning. And our automated formulation of an offer out to the applicant. So what that does is it vastly reduces the amount of expense involved in processing those applications. It increases the satisfaction of the small business who’s applying for the financing, and it ultimately creates a much better performing portfolio of loans for the lender. So that’s, that’s been the experience of fintechs. Where I think they run into headwinds is that cost of capital for fintechs can be who are involved in lending can be very high and very volatile. And the cost of customer acquisition is quite high. And so where the banks come in is, banks have to have, you know, access to very low cost, depository capital, and to intervene capital. So their cost of funds is low and stable. And they have, you know, a huge repository of customers for their other products to whom they can cross sell at a relatively low cost. So then they of course, have compliance, they have all the infrastructure for for security and compliance on the back end. So it’s really a perfect fit between the two, to bring the two together to offer that combined exceptional experience. And I think that as that progresses through the lending world, that is really what’s gonna unlock the flow of capital to a far wider range of small businesses, and in amounts that are quite appropriate, and that will enable, you know, obviously, better growth in these companies and also a more level playing field, which provides some, for some, you know, a better degree of inclusion in that lending scenario. So

    Vaidik Trivedi 11:16:12
    whenever we talk about payments and lending, fraud definitely comes to mind. And earlier, you mentioned that MasterCard is helping SMBs and safeguarding themselves from fraudulent activities. Can you tell us a bit more about that? How are you doing it? And what’s the success ratio that you have?

    Jane Prokop 11:16:36
    Absolutely, yes, cyber is really an important area for us at MasterCard, and we’ve been investing significantly over the last 10 years or and more into growing our, our set of assets. So to step back for a second and just quantify the the threat and what’s out there. Some of the big trends we see are continued rapid digitization of, of activity, and if we apply it to SMEs, we’ve already talked about them going online, and looking to the business in unfamiliar geographies. So that’s, that’s considered continuing to proceed a pace. We also see unprecedented levels of connectivity. And that’s both among SMEs and consumers. As smartphones proliferate around the world, and connectivity becomes more accessible, virtually everybody is connected into online activity. And then we see an exponential growth in data. And so these three things together have really turned cybercrime into an industry. So if you if you were to quantify it, you’d see that it’s cybercrime would be the world’s third largest economy, behind the US and China. There’s, that’s our biggest calm. And within that landscape, we see that 43% of cyber attacks target small businesses. At the same time, small businesses are less equipped and big ones, to be able to protect themselves against fraud and financial loss and cyber attacks. So very often, their IT services are are outsourced to third parties, and the owners and managers of the business actually don’t really know the nuts and bolts of how it works. So we have developed a multi pronged strategy at MasterCard with addressing the cyber threat. First of all, we have assessment tools by which we monitor 90 million entities globally. And that happens on a cycle that repeats every 10 days. We have protection tools that that help stop an attack once one has been detected. And that’s been powered a great deal by our AI technology. And then we also organize we work and we collaborate with industry players and governments to set standards and to influence policy that will help to spread these Innovations in these protections more broadly. So we think of this as these three things assess, protect, and organize as three layers of a portfolio of solutions that are designed to work together and to, and to provide protection at every stage of a transaction. For small businesses, specifically, there are a few of our products that are very relevant. One, one, I would say that I’d like to highlight is our tool called My cyber risk. And this is an automated tool that monitors the cyber environment of a business’s online presence, to identify vulnerabilities that they have before a cyber attacker can come and exploit them. So it gives them back, it kind of crawls, looks at the environment, and then comes back with a report to the owner to say, here are the vulnerabilities we’ve seen, here are ways that you can address those vulnerabilities. And, you know, that’s really critical to small business owners, because as I mentioned earlier, most of the time, they aren’t intimately familiar with how their IT environment has been set up, and it’s being operated. So they won’t be able to answer on a questionnaire based type of approach, they’re not going to be able to answer most of the questions. This takes away that barrier and does it for them. And we’re starting to pair that with some of the other protection tools. We’ve got some new tools that we plan to roll out later in the year, which are specifically designed for small businesses, to help them take the next step once they’ve assessed the vulnerabilities to address those vulnerabilities. So that’s a little bit about the way that we’re approaching this to keep businesses safe.

    Vaidik Trivedi 11:20:58
    So talking of automation, you’re already deploying automation in finding vulnerabilities within an SMBs digital ecosystem. Can you tell me what are some other use cases that MasterCard has in place, and they’re exploding with automation and AI? Sure.

    Jane Prokop 11:21:18
    We have another product solution called a new detect, which uses machine learning and behavioral biometrics, and, and basically rests on billions of data points, to validate users in real time without disrupting the digital experience. So it means that customers get a secure and frictionless experience. At the same time, it’s able to understand whether there’s anything potentially fraudulent going on and to provide a warning of that going

    Vaidik Trivedi 11:21:52
    into 2024. Can you tell me what you’re seeing in the market? What’s on your Horizon? What’s something in the pipeline that has gotten you excited?

    Jane Prokop 11:22:02
    Well, I, I suspect I sound like many others when they answer this question. But AI driven technologies are definitely forefront. For us, you know, and the newest step change in terms of Gen AI, has been also something that’s fueling a lot of innovation at MasterCard, we’ve been using AI for four years, we’ve used it to protect against fraud, you know, to monitor transactions, and so on. And so, you know, that that’s been sort of a bedrock for us. But we are looking at what we can do with the newest, the newest advantages. And in doing that we’re, we’re spending, we’re turning that toward both our internal operations, and our customer facing operations. So one of the biggest applications of AI is to actually make it faster to develop new products, and we’re definitely moving in that direction. But in terms of customer facing ones, we’re in the stage of testing and learning a lot of those right now. And we see a bunch of I’ll talk about an example in a moment, but we we see lots of potential advantages for payment solutions of AI. Optimizing, optimizing payment performance, and security is really important because AI is better than, you know, human ever could be at detecting anomalies and data flows, errors, fraud, and then monitoring, managing the resulting payment risks from that. It can we can use it to leverage data, insight, data and insights. And that’s super important because not only are we using machine learning to to get better insights out of structured data, but we can use Gen Gen AI to get better insights out of unstructured data. So it allows us to bring the two together in a way that no one really could previously and And then a third big area is adapting to changing customer needs and preferences. So the the potential for customization and personalization of our services of our payment solutions and our other services is practically limitless. Because you know, AI can continue to learn from every interaction that it has with a customer, and then further tailor the content, suggestions to their specific situation. So one of the things that I wanted to mention about AI when this is super important for for MasterCard, we’re really approaching in a way that we want to ensure that it is ethical, and it’s transparent. And it’s also reliable. So we’re being careful in the way that we deploy anything that’s customer facing. But we’re starting to, as I mentioned, do test and learn in this area. And so one of the things that we have underway right now, which we plan to roll out at the end of this year is a small business AI tool that we’re doing together with a large media coalition. And the intent of that tool is to be able to use relatively unbiased data sources, to provide suggestions, general suggestions about that for questions that small business owners may have, again, relying on data that’s likely to be less biased than we normally see in the public Internet. So entrepreneurs, you know, who are looking to start a business, or they’re looking to figure out how to organize it better they can, they can ask questions about, you know, I’m in this industry, and what’s the best form of organization is that a partnership is LLC, a corporation, etc. Or a sole proprietorship for this type of business. And they can ask that it’s intended for general purpose using these sorts of sources. And that’s gonna be our first sort of version of the tool. We plan and we’re developing in parallel AI tools that can be deployed on proprietary datasets. So whether it’s our internal datasets, whether it’s our datasets combined with partner datasets, these are, you know, can be directed toward much more specific use cases. So what we see coming out of it ultimately is a suite of different AI tools that are suited to a range of use cases for small and medium businesses.

    Vaidik Trivedi 11:26:51
    Really excited. So it sounds like a chat GPT specifically catered towards entrepreneurs and businessmen.

    Jane Prokop 11:27:00
    Yes, and there are there are multiple AI tools actually Gennai tool. So we’re using we’re experimenting with not just the chat GPT but with others as well.

    Vaidik Trivedi 11:27:10
    Are you creating this tool in house? Or are you working with a vendor or a third party to create this tool?

    Jane Prokop 11:27:16
    The tool that I mentioned, that’s going to be out later this year, we’re working with in partnership with a company called Create Labs, which is going to be doing the build together with us. And as I mentioned, we have a media coalition that’s providing the data sources including black team, media group group, black, Newsweek, and some others. So we do see this as they kind of range of solutions, some of which we will produce in partnership with other either channel partners or tech partners of ours. And some which of which we will produce in house, you know, using and relying on a MasterCard data sets.

    Vaidik Trivedi 11:28:03
    Okay. Well, thank you so much for joining us on our podcast this week. And I hope we get to have a chat. So

    Jane Prokop 11:28:12
    thanks so much for it. It’s been a pleasure to be with you. And I hope to meet again soon.

    Vaidik Trivedi 11:28:18
    You have been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can read this podcast on a platform of choice. Thank you for your time. And be sure to visit us at Bank automation news.com For more automation news,

    Transcribed by https://otter.ai

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  • Podcast: Grasshopper CEO Butler talks growth | Bank Automation News

    Podcast: Grasshopper CEO Butler talks growth | Bank Automation News

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    Grasshopper Bank is investing in its digital offerings to meet its clients where they want to be met — whether through self-service channels or other avenues. 

    The digital bank, which has 18,000 business clients, gains roughly 1,000 clients a month, and to keep them, must update to meet customer demand, Chief Executive Mike Butler tells Bank Automation News on this episode of “The Buzz” podcast.  

    “It’s really important that we have a program in place that customer experience can be continued throughout their time with us,” he says. 

    Listen as Butler discusses how Grasshopper competes for deposits through customer retention efforts and investment in customer experience.  

    Grasshopper Bank’s Director of Product Luther Liang will speak at Bank Automation Summit U.S. 2024 on Monday, March 18, at 3:15 p.m. CT, in Nashville, Tenn.

    Get ready for the Bank Automation Summit U.S. 2024 in Nashville on March 18-19! Discover the latest advancements in AI and automation in banking. Register now. 

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:03
    This episode of The buzz is brought to you by bank automation summit us 2024. This annual event is tailored to resonate with financial services professionals focused on business optimization through technology and automation. Learn how to overcome implementation challenges by hearing firsthand from C level executives from institutions, including Bank of America, Wells Fargo city and more. There is no better place to get a read on the competition than at Bank automation summit us 2024 Register now at Bank automation summit.com. My name is Whitney McDonald and I’m the editor of bank automation News. Today is March 14 2024. Joining me is Chief Executive of Grasshopper bank, Mike Butler. He is here to discuss how grasshopper grows and gains deposits through customer retention strategies and overall customer experience efforts. Mike previously served as the president and CEO of radius bank and president of Consumer Finance at key cord before joining grasshopper in 2021. Thanks for being here, Mike.Mike Butler 1:00
    Sure, happy to and thanks for having me. Love talking with you guys. So yeah, I am the CEO today of Grasshopper Bank, which is a was it’s an oval bank in like 2019, I joined about two and a half years ago. We are a digital bank that’s designed to serve the business and innovation economy. We are predominantly focused on providing financial services digitally to a group of people that we think are demanding that type of solution from their bank. Prior to Grasshopper, I ran a company called radius Bank, which was focused on the consumer of digital space that we sold to Lending Club in 2020. And before that, I was at kind of a big banker at KeyCorp for 25 or 30 years or so. So happy to be where I am.

    Whitney McDonald 1:51
    Great. Well, thank you again, for joining us on the bus, we have a great conversation ahead of us. Before we get into it, let’s set the scene here we’re going to be talking about where banks stand on competing for deposits, a topic that we’ve been hearing about a lot as of late, so maybe just tell us where we stand today. What are what are banks looking at when it comes to getting that deposit growth?

    Mike Butler 2:16
    Yeah, so a little bit of, you know, again, you’re you’re gonna periodically ask me for opinions on the industry. And so I always like to say I’m one person, and I’ve got a view, but others may see things differently. But I’ve been, we’ve been really focused on deposits over the last 10 or 15 years, as we’ve seen a shift in people’s preferences from how they want to do business. But, you know, at the end of the day, deposit gathering is the core competency of a really strong bank, we need to gather that funding, by leveraging our charter in our insurance, and be able to use that funding to be able to provide other products and services into the consumer or business. So it’s really important for us. And, again, to keep things really simple, I think over the over this period of time in which rates were flat. And consumers and businesses cared a little bit less about where their money was it kind of stagnant Lee was in the banking sector sector, and banks were able to grow, I think at a faster pace, because there was less competition for deposits. And funding sources outside of deposits were very low cost. So I had a deposit base, but I wanted to borrow money in the marketplace to grow my assets, I could do that fairly cheaply and make a nice margin. And things were fairly good in the industry. So the way it worked is low rates caused, I think the industry to become a little bit complacent with how we were gathering deposits, and lost track of the importance of it. And when rates started to rise, it started to become very clear that if you didn’t have a good source of what we call core deposits, then your margin was going to erode fairly quickly. And so that combined with the evolution of the client base, wanting to do business differently, I think has left the industry a little bit behind on what they’re going to do to solve the problem of gathering deposits. I think we saw during the pandemic, a fairly big shift in clients wanting to work digitally with banks. And, you know, again, I don’t want to spend too much time on industry views but but I do believe that the banking sector is just the last of the last man standing when it comes to the E commerce world. And I think using simple examples of you know, Amazon started selling books and now they sell the world. They’ll sell you anything. And we use them because that’s what we want from a car customer experience, we want the product, we want to be able to get it very quickly. And we want it at our front door, as we say, you know, fairly quickly, we really care how it gets there. But we but we liked that experience. And I think people are starting to say, Well, wait a second, why is my experience with my financial services company, not anywhere near what this is? And again, you know, I like to joke that after the pandemic, I know, the first thing I did was go to a nice restaurant, and you know, have a meal. I don’t think a lot of people ran into a branch and said, Boy, I missed you guys. So So I think, today, the combination of customer behaviors and demands, and the interest rate environment have made deposits, a really big issue for a lot of banks.

    Whitney McDonald 5:41
    Now, you mentioned a couple of things that we can break down there one being the competition, where we stand, of course today with rates, everything that’s changed since the pandemic on the client demand side, you want those digital capabilities, more grasshopper specific, what is your strategy for gaining those deposits, meeting clients where they want to be met? What are you hearing from those clients? And how do you then approach that that digital strategy?

    Mike Butler 6:08
    Yeah, so So again, so we’ll, we’ll take it from the top, I guess, right. And so if you said customer behaviors and demands are changing, so if you listen to a survey about how clients wanted their products and service delivered 10 years ago, you’d say, oh, there was 15% of these clients that said, Gee, I like the idea of doing things virtually, or digitally. And so that’s gone to like 60%, in the most recent surveys that people want that done so. So that’s a big part of it. So what we’ve said at grasshopper is we want to be part of that group of people that want their products and services delivered that way. And again, to use comparisons that I think are fun, because it’s our day to day life is, you know, my wife likes to go to a store and shop. And she still likes a store to go to. I haven’t been inside a store to shop in 20 years, right. And so we’re the same age. So it’s not about an age differential. Surely younger people like technology more than some older, but it’s people’s behaviors. And so, so I, I’m trying to find me, and maybe somebody else is trying to find my wife, but I think there’s more of me around than there are of my wife, and are more people who want their products and services delivered. And that’s what we’re after. So a couple things happen. There is so so how do you build social, what’s important to them? And how do you serve their needs? Well, we think the most important thing is the customer experience. So we start with the experience, some would say it’s a product, I need to have a great product. But But our view is if you can’t get to the product efficiently and effectively with a great customer experience, it doesn’t matter how good the product is. So we spend all of our time on the experience. And that experience is is can you open an account with me in three minutes, or four or six minutes, if you’re a dual signer on a business account? And was that experience good. So that’s number one, what we’re trying to do is build a customer experience a track and focus on the client that wants it and is is interested and then building them the customer experience. And again, to go a step farther, we believe in the opportunities to work with in the FinTech environment. So we use partners to build that experience for us versus kind of traditional banks that, you know, you know, sometimes they’re trying to use the core processors to do it. So. So that’s where we kind of differentiate ourselves. And then we get to the product, a product has to be good, and it has to work. But then experience has to be great. So so I’ll pause there. And I hope that was answer your question.

    Whitney McDonald 8:53
    Yeah, absolutely. And I’m very familiar with grasshoppers partnership strategy, you often are partnering with different fintechs in order to launch those products and be on the digital forefront in meeting what those clients are asking for. One thing that I wanted to touch on here, it’s it’s one thing to get those get those clients getting those deposits, but I wanted to talk a little bit about retention and customer loyalty. And I think that goes to the different products that you do launch and kind of continuing to evolve your your product offerings. Where does technology come into that? How do you make sure that you’re keeping those deposits, especially in a time I know that we’re almost a year post SBB and consumers were really looking to diversify their deposits? How do you make sure that you’re retaining and keeping those consumers that that are putting their deposits with you?

    Mike Butler 9:47
    Yeah, great question. And really, really important for us so we’re trying to you know, develop real relationships. And so for grasshopper we open somewhere between 800 and 1000 new DDA accounts a month. So over the last two years that I’ve been here, it’s been growing, and we’re hitting this $1,000 1000 new clients a month. So we brought on now 15, or 18,000 clients since we started. And it’s really important that we have a program and in place that that customer experience can be continued throughout their time with us. So two things that we do. One is we invest a lot of time in customer service, and a lot of technology and customer service. So that when people, people can self serve as much as they can, is, you know, a lot. So what you want to do is have a customer service in which you can use your bots and some other, you know, kind of technology to be able to get the client and answer 24/7 on their own, by by finding answers quickly. Other times, you got to answer the phone very quickly, and make sure when there is a call. So we spend a lot of time on that we’ve, you know, we’ve put some technology in there. So and we got to have an NPS score, that’s like 70, right. So not being critical of anybody. But traditional brick and mortar banks tend to have NPS scores in the single digits, right. And we have to be up there in the 70s. To do that. And that’s where we’ll be we were there before we’ll do it again with grasshopper. The second thing we do is we create this kind of like what I would call a market place, infrastructure inside the organization, which today we have eight, heading towards 15 different products and services that we make available to our clients that make their lives easier. So, for example, if we’re dealing with the startup community, and those companies are looking for people to help them fund, raise money, or to get debt, we’ve got special solutions on our website, we have companies that do that for a living, that will pay more attention to clients from grasshopper, and they will right off the street. We offer them discounts, we offer them different products and services. So when they come into our kind of ecosystem, it’s not just the product that we offer, but we offer them other products that people do better than I could with with ease and at a better price.

    Whitney McDonald 12:30
    Yeah, I like that that word of an ecosystem. It’s not just what you’re getting with grasshopper. It’s not that one solution that reels you in but the other access that you get to, which of course would be a reason to be loyal to the bank.

    Mike Butler 12:45
    Yeah, I think what we’re trying to do is now we deal with businesses, right, so so we go back. And again, I oversimplify things, but I think it’s the easiest way to do it. If you’re a small business, the biggest pain point for you is time, right? So do you have enough time. And if I can ease that pain point, by making their lives better, by not spending five hours in a branch to open up a checking account, or spending five minutes doing it? Can I do that by saying not spending two hours on a phone call, but being able to self select and self service your questions? And it can it can I make your life better by having a dashboard of your treasury management services right in front of you. And you can wire money easily in and out of your account and product capabilities versus going into a branch to wire money. Then I’m then I’m value add to the client. And when you’re truly value add, you have a relationship. And then there’s stickiness to that relationship, which is really important.

    Whitney McDonald 13:47
    Now, when it comes to having this value add keeping up with the digital capabilities that clients are asking for having this partnership approach. I wanted to spend a little bit of time on on tech spend. And obviously technology is expensive. But I wanted to talk through a little bit on how do you consider those costs. Where are you spending? How do you consider even on the partnership side? Who’s the right fit for grasshopper, but how do you what’s your strategy behind where to invest? What products to invest in? Does that come from client feedback? What does that what does that approach?

    Mike Butler 14:21
    Yeah, so So I would say when we build our technology roadmap, it is all about client first demand, what is going so so every quarter we go through a roadmap evaluation of what we’re doing. So and I’ll give you a live examples right now. There’s a next on our roadmap is being able to change your debit card credentials via technology versus via phone call or via another complicated way. It’s one of the biggest it connects to the phone calls that we get into Call Center as to what people are unhappy with, or have to go at set, you know, an extra step to solve. And then we take that back into our technology roadmap and say, well, here’s what the clients are saying, is a problem with our product, how do we fix it and put that as a priority. And then once we decided to priority, and it’s meaningful, worst thing that we can do is work on technology products. That sound good to me that are cool, but don’t really mean anything to the client. That’s why we don’t like shiny new objects, right? A lot of technology. People say, Oh, that’s cool, I gotta have it, right. It’s like, you know, like, my friends who have every tool in America in their garage that they got from the hardware store, because it was new, and but they only use it once a year, well, I can’t afford that, right, I gotta use, I gotta have things that work, and are really important. So our roadmap is connected to our call center, and don’t have as many shiny new objects as you would think. So that’s really important. And then then how do we choose the client or the vendor to do that for us? Well, that’s something that we feel like we’ve spent a lot of time evaluating technology companies, and trying to determine which ones are the best to be able to deliver. And I’d say to you, consistently, I say in the marketplace, that there are a lot of companies that have the same technology, it is about the people that deliver that technology that we select. So we work with people, not technology, and we work with companies that have great leaders, and great people, and that we can count on. And so those are the things that are important to us. And we find that if you can be thoughtful about what you want to deliver, and it’s meaningful to the client, then there’s a connection to revenue that makes paying for that technology a lot more palatable than it would be if I put technology in, and hope clients will use it, or it sounds good. And if I tell people I have it, they’ll come to my bank, now they want to, I gotta get them to use it. So the more people who use my debit card, the more interchange income I earn, the happier my client is, if they can self service with it. So that’s technology, I want it. So so that’s how we that’s the process we go through. I hope that makes sense. So

    Whitney McDonald 17:15
    with that process, and with that strategy in mind, maybe you could give us a little insight as to what what clients are asking for now, or maybe a little insight into what you’re working on for 2024. What are those demands that you’re trying to meet?

    Mike Butler 17:32
    Yeah, I think if you went through, you know, again, if you went through our roadmap, working on the digital part of our debit card, we have a virtual card, and then using that virtual card, to allow people to get access to it and make changes is early on our list. I think if you I will tell you, customer service, surely a client call center. And how we use technology in advance, the box that we use in there is really important for us, because clients want to spend less time on the phone or very little time on the phone. And then I think the third part of it, which is always important, important for our small business clients is access to credit. That’s probably on our roadmap in the latter half of the year, how we can solve that problem for him as well. And I think those are, you know, and then I think the marketplace, I would go back to a weekend, accept the fact that we are very good at a couple of things and focus on that, and then bring great partners. So so we’ve got a so here’s a good one that we’re working on right now. And some people aren’t going to be happy I talked about it, but I’m excited about it. And that is giving people access to their money a little bit quicker. Through some better cheque clearing process. You know, there’s a, there’s a complicated process in the industry in which somebody’s deposit to check in, I’ve got to go through a system to actually get paid that money myself, and the client wants that money earlier. So we’re working on a program that will give a client immediate access to the money and reduce some of that process and risk behind the scenes for us. And that’s going to be I think, a great tool inside the small business market where people will be very

    Whitney McDonald 19:28
    even listening to the buzz of a confirmation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time and be sure to visit us at Bank automation news.com For more automation news

    Transcribed by https://otter.ai

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  • Podcast: Digital bank grows account volumes by 420% | Bank Automation News

    Podcast: Digital bank grows account volumes by 420% | Bank Automation News

    [ad_1]

    The digital, FDIC-insured bank looked to affiliate marketing platform Fintel Connect nearly two years ago to expand its reach, Fintel Connect Chief Executive Nicky Senyard tells Bank Automation News on this episode of “The Buzz” podcast. 

    “When Live Oak came to us, they had been doing a lot on product, on testing, on messaging,” Senyard said. “And what we were able to do is, when we started working with them, we were able to bring their acquisition cost down.” 

    Fintel Connect also works with Ramp, BMO, Scotiabank, Royal Bank of Canada and First Citizens Bank, according to its website. 

    Listen as Senyard discusses how financial institutions can grow account volume, bring acquisition costs down and gain overall deposits. 

    Get ready for the Bank Automation Summit U.S. 2024 in Nashville on March 18-19! Discover the latest advancements in AI and automation in banking. Register now.

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:03
    This episode of The buzz is brought to you by bank automation summit us 2024. This annual event is tailored to resonate with financial services professionals focused on business optimization through technology and automation. Learn how to overcome implementation challenges by hearing firsthand from C level executives from institutions, including Bank of America, Wells Fargo city and more. There is no better place to get a read on the competition than at Bank automation summit us 2024 Register now at Bank automation summit.com. My name is Whitney McDonald and I’m the editor of bank automation News. Today is March 12 2020. For joining me as Nicky Senyard CEO and founder of FinTech connect, she is here to discuss how financial institutions can grow volume, bring acquisition costs down and gain deposits. Welcome to The Buzz Nikki.Nikki Senyard 0:51
    Thanks very much. It’s great to be here. My name is Nicky Senyard I’m CEO and founder of Intel connect fintel Connect is a relatively new business by brand in the industry, but it’s a business that we Phoenix don’t have another business. I have a passion about solving problems. So affiliate marketing is a really good segue for me to help different businesses, financial institutions in this way, be able to utilize the power and voice of third party publishers like the nerd wallets of the world, the credit Commerce of the world to actually drive new customers. And the new customers can either go through to a deposit product, which we all know is very high topical at the moment, all through to loan products or credit cards or mortgages or whatever else. But we’re in a little niche. We’re the only ones in North America that find focus only on financial services for this type of acquisition marketing. So it’s a really cool space. And I love it. I love the intricacy of how all of the vendors work together from the coop providers to the digital account opening to the KYC. Guys are all the guys that do the product development in terms of giving banks really good choices and variety on different products that they want to offer. I find the industry completely fascinating. So I’m really excited to be part of it. AbsolutelyWhitney McDonald 2:26
    seeing all the puzzle pieces connect right?

    Nikki Senyard 2:30
    That’s exactly right. Now,

    Whitney McDonald 2:33
    I’d love if you could tell me a little bit, I know that I know that you mentioned about pintle connect, or maybe you could tell me a little bit about the need for a connector between financial institutions and the right partner to get those acquisitions to Grove institutions.

    Nikki Senyard 2:49
    So I’m going to take it a bit, I’m going to go a bit big picture for a bit and then come back to it. Because I think context is always a really cool thing when you’re hearing about something. So if I go really big picture in marketing, there’s two types of buckets in marketing. One is brand marketing. And the other one is I call the acquisition marketing. Now the tactics in marketing are the same, whether that’s everybody’s heard about organic search engine optimization, they probably have heard of the term Pay Per Click advertising, they know the power of social media. All of those are different channels in these two buckets of marketing. But there is one channel in acquisition marketing called affiliate marketing. And that’s what extensively what our company fintel Connect is. And the power of affiliate marketing is we’re almost like the plumbing behind this type of acquisition. Because with affiliate marketing, you only pay for the client you get. So in all of those other forms of brand marketing or acquisition marketing, you’re paying for the click, you’re paying for the placement, you’re paying for the eyeball, which means that sort of like you’re paying to be in front of the audience. Whereas with affiliate marketing, you’re paying for the actual customer, approved customer you get. So with that, if you’re only paying for what you get, we need to make sure that we’ve got great connectivity between the website that sending the traffic through. And then the final result of you getting that customer. So what we do is, I call it the plumbing. So we basically provide the tracking and reporting behind that relationship that the customer actually doesn’t see. And the really cool thing about what we do is we track on a headless basis, which means we have no personal information about that customer, which is of course exactly what everybody wants with privacy, increased privacy laws increasing and all of that sort of stuff. So yeah, so that’s how we do what we do. We allow the bank to get reach out to all of these third parties. We can actually track where the customers come from So it gives them transparency. And we all know, data gives insight and with data, you can make better decisions. So that’s a really key element of what we do is provide that transparency through the data, as well as providing all of this connection to these third parties. That which banks may not actually have relationships with, but we do so they can leverage those relationships. So we provide them a pool of these really cool high value partners in terms of reference sites, educational pieces, as well as traffic. And we also provide them with the plumbing, I shouldn’t say that the tracking so so much more sophisticated, and to be able to see what goes on. So yeah, that’s what we do.

    Whitney McDonald 5:46
    Couple of things to unpack there. Of course, you can’t talk about anything within the industry right now without talking about the importance of data. And I think that’s important that you note that. But one thing I wanted to dig in a little bit deeper, and I know that you said the word plumbing, but I think we can get into that a little bit. And I know I’m skipping around a little bit. But I I’d like if you could maybe talk about the I know, you talked about how but maybe the technology, how does this really connect to an institution? What does that all entail to make all of this operate? Okay,

    Nikki Senyard 6:18
    so the most important for fact, versus headless data. So, and I’m very aware that privacy is crucially important to banks. So I’ll say headless David to start with. So the way that it actually happens is that we connect, I’ll talk about the flow, maybe that’s the best way of describing it. So people can imagine something in their mind. So these third parties log, the important thing about our technology is it’s third party login. So the bank logs in and sees their data and the publisher logs in it sees their data. And of course, we get to see everything that goes on. But what happens is a publisher who’s been approved by the bank, into their program, or into their, you know, into their patch, can log in, and actually grab a tracking code. And then that tracking code goes behind the text link in an article, it goes behind the creative like banner or button. So then what happens is that when a customer comes and says, best deposits, or best CD product, or wherever it is, the customer can click on that link, and that will go through to the bank’s landing page. And then the customer can fill out all that data. And as soon as they press submit, that tracking code is sucked through with that customer registration. So basically, what we’re doing is we’re sucking this headless, we’re sucking our tracking profile through with this customer registration. And what actually happens is most banks, almost most digital Institute, digital businesses have a tracking profile or a customer ID. Now what will happen is, then we get a file sent back from the bank, API, CSV, pixel, or whatever. And that says that this customer has registered, this customer ID has registered now that customer ID might be a real customer ID or it may be a key. So it depends on the how the bank wants to do it. And then what happens is that once let’s talk about deposits, and maybe it’s a CD product that needs $1,000 deposit to trigger the payment to the publisher, once that action has been completed, the bank will send us a file and say customer ID approved, and then that will trigger on our system, the payment to the publisher that sent it through. So basically, that’s why I call it plumbing because this all happens behind the scenes. And it also happens, it doesn’t in any way dispute the flow of the customer registration, it just means that this variable needs to be sucked through with that customer registration. And the bank needs to send us a file back to say that it’s been successful. So we, the bank pushes to us, and the tracking profile is pulled through to their customer registration system. So that could be digital accounting product, it could be a core system, it could be a CRM system. So we integrate with all of those different systems to get this plumbing working. I’m hoping I didn’t bore everybody with that. But it’s it’s good to just go into the details of it.

    Whitney McDonald 9:38
    No, that was great. And thanks for breaking down all of the layers and I know that we’ll get into an example or two here to also explain this as well. But before we get into an example of this at work, I kind of wanted to break down a little bit further. The demand and and maybe take a step back and talk a little bigger picture here. You’re but we know that financial institutions continue to invest in technology and and fintech connect being a provider of technology. I know that one of the keys is how do you really weigh your return on investment as financial institutions look, and I know that everyone’s looking to grow deposits and gain consumers? How does how does this all fit into that puzzle of being able to look at okay, investing in technology, and considering ROI and what that will mean for the long term?

    Nikki Senyard 10:28
    Great question, because I think that’s the pragmatic, pragmatic way to approach all of this, we are actually what I would call a useful technology in the fact that the whole reason we exist, is to grow deposits. So the whole purpose of our business is to make sure our clients to successfully acquire new customers in the product that they’re looking for. So even though we’ve got great tracking, even though we’ve got phenomenal reporting, for the data perspective, we actually exist for the purpose of growth. That’s the reason that we exist. So we come into play, usually, when a bank want or a financial institution, Credit Union Bank, FinTech want to actually scale the acquisition that they’ve been doing. So this means that we leverage these third parties once the bank has their product set, and know what their product that they want to promote, and have tested that onboarding process. The other thing is that when they’ve got their messaging correct for that audience, so somebody else come and say, We want more deposits. But it’s really cool when they say we want more deposits of this customer persona. And their product is really good, they’ve got a really good promotion, that means that we can go out to the industry, like the Forbes or the business insiders, or the bank rates, or the nerd wallets and say, Hey, we’ve got this brilliant new product, they’re looking to get new clients, they’re prepared to pay $120, CPA or a $200, CPA or a $50, CPA, wherever the market rate is, and they’ve got this really cool product. Are you interested? And they’ll say, Yes, we get the bank to approve them. And that’s when the flow starts. So the tracking allows functionally for the relationship to happen. It’s purposeful. It’s sort of like not just for the data, but it allows this relationship to happen, the exchange of a new customer for this set amount to actually occur. So that’s the functionality of what we are.

    Whitney McDonald 12:43
    Let’s take that a step further and talk about some examples here. Could you tell us about an institution that that you work with and talk us through what that looks like?

    Nikki Senyard 12:52
    I’d love to thank you very much. We have a brilliant client called Live Oak. That Live Oak has been working with us, I think, for 18 months or two years. And they were a very good example of where a client has absolutely leaned into this channel successfully. So when Live Oak came to us, they had been doing a lot on product on testing on messaging on all of that sort of stuff. And what we were able to do is, when we started working with them, we were able to bring that acquisition cost down by 80%. And increase their volume by over 400%. And we were able to do this, and they’re now working with over 35 partners in this way to be able to grow their deposits. And what they were able to do is we did a lot of test inlining. But we were able to, they had a really good foundation of what they had done previously. And we were able to actually capitalize on the learnings that they had already had, and actually take the program to the next level. So as with their knowledge and our knowledge of the channel, we’re able to combine that and actually start to deliver the results. But they’ve been a really good partner, because they really did come to us. They tried to do this on their own. And we were able to really optimize through the technology through our strategic understanding and through our knowledge to be able to deliver the results that they were looking for. Now,

    Whitney McDonald 14:19
    we’ve talked about the how we’ve talked about the tech, we went through an example. I’d love to hear a little bit more about your plans for 2020 For what your blank bank clients are really asking for, and how you’re innovating around that.

    Nikki Senyard 14:35
    I think the I think that the theme is very common and how banking, how each bank does it is very unique. So the theme is definitely growth through the partners that are coming to us, sometimes with brand new products, sometimes with optimization of current products. But I think the common theme always with really invested partners is how do we do this better? How do we get better flow? How do we get to work with the publishers, in more an effective and efficient impactful way, which may be just volume, you know, new volume of customers. But a lot of times, it’s also about quality. So it’s actually a lot of times about the quality of the customers that come through. And we’re really lucky with our partners, that we get a lot of vintage data in terms of the quality and we can get quality for some clients down to the publisher type or the campaign type. And this goes back to what we were talking about before, insight through data gives you a better decision where you make your investments. So in some cases, we are right down to that that sort of like sometimes it’s like just one volume. Because we’re testing out a channel, we’re testing out a campaign, we’re testing out a product, or at other times that we really need to tweak that value of the customer that’s coming through for what we’re doing. So it’s really about optimization, some, what we always suggest is that we start, we see what sticks, we see what works. And then we optimize and optimize and optimize. And then of course, somebody says this is going so well let us try a new product. You know, like we may be doing a savings account and then somebody will say, hey, let’s do a CD product or let’s do a checking account or so that’s the that’s the way that it sort of usually grows for us.

    Whitney McDonald 16:32
    You been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time and be sure to visit us at Bank automation news.com For more automation News.

    Transcribed by https://otter.ai

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  • Podcast: Citizens approach to new tech | Bank Automation News

    Podcast: Citizens approach to new tech | Bank Automation News

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    The best new products are created with an abundance of identified use cases, Jo Wyper, executive vice president and head of operations at Citizens Commercial Bank, tells Bank Automation News on this episode of “The Buzz” podcast.  

    “The approach needs to be measured. … You need to start with it in a comfortable sandbox, and a place where you probably want a human in the loop,” Wyper says.

    With generative AI, “you probably want to adopt [it] in a place that the human gets the final see,” she says.  

    Listen as Wyper discusses how to approach generative AI and new innovations the commercial bank is working on for 2024.  

    Get ready for Bank Automation Summit U.S. 2024 in Nashville, Tenn., on March 18-19! Discover the latest advancements in AI and automation in banking. Register now. 

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:03
    This episode of The buzz is brought to you by bank automation summit us 2024. This annual event is tailored to resonate with financial services professionals focused on business optimization through technology and automation. Learn how to overcome implementation challenges by hearing firsthand from C level executives from institutions, including Bank of America, Wells Fargo city and more. There is no better place to get a read on the competition than at Bank automation summit us 2024. Register now at Bank automation summit.com. My name is Whitney McDonald and I’m the editor of bank automation News. Today is March 1 2020. For the buzz welcomes Joe wiper, she is the Executive Vice President and head of operations of citizens commercial bank. She has been on the bank’s commercial team since 2009. She is here to discuss her approach to new technology within the commercial business, including new technology launches, the bank’s digital Butler and its Payments API efforts. Welcome to the bus, Joe, when

    Joanne Wyper 0:58
    it’s a real pleasure to be here. So I’m Joe wiper. I’m head of operations in digital Citizens Bank for the commercial business banking divisions. I’ve been in citizen since 2009. And I currently lead all the operations regardless agnostic to product, whether it be business banking, Treasury, commercial lending, credits, global markets, etc. Yeah, I’m really privileged to have such a broad and varied team.

    Whitney McDonald 1:24
    Great. Well, thank you again, for joining us. Let’s get into a little bit more about your role, your strategy within the commercial banking, business, let’s talk through about some efforts that you’ve been doing within the digital channels there. Maybe talk us through your strategy there and how you’re meeting client demand, what they’re asking for on the digital front. Yeah,

    Joanne Wyper 1:43
    no, it’s a great question. That’s actually, you know, one of my favorite topics in terms of how do we bring the client into the center of what we do, but at the same time, we innovate around them. And our strategy here at Citizens commercial has never been about replacing that relationship with a digital channel. And in fact, it’s not, it’s about fully complementing, and adding options for our clients, or we’re very proud of our long running relationships, you’ll get decades old relationships with some of these clients. And it’s really fostered on trust. And we know who they are, we know where they are in their lifecycle and what they need and what solutions that we can take to them. So our digital strategy, and the approach that we’ve taken is about providing options. And given them new channels, should they want to engage with us and self serve like you would on some of those digital tools that we provide them with that commitment behind it that says you will always have your dedicated human being. But in addition to that, you may want to bank with those 24 hours a day, and you might want to do it yourself. So our strategy has always just been about complementing that real trusted adviser moniker that we’ve worked very hard to achieve.

    Whitney McDonald 2:56
    Yeah, that definitely make sense, right, combining the human and digital experiences. Of course, there’s demand for more digital capabilities, but still not eliminating that human touch. That that takes us greatly into our next question here about new technology. It’s hard to have any conversations right now with without tapping into AI and generative AI, how do those new technologies fit into your strategy within the business?

    Joanne Wyper 3:21
    Yeah, look, you know, like any new technology, we need to have a measured approach. And I do think that, you know, the way that chat GBT, and some of the generative AI that has exploded into the market is caught many people’s imaginations for, for all the reasons that that you’re asking me the question today, right? It’s exciting is that next step change. And that’s providing more potential more opportunities in the tech space. Right. So it’s incredibly exciting stuff. I think that, that we as citizens can see the adoption of it in many cases, right? If you think about commercial in terms of being able to rate through the lifecycle from a client perspective, it’s sales enablement, the ability to really rapidly pull together data and understand a more sophisticated way of what they might need right through the credit cycle, around how you package and how you generate information is speed into the service arena, where you can always get into a place where you can anticipate that client’s needs and their next best advice and next best product, etc. So, you know, it’s not without an abundance of use cases, I think the approach needs to be measured, I think you need to start with it in a comfortable sandbox. And a place where you probably want a human in the loop. You probably want to adopt the generative AI in a place that the human gets the final see. And once you become more comfortable with it, and once it’s more embedded in our processes, then you can start using it for more and direct interfaces into the digital channels with our clients. But yeah, I think you know, we’ve been using AI for a while now. It says and CFG is not a new thing. We’ve even had predictive vi I think the ability to generate content from the chat GBT in the chat. Smith’s of the world just takes it to that next level. So hugely exciting. Not as exciting as it would be if you hadn’t already been deployed AI for the last best part of the last five years. But yeah, certainly lots of opportunity. Yeah, I

    Whitney McDonald 5:18
    think that that’s great to point out that you have been using AI that you have found use cases. But of course, new use cases are surfacing. Of course, with generative AI, it adds another element to the mix, and, and all of that experimentation and exploration as well. Maybe we could talk through one specific launch that your team has worked on, which is the digital Butler, maybe you can tell us a little bit more about the digital Butler, how that rollout has gone and how it works.

    Joanne Wyper 5:45
    Now, that’s my other favorite topic. Yeah, so we’re really proud of digital Butler. We launched it in 2023. And we’ve been iterating it every quarter since then. It’s no one or a number of industry wars. And just this week, we got a patent approved. So what is it, it’s a one stop shop for clients? You know, we we changed our engagement model here for commercial clients a good number of years ago, back in 2017. And what we did is it was a human led innovation where we put a dedicated concierge agent aligned with every single commercial client agnostic to product, right, and that drove a high degree of personalization. So soon as you became a client, what would happen, you would be given your dedicated person who you could call that would navigate across all the products, anything that you needed. And that went down really well as you can imagine, right? You, you suddenly had a very friendly face, a very friendly person at the end of the phone that you trusted and build that trust with. And it brought a high degree of transparency. So the digital Butler was, was sitting back and saying, Okay, well, we want, we do recognize that people want to self serve, commercial clients included not just retail clients. And we want to give them that option. But it has to be personalized. And it has to bring that transparency, or what are we doing here, it’s another option to complement the human led innovations that we’ve done. So that’s what digital Butler is, it’s a one stop shop. If I’m a commercial client, I can come on to digital Butler, it knows who you are. So we can tailor the content based on the products that they have with us offer them advice based on the products that they have with us and give them transparency around where they may have an open customer service case with us. Wait, is that who’s at West? When’s it likely? What kind of pizza tracker idea. And in addition to that, you know, we’re iterating, every single quarter with new technology. And then short term, we’ll have scheduling capabilities, client notification centers, and then in the more long run, you’ve already asked the question about Jenny eight, but that’s absolutely kind of medium to long term connectivity into digital Butler. So that’s what it is clients really enjoying it. So far, we have about 700 clients choosing to use it, instead of calling their dedicated representative on a monthly basis. And we have about 30,000 clients using the gateway for information every single week. So we’re incredibly thrilled by it.

    Whitney McDonald 8:19
    Great, maybe a couple of things to break down there. So one thing that you mentioned that I wanted to touch on is this patent that you you are this week granted a patent. What’s that about?

    Joanne Wyper 8:30
    That? Well, we had a provisional patent for the last year, but it just got granted this year fully. Now, why is it a partner? And that’s right. There’s other banks that do digital offerings to their clients. What’s different about Butler is the high degree of personalization. So you know, from a retail perspective, there’s less complexity, you know, Whitney McDonald comes into her bank, they know who she is, and what products you have, etcetera. But when you think about the personas involved in a commercial client, that could be 100 150 employees of that client all have different authorities, different informational needs. So there’s a high degree of personalization that comes with that complexity. And it’s around bringing it from a service and perspective, a lot. The digital channels are about onboarding. They’re not about a one stop shop, and couldn’t onboarding and service and so, so yeah,

    Whitney McDonald 9:21
    great. The other thing I’d like to spend a little bit of time on and not much, but just because you mentioned it these iterations of the digital Butler quarterly, what are those based off of what are you kind of tweaking and updating? Is that based on usership? Or, or what are those needs that that are kind of changing along with the tech? Well,

    Joanne Wyper 9:41
    there’s two things so I don’t think innovation ever has an end date, right? You will constantly iterate and when you do, you’re missing something right or client needs change, and you have to keep ahead of it. But the other reason that we’re constantly investing in it in an iterative fashion is our methodology around driving change. So we deploy change in an agile fashion. Should. So we go to market with a product that we think our clients will like. And then we’ll continue to add functionality on it every single time. Every quarter that we get investment, we will add more functionality, depending on client needs depend on what we hear from them and our surveys, etc.

    Whitney McDonald 10:15
    So yeah, I love that innovation never has an ending right

    Joanne Wyper 10:19
    now doesn’t never sleeps either. Yeah,

    Whitney McDonald 10:22
    yeah. So then the next thing I’d like to discuss here, speaking of innovation is what other innovations your team is working on? Are there any other retail technologies or retail innovations that you’re able to plug into the commercial side? without reinventing the wheel being able to tap into technology that exists? How does that how does that convert? What does that conversation look like with your team?

    Joanne Wyper 10:45
    Yeah, so our organization’s large, so but we also are very good at making sure that we don’t reinvent the wheel as well, where there’s technologies will make sure that the consumer bank loan and the business bank and the commercial banker are maximizing the software that we’ve got in house or the stuff that we’re building. One of the interesting things that is an inflection point for innovation, good citizens will be our newly developing private bank. So if you think about that, there’s a huge crossover between the retail side of the house and the commercial side of the house, because our high net worth clients in the private bank may want some commercial products. Whereas, you know, in consumer before, that might not be a typical behavioral trait from some of our retail clients. So what does that mean? It means that we’re really looking at the infrastructure that sits behind the technology for so that so that the experiences are, you know, a standardized, it feels like if I’m a client, and I’m going to private buying, then dependent on a retail product or a commercial product, then it looks and feels like this level of, of sophistication that you’d expect from Citizens Bank. So there’s a lot of work going on at the moment to make sure that we have those very cohesive and expert digital experiences for our clients. So that’s very interesting. But one of the things that we’ve just launched in the business bank is cash flow essentials, which is essentially a digital platform that allows our small business clients to engage with us on a self serve basis. And for all your basic Treasury solutions, products that you might need cash, wire, Ach, etc. On board, June, a very simplified fashion, and in the backend of automated a lot of more plans to make that onboarding as instant as possible. So there’s some really exciting stuff happening across the entire enterprise.

    Whitney McDonald 12:36
    Being of all that exciting stuff, maybe we can shift a little bit more to this, this forward. Look, we’re coming into March 2024. And, and we’re getting through the first quarter. But what is your team really working on? What’s on the in the pipeline for the rest of the year? And and what’s your focus on? Or what are you excited about?

    Joanne Wyper 12:54
    Yeah, excited about the whole thing, actually. So we’re only in February, still enough feel like the delivery that we’ve been doing in the first two months has been incredible been dropping code almost every week. And we’re constantly surveying that landscape. So I may have an agenda set for 2024, unpacked, 2526, and 27. It’s never ever done in a sandbox, and all the building blocks that we need to do as an organization, and where we need to be placing those investment dollars. But we’re constantly looking out into the market to understand what needs refresh and reprioritize. should, should expectations change should access to technology change, right? That could be another step change, we’ve just talked about Chuck UBT. But that could be something else that comes along. And we would want to be able to pivot quite quickly. But you know, as it stands, we’re there all the rest of that changing. We’ve we’re excited about a new payment hub that we’ll be deploying about halfway through this year. We’re exploring connecting to our clients, ERP systems directly. And, you know, use cases for Jenny i, and addition to that huge part of what I’ll be doing in the commercial bank is connectivity around data. So we have a significant API agenda, which is really about where we store our data, how we connect it, how we move it and where we move it to. And I think that that is going to pay huge dividends from a client experience perspective in terms of speed and accuracy, as well as freeing up some efficiency and our operations so that we can recycle and reinvest that back into the relationship. He’s so so much going on. So much going on Whitney. Yeah,

    Whitney McDonald 14:35
    it sounds like you’ll be quite busy. Looking forward. Yeah. Um, before we wrap up anything that we didn’t hit on, I know that we talked future luck. We talked in AI, we talked innovation, but anything that we didn’t hit on that that you’re focusing on or excited about, or did we hit it off?

    Joanne Wyper 14:54
    We had it all if we’re talking about the bus to the bank automation, then I think we had it all out. You know, I think it’s a topic that we could talk about for hours, to be honest, a, I’m really excited about 2024. I think that our agenda for digital has been going for five years now. And we’ve seen a lot of improvements that our clients are thrilled about. I mean, our customer survey results in terms of net promoter score is an all time high is 73, which is world leading, our response times have went up. So I think for us, we went from like 90% resolution and in same day to 93%. And with all the technologies that we’ve just talked about, that it’s only going to get faster, cheaper and better. So yeah, incredibly buoyant and positive about what 2024 will bring for clients and for Citizens Bank.

    Whitney McDonald 15:47
    You’ve been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time, and be sure to visit us at Bank automation news.com For more automation news,

    Transcribed by https://otter.ai

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  • Podcast: Jack Henry’s incoming CEO talks 4 tenets of leadership | Bank Automation News

    Podcast: Jack Henry’s incoming CEO talks 4 tenets of leadership | Bank Automation News

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    Jack Henry Chief Operating Officer Greg Adelson will take over as chief executive for the tech provider in July.  

    On this episode of “The Buzz” podcast, he discusses how his four-tenet leadership strategy will be reflected in his new role as he takes on Jack Henry’s ongoing cloud modernization.  

    1. Transparency. Have direct conversations with associates and customers. That means not necessarily telling people what they want to hear but what they need to hear.

    2. Consistency. Internally, make it easier for associates to cross over into other groups and show career advancement opportunities throughout the company to increase employee longevity. 

    3. Collaboration. Work as a team. The more group collaboration, the better. Have different areas of the business spend more time solving problems and building products together. 

    4. Communication. Talk to teams and customers in a variety of mediums. 

    “The more people that are in the know, the more they’re motivated to solve whatever the next problem is,” he says. 

    “That’s really been the leadership style that has worked for me, really, in all my roles, and I wanted to make sure that was something that was a focal point here,” he tells BAN. 

    Get ready for Bank Automation Summit U.S. 2024 in Nashville, Tenn., on March 18-19! Discover the latest advancements in AI and automation in banking. Register now. 

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:02
    This episode of The buzz is brought to you by bank automation summit us 2024. This annual event is tailored to resonate with financial services professionals focused on business optimization through technology and automation. Learn how to overcome implementation challenges by hearing firsthand from C level executives from institutions, including Bank of America, Wells Fargo city and more. There is no better place to get a read on the competition than at Bank automation summit us 2024 Register now at Bank automation summit.com. My name is Whitney McDonald and I’m the editor of bank automation News. Today is February 26 2024. The bus welcomes Greg Adelson. He is the chief operating officer at Tech provider Jack Henry, he will take on a new role in July as chief executive of Jack Henry as Dave FOSS retires and moves into his new role as executive board chair. Greg is here to discuss how the transition is going and how he will continue to support Jack Henry’s ongoing tech modernization strategy.

    Greg Adelson 0:57
    Yeah, I appreciate it. And thank you for having me today. Whitney. So so just to be clear, I don’t officially start till July the first. So Mr. Dave Foss will be in that chair until July the first. But I’m super excited about the opportunity to take over this great company and, and kind of lead us to the to the next phase of our growth. But as far as my background, you know, I have an accounting degree. So I started in financial services. Actually out of school, I started outside of financial services. But I got into financial services in 1996, and had several different roles in both the credit card acquiring and issuing side of the business. I’ve also had some of the executive roles along the way, President titles and COO titles at several different companies before I landed at Jack Henry in 2011. When I came into, to Jack Henry, I, we had just acquired our billpay business called iPay. And that was acquired in 2010. I started in 2011, when the founders had left. And so I read ran that business for three years, got promoted to run all of our payment businesses, which included our card business bill pay, and our remote deposit capture business. And I did that until 2019 When I was asked to become the Chief Operating Officer. So I was in that role for for for the last four and a half years. And I picked up the president title right around two years ago. And and now I’m honored to take that next step.

    Whitney McDonald 2:36
    Great. Well, thank you so much for for kind of setting the scene there a little bit on your on your journey, and where you’ve taken, or what you’ve been doing at Jack Henry as well. Before we get into some some future lugs, it would be great. If you could talk us through your role today what you’ve been doing at Jack Henry as of late that’s preparing you for CEO.

    Greg Adelson 2:58
    Yeah, I think it really goes more into my experience as the Chief Operating Officer and again, most recently as president. So you know, I’ve had responsibilities, you know, we have about 7200 employees. And right now about 6800 of those report into my organization. So I have total responsibility for all of our product lines, all of our technology, infrastructure. Net, and our sales organization as well. So really, the only things that don’t report to me today are legal risks, finance and HR. And so, you know, as part of that preparation, you spent a ton of time with clients and spent a ton of time with the folks that are really kind of making the sausage, as we like to say. And so it’s been, it’s been a great experience to, you know, be a part of the strategic decisions that we have been building over time. And so I think that’s one of the things that should be a comfort level for, for our customers and partners, and really even our associates is that I’ve been a very integral part of building out the strategies that we’re executing on now. As well as other strategies along my way of being here, especially our car platform migration, and a couple of acquisitions that I was, was key in so I think, you know, everything that I’ve done not only in my current job, but even in past roles in other companies, you know, they all help prepare you for whatever that next step is going to be and I I definitely take time to learn from those I work for those I work with, and try to kind of blend those those learnings into what will continue to be the philosophy that I I use today.

    Whitney McDonald 4:51
    Now speaking of some of those strategies, and I know that you talk through a couple of those that you’ve been a part of, I’ve been following along Jack Henry’s cloud You’d have strategies, tech modernization, maybe you could talk us through how you’ll continue to approach this ongoing effort.

    Greg Adelson 5:08
    Yeah, absolutely. And I think, you know, most people need to, I guess, maybe understand our tech modernization strategy. So it’s really, really rebuilding the traditional core and non core functions into a flexible cloud native portfolio of services and solutions. And I think that’s important for people to understand. Because we’re doing we’re taking an approach that’s much different than those that are in the market today, especially our largest competitors, where we’re taking the components of the core. And we’re actually breaking them out into discrete you know, kind of what we call kind of components, and building each of one of those in a cloud native API first technology set. And then we’re taking some of the some of our newer products that we’ve rolled out most recently bandeau business, Financial Crimes defender, pay center, other things like that, that have been out on the market for a little while, which all have been built with the same type of of mindset. And we’re putting them onto a single platform, which we call JH platform or Jackanory platform. And so that is really going to enable our clients to have access to everything, they need to run their financial institution in a in a single platform. But it gives them all the advantages that the cloud offers. So you know, things like high system availability, real time processing, streamlined, you know, kind of operational, or what we call DevOps, you know, your ability to bring products to fruition, you know, much more quickly or make changes and feature enhancements much more quickly as well. So that’s been a big part of really driving that that part of our, our mindset. And so I think when you look at really what our competitors have done, where there’s been less focused on really trying to break the core in and really trying to just build some level of cloud nativeness, or public cloud nativeness, to their solution sets, it’s taking a little bit longer, it’s much more of a bigger lift, than what we’re able to do as part of our our strategy.

    Whitney McDonald 7:29
    Maybe I’d ask you to take that just a step further about that, that need and the demand for a one platform approach, and maybe even talk through what a siloed approach looks like, and why there’s a need for this single platform.

    Greg Adelson 7:44
    Well, the single platform will enable a lot of things. So we’re able to take both Jack Henry products and third party products and integrate them into the platform. Also, when you think about the historical view of how core processing has worked in, you know, even at Jack Henry for 40 plus years, is that there’s multiple cores that a customer could be presented. And so Jack Henry, you know, fortunately, we only have three banking cores in one credit union core, but a lot of our competitors have 15 to 20 different course. So the the opportunity for us and for our clients is to have all of our develop development going in, eventually. And again, this isn’t going to totally happen for many, many years, because we’re continuing to invest in our existing course, but to allow the investment, the flexibility, the Creed, the innovation to all happen on a single platform. And when that is, you know, when that is part of the process, you truly will have banks and credit unions operating on on the same platform with their own idiosyncrasies that that apply. But it again, speed, the development, the ability to have those fintechs all integrated into only one platform. So they’re all going to be very interested in working with Jack Henry, because they only have to do that one time instead of you know what they have to do with a lot of our competitors today. So it’s really part of what we view as the the long term view of this industry. And again, making it simpler to do business with Jack Henry. But more importantly, being able to be innovative faster than than we have today are really what the industry is seeing today. Thank

    Whitney McDonald 9:32
    you, and thank you for breaking that down. Now I know that you’ve talked a little bit more long term and bigger picture, but maybe we could talk a little short term to on what really is top priority when it comes to this tech modernization strategy. What are those more short term short term investments that you’re making?

    Greg Adelson 9:51
    So we’ve made we’ve made several so some to date that we’re still kind of finalizing the others that are Part of the rollout of the various components, but, you know, short term, what we we really wanted to do was build out what we call the Shared Services mindset. And that is ensuring that we build things one time, and are utilized in multiple, multiple places. And so in the, in the past, you know, each of our individual product groups, and we basically operate about nine different product groups, they may have the same need for a particular feature or functionality that each of them would build individually into their own their own product sets. So we may have something that is built, you know, four or five different times, and potentially different ways. So from a cost standpoint, you know, you’re using those resources to build something that you could have just done one time. And so now we are only building things one time and using it in multiple areas. So that shared services man mindset provides a couple of things. So obviously a cost structure that’s improved. But more importantly, like I said, for, excuse me, for our our clients is our ability to innovate much more quickly. So when something needs to change, or things are changing, regulatory wise, or, or anything, we’re able to make that change one time, and then the API’s will be utilized in each of those products set. So a huge advantage. And that’s been a big focal point for us. And we have several examples of things that we’ve already done to make that happen. And then I think the we’ve been focused on getting our wires platform out. So that’s been the very first component that’s come out of the out of the GH platform tech modernization story. And then I did mention things like bandeau business and pay center, and defender, which are all components that will sit on top. But the big focus for 2024 is around a couple of things. So one is what we call data broker. And it’s basically a single repository where all of the jack Henry products data sits, that gives the institution the ability to utilize that data in a lot of different ways, in a very simplistic way. And also, over time, we’ll have some generative AI type capabilities in there as well. And then we’re adding to that data broker solution, a product called executive dashboard. And that’s really being built for the C suite, executives at the bank or credit union, that will allow them to do deep dive insights truly, in real time. You know, I sit in meetings all the time, where some of our CEOs are in there and literally have their on their computer, you know, hit refresh, refresh, refresh, to try to get the latest data on their institution. And so not all that data is in real time for them today, you know, based on, you know, either using us or somebody else. And so this will be a really big opportunity for our institutions. So we’re super excited about getting focused on that. So those I think, are the most near term things that we’ve either done, or working on right now.

    Whitney McDonald 13:22
    Now, speaking of that 2024 roadmap, this would be a good pivot to talking about some new technology that’s going on in the industry. Right now, I know that you mentioned generative AI, I know that you mentioned more access to real time data. Maybe you could share a little bit more about what new technology you’re excited about this year, there’s just so much going on in the space, and even beyond our industry, but maybe you could share a little bit what you’re excited about for the opportunity with this new type of technology.

    Greg Adelson 13:51
    Yeah, absolutely. And I think, you know, really, it starts with AI, right? I mean, that is that is something that is going to revolutionize many industries, and will definitely have an impact on the financial service industries in a variety of ways. I mean, things that, that, you know, have been mundane in the past tasks, that you’re you’re able to eliminate the ability to improve developers, you know, output and accuracy, the ability to do some automation, specifically. And in some of the tasks like you know, we have a call center, there’s opportunities for us to improve the ability to handle some of those tasks and improve our customer service for our clients. We have some products that we built out that are specifically built to assist the institution with their customers, product that we call bando conversations and we actually have done a demo of how generative AI can be utilized in that particular product. So like I said, everything kind of starts there. You know, we’ve talked about the Public Cloud and the public cloud will have some timing challenges, there’s still some regulatory things that need to get worked out. And, you know, not all of our institutions are interested in moving to the public cloud. At least from a core perspective, we have a lot of our products already in the public cloud. But But again, there isn’t anybody on a core perspective. So there’s some things that people have to get comfortable with. Before that will, you know, that will be the mainstream kind of kind of thing. But, you know, the other stuff that we’ve been we’ve been highly focused on is really our ability to enhance our fraud products. So we believe that, you know, when you talk to the institutions today, most of the CEOs continue to be very concerned about fraud, you know, real time fraud that comes from Zell, the real time payments network that the Clearinghouse runs, and of course, now the Fed now network. So those are, those are things that people want to make sure, because Faster Payments, equals faster fraud. So we’ve been highly focused on using some solutions that we have, again, financial crime, its defender, I brought up a couple of times, which is a product that we’ve rolled out to help combat that it does have real time processing capabilities, something that we have not seen from any of our competitors, today that that are truly real time. So we believe we’re going to have an opportunity to help the institutions and some of these, these rails fight fraud a little bit better. check fraud is another big concern that’s been out in the marketplace. And again, this product, as well as other things that we built, internally, are focused on on check fraud. You know, you can’t do anything today, when you think about the financial services, banking industry, without having a really good digital platform. And so we’re pretty proud of our bandel platform, and a lot of the feature functionality that we have in there that allows you know, that particular platform to be the front door for the institution, so that technology and advancements have all been part of, of really how Jack Henry is, I think kind of turned the corner, we’ve always been known as a a very high level service excellence organization. But I think people are now recognizing us as a truly innovative technology company as well. So when you put innovative technology with superior customer service, you know, we’re starting to see the results of that with our, with our sales wins and pipeline growth over the last couple of years. So

    Whitney McDonald 17:48
    shifting a little bit here, I know that we’ve talked about the technology, the roadmap for 2024, a little bit about your background, but we can kind of do a little bit more of a forward look. Now, I’d love to hear a little bit more about your transition into your new role, how David fosse has helped you prepare what that has looked like and what the next couple of months will look like as you guys make this transition?

    Greg Adelson 18:11
    Yeah, great question. And so one of the things that Jackanory we pride ourselves on are are very succinct and consistent succession planning. So we actually do this, every, every single individual all the way down to truly the lowest manager level we have, is responsible for creating a succession plan. And so that succession plan gets submitted, gets reviewed, actually, Dave and I, over the last four years have gone through everyone’s succession plans that at a variety of levels to make sure that we’re comfortable. You know, we asked a lot of questions, the teams ask a lot of questions. So the short version of that is, is that, you know, this discussion for my upcoming role has been going on for a while. And so as part of that preparation, obviously, you know, getting into the CEO role and kind of living the daily routine of have a lot of involvement with customers and our team and things along that line as part of the preparations. But the other part is, is that I’ve been very fortunate that I’ve been at Jack Henry almost 13 years and Dave is the only boss I’ve ever had and that’s important because he you know, he and I are are very much aligned on kind of philosophical approach to running the business, we have different backgrounds, I have an accounting degree and he has a you know, more of a is degree Information Services degree, but, but we have a lot of commonality and and again, how we view the company. So, you know, part of that preparation is is really understanding some of the The things that you don’t you don’t see in your co chair that you’re going to see in your co chair. So Dave is given a lot of his time and helping me prepare for that. But honestly, you know, a lot of it is just through, like I said earlier, kind of working through other roles and positions and an understanding that you can’t change your philosophical leadership approach. Regardless of what role you’re in. That’s something I’ve been very consistent in. And so the work that Dave has helped me with, but also just my own background, and, and trying to be consistent, and how I lead is really what I think has helped prepare me for the role.

    Whitney McDonald 20:40
    Great, and thanks so much for talking us through that, that timeline and more of the succession plan and what those conversations might look like. I know that you also mentioned that you’re aligned with the strategy with Jack Henry, but maybe you could leave us off here and tell us a little bit more about your unique leadership style, how you expect to lead as CEO and how you’ve led in the past. Yeah,

    Greg Adelson 21:02
    thank you. So a couple things. So back to the strategy, just so you, again, I kind of put a bow around that is, we have been building out our tech strategy for for many years. And again, being a part of that, when I took over it as Chief Operating Officer, I wanted to institute a program that we called one Jack Henry. And so that really was was positioned around creating the ability for our company to be a better partner with our clients to be a better partner with the consultants in our industry, and creating more opportunities for our associates. Because when you’re when you’re kind of built as a more siloed company, which kind of comes out of a multitude of acquisitions that we’ve done, we’ve done 57, I think and in our 47 year history, and you know, kind of a byproduct of that is you tend to get kind of siloed not not on purpose, but it just happens. And so I wanted to create more consistency and more opportunity. And so I’m kind of leading that up into my leadership style. So as a part of rolling that out and trying to get people behind the program, you know, I’m big about creating a vision, and then trying to communicate that vision in a variety of manners. So in keeping consistent with that, but I believe that the only way that this program was going to work was for us to adopt what I have, I’ve called the four tenets. And those four tenets are transparency, consistency, collaboration, and communication. And my belief was, is that if we let our teams using those four tenets, but also had those same principles apply with our customers, that we would be the company that we aspire to be using one Jack Henry as kind of the North Star. And so it started with transparency? Well, you know, you want to make sure that you’re having direct conversations with your associates, you want to make sure that you’re having direct conversations with your customers. And that doesn’t always mean that you’re going to tell them what they want to hear. You’re going to tell them what they need to hear. And so, one of my mantras was do what we say we’re going to do. And so, you know, let’s make sure that we’re we’re being very transparent on things that we’re able to go do, and things that we’re not, and let’s not tell people, oh, yeah, we’re gonna get to that if we never are. And so I started to create roadmaps that kind of applied to that and the execution of those. And so that was kind of the transparency mindset consistency was really like I said, you know, making it easier for our associates, to, to cross over into other groups. You know, lots of times in companies, people leave a company just because they don’t feel like they have an opportunity where they are, well, the more we kept created consistency in our company, the more that we were going to create career paths, because they wouldn’t feel like they were jumping to another company just because they were going to a different division. And, and we’ve seen that we’ve seen a lot more career advancement and opportunities for our associates, but also, again, back to our clients, creating that ability for us to look like one company through consistent processes and approaches and things like that. Collaboration really is all about making sure that you’re working together as a team in again towards that Northstar goal. So our our focus has been the more that we get not only diverse folks into our organization, but the more we collaborate across the groups where again, people would kind of go solve their problems to get it within their own little walls, and they wouldn’t share their their their advanced and some of those issues. So we would kind of recreate the same issue again, and another group. And now, teams are spending more time collaborating, and building products collaborating to solve customer service challenges, things along that line. And then communication is really what it is. It’s just making sure you’re talking to your team’s your customers in a variety of mediums to ensure that they’re, that they’re in the know, and the more people are in the know, the more they’re, they’re motivated to go solve whatever the next problem is. And so we’ve seen that that’s kind of been the leadership style that has worked for me, really, in all my my roles. And so I wanted to make sure that that was something that was a focal point for here.

    Whitney McDonald 25:44
    Great, and that that definitely comes through and thank you so much for breaking down those four areas of focus and, and it really stands out the the consistency and making sure that not everything changes at once. Right. And I think that goes back to what you were saying about just these long term conversations and, and having the succession plans in place. And it all kind of connects those dots, as you do have change in leadership. So thanks so much for breaking that down. Sure. Before we close out anything that we missed that we didn’t touch on that you wanted to be sure to

    Greg Adelson 26:19
    know I think one thing I’d like to do is I’d like to give a real shout out to Dave Fosse. You know, Dave has been our CEO for eight years he’s done a tremendous job. He’s been a tremendous leader mentor. And I’m like I said, I’m very humbled and excited about and you’re planning assuming the next role but your time and be sure to you know, he’s he’s moving into an executive board chair role, so he’s not going too far. But, but, and he’ll be there, you know, if I need him as our board chair, but it’s been a it’s been a real pleasure working with Dave and he has done a great job for Jack Henry and, and his legacy will be one that will be remembered for a long time.

    Whitney McDonald 27:06
    You’ve been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time and be sure to visit us at Bank automation news.com For more automation news,

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  • Podcast: How to operationalize a bank | Bank Automation News

    Podcast: How to operationalize a bank | Bank Automation News

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    Financial institutions continue to spend on technology but many bank technology experiences are disjointed. 

    Banks are hurting their efficiency and overall customer experience with technology that doesn’t connect seamlessly, Emily Steele, chief operating officer of fintech Savana, tells Bank Automation News on this episode of “The Buzz” podcast. 

    To create more seamless digital experiences, banks must unify their digital layers on a single technology platform, she says. All of the bank’s processes, including automation, routing, communications, notifications and alerts, should come from one platform. 

    For example, Savana technology enables back- and front-office teams at $9 billion Woodforest National Bank to support all customer and product needs, Steele said. 

    Listen as Steele discusses how banks can use technology to create efficient and consistent processes throughout their operations. 

    Get ready for Bank Automation Summit U.S. 2024 in Nashville, Tenn., on March 18-19! Discover the latest advancements in AI and automation in banking. Register now. 

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:03
    This episode of The buzz is brought to you by bank automation summit us 2024. This annual event is tailored to resonate with financial services professionals focused on business optimization through technology and automation. Learn how to overcome implementation challenges by hearing firsthand from C level executives from institutions, including Bank of America, Wells Fargo city and more. There is no better place to get a read on the competition than at Bank automation summit us 2024 Register now at Bank automation summit.com. My name is Whitney McDonald and I’m the editor of bank automation News. Today is February 13 2024. The buzz welcomes Emily Steele. She is the president and chief operating officer of FinTech Savannah. Before joining Savannah, she spent time at Tech provider Temenos. She is here to discuss how financial institutions can invest in technology in a way that won’t lead to disjointed experiences in the long run. She will also explain how long term tech investment can lead to better banking experiences, and overall better customer experiences. The buzz welcomes Emily.

    Emily Steele 1:06
    Terrific, thanks so much with me, it’s a pleasure to meet you. And thank you for allowing me the opportunity to participate in the buzz podcast. So my name is Emily Steele and I have been in the technology industry my entire career, I have worked on technologies that surround the core, I have sold and been a part of companies that have built core software, and most recently joined Savannah about a year and a half ago. And our focus is really two primary missions, we are focused on helping the financial industry improve the banker experience, and helping banks improve their customer experience. And I say banks, but it can be banks, credit unions, FinTech, anybody in the financial industry, really focusing on creating that truly frictionless interaction between a bank and its customers. So that’s what our mission is. And we do that by bringing a digital delivery platform to market with a multitude of solutions for the banker and the customer. So we are very excited to be a part of part of transformation in today’s crazy technology space that we’re in.

    Whitney McDonald 2:27
    Yes, crazy. Technology, space is definitely one way to put it. There’s something new happening in the industry, when it comes to technology, it seems like every day. So again, thank you so much for joining us. During today’s discussion, we will be talking about how to address clunky core systems approaching modernization. So with that, maybe we can just start bigger picture here. How does a financial institution address these clunky core systems? How do you modernize what works? What doesn’t work when you’re when you’re taking this approach to modernization?

    Emily Steele 3:06
    Yeah, it’s, it’s so interesting, Whitney, because I feel like the industry often thinks about modernization as core transformation. And you use the word clunky. And the industry uses the word legacy, for course, and we only really consider a transformation at the back end from a core perspective, or the front end from a digital digital perspective. And we really come at it. And I come at it from a little bit of a different viewpoint. Because if you look at the last two decades, there’s a tremendous spend billions of dollars spent on driving transformation and modernization. But it is almost always targeted at improving self service and digital customer experiences. However, it’s actually creating in our opinion, problems with mismatched, disjointed array of solutions that ultimately begin to present a, it’s supposed to create a unified front, but ultimately, it creates a completely disconnected front, what we find is that really all of these systems that are getting added on the back or the front, they’re ultimately hampering operational efficiency, not improving customer experiences. And from my point of view, modernization, I think we need to look at it from a different lens, and not the back, not the front, but rather look inside of a bank and a credit union and focus on an approach of modernization that’s really operationalizing the bank unifying technology inside of the bank so that those different silos or different systems can begin to talk to each other and ultimately serve the customer better. I think that’s actually how We create a better banker experience and a better customer experience, not just looking at core transformation, but instead operationalizing a bank.

    Whitney McDonald 5:10
    Now, you mentioned this this disjointed experience, of course, you’ve seen different solutions that can work for the short term or you’re plugging in here are plugging in there. How is the financial institution? Do you really know when your system has reached its limit? That you do need to look internally and your operations aren’t necessarily working at their max capacity? What are those signs that you should be watching for to say, hey, I need to take a look at how all of these systems are working together or not together.

    Emily Steele 5:39
    I love that. So I think that there’s a couple of places to look. So if we think about, I’m often asked, the question is specific about core? And I always like to say that, look, I don’t know that core is really the always the challenge. The purpose of a core is to act as a ledger, to provide the account balances the transactions, the interest post, posting, the product manufacturing, if the core is actually performing those well, and it’s an open system, allowing the bank to connect surround systems, then I would challenge is that really the problem that you’re having? So for me, when you think about what’s reached its limit, as you described? I think that it’s about asking, what’s the real problem that you’re trying to solve for. And often, what we’re finding is if bank executives or credit union executives, ask their operational teams, what’s working and what’s not, or stand behind them, and watch how they’re working, what they’ll find is, most bankers are actually entering into anywhere from eight to 15 different systems at any given time. And ultimately, that’s creating a swivel chair, it’s creating inefficiencies, it’s creating mistakes. It’s how regulatory issues get missed whenever you’re trying to be regulatory compliant. But you’re toggling between systems, or you’ve got this procedure book of a checklist of the way that you’re supposed to create or execute a task. So from my perspective, I think that you look at how are you operating? And is it efficient? Is it driving the results that you’re looking for? So for me, whenever you think about the silos that you mentioned, and how do you know it’s the limit, it’s whenever your fingers are working in too many systems, the systems aren’t connected. And ultimately, that’s not able to be pushed forward to your customers. So I don’t think it’s always about core, let the core do what the core is supposed to do. Act as a ledger, be the householding be the product manufacturing. And if all of that’s working, look at what the other problem is, and try to solve for that specific problem.

    Whitney McDonald 8:04
    So So you mentioned a couple of things. One being asked that specific question of what is the problem that we’re solving for? Rather than Are we are we doing all of these different tasks at the same time? What are we actually trying to address? And then you also mentioned looking internally, so not looking at the backend? Not looking at the front end? Maybe we could break that down a little bit? How do you really do that? What does that approach look like? And how do you change your mindset to not just look at the back end or the front end? But really look at the operations as a whole?

    Emily Steele 8:38
    Yeah, that’s an excellent question. And it’s exactly what we think that the banking industry needs to look at today. True modernization of today is about orchestration technology, not just that front and back like you described Whitney, but orchestration that really enables both channel and core agnostic, because those systems that are in the back are often multiple cores to support deposit servicing, to support mortgage servicing, credit card servicing. So that’s what the silos have a very business specific need in the bank. So you need an orchestration technology that’s core agnostic, that can talk to all of those systems, unify them. But it’s also channel agnostic so that you have an opportunity to layer and drive consistent experiences. Regardless of where your customer is actually sitting. They might come in through a self service channel, they might come in through branch through call center, through back office, through an online banking channel through a kiosk, a orchestration technology that can connect all of those channels from a channel agnostic and connect to the core agnostic is where we believe that modernization should actually begin today. The end result then is that the orchestration you is really from core to customer. And then it’s pushing all of that process communication and everything in between. So that the channels can be leveraged very consistently, what it results in then is a bank employee can better do their job, they’re able to help customers as problems arise, while those customers then get a better consistent experience, regardless of how they’re interacting, and it really does include operationalizing processes. And then integrating those two, the front and the back, ultimately providing a single place versus those eight to 15 different places, a single place for a banker to work, and then the customer service channel, regardless of the channel, they’re getting that same experience, because the processes inside of the bank have been operationalized. Does

    Whitney McDonald 10:51
    that make sense? It does. And maybe we could take it a step further, just just to clarify this idea a little bit more. So talking through this, the seamless communication, the connection necessary so that you don’t have this siloed approach? What does this really bring to a bank? And I know that you talked about customer experience, and I know that you talked about having that seamless experience. But what does that really bring to the bank, even on the on the back end, your digital potential, what you can bring in terms of, of innovation? What is that connectedness and that that seamless communication bring to the back end of the bank, or institution? Yeah, no,

    Emily Steele 11:29
    that that’s excellent. And I think it’s a few things. We really believe that once you’ve got a digital layer, or this single platform that’s connecting or unifying the bank, it simplifies a lot of things. One, it enables, as I already shared the banker to have a single platform, it also ensures that all of those processes are orchestrated today, bankers are going individually into each of those systems. And they have to remember what the steps of very simple or very complex processes are. And then they’re often routing their work to various different departments inside of the financial institution. So if you think about what a unification platform brings to a bank is, it’s orchestrating that process in its entirety. It’s automating it where it can, it’s routing it, and it’s sending all the communications notifications and alerts immediately out to the consumers. So it eliminates a few things. Once the bank has operationalize, it makes training so much simpler. They’ve got one system to train in, when they’re then a second thing that it does. You and I started the conversation with technology craziness, right? There’s always a new technology, there’s always a shining star out there that everybody wants to try something new, it’s very difficult to implement in banks, modernization is hard, because they’ve got to retrain employees, they’ve got to retrain their customers, all of their materials have to be updated, they have to ensure regulatory balance, and everything remains intact. If you’ve got an operation system that’s unifying all of that, you can swap out technology much faster, much easier, because you don’t have to change all of your procedures. So you don’t have to retrain your staff. You don’t have to retrain your customers, it eliminates that because everything’s been centralized. And then finally, the other thing that it does is, it really begins to simplify a customer’s experience. And this is probably the most important, and I’ll use an example. I’m gonna use a simple example. But one of the things that we’ve been talking about for years is bringing the ability for us, you and I, as customers of our financial institution, much more self service, we don’t want to rely on our bank, we did, when was the last time you actually went to your bank, you want it to all be online. So the ability to bring a lot more self service forward to our banks, customers, or our credit unions customers. And the way that we can do that, once we’ve unified the processes is by having open technology that can push those same processes. So let’s use an example. You want to change your address today. Very simple process. But for a bank, it’s not that simple. Because there’s regulatory considerations. There’s, you’ve got to check and make sure that it’s a valid address that I as a consumer might have fat fingered and entered wrong, and we don’t want garbage in garbage out right into a system. So the system needs to check and make sure that that’s a valid USPS address velocity. We’ve got fraud considerations if people are changing their address regularly, it may be because of some fraud that they’re trying to commit. There’s notifications from a regulatory that if you change your address, you’re required to get a notification just in case it wasn’t you that did it. Imagine if all of that is orchestrated. If, and if you can push a button and all of that happens, and all of the backend systems get updated, now you get a better experience. Or if we take another one, let’s assume you start a loan application online, but you hit a snag. Now you want to call into the bank to figure out where that loan is, if the systems are connected, your banker can pick up the phone and see exactly where you left off in your self service channel. So the third and I think the most important is it really creates a better customer experience bringing that self service to them, and consistency across their channels.

    Whitney McDonald 15:40
    I mean, those are all key points and create key drivers. And those questions that you were asking or that you mentioned earlier, what should you be asking of your institution? What problems are you solving for? Those are all examples of those problems that institutions are working to solve for with the ultimate goal of that seamless customer experience. At the end of the day, it’s a people’s business with, with all of the technology that you have, you want to be serving your customers in a way that’s that’s the easiest and most convenient. Maybe we could go through some examples of financial institutions that are that are on their modernization path, or that are simplifying this, this journey to the customer side, on the back end side. You don’t necessarily have to have to name an institution. But if you have any examples there of some of those processes that have been improved throughout modernization, that’d be great.

    Emily Steele 16:34
    Absolutely, at one of the we’ve been implementing bank right now, that is a perfect use case for this, and they’ve got over 800 branches, they’ve been in business for a very long time. And they have a lot of what would be considered legacy systems. They’ve selected Savannah specifically to support them in a full stack, tech conversion. And their goal is to unify their departments and their service channels through a single digital delivery platform. They’ve selected Savannah to do that for them. And this is Woodforest bank has actually partnered with us to bring this technology forward. And ultimately, what they’re looking to do is enable their back office, front office teams both call center and branch to support all of their customer and product needs. On any channel with speed and consistency. Their goal is a single delivery platform, we do have other financial institutions that don’t want to bite off sort of the big bang approach of doing core to customer all at once. So sometimes they’ll start on the front, because we have solutions, that you can start at the front and then build your way back by operationalizing, after you’ve gotten your digital channels in play. So some of our customers choose to start on the front to enable as much self service while they’re implementing their operationalization of the overall bank. What we’re really finding is a trend we’ve we’ve talked about unifying. And you saw technologies over the years that were integration layers, or ESPs. So lots of people have been talking about this, the difference in what we’re talking about today is it’s not just an integration layer, it’s banks really having a desktop that they can work from. And then behind the scenes is the magic of the integration layer, regardless of where you want to start that implementation. So we also have banks who are using it for the the trends that you’re probably talking about on other podcasts with embedded banking and bringing more FinTech services to their customers. So they’re integrating using our servicing layer and our digital channels to get embedded banking and additional services out to their customers quickly.

    Whitney McDonald 19:06
    Now, I’m going to kind of combine my last two questions just based on what you were saying, In your previous response. A full tech conversion sounds very intimidating. It’s a huge undertaking. So what you were just mentioning about you don’t necessarily have to do it all at once. You can you can do these more self service implementations early on. So you don’t necessarily have to do it all at once. So that that is one question that I have. So what could we done in the short term what you kind of discussed so maybe we could take that a step further, but maybe combine that with, with what would what advice or one one lesson learned that you would get one of these financial institutions listeners in our audience about how to approach modernization and noting that you don’t have to do it all at once? So what is that takeaway of how do you get started or or what’s one place to start on this path of modernization to to really enhance your institution?

    Emily Steele 20:07
    Yeah, I think you nailed it as well. I think the key is to just get started. And getting started isn’t about trying to solve for utopia, figuring everything out. It doesn’t have to be operationalizing every single thing in your bank, you can choose one process to start with, one that we have a bank, who we’re working with today, that’s decided to first start with disputes. I think it goes back to what you and I were talking about at the very beginning, really understanding what are the problems that you have at your financial institution that you’re trying to solve for, and not just leaping to the buzzwords of modernization, modernization is more than just replacing the core modernization is more than just adding a new, sexy digital channel. It’s about looking at how do you holistically change the way you serve your customers? How do you create a wow customer experience? And I think it is time to take the bold step, intimidating step, but bold step to re operationalize from the inside out at begin to eliminate silos, empowering employees and delivering exceptional frictionless experiences across customers. And while we’ve talked about that vision for a long time, we’ve not actually been able to achieve it. And it really is how financial institutions can future proof themselves for really generations of banking. And it only takes one step. It doesn’t have to be every process. It doesn’t have to be front to back, choose one and get started.

    Whitney McDonald 21:47
    You’ve been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time and be sure to visit us at Bank automation news.com For more automation news

    Transcribed by https://otter.ai

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  • Podcast: FIs invest in digital experiences, AI and data | Bank Automation News

    Podcast: FIs invest in digital experiences, AI and data | Bank Automation News

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    Financial institutions are looking to technology providers to keep up with digital capabilities requested by clients.  

    Based on consumer needs, technology service provider Fiserv is “making a big bet across all of our digital assets,” Fiserv’s President of Core Banking and Integrated Solutions Dudley White tells Bank Automation News on this episode of “The Buzz” podcast. 

    As clients continue to demand digitalization, Fiserv is focusing on creating “a really strong digital presence,” White says. 

    The company is providing FIs capabilities in the following areas of technology: 

    Fiserv clients include tech giants Microsoft and Google as well as banks, including Fort Lauderdale, Fla.-based Evermore Bank and Marlborough, Mass.-based Main Street Bank. 

    Listen as White discusses the digital experiences financial institutions are developing to meet client expectations. 

    Get ready for the Bank Automation Summit U.S. 2024 in Nashville on March 18-19! Discover the latest advancements in AI and automation in banking. Register now.

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:03
    This episode of The buzz is brought to you by bank automation summit us 2024. This annual event is tailored to resonate with financial services professionals focused on business optimization through technology and automation. Learn how to overcome implementation challenges by hearing firsthand from C level executives from institutions, including Bank of America, Wells Fargo city and more. There is no better place to get a read on the competition than at Bank automation summit us 2024 Register now at Bank automation summit.com. My name is Whitney McDonald and I’m the editor of bank automation News. Today is February 6 2020. For the buzz welcomes Dudley White. He is the president of core banking and integrated services at Fiserv. He also served in executive roles for payments and a CIO of risk management solutions for the provider. He’s here to discuss the following tech trends that his financial institution clients are interested in. Those trends include digital channel investment, AI investment, modern core platforms and data insights. Thanks for being here, Dudley.

    Dudley White 1:02
    Great. Thank you, Whitney. I really appreciate you having me. On the podcast. It’s it’s an honor. A little bit about myself. So Dudley White, I have responsibility for core account processing at five serves. I’ve been with the company now for five years. And it’s been a it’s been a great journey in the five years. I initially came on as a CIO for one of the business units. After about a year, I moved over into a payments leader role. And then about two years ago, I moved over into the core group and took on responsibility for a subset of those course. And then in May of last year, we made the strategic decision of bringing all of our cores together. And I’m thankful that I have the responsibility of that core cloud processing group. Prior to Fiserv, I worked at Equifax and played several roles there. At one point I had responsibility for technology and analytical services. I was also the CIO for the US business for a period of time. And then for three years, I had responsibility for global product management, as well as product innovation. And before that, I worked at a company called S one played several roles there, across a couple of different functions. I my last role was working in Southeast Asia. So I had responsibility for Singapore and Thai operations, also responsibility for international professional services. And so a wide variety of responsibilities all within the financial services space. Prior to s one, I worked at Deloitte Consulting. And I’m a I’m a proud University of Georgia Bulldog and the Double Dog with undergrad and graduate degrees from University of Georgia.

    Whitney McDonald 3:01
    Nice. Well, thank you again for joining us lots of background of course in the industry. So we’re so excited to have you on the podcast and and get your perspective on on what you’re focused on at Fiserv today. So with that we just closed out 2023 We’re kicking off 2024. Let’s start with just what are some common trends that your financial institution clients have been asking for within the technology realm? What are the hot topics?

    Dudley White 3:28
    Sure, there’s, there’s a lot going on right now from within the technology space. I think it first starts with digital. So we are making a big bet across all of our digital assets. So everything’s tied more to that omni channel experience. So the ability for us to have a really strong digital presence, we have a platform that we call like an experienced digital or XD and that is a really important for us, we know that the banks, banks that have more digitally engaged customers are more loyal, and more profitable. So the investment in that omni channel experiences is very critical. Another key technologies AI, alright, so when you look from an AI perspective, you know, we use the term AI as kind of one big term, but really, there’s different forms of AI and conversational AI has been in place. We’ve leveraged it significantly, it’s helped from an operational costs primarily within the client services or customer service space. I think you’ll see more applications of generative and predictive AI. And there’s, you know, things that in addition to the technology from a regulatory and from a business rule process that has to come in play there, but you’ll start to see even more investment from an AI perspective from a technology standpoint, and everything around the open A As API ecosystem, so the ability for us to work in an environment not just with banks, but with fintechs. And we’ve already curated many relationships with fintechs, through our open API approach, and I think everything around that is, is critical. The whole concept of a next generation core as well. So having a, a cloud native core is critical, I think we’re not think I feel very strongly were the leaders in that space. And really all of our tours from a standpoint of not thinking of a core just in isolation, but thinking of a dual core approach. So having our whether it’s our DNA core premier core platforms, coupled with our new digital cores allows us to really be innovative and bring new products to market, I’d probably be remiss if I didn’t mention cyber, right. So from a technology perspective, everything from a cyber perspective, we’ve we’ve invested heavily from an encryption standpoint, it’s actually when you look at our spend over the last two years, it’s been very focused on building that moat around our platforms. And really focusing from a cyber investment standpoint, I think we’re very much the leaders in that space. Those are some of the key technologies and focus, I probably would be remiss as well, if I didn’t mention cloud. So you know, providing that capability for different deployment options, whether it’s in house, whether it’s hosted with us from an ISP perspective, or providing cloud capability in cloud just allows for that full resiliency, that ability for self healing platforms being able to from an operational standpoint, the the improvements there. So that’s a probably just the tip of the iceberg as far as technology focus and 24. There other things I can mention, like blockchain, that the you know, the items that I mentioned, are, I’d say are top of mind for us from a technology perspective.

    Whitney McDonald 7:16
    Yes, and lots of technology trends that you did just go through, definitely top of mind within the industry that kind of reflects perfectly what our coverage has been for the past year. So that’s good news, when it comes to tackling what your financial institution clients are looking to implement when it comes to all of these projects, and we don’t have to break down all of them. But maybe you could just walk me through what those client conversations look like, how does Fiserv really meet those needs that your clients are asking for when it comes to implementing this tech?

    Dudley White 7:49
    Yeah, and I think it really depends upon the customer itself. Right. So the discussion with the smaller community bank would be different than some of our larger FIS. So from a community bank perspective, they’re really dependent upon us for a lot of their innovation. And they really trust us from not only technology perspective, but also our position in the market from a guidance standpoint. So, you know, when you I mentioned digital, and I mentioned everything from an omni channel perspective. So being able to sit down first, and I think mapping out a true digital strategy is huge. I didn’t mention in the first question, which I should have, but you know, data has become king as well. And whether you’re this smaller community bank, or the the larger FIA or credit union, it’s critical for you to have a full view of your customer from a data perspective. And we’re making some very big bets with our Open Data solution, either managing that data for you to be able to provide you with KPIs and benchmarks to truly understand your space, or are working on it together or giving you the the capabilities to drive that. So I think having that digital piece having a true data strategy are those discussions. And I also had mentioned the from an API perspective, the ability for banks to be able to quickly integrate with third parties is critical. So when when we when we have these discussions, we tend to try and create a roadmap that you don’t want to do everything all at the same time. Right? There’s some things that are foundational. I think that the the API ecosystem is critical to accelerate some of the other components. I mentioned before the next generation core systems I think, is foundational because that can accelerate the rest of the innovation. You build those foundational pieces first. And then after that, you’re able to go to But I’d say some of the other components. Alright, now let’s figure out what we can do from a generative AI perspective to potentially reduce some of your, your back office and loan processing cost, right. Let’s see what we can do from an overall client services perspective, to reduce the the time for resolution for incidents and things like that, let’s see what we can use AI for, for reducing some of your loan processing costs. Right, and then you can continue to go to other advances across your technology roadmap, do we are you currently in house? Do you need to really look at a public cloud strategy and go through that transformation? So what we try and do is, you know, change is difficult, I think it first starts with the core. So to the extent that we can create a core that extends to all of these critical surrounds, whether it’s data, whether it’s digital, whether it’s your API ecosystem, having your core fully integrated, allows you to first address the core and then expand into these other key surrounds that will accelerate new product innovation and growth.

    Whitney McDonald 11:14
    One thing that you mentioned, of course, being generative AI, that’s one theme that you can’t necessarily get away from right now. Just out of curiosity, are you hearing more from your clients interest on where Gen AI can fit into the institutions? Yeah,

    Dudley White 11:29
    absolutely. So I, I actually did a presentation at the National Bankers Association, in q4 last year, specifically around AI with a focus on generative AI and what some of those applications can be, I think, on the onboarding process, it can be significant from a accelerating that process. Also, I think the ability for customers to get a better view of a viewpoint of their portfolios with some predictive analysis as well as far as where their portfolios may go, what if type scenarios from a generative AI perspective, I see two benefits for the customer from a self service perspective. But I also see the benefits for the bank’s reducing some of their operational costs, whether it’s onboarding or whether it’s on backend processing, leveraging AI to really improve their efficiency.

    Whitney McDonald 12:28
    Yes, and I think that just as you were mentioning, we’re just on the cusp of seeing more and more with with AI, believe it or not Gen AI, it’s all moving so fast. And you’re seeing that implementation, quickly changing as as the months go on, even as the days go on. It’s

    Dudley White 12:47
    changing as we’re speaking, it’s changing. Exactly.

    Whitney McDonald 12:51
    Now, speaking of implementing all this technology we’ve seen throughout 2023, I’m anticipating the same this year, technology spend just continues to be a priority for financial institutions, even as spending pulled back in other areas across banks. Technology remains an important effort. Not surprisingly. So when it comes to making sure that institutions are tech forward, I think the term that you used as being a next gen institution, maybe you could explain what that really means to make sure that you are on the forefront of technology.

    Dudley White 13:30
    Yeah, and you know, and I, I do use that term, I fell victim because I think it’s a term that everyone’s using. The reality is, it may be a bit of a misnomer. It kind of implies a then versus now, when, when actually from, you know, with my responsibility from a core perspective, it’s more about continually evolving, evolving the platforms. So, you know, to me and next gen platform, most important allows for open access, right, the ability to accelerate new products, on next gen platforms or cloud native. So, you know, in today’s digital world, in the past, it was about three nines, or four nines, but now it’s really about always being available from a from a platform perspective. So having that full of resiliency. So for me, next gen is about quick innovation, new products, helping financial institutions grow their their deposit base. It’s about systems that are resilient and reliable and self heal. It’s about systems that really play within that ecosystem for integration. So the concept of Next Gen. Really all of our platforms have been within that mode. It’s just that we continue to evolve as the technology allows us to advance those capabilities.

    Whitney McDonald 14:50
    Now, maybe you could give some examples and you don’t necessarily have to name them but some some bank clients that are next gen some examples of what they’re doing. That would put them into that that folder.

    Dudley White 15:04
    Sure. So and I don’t mind naming, we actually have a, on our investor day, in November last year, we had a testimonial from a bank, on premise bank, I think it’s one of the greatest examples. So they were, they are a bank that was on a, our premier core. And we implemented a dual core approach with them. And within a period of six weeks, they were able to increase their deposits by just a little bit south of a billion. And it’s that type of rapid acceleration through new products offering. It also expanded their reach, right, they were a smaller community bank within the Mid Atlantic, and now they’re able to offer all their services across 50 states. It’s about putting that digital first API first capability. In the in the hands of our FIS, whether it’s leveraging a premier or FinTech or a DNA core, it’s just a great example of us being able to take a customer and really expand its reach and grow deposits do next gen capability. Great. Um, and I can give you another example, as well. So call federal in Virginia, it’s a it’s a credit union. Similar to what I mentioned before, as far as innovation, we were able to use our digital capability, they really wanted to move much more to tablets in their branch to focus on holistic member experience versus transactional actions, much more of that kind of customer experience approach. And our digital capabilities significantly helped and improved. Customer said and new surveys and information. So you know, the digital experience can help you expand your that next gen can help you expand your your reach, but probably just as important to improve your customer service.

    Whitney McDonald 17:10
    Thank you for leaving a couple and talking through those examples. It’s great to have uses and how the technology is actually performing and have those takeaways. So thank you so much for talking through that. Now we we’ve given those examples. We’ve talked through the technology, and naming some of those was was the investment in cloud and the desire for cyber and AI and data analytics. If you were talking to a financial institution that’s getting things going in 2024, it’s kind of a clean slate, it’s a new year, what are what are those technologies that you would really recommend a financial institutions start with, to keep up with competition to make sure that they are on a tech forward path? What would you really start with on the tech front?

    Dudley White 17:56
    Yeah, so I’m going to invest in that scenario, kind of assume that the core is in place, right? So from a, from a core account processing, I, you know, I’ve mentioned it in several times, but it just, it starts with digital, right. So that ability for that a seamless omni channel solution. So from a digital perspective, but then even able to drive the customers to the branch as well. I really didn’t discuss brands technology and branch experience. But you know, one of the things from a digital standpoint, I think it’s a bit of a misnomer. We’ve never felt this way, but that it’s digital only, it’s more about omni channel powered by digital, but then also being able to drive those higher valued customer experiences to the branch as well. So I, you know, my advice would be start with a very strong digital digital approach, as I mentioned, those are more loyal customers with higher balances and, and a higher margin, but not to be lost is the need for the the service from the branch as well. And those two are not. They’re not opposed to each other, they actually are complementary to each other. Yeah,

    Whitney McDonald 19:15
    I think that’s that’s great advice. And I think it goes with the theme of what we’ve been talking about, and the digital front. Now looking ahead to this year. It would be great if you could talk us through what’s on fire service product roadmap, what you’re excited about for the year what’s coming for for 2020? For

    Dudley White 19:35
    sure. Yeah, I mean, I really am jazzed about are the investments that we’re making. You know, we’re on this journey. I talked about kind of the evolution from a next gen perspective, or the journey for all of our platforms to be real time, you know, where as I mentioned digital, we are, you know, in a in an era now from everything needing to be real Time, we continue to refresh kind of react frameworks and everything that we’re doing from a UI and usability perspective. So, really excited about the investments we’re making there. I mentioned cloud every, you know, it’s a race to cloud. So we we moved. I think, in our credit union space, I may be off by one or two, but 88 new customers to our portico cloud solution in 2023. And I think we’ll move another 138 or so and in 2024, so very excited about our cloud transformation. And I, you know, some of the other things I talked about from an open data, I think that we are at the forefront of what we’re doing around providing the tools and the capabilities, so that FIS have a full 360 view of their customers. And I always refer to our I talked about Open API, but we we have a we have technology and tools, I kind of I call it somewhat speed dating for for banks, right, the ability for banks to be able to really look through the different fintechs that are out there and make decisions as far as who they want to have relationships with from from an innovation perspective. So, you know, I’m excited about all of it. I think that uh, you know, we at our forum, customer event last year in in June, we had an experience Center and our customers were delighted to see where we’re taking from an innovation perspective, we’re where we are. And as far as where we’re evolving those technologies across data at rest API’s across, across blockchain, whatever the that innovative technology is where we’re involved across the board. So I’m very excited. Right. So

    Whitney McDonald 21:57
    before we close out, just wanted to make sure you had an opportunity to cover anything that you didn’t hit on or anything that we missed. You

    Dudley White 22:04
    know, we touched on all the key themes, but it’s probably worth reiterating the importance of customer service, and the investments that we’re making from a technology perspective, I talked about some of the AI tools that we’re investing there. And just the from a technology standpoint, as important as it is for innovation and product growth and everything I mentioned moving to the cloud, as important or cyber and the customer experience. And so we continue to invest in our AI tools like Maeve to improve that customer experience. And we’re very proud of of that investment in that journey that we’re on. That’d be the only thing I’d say we probably didn’t hit on as much as I would like, you know, in summary, the the investment and cloud the investment in what we had discussed as far as more in evolving of our core platforms, not necessarily next gen but the evolution as we continue to make advancements there. And then some of the breakthrough technologies didn’t mention rpa, but things around RPA as well as blockchain and AI are innovative new technologies that we are investing in as well.

    Whitney McDonald 23:19
    You been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time and be sure to visit us at Bank automation news.com For more automation news,

    Transcribed by https://otter.ai



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  • Podcast: AI, RPA, fraud detection, data sharing enhancements in 2024 | Bank Automation News

    Podcast: AI, RPA, fraud detection, data sharing enhancements in 2024 | Bank Automation News

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    Technology and innovations advanced in leaps and bounds in 2023, including enhancements to AI, the introduction of generative AI and investment in data analytics. 

    In 2024, financial institutions can look to even more developments in AI, robotic process automation (RPA), fraud detection and data sharing technologies to set themselves up for digital success, technology platform provider Chargebacks911 Chief Executive Monica Eaton tells Bank Automation News on this episode of “The Buzz” podcast.  

    “I think the technology evolution that will end up affecting banks, commerce and even change the way consumers behave. … will be pivotal,” Eaton said. 

    This is the final week to register for an early-bird discount to attend Bank Automation Summit U.S. 2024 in Nashville, Tenn., on March 18-19! Discover the latest advancements in AI and automation in banking. Register now.  

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:03
    This episode of The buzz is brought to you by bank automation summit us 2024. This annual event is tailored to resonate with financial services professionals focused on business optimization through technology and automation. Learn how to overcome implementation challenges by hearing firsthand from sea level executives from institutions such as Bank of America, Wells Fargo city and more. There is no better place to get a read on the competition than at Bank automation summit us 2020 for Early Bird registration ends February 2 Save $200 By registering at Bank automation summit.com My name is Whitney McDonald. I’m the editor of bank automation News. Today is January 30 2024. The buzz welcomes Monica Eaton chief executive at chargebacks 911. She is here to discuss Tech Trends. She’s keeping a close eye on including RPA AI advancements fraud, evolution, and of course, chargebacks. She founded chargebacks 911, more than a decade ago, and prior to that had a career in E commerce. So

    Monica Eaton 1:01
    I founded chargebacks 911, geez, over a decade ago, after being an E commerce merchant, myself, I had a marketplace dealt with chargebacks. And it was born out of necessity. So fast forward, I never thought that I would be, you know, an international company and doing business, you know, with large financial institutions and all sorts of online merchants and businesses. But that’s where we are today. So chargebacks 911 is a company where that that actually solves chargeback problems. And chargeback is really a dispute between a buyer and seller when a credit card or a debit card is involved. And what happens is the consumer ends up going to their bank to request a refund because something went wrong generally, instead of going to the business that they purchased it from. And chargebacks. 911 is a technology platform provider. So we provide automation software, and all sorts of tools and technology that help exchange data for chargebacks and automate a lot of processes that are required to manage you know this this pesky statistic, our clients, our financial institutions, like banks, as well as merchants, or business owners. And we operate all over the world with four different locations, and just under 400 employees worldwide.

    Whitney McDonald 2:49
    Great. Well, thank you again for joining us on The Buzz 2023 was a transformative year for the banking industry, there was lots of talk of AI and Gen AI even took off and more in payments, technology and digital adoption and digital wallets and all that good stuff. But without talking too much about 2023 We’re here to talk a little bit more about the future look of 2024 So the question for you is what banking and technology innovations? Do you really have your eye on for for 2024?

    Monica Eaton 3:19
    Great question. So 2024 I think, you know, there’s there’s a lot that is going to change with the innovation around AI. Specifically, you know, it’s not, it isn’t even as it’s, it’s actually pretty unprecedented what, what is happening in, in our industry and in the world. I think the technology evolution that will end up affecting banks, commerce, even change the way that consumers behave, shift our demands, will be pivotal, probably similar to some of the structural changes that we all witness through through COVID As a matter of fact. So for example, when we look at, you know, the application of AI and some of the advancements with tools such as chat, GPT, etc, you know, all of us have heard of what type of, you know, some of the innovation that is that is that that’s happening, but also just the ability to duplicate a process create automation, not just with speed and accuracy, but actually even better. And I think, you know, this is it’s very exciting, but it’s also very frightening, especially for a legacy environment like in payments in the banking industry. where oftentimes, you know, people will define innovation as just simply making something faster. I think it’s equally exciting to consider this type of technology. gives us the ability to really challenge the status quo and look at how we can do things even better. It’s going to challenge the way we think about things. Create, you know, opportunities for it’s going to be create more inclusion, there will be more competition in the market. Because, you know, previously, it used to be where you had to have the best product, this is something that, you know, all of us, myself included, I’ve, I’ve definitely rest on my laurels on on believing we have the best product or technology is always, you know, staying a step ahead. However, I think as we look at 2020 2024, it’s going to be not only technology, but technology will become more of a level set, it will be about relationships, it will be about people. Ironically, I think there’s going to be even more value placed on, you know, talent, people and really human ingenuity, despite the fact that you have all this technology that is threatening to automate and replace humans, I think what we’ll find is, it’s going to be so accessible, that actually, the human capital will become more valuable, the relationships, the connections, connectivity, infrastructure, and you know how things work. And that blueprint, will will actually add the most value. So what this means in terms of payments and disputes and chargebacks, I think we can also look at, you know, biometrics coming in and being stronger, there’s continuous demand, or better mechanisms to reduce fraud. And there will be more data sharing, we can see, there’s, you know, some of the brokerages and, and advocacies collaborative efforts that are happening in in Europe are going to continue and hopefully, you know, influence the US market as well. So lots of collaboration and sharing data, and in creating, you know, more industry insights. Lastly, you know, in the fraud space, we’re on the cusp of, you know, all of you have a terrific amount of alternative payments, right. And I think that is going to continue to surge, mainly because merchants are seeing banks are saying costs are continuing to increase. Competition is fierce. And, and competition is fierce between them. But it hasn’t been that fierce when it comes to payments, the card market still owns the majority of the E commerce market share. And I think that that will begin to shift in 2024, as some of these alternative payment methods, explore new arenas, and new consumer protection mechanisms, allowing them to be more competitive, you know, delving into democratizing some of the fraud so that it can be a safer environment. We’re looking at, you know, variable recurring payments. I mean, there’s all sorts of initiatives that are really centered in creating a much more level marketplace for multiple payment methods. Digital currency, I think, will, I know, it’s very volatile, but I think we’ll start to see that level out. And and just, you know, a lot of open doors, a lot of open doors to say the least. Absolutely.

    Whitney McDonald 8:44
    I mean, everything that you’re talking about is definitely a coincides with what we’ve been covering as well. And just thinking about how far things have come in 2023, especially with AI, being one of those areas that has been has come leaps and bounds thinking about 2024 I think that the word that you said is it’s exciting, but it’s also a little bit frightening to see how fast the innovation can change.

    Monica Eaton 9:09
    Oh, yeah, it’s broad. I think, you know, fraud is like the the absolute dichotomy right? On one side, it’s like this is technology that you’re that we’re seeing, can literally duplicate somebody’s voice signature, and impersonate them on the phone to steal money. I mean, there’s there. This is literally the type of technology it’s capable of right. But at the same time, it’s like, this is the secret sauce that we’ve been missing to resolve the fraud problem in the whole world. It’s like you it’s a catch 22 And it definitely like anything new, right? It’s going to go through, we’ll see. Just like a sigmoid curve. I think we’re going to see some pitfalls. It will be a bit of a roller coaster. But you know, wherever there’s a problem, there’s opportunity. I think there is more upside the downside?

    Whitney McDonald 10:05
    Yes, definitely on the fraud side of it, I’ve been having several conversations. And one of those is is just as much as the good guys are leveraging AI to fight fraud. The fraudsters too, are using the technology for different creative ways to commit to commit fraud, just the same. So like you said, it’s a catch 22. Yes,

    Monica Eaton 10:27
    it’s it, we all are interested in exploiting opportunities. And unfortunately, there are equal opportunities on both sides of the equation.

    Whitney McDonald 10:38
    Now, I know that you have put together some look ahead into into what bank technology and innovations can really determine the financial landscape for 2024. I know that we just talked through a few of those. But you also have have dove into what RPA will bring to the industry and 2024 Maybe we could dive a little bit more into cybersecurity, and new immersive technologies, and even Neo banking. Would you mind diving into what some of those have in store for 2020? For?

    Monica Eaton 11:11
    Sure, sure. So, um, so let’s start with the RPA robotic process automation. So for us, we we label this tool is emulation, robotics emulation. So imagine, you know, used to be screen scraping, and this is something that nobody wanted to actually talk about. The reality is, this is pretty high tech stuff. And and if you, you know, even if we take a look at I think it will, it actually can compete with open banking in some ways, because the the, the applications and the, I guess the demand for this type of application is so widespread that you can, there’s terrific use cases, not just for creating automation internally, which is really what robotics have traditionally been used for. But with all and here’s, here’s the issue, right. So historically, when you use robotics, then it’s been a complete pain to maintain. So you build the code, you create all these different scripts, and then providing that the software never changes, it will continue to work similar to a macro, well, with the use of AI, then you can infuse into those algorithms into those scripts. So that now you have a really a mechanism that is going to help predict, if there is a change, where was that change. And really, it creates just a very, very smart layer of automation. And this allows you to essentially the, you know, scale, so many different resources in such a short amount of time, reduce integration requirements, and achieve speed to market in areas that previously were probably unthinkable. So if you consider, you know, let’s say you have five different data sources, well, to create, to leverage technology resources to create API connections to each of those, and then join all that data, and then analyze all of that data, that could be a six month project, maybe even longer. And it’s it’s heavy resource strain with with robotics, and with a lot of the AI methods that can be attached to this, that has the ability to, you know, create, really, it’s OCR recognition on the fly process, automation intelligence, that you’re infusing into that, that create, you know, that, I mean, it is it is super exciting stuff, you know, being able to, to get data and then automatically encode and decode it, and you’re, you’re condensing that process in such a, a, an efficient manner. What that it, it just, it allows tremendous complexity to be reduced into a pretty simple application that is much faster to deploy and not not as cumbersome to manage and it’s getting smarter and smarter. So, so anyway, super excited about the that the opportunities in in connecting you know, smarter technology to those types of tools and the fact that it’s becoming wider adopted wider used, I think that that’s it’s going to continue because we we will always have, you know, use cases and making making this smarter. I think, you know, just make sense. And, and it just goes along Along with, you know, using technology to replace a lot of mundane, you know, human resources that can be used to leverage other other ideas and strategies. And then if we look at, you know, the advancement of I think you were talking about neobanks, which is another thing that I talked about. So, you know, if we, if we study the market, and and look at what consumer behavior is doing, where the demands are taking us, there’s no doubt that the technology and the evolution that we’ve had on the back of COVID, and really, you know, moving everybody to an online environment, that’s probably carved or created. What’s, what’s a good word, as probably shaped a lot of consumer behavior, and really changed the way we think about things. It’s, it’s created new standards, new norms. So today, very few of us ever go to a physical bank, you know, we, we, we probably do all of our banking through a mobile app, we pay our bills, we, you know, it’s it’s becoming, you know, we’re one with our device, I don’t think any of us now even leave home or even go anywhere without having a phone by our side. And this has become our identity. It’s not just you know, and we look at, you know, these devices are now connected with wearables, and there’s all sorts of things there. So I think there’s going to be, you know, even more opportunity for, you know, more innovation and banking, efficiency, better rates, more functionality, things that are very tech forward. I think that, especially with the millennials, the Gen. The Gen Z’s coming up the Gen. Alphas, I mean, we’re having younger and younger generations, that have grown up, literally on iPads, and we need to recognize, you know, my, my young kids literally didn’t learn how to handwriting, they started out with an iPad, they’ve done everything on iPads, they’re in high school, operating on iPads, they’re using MAC’s I mean, it’s a totally different generation, you have, you know, even in fact, in chargebacks, an interesting stat, so a large number of disputes are actually generated from toddlers that are using their parents phone to Play apps. And they’ve actually figured out how to buy points, and make all of these charges on iTunes and Candy Crush. And it’s creating a chargeback problem. But you you just have an incredible aptitude to the digital world that’s becoming a comfort zone is becoming a new standard. So I think as as banks is in 2024, look at how do you compete in this environment, it’s about personalization. It’s about knowing your customer, and preparing for the next generation and that next generation, they that they’re going to be pretty digital. So I think we’re going to see more and more interest in those arenas. Likewise, you know, cybersecurity. I think we touched on this a bit. But the, the technology today has has bridged so many gaps and created. I mean, you look at Chet GPT, for example, most of us don’t realize whatever we put into a tool is now available to train it. So it is not, it isn’t just about what can you get out of it, but the entire world is going to be utilizing these tools. And so we’re all you know, we’re we’re contributing, it’s just, it’s, it’s honestly one of the most amazing things, it feels like to me, it’s sort of like, you know, moving from the the DOS environment

    many, many years ago, like actually having a PC, it’s that exciting. And also that frightening because to your point, like there is a lot, there’s a lot to be exploited with anything that’s new. But if we look at cybersecurity, you know, to, to be able to to really get away from just standard hard coded roles, which many systems still use today, and actually be able to consume so much data data, you know, terabytes of data in a millisecond process that data, you know, build other relationships with that data, learn from that data. And, and really make better decisions on the fly in real time, it’s really about being able to analyze the present instantly, as opposed to how we’ve been operating in the fraud environment is, you know, traditionally, it’s just machine learning. And so you have to train this model, and you need six months plus of data. And then you can create a decision matrix, well, with the dynamic way that the world changes, the most intelligent system would be able to make a decision based on a quick analysis of the present with some intel from the past, and really be able to have a prediction based on all these different indicators and relationships, and be completely dynamic. And that’s what we have today. So I think we’ll start to see, you know, instead of a single transaction today, that transaction, that single transaction, if you think about it, it’s crazy, one single transaction in today’s world, if you pay, if you buy a product on Amazon, that transaction could be scored by six different fraud filters, and they are literally looking at the same type of data. And six times they could be coming up with a bit of a different decision. This is one of the issues. So I think what we’ll find is that the data will become much more, you know, centralized, there’s going to be more collaboration, and we’re all going to be learning from each other. And that data sharing, it’s scary in some ways. But but that’s going to really give us to centralize identities, create a safer environment, create faster exchange, reduce a terrific amount of costs and redundancy in the space, and really work toward a scenario where all fraud data is really democratized and available for everybody. Now, I don’t think that will all happen in 2024. But I do think that that, that, that this will take shape, kind of similar to blockchain, there will be so So lastly, this is this is I guess, this will be a summary of what what I look at in 2024. So, so in payments and banking, like the whole nine yards, we’ve always here, you know, what’s most important, it used to be security is most important. Everyone wants security. Number one, well, if I read a study the other day, and I think everybody would agree who’s listening. If anyone asks you, what’s your number one concern with your bank, none of you are saying security, or we’ve all taken it for granted. None of us are concerned about posting something on Facebook, about sending a payment about entering our card online, having a one click you know what we want, we want convenience. So we’ve migrated quickly from, you know, security being top of mind to, you know, we want something that’s faster. And of course, we want something that’s better. So we know it has to be secure, it needs to be faster, it needs to be better. But I think what 2024 will bring us is the reality that it also needs to be more transparent. And that transparency is really the missing element that has created not only friction, but also more opportunities for fraud, you know, higher amounts of redundancy, higher costs, and just you know, we it’s like the innovation with Blockchain. But I think the the demand for transparency and the availability of transparency, to me, this is really one of the most pivotal change or Pivotal, Pivotal changes that will affect our mindset in 2024. It will be the idea of thinking, you know, actually, we want to create an environment that is more efficient, that is more accurate, that has more integrity, and is secure. And in order to do those. We’re missing that transparency. And this was really what AI is bringing to the equation if you think about it, biometrics you know, the whole nine yards. So yeah, exciting, but but also scary at the same time.

    Whitney McDonald 24:44
    So keeping AI RPA and biometrics in mind. What can banks do now to set themselves up for digital success or growth or whatever it may be? This year? The

    Monica Eaton 25:00
    banks that will be most wise in this new year are going to be those that explore, you know, areas that previously probably felt pretty uncomfortable. But those are the areas I think that will reap the most rewards. It’s going to teach us different ways of doing things, that if we look at how the industry has grown so far, we are absolutely getting, we’re getting smarter, we’re getting better, we’re getting more secure, and we’re going to be getting more transparent. So it’s, it’s, you know, we can’t be looking to the right and left and make sure that, you know, we’re doing what everyone else is doing in order

    Whitney McDonald 25:45
    to is there anything that we didn’t hit on that you want to hit? Between?

    Monica Eaton 25:50
    You know, I also know those of us that are saying, We did cut? Yeah, rather, you’ll have a lot of editing and I hope never forward. Let’s see. Probably, oh, you know, what, actually, so So I will, I don’t know where you could cut the sin. But what I would say, Okay, so back on. So one of the reasons why I think banks should absolutely make sure that they have focus on ensuring they have a sustainable, you know, fraud prevention and chargeback processing platform, I actually cannot underscore this enough. And forget about me being in the industry, if I was not in this business, and I had a totally different business, this would still be my number one point of advice for banks, because I believe this won’t just become a competitive advantage, whether you’re an issuing bank serving card holders, or you’re on the acquiring side, serving merchants, and even more. So if you’re both an issuer and acquirer, the amount of inefficiencies redundancies and costs and opportunities and value added services strictly around disputes and chargebacks. And fraud is off the charts. And just to share some statistics recently, and I was blown away myself, and this is actually an area that I have a business in. So I’ve always thought that chargebacks and disputes, which is a type of post transaction fraud, that every bank has a regulated responsibility to process and not really any of them do it great. It’s a totally different skill set, kind of like you know, operating a payroll service within your organization. Really, it’s never a core competency. Highly recommend, like figure out a way that that you have a scalable platform for that. But bottom line. So growth of E commerce transactions worldwide on an annual basis is between 15 and 17%. And that’s substantial. I mean, that is really substantial. I always thought growth for chargebacks. And disputes were around 20%. And you know, recently I I was corrected. MasterCard has stated growth from chargebacks. This is just for MasterCard alone, which is about 50% of the card use in in the UK and European environment, internationally 32%. So we’re looking at almost 50% more growth in chargebacks and disputes than in transactions. And the things that most banks don’t recognize and don’t realize is that the chargeback and dispute strategy, even though this is probably only affecting maybe half a percent of your total transaction volume. This is affecting probably 80% of your acceptance rate issues and your false positive issues that is either causing you to lose cardholders, because they’re removing you due to a false decline, a bad decline in inaccurate decline, or they’re having a bad experience with a chargeback. It is all about having the right data, it is all about having a good customer experience is all about having a fast resolution and the end the the more that banks can, you know, have leverage connections, deliver speed to market, be able to consume data and I mean a lot of data that is dynamic in real time and create as as fast of a decision as possible to rid themselves of fraud and create a better customer experience. Those are the banks that I think you know it. Well I don’t even have to say those are the banks that will end up gaining the most market share. And if we just look at the way that the world is growing. It’s um, it’s crazy. I did not I myself did not realize how fast this has picked up it just it’s a testament to show us how quickly you know this, the concept of you know, I want it faster, I want it better. I want to instant. This is I always say this is the age of entitlement, the age of consumer entitlement. Every consumer today, we are the most impatient consumers that have ever existed in the entire world. And instant is our new expectation. So those banks that can deliver instant are going to win. And you need to make sure that you you have all of the necessary ingredients in place to be able to to supplement those requirements.

    Whitney McDonald 30:56
    You’ve been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time and be sure to visit us at Bank automation news.com For more automation news

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  • Podcast: Emerging tech key to long-term success for FIs | Bank Automation News

    Podcast: Emerging tech key to long-term success for FIs | Bank Automation News

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    Financial institutions are looking to their infrastructure and platforms to determine where to overhaul their tech in 2024.  

    To keep up with the changing industry including AI tools and immense volumes of data, FIs need modern platforms to support their technology, global payments and banking infrastructure, fintech Episode Six Chief Executive John Mitchell tells Bank Automation News on this episode of “The Buzz” podcast. 

    Mitchell co-founded Episode Six in 2015 and previously served as a board director at environmental services company Re:wild and chief executive of payments provider Rev Worldwide, according to LinkedIn. 

    When determining what to modernize, FIs must think long term, Mitchell said, noting, “Having the ability to leverage emerging technologies, I think is the starting point.” 

    For example, FIs should avoid starting long-term projects based on regulation and technology from 2018 that would be complete in 2027 he said. 

    Episode Six works with financial institutions including Oklahoma City-based First Fidelity Bank. 

    Listen as Mitchell addresses how FIs can best approach modernization, the 2024 tech trends to monitor, and the recent evolution of technology in the financial services industry.

    Get ready for the Bank Automation Summit U.S. 2024 in Nashville on March 18-19! Discover the latest advancements in AI and automation in banking. Register now.

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:02
    This episode of The buzz is brought to you by bank automation summit us 2024. This annual event is tailored to resonate with financial services professionals focused on business optimization through technology and automation. Learn how to overcome implementation challenges by hearing firsthand from C level executives from institutions such as Bank of America, Wells Fargo city and more. There is no better place to get a read on the competition than at Bank automation summit us 2024 Early Bird registration ends February 2 Save $200 By registering at Bank automation summit.com My name is Whitney McDonald and I’m the editor of bank automation News. Today is January 25 2024. Joining me is chief executive and co founder of Episode Six John Mitchell. John is here to discuss how financial institutions can approach 2024 regulation in innovation, while keeping emerging technologies like aI embedded finance and payments at the forefront of their strategies. Join me in welcoming John. Thanks, Whitney.

    John Mitchell 1:01
    It’s a pleasure to be here. I’m John Mitchell, CEO, co founder of Episode Six, I have a lengthy, lengthy background in payments. I’ve been in payments since 1999. When myself and one of my co partners worked with a group of folks putting together a large prepaid payments platform and program manager and expanded beyond that in the late 2000s into building payment platforms in different parts of the world. Some of that revolved around FX and multi wallet propositions. And then in 2015, myself and my two co founders came together and we started episode six. So episode six offers a payments platform via API to banks and brands and other technology companies on four continents. And the platform is info provides infrastructure for payment products and services such as debit, credit and prepaid on the on the card scheme side and account to account services. On the ledger side. We started off with a little POC in the South Pacific and Tahiti, actually. And from there, we Springboard it into working with one of the world’s largest banks, HSBC in Hong Kong and Japan Airlines and the largest digital bank in Japan. And then from there moved to Singapore and London. And now we’re active across 50 b2b clients on four continents. Great.

    Whitney McDonald 2:38
    Well, thank you so much for the background. And again, for joining us on The Buzz today, we’re going to be talking through what we’ve experienced in 2023. In the industry, lots of changes, which is not a surprise. So maybe before we get into the forward looks of what we’re prepping for, for 2024. Let’s kind of take a step back talk through 2023. I’d love if you could share some of the trends, innovations, anything that really stood out for the year that have changed the banking industry?

    John Mitchell 3:07
    No, I think that there was there was a continuation of what we’ve seen for the last several years. And then that that trend was was accelerated with the advancements that we’ve seen around AI. The pandemic really highlighted the need for on demand, convenience, contactless a lot of the infrastructure and much of the technology that banks use today, and we’re using at the time simply wasn’t adequate for some of these new products and services. So we saw the beginnings of more of a large scale transformation and modernization projects. So that new technologies around AI, machine learning, etc, can provide the provide the services that customers and financial institutions are demanding. We saw more around open banking. And we saw more around regulation. I think Dora in the UK is quite an interesting, interesting example of that. But really a continuation of what what started in the late 2010s. And that’s a realization that modernization is required in order to keep up.

    Whitney McDonald 4:22
    Regulation this year is definitely something that we’ve been monitoring closely. There’s been proposals and changes around open banking, like you mentioned around AI as well. Looking back on 2023 and these proposals, I kind of want to get your insight here on how financial institutions can can monitor the regulatory landscape as we head into 2024. What they should be watching for as regulation comes down the pipeline, and we we can kind of start with open banking but then get into AI as well.

    John Mitchell 4:53
    Why I think AI is going to open up in frankly, we don’t know what we don’t know but right you motion around AI is nascent. But it’s going to expand particularly as the use cases around AI start to take over. And we see behind the scenes, how every, every point of friction can now be, can be analyzed and can be, can be altered. And the way that all that happens will be under the scrutiny of regulators over time. So banks and who are quite familiar with the regulatory landscape and regulatory environments will be will just have more to more to operate with open banking, different parts of the world see different, different requirements. And we’ve seen multiple requirement changes. And some in some cases, particularly in the UK, and in Europe, and the US, it’s it’s coming, I don’t think the final form is, is quite, quite known. But access to data is key for many of the components in the ecosystem around banking and financial services. So that’s happening, more regulation, around crypto around CBDCs. Is that sort of sort of ongoing, but where does it sit? Who, who is in charge? I think those questions are still still being wrestled with, particularly in the US. So we’ll just see a lot more of that. And so as we shift towards towards new technologies, regulations will, will or follow closely behind.

    Whitney McDonald 6:30
    Yes, absolutely. And I know that some of those proposals were coming up at the end of the year of that some of those deadlines for comments and getting all your your last minute comments in and where those stand with regulation coming down the pipeline coming spring, summer. So we’ll definitely be following along for that.

    John Mitchell 6:47
    Summer. Yeah, it’s gonna it will be interesting. That’s for sure.

    Whitney McDonald 6:51
    Yes, I think I think so. Now, I know that we talked about the trends for 2023. We we talked through a little bit of the regulation, but maybe kind of this forward look of 2024, as we get started in the new year, what what kind of innovations do you really have your mind? And I know there’s a lot of talk with AI, embedded finance, changes in payments, what are you what are you really monitoring for and watching for as you kick off the year, you know,

    John Mitchell 7:18
    all everything, everything you mentioned, requires requires access to data. And you know, since we’re an infrastructure play, we what we see is this acceleration around these modernization projects that I mentioned earlier, so that so that these AI tools actually can consume and have access in a digestible fashion all of the data they need, so that they can handle the decisioning that will provide all the benefits and in in 24, so I see as as as infrastructure is upgraded, hyper personalization around some of these products so that consumers and merchants can offer, what is becoming increasingly more demanded by their customers is, is only going to accelerate. So I think the evolution towards hyper personalization. And on the on the back end, and the back office streamlining and driving efficiencies, and risk management, being able to survey vast amounts of data in almost real time, all will have tremendous implications. And we’re just seeing a lot more of that. And it’s becoming

    Whitney McDonald 8:33
    table stakes. Yes, I’m expecting that efficiency will continue to be one of those buzzwords throughout the year, as it has been in 2023, as well. So everything that you’re mentioning about about data and being in real time, that’s all definitely going to move us along.

    John Mitchell 8:51
    Yeah, it just having the having the having the ability to leverage emerging technologies, I think is the starting point. And not every Fy is equal in terms of their ability to leverage these emerging technologies. But over the coming, it’s not going to happen overnight. But over the coming years there, there’ll be an evening out of in terms of what what, what F eyes are able to offer. And what we’re seeing more and more today is that these smaller F eyes have access to these newer technologies. And these newer platforms were traditionally they had to rely on sort of more meat you legacy types of offerings. And so the ability for somebody in Florida to hyper personalized towards their client base and not be reliant upon what somebody somewhere else in the world or some in some other state is offering their clients, I think is a big we’ll see big shifts around that.

    Whitney McDonald 9:55
    Yes, there there’s definitely depending on your capital depending on your resource Just kind of where you sit on how that investment goes. But it does seem that across the board, everyone has their seat at the Digital table, it just kind of depends on on your resources.

    John Mitchell 10:08
    Yeah, FYI. So what we’re seeing in terms of these modernization projects are infrastructure systems that are decades old, are being either enhanced, or swapped out entirely. Some of the challenges that we see that FIS go through are related to taking on these massive projects that are hard to see through to an end, they’re just too big, they take too many resources prioritizations change the market changes, they just take a lot of a lot of time, what we’re seeing success is with the FIA is that are going through more of a progressive modernization strategy. And so that is to start with smaller, more palatable size projects that can fit within budgets can fit within time periods, where you can actually see tremendous results, and then to layer on that over time. And so all of these banks should start with the appropriate baseline with the appropriate infrastructure, so hard coding on new types of, of capabilities, or reworking infrastructure that was designed in the 70s and 80s, for requirements that are no longer relevant, probably not the probably not the best long term strategy. And so I guess, looking towards the future and understanding that doing things correctly in the beginning, so that you can have a longer term view is quite important. But really everything from our point of view, it starts with the fuel from the ground up and to, to leverage technologies that are more adaptable, that can actually be modified and change as the market changes, and the rate of change within the payment space is accelerating as well. So starting something today finishing it in 2026, or 2027, based on requirements for 2018 doesn’t necessarily make sense.

    Whitney McDonald 12:18
    Yeah, I like what you’re saying about kind of that little by little approach, things that you can build upon. You don’t necessarily need to do a full overhaul today. But taking those different pieces of the puzzle or the digital puzzle and, and stacking on as you go.

    John Mitchell 12:31
    Yeah, if we don’t lose, share, meet existing budgets, and test things out, have an opportunity to see that you’re heading in the right direction, progressive modernization. Great.

    Whitney McDonald 12:45
    Now I know we’ve talked through some things that we’re excited about that we know are going to be we know are going to be top of mind for the year. But I’d like to kind of push you a little bit to talk through what sort of technology or what digital evolution that you might be excited for in 2024. What do you think’s coming? What do you want to see from the tech side within the industry, where

    John Mitchell 13:09
    we’re excited about watching where AI takes the industry? You know, it’s it’s really early days. And I think when Chad GPT, four came out, folks thought within six months, everything would be altered and changed. And obviously, things aren’t happening that quickly. But the tool sets that we’re seeing based on AI are just more and more powerful. And we’re excited about that from an episode six perspective, because those require technologies like ours to really to really see Max benefit, you know, in terms of just product sets, microlending platforms, and even there seems to be a bounce back around blockchain somewhat, although it’s not necessarily always perfectly interconnected into mainstream systems. I think we’ll see kind of the slow evolution of integration of blockchain for cross border. And I’m particularly excited about some of the interoperability that we’re seeing between various faster payment systems, real time payment systems, I’m excited about what we see here in the US with with fed now and how that that pops up or or clearing houses, real time payments. All of that is going to just make driving efficiency but just the the use cases for for for commercial and consumer just going to be quite quite a bit more exciting.

    Whitney McDonald 14:44
    You’ve been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time and be sure to visit us at Bank automation news.com For more automation news,

    Transcribed by https://otter.ai

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  • Gen AI can provide FIs up to 90% automation | Bank Automation News

    Gen AI can provide FIs up to 90% automation | Bank Automation News

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    Financial institutions can look to generative AI to reach up to 90% automation, WorkFusion Chief Executive Adam Famularo tells Bank Automation News on this episode of “The Buzz” podcast.  

    Traditionally labor-intensive tasks — including know-your-customer processes, transactions and sanction screening — are now easily automated through AI, Famularo said, adding that WorkFusion’s AI-driven digital workers are improving the efficiency of its financial institution clients.  

    WorkFusion’s digital workers are AI models trained to do a specific task for FIs, Famularo said. With the AI-driven digital workers, FIs can get automation for processes up to 70%, but with gen AI tools, “we can get up to 90% automation,” Famularo said. 

    The company is working to incorporate gen AI into its digital workers for better efficiency, Famularo said. 

    WorkFusion clients include Deutsche Bank, Scotiabank and Bank of Asia, according to the company’s website. 

    Listen as Famularo shares how financial institutions can leverage digital workers and AI to drive efficiency within the organization. 

    Get ready for the Bank Automation Summit U.S. 2024 in Nashville, Tenn., on March 18-19! Discover the latest advancements in AI and automation in banking. Register now.

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Vaidik Trivedi 0:02
    Hello, and welcome to The Buzz, a bank automation news podcast. My name is Vaidik Trivedi and I’m the associate editor of bank automation News. Today is January 9 2024. Joining me is Adam Famularo. He is the chief executive officer of workfusion, an automated solutions company. Adam has served as the chairman on the board of directors of lucid work prior to joining workfusion, and brings decades of experience in automation and digital transformation to work fusion. He’s here to discuss how financial institutions can leverage AI driven digital workers for efficiencies, and his company’s plans for 2024.

    Adam Famularo 0:44
    You got it, buddy, Ken, thanks for having me. So I’m Adam Famularo on the CEO of workfusion. You know, I’ve been in the software industry for the last 25 years as CEO, General Manager, all the way down to individual contributor roles. So I’ve been doing this for quite a while. workfusion is by far the most exciting company that I have worked for to date. Port fusion workfusion is a mixture of three really trendsetting technologies with RPA IDP, intelligent document processing, and AI and machine learning. And our technology has been around for about 10 years now. It was born out of MIT labs. And it’s been proven out really over the last, I would say seven to eight years within large enterprises. We started as kind of a holistic platform, we call it work.ai platform that can in essence, enable any company to take any complex data source, and add an AI machine learning algorithm to it in essence, a brain that can create and cause action on top of what it just read. And then from there, it can then build it, we have a learning mechanism that allows it to learn and develop and grow. About two years ago now it’s actually two years, February 2 2022, we launched what we call digital workers. These are our fully packaged workforce, right. So it’s an AI powered workforce, that allows companies specifically financial crimes, focusing on financial crime, so doing job roles, like sanctions and sanctions, screenings, and job roles in the whole KYC process of selling targeted to financial services companies. So we built out these digital workers. And now we’ve we have, in essence, built a large business focusing in on the financial services companies, we still do provide our work.ai platform for other companies and other industries that want to build or develop their own custom digital workers. So that our business

    Vaidik Trivedi 3:09
    Alright, so digital work is that sounds very interesting. Let’s talk a bit more about that. Tell me how is it developed? And what are some of the best use cases of these digital workers in financial services industry? Yeah,

    Adam Famularo 3:24
    so what we’ve done is we’ve taken really a honed in focus on IDP. So So the notion of being able to read or decipher documents, and in working with the top banks in the world that were already our customers using our work AI platform, we took the best machine learning models that they were already using today, and package them up as actual digital workers. The reason why we did this work was the banks that were successful using our software, they felt like naming them, giving them a persona made it easier for them to be digested and used within their corporation. So in studying companies and seeing what they were doing in success, we said, well, let’s take it to the next level. Let’s give them names was given faces. Let’s give them personas. Give them a specific detailed job description and job role. So that when you view our digital workers, you’re viewing them as hired workers that you bring on board as kind of copilots to go along with the people that are doing sanctions and sanctions screening or job roles in the KYC process. What we want to do is automate the remedial work, right? The work that most humans don’t want to do so very heavy data intensive reading documents, reading databases, reading websites, as part of the decision making process.

    Vaidik Trivedi 4:58
    Okay, Can you tell me what datasets do you use to train these AI digital workers? Is everything in public domain used to train them? Yeah,

    Adam Famularo 5:08
    we do. We use everything from software applications that they might be using today in the sanctions and sanctions screening process. We’ve recently launched partnerships with companies like Thomson Reuters, where we’re taking in reading and deciphering their data as part of our process. And we’re working on multiple other partnerships right now that will help us support those data flows. And then more importantly, a lot of our customers are allowing us to take the datasets that they have trained their models on, and use those datasets to share with other banks and financial services companies. So that when you hire one of our digital workers, it’s like hiring somebody that’s been trained for the last three to four years in doing that specific job role.

    Vaidik Trivedi 5:58
    Okay. And you said that you gave your digital workers a name of face so that you can just onboard them into your company. Can you tell our listeners about who Tara is and who Kendrick is? Yeah,

    Adam Famularo 6:12
    so you’re thrown out some of our names. So So Tara is a specific job function doing transaction screening, right. So what she’s doing is she’s viewing all the transactions that are coming in. And then using outside sources inside sources, she’s deciphering whether or not that that is a good invalid transaction trying to stop the bad guys. And if she finds one that looks like it is, she will then tie in a human, we have this thing called a human in the loop that we developed very early on. But it’s in essence, an algorithm that pulls in a co worker, and that co worker will then view it and say yes or no, and approve or disapprove. And then terrible kind of go about her job. So that is our transaction screener. Then the other men, the other person that you mentioned, was Kendrick. So Kendrick is part of the KYC process. So he is doing Id check. So he’s checking that you are who you say you are. He’s looking at passports, he’s looking at driver’s license or any other form of ID that you might have overseas, and then deciding whether or not that you are who you say you are as part of the KYC process. And those two are part of now seven digital workers that we have in the sanction screening and KYC process.

    Vaidik Trivedi 7:33
    Okay. So for digital workers, can you tell me why would a financial services company want to have them? Does it bring monetary savings? As they speed up that operations process?

    Adam Famularo 7:47
    Yes, yes. And yes, the more. So the reason why you you bring on one of our digital workers or multiple digital workers is the first part, it’s very hard to find the people to do these job roles, these are really level one job roles. They’re very remedial work. It’s very labor intensive, and it’s very error prone. So with all of that, it’s easier to hire one of our digital workers to come to work for you, and then work alongside the rest of your team as that AI kind of co pilot example. So that’s the first part then the second part is that this is very, it’s a regulated space, right? So we’re talking about areas where if the job’s not done the right way, or it’s not documented the right way, you can be fined. And what we do is we give it a an easier shot for regulators to be able to come in and see all the decisions that were made by Tarot or Evelyn, and understand why they made those decisions behind the work that they’re doing. So it makes it easier for the regulators to do their job. And overall, we’re looking at a reduction in costs, right? So it’ll cost you less money to do the work without digital workers, you’ll get much faster time to value. And it’ll be much easier the day that a regulator comes in to want to see what the work that you’re doing and prove out that work. Were we actually documented all and it’s ready to go. All

    Vaidik Trivedi 9:18
    right. Can you give me a few examples of the financial institutions that are using your solutions as of now? Yeah,

    Adam Famularo 9:27
    so we’re in pretty much most of the top 50 banks around the world. Very heavy focus in North America and Europe. From our business standpoint, of course, most of the banks don’t like us to name names. So you know, I don’t usually tell their names. But we are across the board on all the large banks. And usually the way that they start with us is they usually start around sanctions and sanctions screening. And that’s Tara Neverland. So Most banks today, if they’re either on boarded with us or looking at us, they’re looking at us for sanction screening. And then the ones that are with us for the longest period of time, they usually then move over to the whole KYC process, where, you know, we’ve just built and developed what we call a P KYC. Digital worker for perpetual KYC. So getting to a state in point where we can monitor and manage KYC, in perpetuity. So that’s, that’s usually how we set up and work with banks today.

    Vaidik Trivedi 10:33
    Okay. As a for AI, it’s a very rapidly evolving field of technology, from machine learning to now we have generative AI, how are you looking towards generative AI? Do you have any use cases for this?

    Adam Famularo 10:48
    We do we do. We have plenty. So. So look, we’ve since we’ve been in AI for shoot over over three years now, we have a lot of built knowledge and understanding of models and developing models. The beauty to our AI for the banks is that we are a white box, right, so you know how our AI models are built, we update the AI models with our network learning on an ongoing basis. And they know and understand the power of our AI. And it’s documented and open for everybody to see, including the regulator’s with Jenny AI, you don’t have a lot of those same ingredients more of a black box behind the scenes. But we view it as part of our human in the loop process, we almost have like a Gen AI in the loop process to go along with human in the loop. So you know, we’re using it with Evelyn today when we’re doing adverse media, and looking at different adverse media as out there in the marketplace. And it’s helping drive up our automation rates where you know, we might be when we start out in implementation, we might be about 70 75% automation, with a Gen AI tool, we can get up to 90% automation. So we can, we can really kind of close the amount of automation that we’re bringing to market using Gen AI. But we have to be careful with the hallucinations that come from it and to ensure that it’s it’s part of our human loop process. So it helps build the confidence of the outputs that come from from AI software. Okay,

    Vaidik Trivedi 12:25
    how revolutionary Do you think Gen AI will be in anti money laundering space and financial services in general?

    Adam Famularo 12:34
    Look, I think in general, it’s going to impact all parts of business, right, just like I gave you the example of how we’re enhancing our software with it, I am enhancing my customer service organization with it, I’m enhancing marketing with it, I’m enhancing finance with it, I can literally enhance all the functions of my business with it. So viewing it very much through that same lens with financial services. The beauty of our software is that we help enable companies to actually prove value. Now, a lot of the financial services companies are stopping and pausing and waiting until this whole thing gets figured out because of the black box nature of Gen AI. The beauty of using our software along with Nai is that we can get you real time results today by using that software, where you can see real cost improvements and productivity improvements and doing it in a safer environment.

    Vaidik Trivedi 13:31
    Okay, as afford 2024. What has gotten you excited? What’s in the pipeline for cold fusion? What are the future plans?

    Adam Famularo 13:39
    So I started talking about what we’re doing with PK YC, that was actually led by one of our largest customers. And they said, Listen, we want to do we want to go to the next level and really make regulators happy with what we’ve been doing by introducing this notion of perpetual KYC. And we’ve just went live with them. We’ve just packaged that up as Kayleigh, we just named that digital worker and and going to market with that this year. So that one really has us going. Then the other part since we do see so many transaction data flows, were starting to cross over into fraud as well. And we’ve just launched a digital worker called Isaac that’s going to help do fraud prevention. And we’re literally just launching that one now. And we have three customers that are kind of our launching customers with it. And I believe, between those two new digital workers that we’re bringing to market that’s really going to excite our customers by getting into new spaces using AI. The other piece that I just started to mention was eight strategic partnerships. So partnership, we can’t do it alone, right? We’re still a medium sized company in the end of the day. We’re not you know these multibillion dollar company yet, but for us to get there we need to form unreel strategic partnerships. And that’s where, you know, Thomson Reuters comes in, we just did a big partnership with emphasis, which is helping us really bring to market, our financial services, digital workers to their financial services customers. So between those two partnerships, and we have about three or four more that are coming in early this year, I’m very excited to see what they’re going to do to help us really, really grow in the marketplace at a faster clip.

    Vaidik Trivedi 15:29
    Okay. Talking about your funding plans, and how you raise funds, in 2021. Do you have any other plans are facing any further? So

    Adam Famularo 15:41
    that’s a great question. And I still don’t know the pure answer to it just yet. You know, we were going to do around in 2024, late 2024, before the whole, you know, the this little bit of a mess in the financial services industry over the last 12 months. So that kind of delayed things for us, right, we just like other software companies became a little bit more cost conscious. So we watched where we’re spending our money. And we since we did do a big round in March of 21, we’ve been able to kind of push that out now into 2025. Now if there’s if there’s signs of, you know, the market rebounding, and we do see this continued growth we might do around earlier than later. But I would probably tell you, sometime q1 of 2025, more potentially in q4 of

    Vaidik Trivedi 16:35
    2024. Okay, as for the growth of the company, can you tell me how the company is growing, how much the revenue has grown year away?

    Adam Famularo 16:45
    So we don’t publish that since we’re a private company. I can tell you we are in double digit revenue growth. But I can’t share a number since we are a private company.

    Vaidik Trivedi 16:56
    You have been listening to the bus a backlog of machine news podcast, please follow us on LinkedIn. And as a reminder, you can leave this podcast on a platform of choice. Thank you for your time. And be sure to visit us at Bank automation news.com For more automation news,

    Transcribed by https://otter.ai

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  • Podcast: Deploying AI in underwriting | Bank Automation News

    Podcast: Deploying AI in underwriting | Bank Automation News

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    Eight in 10 credit union execs are looking to AI to enhance their underwriting capabilities. 

    Credit union executives “said they would like to deploy AI within underwriting because of the impact it would have on their balance sheets as well as their members,” de Vere tells Bank Automation News on this episode of “The Buzz” podcast. 

    Zest AI’s underwriting technology allows financial institutions to assess loan decisions using richer data and insights through AI, de Vere said, noting that members “are more than a number.” 

    With the technology, FIs can lend to consumers in a smart, inclusive and efficient way, he said. 

    Zest AI was founded in 2009 and has bank and credit union clients including $1.2 billion Credit Union West, $1.3 billion First Service Credit Union and $4.7 billion Truliant Federal Credit Union.

    Listen as de Vere tells how credit unions are improving the underwriting process with AI. 

    Get ready for the Bank Automation Summit U.S. 2024 in Nashville on March 18-19! Discover the latest advancements in AI and automation in banking. Register now.

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:02
    Hello and welcome to the buzz of bank automation news podcast. My name is Whitney McDonald and I’m the editor of bank automation News. Today is January 4 2024. Happy New Year. Joining me is Sai CEO Mike de Vere. He is here to discuss how AI is improving the decisioning and lending experience for financial institutions, as financial institutions look to serve their entire communities and lean on automation to make smart lending decisions. Prior to this day, Mike spent more than four years at Nielsen served on Google Surveys advisory board, and was the CFO at radius financial join me in welcoming Mike.

    Mike de Vere 0:38
    Well, thanks for having me, Whitney, super excited to be here. So Mike, de Vere CEO of zest AI, I have been, you know, perfecting the translation of data into insights over the last few decades. I’m here at CES AI, we’re our technology deal delivers and automates underwriting with more accurate and inclusive lending insights. And so just to unpack that, there’s a lot of discussion around automation, certainly with this economy around efficiency. So definitely topical, but foundational to automate your underwriting is you have to have better insights going into the system. And that’s where this more accurate approach to assessing credit comes in. That’s applying better math called AI. And so you can’t just have this more accurate inclusive lending insight. Because it also you have to make sure that you’re serving all your members and all your customer customers. And that’s where inclusivity comes in. And so we have been solving that problem for the last roughly a decade and a half. And excited to share more about the adventure that we’ve been on. It’s just

    Whitney McDonald 1:42
    great. Well, we are definitely excited to hear more. So thanks again for being here. Let’s start here with kind of a market update tell us about the current lending market. And then we can kind of get into how credit unions can really navigate this space as we close out 2023 and get into 2024.

    Mike de Vere 2:01
    Well, if I think about the last 100 or so conversations I’ve had with credit union executives a consistent theme surrounds were lent out, you know, in this economy with rising interest rates demand going down because of these rising interest rates. And so many credit unions find themselves in a position where they have very little to support their communities. And what they’re faced with is because of the tools that exist today, there, they’re inaccurate. Their face was really only lending to a small segment of the population, you’re a tear paper. And so, you know, from an economy perspective, certainly there’s a lot of focus in on lending. Really what people are asking us for help with is around decreasing charge offs, improving yield, being able to serve your entire community, not just those at the top socio economic bracket.

    Whitney McDonald 2:57
    Now, when it comes to being able to accomplish exactly what you were just saying, let’s kind of get into how technology fits into this. And more specifically, we can’t really have conversations right now with talking through AI. So how can credit unions really optimize look to technology, technology, optimize automation, improve underwriting using AI right now?

    Mike de Vere 3:20
    Well, I think that there’s three pillars that that we work with credit unions on smart, inclusive and efficient. And so smart is, as it says, which is, the current credit system is failing America, whether you’re talking about a good a good economy or a struggling economy, it’s failing America, because it’s only serving parts of it, if you’d segments of the population are left out whether they be thin file, there’s significant segments of the population that are where there’s bias and discrimination in the end. And so, this idea of smart means, we’re appending to the current credit system, which uses roughly 20 variables to assess if we should give a person alone, the current industry scores that are out there, and it tries to boil an individual down to a number. But what we know is that members and customers are more than a number. And so you’d have to open up the aperture and consume more information. And that’s where AI comes in and enables a credit union or a bank of any size to accurately and smartly assess if they should issue that loan. The second pillar that was around inclusion, that’s really where purpose comes in. Because it’s one thing to be more accurate and drive your balance sheet but it’s the second is fulfilling your mission and being able to serve your entire community that you’re within. And that’s why being purposeful about the models that you built to ensure that they’re inclusive and then finally, around automation. Listen, there is such a huge business case right now, for this third pillar on efficiency, where you’re taking this more accurate inclusive Linda inside, but now you’re looking at the the human policies that get overlaid on top and the manual review that gets overlaid on top. So let me give you an example. The average credit union automates their decisions roughly 20% of the time. Now, the challenge with that wouldn’t be is that the average credit union number one, eight out of 10, roughly one a decision in less than a second. And so four out of five are getting kicked out for manual review. You’re really dissatisfying, your customer, that’s a problem. And so really being thoughtful not only about the technology, but around your policies and overlays, is really important. And so what we find is that the normal credit union might have 20 policy overlays, on top of this industry score, which you know, for me is really like duct tape and spit and chewing gum and in dirt, but you’re just trying to put on top of this failing industry score. Well, when you use AI that’s more accurate and more inclusive, you actually have to address those policies, what you find is that up to roughly 20 to 25, probably 10 of them, you don’t even need, because the signals that you’re trying to measure are already within the model itself. So you can dump those out, that manual step is gone. The second bucket is around, well, there’s a lot of policies that frankly, have no signal whatsoever. You know, it’s I love hearing, we’ve had that in place for the last 50 years, the old clo Chief Lending Officer has had that in place. And I frankly, don’t know why it’s there. And so we kick those out. And then there’s this this last bucket around really optimizing policies, so you end up with four or five. And the net result, if you do that implement AI driven underwriting is you should be able to audit a decision 80 to 90%, for those loan applications that come across your desk, which is what customers want. And from an efficiency perspective, dear gosh, probably our poster child in efficiency was able to eliminate two thirds of the resources for underwriting through automation. That’s a heck of an ROI.

    Whitney McDonald 7:08
    Yeah, I’d say that’s huge. And throughout the year, it’s been a consistent theme across the industry where we’re focused on efficiency, we’re pulling back on costs, where can we automate? Where can we invest in technology? So that leads me to the next question, I know you talked about the three pillars where technology can fit in kind of throughout the institution? How do we really approach this technology strategy? If you’re a credit union? How do you how do you prioritize those must haves? Where do you start, we

    Mike de Vere 7:36
    did a study of credit union executives and eight out of 10, asked for, and they said that they’d like to deploy AI with an underwriting because the impact that it could have on their balance sheet as well as their members. That to me, is a good starting point. And why do I say that? Because if you think about what a credit union or bank does, at its very core, it’s lending money. And so that foundation, if you get that, right, that cascades out to all of the other technology, things you may want to do as a business. But you got to get that right first. Imagine if you’re overlaying technology on a broken system, it’s a wasted effort, you have to start with a smarter brain at the core of the credit union or bank.

    Whitney McDonald 8:20
    Now, when it comes to innovation within ZX sai we can kind of get into your technology a bit here. What really are your credit union clients asking for I know that you just mentioned the survey that they’re asking for more AI within the decisioning. What is really driving that innovation within this AI, maybe a few things that you’ve you’ve got in the works or some products that you’ve got working on.

    Mike de Vere 8:41
    So we actually started solving the most difficult problem, which is how to safely and soundly underwrite a loan. So that’s the core. But now you can move up the customer journey and talk about pre screening or pre approvals, you could actually go down the customer journey and say, Now once I have an individual loan, well, now let me look at the health of the portfolio itself. And understand things like credit migration, you know, 18% of your portfolio was a paper, it’s migrating now it’s 22%. So you’re now skewing more towards higher paper. Within the analytics, you’re able to look at numbers that may be in distress, that are moving from an ATR all the way down to a C tier, and there’s an opportunity to engage them before they end up in collections. And so, from a technology perspective, when you’re asking that question of assessing credit, that’s where our technology really shines. And so pre screen pre approval, we look at the underwriting question itself, as well as portfolio management. Now, I would be remiss if I didn’t talk about some of the significant innovations that we’ve had around fraud and detecting fraud. And so it always starts first with us understand that every customer has their own unique set of issues and so one fraud solution doesn’t fit all. And so for example, our partner So Equifax have a phenomenal fraud solution. But sometimes that might not be the right fit. And it might be that you could use AI. So zeste uses AI to detect fraud, and identify early default and things of that nature. And so it really depends on the individual credit union and their needs and the type of fraud that they’re experiencing. And so I think if I were to say a very, a very consistent theme across each of our offerings, is that we tailor them specifically thoughtfully to that credit union or bank understanding that one size doesn’t fit all.

    Whitney McDonald 10:36
    Now, speaking of that, one size doesn’t fit all approach. I’m gonna go off script a little bit here. But when it does, when you do get approached by a credit union, or a credit union is interested in Sai, what are those conversations usually looks like? What are they asking for? What are what are you really solving for? I mean, other than the obvious, but what are those questions kind of look like when you’re in those early stages?

    Mike de Vere 10:58
    Sure. So it depends on what’s going on with the economy. So today, it’s really leading with things like my charge offs are starting to drift up, can you help. And what we know at best is that we can reduce charge offs, roughly 32%, everyone’s across, if you look at the NCAA findings, they’re all going up across the board. And so imagine if you could bend that curve down. The second area is around yield. And so most credit unions are focusing in right now only on their a paper, but there’s almost no yield there. And so what better way to generate capital than having increasing your yield. And then there’s the topic of inclusion, I want to make sure that I’m assuming serving all of my members and 10s of millions of Americans are left out of the current credit system, because of the bias that’s associated within the system. And so there’s a significant opportunity there. And then finally, it’s really around efficiency is that weren’t tough economic times right now, where we’re going to invest is where it makes us stronger and smarter with our lending. And so it really comes down to efficiency.

    Whitney McDonald 12:08
    And I’m guessing those those topics that you just disclosed that were that were the questions that come about is that kind of helping set up your your plan or your roadmap for 2024, and what your focus is.

    Mike de Vere 12:21
    So our current product offering actually addresses that. So where we’re expanding in 24, is, first off looking at additional consumer verticals, additional, commercial, vertical, so we’re addressing different types of loans. We’re also going within the customer journey and automating various steps in the process. And so imagine if you’re a large credit union on the West Coast, and you have this great technology company called SSDI, that you work with, and it automates the credit decision in less than a second. But then the underwriter has to manually turn around and do a fraud check. And it takes five minutes while automation falls apart. And so we’ve launched a product called zest connect, where we work with credit unions, and their ability to not only from an underwriting perspective, but identify those other manual steps in the process that can be automated, whether it be through native integration, robotic process automation, what have you, we’re really trying to streamline that customer journey.

    Whitney McDonald 13:24
    Yeah, that definitely makes sense. And thanks for kind of giving us a look ahead into the next year. Now, as we, as we kind of wrap things up a little bit. What would one piece of advice be for credit unions that are implementing technology that are looking to automate these processes? I know that you just kind of gave that that great example of automate the whole process don’t get stuck after the first piece of the automation puzzle. But what would you give? What advice would you give when implementing this technology kind of getting into the next year? I mean, cost, of course, is one, one area that has to be considered but but what’s the what’s one piece that you would give to a credit union that’s looking into these automation and AI technologies?

    Mike de Vere 14:08
    Well, so for me, it’s always is the juice worth the squeeze? So there are many executives I run across that have just fallen in love with the technology. I get it. We’re all emotional buyers. But there could be this rational component. And if you have a technology provider, like SAS AI, whose suggestion you can have a 10 times return on your investment within the first year. That’s going to be a pretty smart bet. And so I would encourage people when assessing what technology to prioritize is to ask yourself, the question is the juice worth the squeeze? The second piece is really the people component is that I see whether I was at sastra. And in my past life technology initiatives will fall apart because they forget change management in the human component, that this is a big change you’ll have if you’re talking about underwriting And you’ll have people who’ve been underwriting the same way for three, four decades. And so their willingness to change is not quite there. And so it’s really going to be important for an organization when implementing technology that they understand the role of change management. But they also understand there’s a human impact. And so there needs to be that software approach going forward.

    Whitney McDonald 15:25
    Now, lastly, as we look into the new year, What trends are you following for 2024?

    Mike de Vere 15:31
    If I look at 2024, and ahead, I think, you know, one of the big trends that I want to call out is certainly technologies is going to play a big role, and day to day business, but technology and the intersection between that and purpose is going to become even more important as we look ahead. And so purpose is being mindful about when I implement a technology, what outcome am I expecting? And so when I build an AI underwriting model, what outcome Am I looking for? Am I looking for better economics? Well, that’s that certainly is purposeful and how you build it. But there could also be a secondary thing on we also have a mission to serve our community. And so certainly with a credit union, that is core to who they are. And so the question is, are you being purposeful about how you’re building the model to make sure that men and women get a fair shot. Different ethnic groups get a fair shot. And so you’ve got to be thoughtful about how you build the model. It is not just something that happens. It’s having technology and IP, around D biasing the model, and so that you’re able to fulfill your mission. In really lean

    Whitney McDonald 16:46
    You’ve been listening to The Buzz, a Bank Automation News podcast. Please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time, and be sure to visit us at Bank automation news.com For more automation news,

    Transcribed by https://otter.ai

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  • Listen: Top 3 Bank Automation News podcasts of 2023 | Bank Automation News

    Listen: Top 3 Bank Automation News podcasts of 2023 | Bank Automation News

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    Among themes discussed on Bank Automation News’ most popular “The Buzz” podcast episodes this year are:  

    • Improving customer experience;  
    • Navigating ChatGPT for finance implications; and  
    • Preparing for FedNow 

    Listen to the top 3 podcasts of 2023: 

    1. Citi Treasury and Trade Solutions improves CX, grows revenue 34%

    Naveed Anwar, global head of digital and data platforms at Citi Treasury and Trade Solutions, discusses in this episode of “The Buzz” podcast how Citi has improved its customer experience and grown revenue through platform modernization and a more strategic approach to data.  

    “Our platform technology is able to mine a vast body of data to help TTS understand client preferences and needs as well as predict them, ultimately providing clients with relevant competitive insights in today’s [digital economy],” Anwar tells BAN. 

    1. ChatGPT and the power of AI tech for banks

    The combination of ChatGPT and existing knowledge models can enhance customer engagement, improve efficiencies and heighten security, Sanat Rao, chief executive and head of SaaS provider Infosys Finacle, tells BAN in this episode of “The Buzz.” 

    “I think the exploding of this tool [ChatGPT] has to be seen in the context of a variety of other changes that are presently already happy in the industry,” Rao says.  

    1. Financial institutions prep for FedNow July launch

    Financial institutions looked to tech providers and industry experts to prepare for the July launch of the payments rail FedNow. 

    FIs must gear up for the launch by prepping their tech stacks, selecting tech provider partners and reviewing their connectivity and bandwidth to support the rail, Al Carpetto, head of payments strategy at tech provider Finastra, tells BAN in this episode of “The Buzz.”  

    “There’s a lot of little parts and pieces that need to be paid attention to,” Carpetto says, noting that FIs should review internal channels, put 24/7 operations into place and approach treasury planning from a settlement perspective. 

    Since FedNow launched, more than 220 institutions have gone live on the payments rail, including $3.9 trillion JPMorgan Chase and $1.8 trillion Wells Fargo, according to the Federal Reserve. 

    Get ready for the Bank Automation Summit U.S. 2024 in Nashville on March 18-19! Discover the latest advancements in AI and automation in banking. Register now. 

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  • Podcast: Lazard saves 100K hours annually with UiPath | Bank Automation News

    Podcast: Lazard saves 100K hours annually with UiPath | Bank Automation News

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    Financial institutions including asset management firm Lazard and technology provider Fiserv are looking to business automation platform UiPath for automation, AI and added.  

    Through UiPath, Lazard, which has a market capitalization of $3 billion, saves 100,000 hours annually, UiPath Chief Product Officer Graham Sheldon tells Bank Automation News on this episode of “The Buzz” podcast.  

    Lazard tapped UiPath to automate pitch decks — which traditionally took its teams two to three hours to create — using generative AI for analyses and formatting of pitch decks, Sheldon said. 

    It took six months to implement the UiPath technology into the fintech and has reduced errors and improved Lazard’s overall consumer experience, he said. 

    Listen as UiPath’s Sheldon discusses how financial institutions can improve operations by automating mundane tasks with AI and generative AI.  

    Get ready for the Bank Automation Summit U.S. 2024 in Nashville on March 18-19! Discover the latest advancements in AI and automation in banking. Register now. 

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:02
    Hello, and welcome to the buzz of bank automation news podcast. My name is Whitney McDonald and I’m the editor of bank automation News. Today is December 18 2023. Joining me is Chief Product Officer of business automation platform UiPath Graham Sheldon, he is here to discuss how financial institutions can implement AI and automation to improve employee and client experience. Absolutely.

    Graham Sheldon 0:24
    Well, thanks for having me, Whitney. My name is Graham Sheldon. I’m the Chief Product Officer for UiPath. And what that means is, I sort of look after the vision, the strategy and the roadmap for what we build at UiPath. And I spend a lot of time with customers trying to create what’s coming next for us in terms of AI and automation UiPath, we build a business automation platform. So we build these awesome software robots that help people either work with them, or work on their behalf, to make them more productive. And, you know, what we’re really trying to do our mission is to sort of help people achieve, you know, achieve more, both in individuals and together with the rest of their company. And, you know, that really helps them save money, with cost savings, it also helps them operate better. But it really also just drives these sort of end to end experiences for customers, for employees, for investors. I know you worry a lot about, you know, the the financial world, and we try to help them out as well, by putting the best of Ai plus automation together in the solutions for those customers. Well,

    Whitney McDonald 1:45
    in today’s environment, we definitely can’t ignore AI. So we’re excited to have you. Thanks, again for joining us on The Buzz. Let’s say to kick things off here with a little bit bigger picture what really is AI bringing to finance professionals today?

    Graham Sheldon 2:02
    Yeah, so with AI today, people are asking these sort of fundamental questions, just like you said, like they they kind of understand because they’ve made of us chat TPT, that AI can do some amazing things. But they’re really starting to ask us now like, well, what can I really do about it. And so, you know, finance customers of ours have started to really seamlessly integrate intelligence into everything that they do. And it’s sort of fundamentally changing the way people work. So if you think about it, all knowledge work involves, you know, trying to understand what’s in text or in images, and then trying to help people understand what could be done better, automating pieces of it, that could maybe go faster, or be done more efficiently. And then really trying to, you know, do that at scale and help best practices so that every person can be better at their job. And that you can make maybe the every one is good as the best in their particular field. So, you know, it helps bring in like new ideas and helps you create things, right. It also helps you sort of transform and understand what’s happening, like really getting to the bottom of things, summarizing information, or being able to help you understand better what’s going on in a process or in an in an email. And then you know, sort of unleashing productivity, you know, the things that used to be routine, the things that are kind of annoying or hard to do get way easier. When you’re starting to use AI to help you understand help you get things done.

    Whitney McDonald 3:43
    Maybe we can break into some of those annoying or mundane tasks, those manual processes that AI can can help to add efficiencies to and facilitate those activities that you don’t necessarily want to spend hours doing are breaking down data, what are some of those manual processes that you are seeing AI replace? Even if it’s UI path? That’s that’s doing it?

    Graham Sheldon 4:05
    Yeah, absolutely. So you know, all financial professionals out there, they went to school to learn how to, you know, analyze data, or, you know, come up with, you know, projections or, you know, look at investments and things, think about, you know, how to underwrite it a great deal, right? They didn’t go to like, enter data. And a lot of them today, you know, spend a ton of time just getting like a document or a PDF, or just sifting through contracts and long documents trying to figure out, you know, how to apply these things and they’re, you know, copying it from one place and entering it into another, taking it from Excel, putting it into an email putting into a prospectus. There’s a lot of like, very laborious work, and it’s prone to errors. Right. So just give you a concrete example. One of the most frequent use cases for UiPath is for helping to process invoices. So you know, when you’re doing this order to cash kind of process, every customer is getting invoices from, from folks, they’re taking, making sure that all the right line items are there, that it shows up and doing either two way or three way matching, which is when you try to make sure that like the goods that you got match what you’re being you’re paying for, right? And you copy and paste from one document to another or into Excel and then running a tabulation to make sure that the totals are right, or the taxes are right, or the number of goods is right. And that process. Now with AI allows you to take a lot of that out of the hands of that person, so they can focus just on the stuff that’s really hard and interesting. You know, why is there a discrepancy between these two items? Where is it that we should be getting these goods from? Where might the next you know, cost savings come from, so that you take that kind of out of the realm of someone having to do it every single day and take hours to do it, and have ai do it for you? And

    Whitney McDonald 6:16
    that’s exactly the next question I was gonna say is maybe we could talk about some financial institutions that are doing this. Well, where is that automation really being seen? Where’s the AI being leveraged? We could get into some examples there. Yeah,

    Graham Sheldon 6:29
    you bet. One of the customers that I got to talk to really at length is Lazard. So you may know them, they’re global financial advisory and asset management firm. And what they have done is they’ve automated, an extremely time intensive process, you know, transforming information from multiple different sources to create these pitch decks, right. And these pitch decks, you know, it takes two to three hours, typically for 1000s of their employers, their bankers to create. And they they’ve automated this sort of coupling both the automation to get the information from the different sources, from their internal tools from some external sources of data from Excel from SAP from these other line of business systems. And then using generative AI to sort of tweak the those numbers to analyze and to create suggestions for the banker to sort of select the right data and then to format it in a way that you can sort of answer complex queries about maybe a deal that you want to where you can hand it off. And so in just six months, Lazard implemented that automation. And now they are able to answer those questions more accurately, they’ve reduced the errors on that enormously. And then they’ve really enriched the client experience because they can answer much more in depth questions and spend the time really delighting those employees. And so they’re estimating they can save upwards of 100,000 hours every year, and expect to be able to, you know, grow their operations as a result of that savings.

    Whitney McDonald 8:15
    That’s a lot of hours. And is a lot. Um, no, I know that you’ve mentioned client satisfaction, or that you just mentioned and we’re able to quantify what those savings looks like, what it looked like, but when when it comes to leaning into AI and productivity is one thing that that you’ve been mentioning, how does this really improve overall employee satisfaction as well that you’re able to, like we’ve talked through at the beginning, get rid of those annoying, mundane tasks, and really focus on maybe more interesting or intricate pieces of the data that AI helps to pull out. But how is this in improving employee satisfaction?

    Graham Sheldon 8:55
    Yeah, you bet. So for I’ll give you another example, actually, the customer example, Fiserv. They’ve automated a whole bunch of processes, especially in their customer service. But they’ve also expanded this now into HR and legal and it and nearly half of them are focused really on the end customer experience. And if you think about in the customer, like in the call center, or in customer service, there’s a lot of turnover. And that’s because directly these employees don’t get to work on the things that they love to do, which is really making people happy and and satisfying their needs. There’s nothing more that these folks would love to do more than to actually just solve a customer’s problem or help them get something done. And so what Fiserv did was they created this center of excellence. Coe, I’ll maybe refer to it as that funded by the IT group, but they basically enrolled the whole population of employees to go develop these automations for themselves. You And by sort of bringing them along and giving them the tools to fundamentally change their own experience, they were able to obviously drive, you know, things like efficiency. So they average handle time went down by 50%, after they did some of this, this work and processing, you know, 50 cases daily for every agent and saving, you know, 10s of 1000s of hours every year. But they also moved employee satisfaction, because you’re not focusing on trying to, you know, you’re on the phone with the customer or trying to get the answer to them. And you’re looking it up from different places. Now, the automation is bringing that to them, so they don’t have to hunt around for it. And when it sort of here’s what’s going on, you can get the right information from a knowledge base, right. And building that into the desktop console with robots, you know, lets them quickly gather that information in ways they couldn’t have done it before.

    Whitney McDonald 10:58
    Now, when it comes to the technology itself, I know that UiPath has been working on a few things to allow for this type of automation to meet these market needs to improve efficiencies throughout institutions. Maybe you could talk through a few what those products are that UiPath has been working on. Yeah,

    Graham Sheldon 11:19
    absolutely. So AI powered automation is what we call sort of this. Well, how we bring together ai plus automation in our business automation platform. And we keep we’re sort of continuously working on the entire platform, bringing AI to help make that product better. But there’s a couple things I wanted to maybe highlight that people may not have known about. The first of which is autopilot. So at our at forward, in October, we announced that generative AI powered assistant will basically allow folks using generative AI, and something we called specialized AI, which I’m sure we’ll get back to in a little bit, are actually helping people automate and bring this more naturally into their work experience by just letting them use natural language to do some key things. So for developers, creating automations is kind of a laborious process, like you have to, you know, put together all these different steps to gather all that information. Now you can create workflows with natural language, you can also create if you’re a developer create expressions and applications just from a form. So think about taking a paper form, showing a picture of that to the AI and having it come out with a digital form equivalent of that with all the automation behind it just takes a couple of clicks, then, for everyday users, you can actually use autopilot to get stuff done, to actually perform tasks on your behalf that make use of those automations. Things like being able to look at a document and extract the key information, and then enter that into another place. All that takes is you telling autopilot, Hey, move this data from this form to this other place. And those are the kinds of things that you can now do with autopilot that you could never do before. There’s a lot of other things too, that we’re working on so that people can create their own automations that make use of generative AI, so they don’t have to use our autopilot, oftentimes, they want to create their own generative AI experiences. And so making use of our generative AI in their own automations is as easy as sort of dragging and dropping in components that will use models like GPT, four, or from vertex from Google, or from bedrock from their models in Amazon. And putting that together. In a platform like ours requires that you have a lot of trust. So we have an AI trust layer, that helps make sure that only the right information goes to those, those AI models, and that we’re able to marry that with the automation capabilities. So that humans are always in the loop for the important things.

    Whitney McDonald 14:19
    With all of this innovation with all that you’re doing in UiPath, the the discussions that you have with your clients the feedback that you get the technology that they’re asking for, of course mix with the innovation that you guys have going on, what are you really watching for when it comes to AI and what the possibilities are looking ahead kind of to 2024 What are you excited for? What are you working on? Just kind of a future look here?

    Graham Sheldon 14:44
    Yeah, there’s a few things Whitney that really get us pretty excited about what’s coming in 2024 and beyond. I’d say the first one is that, you know, we really believe in this notion of specialized AI and some of the smaller More task or domain focused AI models. So, you know, with models like GPT, four, and some of the larger foundational models, they they’re built on the web data, very publicly large public sources of data. They don’t necessarily know your data, they haven’t seen your invoices, they haven’t seen the way that you work. And in order for you to get better, higher accurate models, faster models, ones that will help you explain how it got the answers that it needs to, you need to have a specialized AI model that you’ve trained with your own data on your own tasks. And so what UiPath does, in addition to making the use of the best sort of generative AI models, which continue to get better, is you need to think about your strategy for these specialized models that really know the way that your business works. And so the UiPath platform helps you build your own models, both with out of the box ones that we have for things like invoices and purchase orders and, and expense reports and those kinds of things. But also, for special use cases that you might have. So I know that we’ve got customers of ours who are building in the insurance market, they’re they’re doing this for claims processing, they’re building models to understand those kinds of documents. I’m also excited about sort of the multimodal so that’s that’s one thing is specialized AI is here to stay and you know, the the that’s that’s a really important part of everyone’s AI strategy. Now, the second is on multimodal models. So GPT, four v. And some of the models that Google just released Gemini. And some of these models that were actually building ourselves do an interesting thing, they they actually come back, they’re not just about text anymore, or they’re not just specifically focused on images anymore. It’s the combination of all of those things. And the really cool part about that is that what that does, is it can understand like what I’m looking at, like what’s on my screen, in addition to what I’ve typed, in addition to all the tasks that I’ve done before. And so I mentioned right at the top, how we’re helping people become the best versions of themselves. If you know that the way to delight a customer, is to send them an email after your order and say thank you for your order, I see you did these of these things, if we can build models that help people remember or can suggest the next thing that they ought to be doing, or that build in some of the knowledge from how their co workers and their industry do things, best practices, you can do some immensely cool things, to delight customers and to make employees more productive. So those are a couple of the things that I think, excite us quite a bit. I think the last thing I’ll mention is in the realm of automation, one of the things we get asked all the time is like how do I make sure that my robots aren’t going to break? How do I make sure that it’s going to be reliable, and that I can trust that it’ll. And in the AI world, one of the things that’s going to is coming is the sort of notion of self healing robots. So robots that have the AI built in, so that they can be more resilient to changes. As you probably know, applications get updated all the time. And when they do, you know, buttons move around, or things change fundamentally, that might break your automation? Well, if the robot knows what it’s trying to do the intent, it can actually go through and try to go around and complete the tasks without being told exactly the way that it was done before. What that means is it drives Total Cost of Ownership down makes those things more resilient to change your robot succeed more of the time. Those are some of the things. There’s a lot of hype around AI still. And there’s still a lot of distrust, and a lot of customers that they can use it responsibly. It’s critically important that when you use AI that you do so on a platform that’s well governed, that’s manageable, that helps you understand things, you know, who’s using which models, what data is going outside, to do those those things, what is my what are my models trained on? And then building humans in the loop. We didn’t talk as much about humans in the loop, but there’s some there’s some decisions, frankly, probably a lot of decisions that really require people to make them and it’s everything from when you’re about to write a check for $10,000 to make sure you didn’t include an extra zero When you’re making a critical hiring decision, you want to make sure that a human is in the loop when you are trying to make sure that, you know you have routed an email to the right place where we are, or a simple one where you’re about to just, you know, send an email back to a customer. You want a human there to be able to make sure that you’re saying the right things. And so having ai plus an automation platform like UI paths, to be able to make sure that your governance rules, your compliance policy, your privacy, posture and security roles are being well taken care of is critically important, so that you can trust that what’s going on.

    Whitney McDonald 20:43
    You’ve been listening to the buzz of bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time and be sure to visit us at Bank automation news.com For more automation news,

    Transcribed by https://otter.ai

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  • Podcast: 3 technologies banks need now | Bank Automation News

    Podcast: 3 technologies banks need now | Bank Automation News

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    Financial institutions are looking to grow deposits and increase customer loyalty as business clients look to diversify deposits and manage liquidity.  

    Bottomline Technologies’ Chief Revenue Officer for North America Kevin Pettet told Bank Automation News on this episode of “The Buzz” podcast that three technologies will help banks grow their client bases and improve their business client experiences. 

    Bottomline Technologies is an e-payment and document automation solutions provider based in Portsmouth, New Hampshire. The tech provider was founded in 1989 and has more than 500,000 members on its digital business-to-business payments network. Bottomline is used by U.S. Bank and UMB. 

    These “must have” technologies are:

    1. Payment monetization: Banks should look to payment monetization to help business customers identify new revenue streams.

    2. Cash visibility: Multibank relationships continued to expand this year, especially as businesses looked to diversify assets following the collapse of Silicon Valley Bank and banks must offer cash visibility tools to simplify the lives of client chief financial officers.

    Banks should ask, “How do you make the CFO’s job easier?” and “How do you help the CFO see a holistic cash position across all of their banking accounts?”

    3. Real-time payments: Everything in today’s environment revolves around liquidity so innovation around payments, specifically real-time payments, is critical.

    Listen as Bottomline Technologies’ Pettet discusses the “must-have” technologies banks need to support business clients.  

    Get ready for the Bank Automation Summit U.S. 2024 in Nashville on March 18-19! Discover the latest advancements in AI and automation in banking. Register now. 

    Subscribe to The Buzz Podcast on  iTunes, Spotify, Google podcasts, or download the episode. 

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:02
    Hello and welcome to the buzz of bank automation news podcast. My name is Whitney McDonald and I’m the editor of bank automation News Today is December 12 2023. Joining me is Kevin Pettet. He is the chief revenue officer of North American banking and financial services for bottomline technologies he is here to discuss must have technologies that banks must implement in order to remain competitive gain business clients and grow deposits.

    Kevin Pettet 0:27
    So Hi, I’m Kevin pettetI’m bottom lines Chief Revenue Officer for North American banking. I’ve been with bottom line for 15 years after several senior management roles in both FinTech and healthcare IT my experiences includes strategic account management, acquisition, integration, globalization, large scale delivery and program management, enterprise SAS business model transformation and Six Sigma process improvement. Bottom line itself is a business payments company focused on transforming the way businesses pay and get paid. At bottom line, we are focused on driving transformation in business payments, similar to what you’ve seen in consumer payments and what consumer payments have realized, trying to make payments, more efficient, intuitive and drive automated payment transactions. Today, we process over 6 trillion and payments volume annually across our digital banking and business payments, network offerings, and we serve over 50, the top 100 North American banks and well over 100,000 businesses.

    Whitney McDonald 1:28
    Great. Well, thank you so much for joining us on The Buzz it’s great to have you excited to get into today’s conversation. So with that, we can kind of look back and round out 2023 Here. As we look back on the year, we can’t help but reflect on the banks failure. The bank failures earlier this year in March, really caused a shift in certain banking strategies that we kind of saw throughout the year, even up until now, let’s kind of start off by talking through how those collapses in March did have banks in their clients switching up strategies throughout the rest of the year. businesses

    Kevin Pettet 2:02
    of all sizes are increasing the number of banking relationships that they have multi bank relationships had been the norm for quite some time for commercial and corporate customers. And it’s still expanding across those groups. But it’s actually becoming the norm for small to mid sized businesses. We are seeing this trend accelerate given the recent industry instability and the bank failures that occurred that you referenced just a few minutes ago, I wrote a recent article and in the article that I wrote, I quoted a Deloitte Report and the Deloitte report stated that 33% of companies with a billion or more in annual revenues have banking relationships with 10 or more financial institutions. What we’re beginning to see a small to mid sized businesses are following suit to reduce risk and minimize operational disruptions that could occur during periods of bank instability. When you’re looking at it from a bank’s perspective, ultimately, the bank who can provide better cash visibility to their customers across their business customers, multi bank relationships will be well positioned to win the largest share of wallet. This is because the bank who owns a primary operating account with the business is the bank that the business will consolidate the majority of their services with creating the greatest revenue opportunity for the bank. And that’s really where we’re seeing a change in strategies. We’re seeing the banks themselves trying to provide better cash visibility, recognizing that it’s going to be across multiple relationships. And we’re seeing businesses expanding the number of relationships they have.

    Whitney McDonald 3:32
    Yes, multi bank relationships, and the diversifying of accounts is definitely something that we’ve been following along throughout the year, following those bank collapses. So how has this desire for multibank relationships really pushed banks to drive customer value prioritize relationships with those business clients? We saw that shifts and we saw that change in loyalty as well. So how do banks really step up here?

    Kevin Pettet 3:58
    You know, as I just shared, the bank who owns the primary operating account is the bank, the business will consolidate the majority of their services with and hence will be the bank who gets the largest share of the respective business customers wallet. As businesses look to de risk and expand banking relationships, they are in parallel, creating more competition for the banks to seek and retain and grow wallet share. So the businesses are focused on de risking, but they’re creating more competition for the banks themselves. So as a result, the banks must find new and differentiated ways to drive customer value. Given the trends we’re seeing in the market, driven by this instability in the higher interest rate, we see two key strategies that come to mind. And here a bottom line. We’re actually focused very much on both of them. The first is payment monetization. And what I’m talking about here is identifying a means and similar to a card interchange model where you can create new revenue streams for payments and businesses are already making. The objective here is to create a new shareable revenue stream without expecting or changing the payment activities that your business customers are already performing. And doing so the bank can then retain some of the revenue from this monetization while also sharing a portion with their business customers who are making the payments. Effectively, if you think about this, businesses are now getting paid to make payments, which encourages the business to do more payments through their bank partner and strengthens the overall relationship. Secondly, and I referenced it just a few minutes ago, caching is ability. Although multi bank relationships reduce the risk for the business, they actually create if you think about it a headache for the finance team. So we have to reconcile cash positions across multiple banking relationships. The bank who can provide a holistic view of a business of a business customers cash position across all banking relationships coupled with meaningful forecasting tools makes the business CFOs and finance teams job much easier, and becomes well positioned to own the primary operating account relationship.

    Whitney McDonald 6:07
    Now with those two examples that you just gave, and the investment that we’re seeing across the board with banks investing in technology, where does the technology fit into this? How can AI obviously, we can’t ignore AI right now, we can’t ignore data right now. How can this play a role? does technology play a role in financial institutions winning those new business clients, retaining those clients, as you had mentioned, that that competition is more fierce than ever, businesses

    Kevin Pettet 6:35
    are becoming more technically savvy, and they’re expecting more from their banks, and specifically from their relationship managers who support them. To be successful relationship managers must bring more than just a blend of technical and social skills. The business customers expect banks to understand their business and to be able to provide meaningful insights and predictive analytics to help the business compete and win as a foundation for building and growing relationships. If you think about it, predictive offerings around stuff like fraud prevention, customer retention, next product and buy are all becoming increasingly more important in the businesses as they compete digitally. Ultimately, a bank’s relationship manager needs to come up with solutions that solve real business problems to be successful in today’s market. Business banks need to focus on building these offerings and training and equipping the relationship managers to be digitally successful.

    Whitney McDonald 7:31
    Now, when it comes to this technology, you know that you gave a few examples there. Where can FinTech partners come in and support this effort, especially on the customer experience side? How can you really improve your bank’s offerings with these FinTech partners? And what should banks really be on the lookout for when selecting partners?

    Kevin Pettet 7:51
    I believe that partner with fintechs represents a real means of differentiation for banks. And banks should be looking for FinTech partners who can accelerate the bank’s ability to create new offerings with compelling value propositions and unique customer experiences. API’s, FinTech ecosystems around bank offerings, and embedded banking are key to delivering and accelerating this trend. That concern, if you think about it a few years ago was at fintechs with disintermediate the banks and they take the high value services away from the bank, leaving the bank to provide the commodity payment rails. Most most banks have moved away from this concern over the last several years and instead of learning to partner with fintechs, the strategy will continue and the ability to partner will be a source of strength for the best banks.

    Whitney McDonald 8:42
    Now, when it comes to which technology are the must haves, as banks kind of prep for 2024, they reevaluate their strategies they’ve been like I had mentioned before quarter over quarter tech investment continues to rise pretty much across the board. What are those must haves that business clients are asking for banks? What are those? I know that you mentioned fraud? I know that you mentioned on the customer experience side? What technology do the banks have to have in order to remain competitive within this within this market when deposits and just maintain those deposits that that they’re that they already do have?

    Kevin Pettet 9:23
    So I think there’s a I think there’s quite a few things here. I think first and foremost, payment monetization, which I covered earlier, is really all about helping banks identify new revenue streams, that they can then share with their business customers and strengthen their relationship. And secondly, all about cash visibility, given the multi bank relationships and the expansion of multi bank relationships. How do you make the CFOs job at a business easier? How do you help the CFO be able to see a holistic cash position across all of their banking accounts? So Those are two key areas we’ve highlighted. I think a third is really all around innovating around the payment, and specifically around real time payments. And I believe real time payments as you move into 2024 is going to find its way into being a holistic payment strategy for banks. If you think about the current interest rate environment, everything today is about liquidity. And it’s important to understand when you’re thinking about real time payments, that speed on its own does not make the value proposition for real time payments. Instead, it’s that real time payments, allow a business to wait until the absolute last possible minute and then still make a payment on time. You don’t make it faster, because you want to make a payment 10 days earlier, you make a faster payment, because you want to pay it on the last possible day and use that as a liquidity tool in managing your business. So ultimately, real time payments are not a strategy in and of themselves, but instead part of a comprehensive liquidity management capability that businesses can leverage and hence critical capability for banks to provide. And with the Clearinghouse it’s already here, fed now coming on board, you’re going to see a much stronger adoption, real time payments. It’s a capability that as a bank you need to be able to provide. That’s I think, as we close it’s important for banks to recognize that payments are not a commodity, but instead an area of focus for innovation and proof monetization. payments have often been looked at in commercial banking as a commodity as banks have focused on creating unique user experiences by owning the user interface. Whereas innovation around the payment has been a key strategy in consumer banking for quite some time with the rise of digital wallets and Person to Person payments as two relevant examples. And you actually spoke about them earlier on in the call. What we said at the bottom line for quite some time as an innovation starts on the consumer side and overtime migrates to the commercial side, which still holds true but we expect this migration to accelerate given the current market conditions. Higher interest rates are decreasing commercial loan demands of banks need to find ultimate means of revenue. And we believe that innovation around the payment is really the key or that to drive that incremental revenue will help fill the gap from decrease lending and drive incremental revenues for the bank.

    Whitney McDonald 12:16
    You’ve been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time and be sure to visit us at Bank automation news.com For more automation news

    Transcribed by https://otter.ai

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  • Podcast: Fighting AI-driven fraud with AI | Bank Automation News

    Podcast: Fighting AI-driven fraud with AI | Bank Automation News

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    Financial institutions are looking to AI to fight fraud, but fraudsters are using the same technology to up their attacks.  

    “Generative AI has become a game-changer for fraudsters,” Alex Tonello, chief revenue officer at risk intelligence platform Trustfull, tells Bank Automation News on this episode of “The Buzz” podcast. 

    Financial crimes like money mules, a person who transfers legally acquired money, and synthetic identity fraud continue to climb as fraudsters utilize AI, and FIs are looking to AI to detect fraudulent activity, Tonello said.  

    Barclays, for one, is warning clients on its website that money mules are setting up fake profiles on social media, advertising quick cash and accessing peoples’ bank accounts. In October, the $1.9 trillion bank reported a 23% increase in student money mules, Tonello said.  

    AI is allowing criminals to commit fraud better, faster and at greater scale, Tonello said, and FIs are exploring how the tech can strengthen risk management.  

    Listen as Trustfull’s Tonello discusses the ways in which fraudsters are using AI — and how FIs can protect their clients. 

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:06
    Hello and welcome to The Buzz a bank automation news podcast. My name is Whitney McDonald and I’m the editor of bank automation News. Today is December 5 2023. Joining me is Alex Tonello. He is the chief revenue officer of risk intelligence platform trust ball. Prior to joining tres fall, he worked at Experian for over seven years. He is here to discuss how financial institutions can look to artificial intelligence to help fight fraud, as money, mules and synthetic fraud threats grow.

    Alex Tonello 0:33
    Great, thanks. And thanks for having me today. So, my name is Alex Diallo. I’m the Chief Revenue Officer at trustful I’ve been in data analytics decisioning, for the last like two decades, so I feel a bit old now. But I’ve been at Salesforce as a CRO, since last year in September. And my role is to expand the brands and you know, and help the company grow internationally, across all continents, and across all the key regions. You know, increasing our our clients, relationships, and our partners networks as well. So that’s a little bit about me, who’s trustful. trustful is a risk intelligence platform. And what we do is we analyze hundreds of data signals and data points that come mainly from email, name, email, phone number, device, IP and browser, and we does a wide set of signals that sits underneath those coming from public available sources, we’re able to very quickly, you know, calculate and generate risk scores to help our clients to detect and prevent fraud early in the customer journey. So we’re talking about a solution that is mostly fitting as a pre KYC. So before bank or financial solutions will run traditional sort of onboarding checks, biometric and so on. So we come slightly earlier. And we help our clients to really prevent and detect fraud early in that in that journey. We are an enterprise focus platform. And we obviously, you know, have a very a suite of API’s, as of course, you need to have these days for our products. And our solution is obviously very easy to use, easy to install for our clients. And yeah, that’s a bit about me and the business. Great.

    Whitney McDonald 2:38
    Well, thank you so much for joining us on The buys. Let’s start here. Bigger Picture, of course, you just mentioned that you’re collecting data, you’re monitoring for fraud. Where do we stand today with fraud? Maybe just tell us where we’re at in the financial services industry with fraud, what you’re watching for? What are those key things that you’re keeping note of? Yeah. So

    Alex Tonello 2:59
    Yeah, unfortunately for for all of us names through fraud is, is growing and is a complex and challenging issue. The leases can becoming commonplace, but he’s always saying the industry is innovating and technology and people scale skills and experience is driving innovation. And obviously choice as well. But so are the fraudsters. And they’re doing that at a faster rate, that the ones that we are seeing from institutions. So of course, fraud is growing, we are seeing a specific type of frauds, of course, and we are monitoring that we helping our clients with specifically, you know, the detection of money, mules accounts or accounts that are used to recycle money. Even institutional, like Barclays in the UK have seen a an increase year on year of 23%. So obviously, you know, that’s, that’s they specifically younger demographics, you know, surprisingly, as well. But that is something that we’ve seen and the industry is obviously suffering from, and are the source of sorts of types of flows, things like synthetic identities. Fraud is another big and one of the fastest growing form of fraud and financial crime in the United States, for example. And again, those are just a couple of examples. We can quote others, for example, such as authorized push payments, up frauds, again, one other type of fraud. So unfortunately, the the landscape for these is growing a lot. And there’s big challenges for institutions. So that’s where obviously come in, and we will get through to our top clients with

    Whitney McDonald 4:51
    Yes, those are definitely some trends that we too have been following that you can’t seem to get away from, that you’re watching for within the instance. tuitions. One thing we also can’t ignore right now is AI being used to fight fraud, but also fraudsters taking advantage of AI as well. It would be great if you could talk through both sides of that. How is AI improving the experience to fight fraud? And how has it also advanced fraudsters ability to commit this fraud?

    Alex Tonello 5:22
    Yeah, absolutely. So AI and machine learning techniques are definitely helping on this challenge. And will will, you know, I will give some examples in a moment about how clients and we seen innovators in institutions are doing this right. But as you said, you know, AI is two sides, and it can be exploited by bad actors. And I think it’s an additive AI is actually becoming a game changer for fraudsters, unfortunately. So we sometimes picture you know, fraudsters and properties worth maybe thinking about for a moment, or what do we mean by fraudsters? Right, so we’ve seen those professional sort of large scale operation rings, those that really have fraud farms that are doing this at scale, and are doing this very effectively. So what AI is doing that is helping these fraudsters to do it even better, faster, and again, at a greater scale. So that is, again, is a worrying trend. But the other things that we have seen is that AI is helping, you know, let’s call it more common people that are taking the bad road, the bad path, and they are really leveraging solutions technologies that are out there, they are there to be to be learned from so we’ve seen this trend where fraud is growing, because it’s both sides disposes professional, but also sort of, you know, individuals that are going down this path, perhaps because they are under more risk, and so on. So that again, it’s it’s a rewarding trend for sure that we’ve seen.

    Whitney McDonald 7:02
    Now, when it comes to financial institutions ability to monitor this fraud, AI brings a different different, it’s a different player in the game. How should financial institutions really approach this and not underestimate the power of AI that fraudsters are using?

    Alex Tonello 7:22
    Yeah. Well, this is a very big open, open question, of course, and we could speak for a long time on these, but I guess the key points here are that, you know, institutions are leveraging a combination of in house skills experience technology, to build their defense systems. So you know, we have seen very, you know, lots of innovators, specifically in that sort of new banking and challenges. FinTech space, really building up from from the ground up and doing this at at, you know, really, really well, but of course, do that, well, they still have to leverage external data sources. And, you know, driving feeding these models, these machines with the right level of data is obviously very important. And not taking away of course, the fact that they need to have really great people to do that as well. So, the human side is obviously very, very important. But But equally, you know, we cannot, you know, and they, you know, this is not underestimation here, concerns, you know, issues, because, of course, you know, AI is driving a lot of issues, specifically when we talking about that onboarding journey, where, you know, user’s accounts are being opens, user asking for line of credits, or asking for loans or credit cards or opening just savings account and so on that early stage journey where a user coming and as you mentioned, they have to go through a verification or document checks, and, you know, nowadays, you know, maybe synonymous long ago, they were doing like selfie or video right? And even that, now is a risk have been, have been, as you know, hockenson sites sites are active by fraudsters. So even things we think about liveness checks where you actually have to pick up the handset and during this call, you know, we are seeing fraudsters and AI and, you know, this this trend towards being able to crack even those safest places where the organizations are early to adopt. So I think it’s a combination for what we’ve seen of, you know, getting the right mix of skills in house resources, technology data points externally, and humans and people to help us to coordinate that, but for sure, I don’t think nobody’s really under the belief that they underestimate the issue. everybody’s aware of this So the question becomes how do you? How do you deal with the it’s how do you solve this?

    Whitney McDonald 10:06
    I know that you’ve started talking through some of the ways that fraudsters are able to even get through the safest of solutions. Can we talk through a little bit more on that red flags to watch for? How do you really monitor this? Maybe it’s on the tech side, maybe it’s on the human side. But how do you watch for these red flags? And what really stands out that should maybe make you hesitate? Yeah.

    Alex Tonello 10:31
    So again, our narrative here is very much around, you know, dealing with with frauds, before he actually happens. So the idea is to deal with the with the first interaction that’s a banker restriction will have with with a user when they register or request an account or open for our products, open accounts for products, we are really wanting to detect that risk at that early place. Now, for us, you know, a simple call is simple. As soon as a user enter an email and a phone number, a silent check, a tech that can be run in the background, can be run technology allow us to do these in a couple of seconds. And to show some early flags, red flags that tell the organization that declines. Look, this user is more likely to be a risky users. So you need to be really careful. So to give an example, if we were to look at an email address, they have what we call a love velocity, check, which means doesn’t have too many accounts connected, for example, doesn’t have a Google account, or an Amazon or LinkedIn, which is kind of normal these days for your personal email, email address. Or another things could be a phone number that doesn’t have a messaging app, such as a Viber, or a telegram or WhatsApp. So these are pretty common things you’d see, right. So you see, these are individual data points in itself themselves, they don’t really tell a story. But when you put them all together, and when you kind of joined the dots, you start to see some patterns and some correlations that telling you, okay, hold on a second here, which is something not quite right. Therefore, we need to make some adjustments, we need to sort of take some actions and therefore, you know, do better decisioning.

    Whitney McDonald 12:22
    Yes, looking at all of that data in a in a bigger picture format, right, not just the one offs that are happening. So that kind of brings me into my next question of who really uses trust fall? Have you seen demand grow as fraud to has increased? Maybe talk me through who it is that is leveraging this technology? And how it’s working? Yeah.

    Alex Tonello 12:51
    Obviously, you know, the, the results of a bigger landscape of fraud means as organizations will definitely need to look for more and more technologies. And that’s, for us. Absolutely, we’ve seen a much higher demand for our solutions. And a lot of organizations wanted to test and learn and, and find ways to really better fight this. Absolutely. So we we really cover a wide a wide array of organizations and financial space. So from traditional banking groups, to to more sort of neobanks intelligent boxes, I mentioned organization that potentially might have already, you know, built things from the ground up, but they need to add additional security measures down to for example, other FinTech digital lending is very big, buy now pay later, again, another sector that we see a lot of demands, because again, those quick decisions that you have to do or the point of someone saying, I want to pay for these goods in in many installments, allow you really to say actually, okay, I want to go further with this with this, this user, this person, rather than actually don’t don’t progress. But again, maybe going back to a bank example, again, to you know, what we’ve seen these days, and I mentioned the beginning, a type of fraud that we see a lot of requests from specifically the money, mewling example, where, you know, we’ve done activities, for example, now we just, we just completed, you know, all series of testing with a large bank is about to be announced and being signed up with us, because we managed to sort of spots over 90% of accuracy of our models in spotting the money mule accounts being created. Again, these are accounts that will be created from so called synthetic identities to obviously commit that sort of money recycling. So again, these are the landscape that are obviously lateral industries we also serve, but in the financial space, that’s where which the biggest demands for for obvious reasons. And that’s where we, I think we’ll definitely continue to see the trend going up. New Year.

    Whitney McDonald 15:08
    Yes, well, just based on this conversation and what we know from from following fraud within the industry, it would be great if you could provide the audience with a takeaway here, what can they be doing to protect themselves from fraudsters? And I’ll let you take that however direction you want, but what would be something that you can do to really put yourself in a better position to fight fraud?

    Alex Tonello 15:35
    So I love I love to sell to say here, there’s a silver bullet in all these, as usual, and there is one single solution, but reality is that nobody really should believe you, if you say that. So the reality is that organizations have to use a combination of tools and technologies and data sources to to prevent fraud. So, we are not sitting here saying yes, that is one single thing, but that is, you know, our solution, we always say this is very complementary to many other checks that are run, even in that later phase, the journey, which is obviously KYC, documents, X biometric and so on. So doing these alongside and, of course, we know from our perspective, running these further checks, complimentary is, is extremely important. And, of course, you know, running these, you know, in, in doing these in two ways, because there’s the option of again, taking a solution off the shelves and running it and relying on the scores, and the risk scores degenerate. Or, of course, for more sophisticated clients, using this vast amount of data, feeding into existing models, again, this depends on sophistication declines, but we see both sides happening in with our clients, you know, conversations. And, and for us, again, it’s, you know, the takeaways, of course, use test and explore new solutions. And, and always stay in the game, because because these, as we talked about earlier, the innovation is not going to stop, I mean, other things that we know is already happening, and we already have sort of solutions and things that we’re building is to, you know, for example, dealing with what we call super synthetic identities, which are fraudsters that are really understand the game and standard solutions that are able to stop them, therefore, they are actually advancing their things to mass themselves. So technology has to advance and that’s always going to be the case for providers, but also organizations and alongside having the right people skills, having the right you know, human intervention that we know is super important. That will be my few key points if I were to list them out.

    Whitney McDonald 18:00
    You’ve been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time and be sure to visit us at

    Transcribed by https://otter.ai

    Transcribed by https://otter.ai

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  • Podcast: FedNow or RTP? Maybe both | Bank Automation News

    Podcast: FedNow or RTP? Maybe both | Bank Automation News

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    Financial institutions may consider which payment rails to integrate — whether RTP or FedNow — but the right answer might be both.  

    “I recommend to financial institutions that if they’re going to just receive, do both rails,” Jeff Bucher, senior product manager for money movement solutions at Alkami Technology, tells Bank Automation News on this episode of “The Buzz” podcast. “If somebody wants to send you money, as a financial institution, you don’t want to say ‘We can’t accept that.’” 

    However, if an institution is more concerned about its send capabilities, one payment rail will do — for now, he said. 

    The adoption of FedNow, which launched in July, is growing rapidly. There are more than 220 institutions live on the rail, including $3.9 trillion JPMorgan Chase and $1.8 trillion Wells Fargo, according to the Federal Reserve. 

    “I think over time, FedNow is going to overtake RTP in terms of financial institutions,” Bucher said.  

    As FIs decide which payment rail to integrate, Bucher said they must weigh the following:  

    The Plano, Texas-based Alkami’s customers include: Ideal Credit Union, Meritrust Credit Union and Vibrant Credit Union. Listen to “the Buzz” as Bucher explains how FIs can best approach integrating FedNow and RTP. 

    Get ready for the Bank Automation Summit U.S. 2024 in Nashville on March 18-19! Discover the latest advancements in AI and automation in banking. Register now. 

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:03
    Hello and welcome to The Buzz a bank automation news podcast. My name is Whitney McDonald and I’m the editor of bank automation News. Today is November 30 2023. Joining me is Jeff Bucher. He heads up product strategy for money movement at Alkami. He previously served as Head of Product Management at Bank of California and has spent time at City National Bank and Union Bank before moving to alchemy. He is here to discuss how FYI select the right payments rail for them when it comes to adopting fed now in RTP. Sure, so Jeff Buch, I work for alchemy, of course, I’m heading a product strategy for money movement, with Alchemy, which includes Faster Payments, ACH wires, handled both business and consumer, we have another business segment also that handles more of the treasury management and things like that. My background is 20 plus years in financial services. So I started out in banking, mostly with the larger financial institutions, Citibank, US Bank, Union Bank, MUFG, Union Bank, and a few others. I spent a lot of time in product management and actually sales, treasury management services. But I also spend a lot of time in the retail segment,

    Jeff Bucher 1:24
    Great, and then a little bit about alchemy would be great. Yeah. So alchemy, alchemy was founded back in 2009. We have 200 plus financial institutions that we work with who are clients. We have credit unions, and a number of banks that we work with, we are a digital platform. So we offer digital banking services, for money movement, but also several other disciplines within the platform. We offer these platforms and then white label them to our clients so that they can offer them up to their members and their, their users and their clients. That work there. We are very focused on offering a great experience for the user, we focus first on on mobile, and the client experience. And then we work backwards from there in terms of the functionality and what is needed, and make sure that we’re listening to not only our clients feedback, but also their users feedback and do a lot of research there. Great. Well, thank you so much for joining us on the bus today. It’s great to have you, we’re gonna be talking through payments rails and fed now in real time payments adoption. So let’s start here with just kind of, I’ll have you set set the scene a little bit about where we stand today with existing payment rails. What are what are f5 is kind of facing right now with selecting these different payments rails that we have. Yeah, so there’s there’s a ton of buzz going around since fed now just launched this summer. And there, there’s a ton of marketing and a lot of focus by the Fed on providing information around fed now. So there’s a lot of excitement around it, you know, plus the United States is a little bit behind the curve compared to the rest of the world with regard to Faster Payments, and being able to do real time transactions. And so there there is a lot of interest. And I talked to my financial institutions that I work with all the time, about how can we use it? How can we get it? What’s the best way to do that? How do we want to integrate things like that? You know, and what I tell a lot of my financial institution clients is, is think about the use cases, think about what problems are you trying to solve, you know, is Faster Payments important to you is Faster Payments, something you want to do? So we have a lot of conversations in that in that regard. And we try to help them out with giving them direction and strategies as well as, you know, thinking of a short term and long term use cases that their their members and their clients want to want to look at. Let’s take those conversations that you’re having a little bit deeper, how do you really determine what payment solution might be right for a certain financial institution? Could you maybe talk us through what those conversations looked like in a little bit more detail? Yeah, absolutely. So so fed now is kind of the buzzword, right, but fed now and RTP are almost identical in terms of the way they would be used the way the financial institution would interact with them. The functionality of them. The only difference is one is supported by the Clearinghouse RTP and the other one is supported by the Fed, fed now, right RTP has been around for a number of years. So it’s been launched in 2017. Fed now was just launched this summer, as we talked about, and RTP has about 300 Plus financial institutions across the United States. Most of the large ones are already on RTP. In fact, they own the clearing house so they

    working with branches working with small business customers, things like that.

    They already have access to that fed now is up to about 100. And they just launched this summer. So it’s growing faster than RTP is, but I mentioned, you know, they’re really marketing the heck out of it to try to get some knowledge out there. What I like to talk about, you know, when clients bring up, you know, that they want to get on to fed now, my first question is, is what do you what do you want to do with it? What, what problem are you trying to solve as a financial institution? And a lot of them say, Well, my clients want, you know, to be able to move money faster. Okay, great. You know, so we look at the use cases, the as a use case, I was just talking to a client the other day, as an example, we, we, they said, We want fed now, they said, We want to move money faster, but we don’t know how to do that. How do we connect what what what rails are better to your question? And we talk about, you know, what you want to receive, right, so most financial institutions are looking to receive, and I recommend that they do receive, at least, you know, so that they can get incoming payments from other financial institutions, whether it’s the bigger financial institutions or anybody else that is on RTP are fed now. So that’s, that’s the first thing. So I try to help them. When I was talking to the client the other day, they thought received was a great idea. And they just want to go with receive to start with, they’re a little bit scared about the center part of things. I have other financial institutions that I’ve talked to before. And they really want to get into send, they liked the idea of the account to account extra instant external transfers. So they want to be able to send money as a user be able to send money from their account at, you know, ABC financial institution to XYZ financial institution, they want to be able to move it quickly. They have money at both financial institutions, they have accounts at both places, but they keep most of their money at ABC, they want to be able to move it quickly to the other financial institution. And we are able to set up and help them do that with the partnership with payment providers that we partner with. No.

    Whitney McDonald 7:11
    Yes, yes. Thank you. Now, maybe we could narrow the scope a little bit and kind of talk through. I mean, yes, you want to address what are you trying to solve for? But there’s other considerations too, when it comes to cost integration client demands? Maybe we can narrow the scope a little bit here and talk through how you have these conversations with your smaller financial institution clients? How do you determine kind of which which rail to take? What solution is right for you, especially when it does come to cost and integration? Which is a huge piece of that puzzle? Yeah,

    Jeff Bucher 7:45
    there’s a very large, typically a large, upfront cost with regard to both RTP and fed now, the cost between the two rails, there’s, there’s really no no difference there. Between the two. And the way that as I mentioned before, the way the rails function, there’s not a whole lot of difference between RTP and fed. Now, what typically we talk about with the smaller financial institutions is do you want to be on one rail? Do you want to be on both rails? Do you want to receive or do you want to send? So those are the conversations that we have? And if you want to send what is the use case? Is eight a, you know, instant external transfer something you want to do? Or do you want something for businesses, so if you’re if your financial institution and most of your clients are businesses, if you’re a bank with with with a lot of business clients, maybe you want to do a b2b solution, or a B to b2c solution. So business to business or business consumer as an option, so we really look at the use cases. And that’s where the conversation really goes, you know, most of the time, and where we get into the meat of the conversation, is what kind of use cases do you want to look at? So you know, first of all, do you want one rail? Do you want two rails? And then do you want to, you know, what use cases if you’re going to do send, are you going to look at

    Whitney McDonald 9:06
    now, from a competitive angle? Is it really an option to just pick one payment solution over another? Where do you stand on that? Or how did those discussions go? Yeah,

    Jeff Bucher 9:19
    I recommend to financial institutions that if they’re going to do just receive, do both, do both rails, because you want to be able to receive money coming into your financial institution, if somebody wants to send send you money as a financial institution, you don’t want to say we can’t accept that, that that just looks really bad. So you know, set up to receive at least for both RTP and for fed now, when it comes to send, maybe you pick one or the other. Right now, as I mentioned, RTP has 300 You know, financial institutions, but fed now is growing quickly. I think over time fed now is gonna overtake RTP in terms of the number of financial institutions, maybe even by next year, and then at that point, and they’re gonna have a lot, a lot deeper reach, in terms of who you could send to. So I always recommend getting on to both rails, if you can, as a financial institution. But you know, if you if you just want to do receive, that’s a definite if you want to do send, maybe just pick one or the other.

    Whitney McDonald 10:19
    Yeah, being able to receive and taking those deposits, especially as key right now, as banks are fighting for those deposits, right.

    Jeff Bucher 10:25
    Yeah, absolutely. Now,

    Whitney McDonald 10:28
    we’ve been doing a lot of coverage of Fed now, we know that there’s a lot of providers that you can pick from, how do you how do you have those conversations? How does a financial institution pick the best provider for them? Whether it’s a smaller institution or a larger institution? Or fed now or maybe even RTP, too, but how are you selecting those providers that are the best fit for your institution?

    Jeff Bucher 10:55
    Yeah, you know, I think cost is definitely something to consider, I think which cores that provider integrates with, you know, said they’re going to what, whatever you do, you’re going to have to find a provider that integrates with your core, your banking core that you use, because there’s going to have to be real time movement of money. And you can only do that through direct core integration. So if you’re going to choose a payment provider, you got to look at costs, but you also got to look at do they integrate with your core, then there’s other considerations such as, you know, servicing, you know, the interface that they have reconcilement, you know, other things that, you know, are a little bit more nuanced, but it’s something you need to, to think about. But, you know, we went with also a, we partnered with a company called alacrity to as a starter, to get into the RTP in the Fed now networks and partner with our clients, and alacrity. And the reason why we went with alacrity, they were a little bit ahead of the curve. So they had one, they had people who knew what they were talking about with regard to the Faster Payments RTP and fed now, two, they already had the integration to a lot of different cores set up. And three, they, they had their product up and running, and they had been using it already. So they were already on to RTP, a few years back, they’ve already been using it. They know what they’re doing. You know, I think a lot of the other providers are playing catch up. And they haven’t done a lot of transactions, but you want to look at that. Do they have experience with the faster payment transactions? Whether it’s RTP, or fed now, doesn’t doesn’t make that much of a difference, but at least one of those?

    Whitney McDonald 12:41
    Yeah, cost is definitely huge. But the experience side of it looking into those number of transactions, how has this provider been operating on these rails? That’s a that’s a great piece of advice. Now, one thing I wanted to break down a little bit that you had mentioned in early on in our conversation was this approach to FIS on on fed now as receive only for now you’re going to kind of see the the sending tick up a little bit, can you kind of give us some insight as to that decision to receive only for now move into sign? What’s that going to be looking like, in 2024? Maybe you’ll see more send ticket, maybe you could talk us through that? Yeah,

    Jeff Bucher 13:23
    so you know, if you’re a smaller financial institution, you have limited resources, right. So you can’t throw a whole team at this and, you know, get it up and running, the implementation is really the heavy lift here. And being able to implement on receive is fairly simple, but being able to implement on receive, and then also do a send, you know, complicates it, you know, by two or three, in terms of the, you know, the implementation, what I’ve heard is once financial institutions are implemented on this, they understand how it’s working, they understand the reconciliation process, and the settlement process, it gets really easy. In fact, RTP and fed now seem to be a lot easier to manage, than, you know, other rails like Ach, of course, ACH NACHA. rulebook is you know, two feet thick, you know, and RTP and fed now were made to be simple, you know, when they created these, these rails, that was one of the defining goals was to make sure that it was a simple process, it would be easy to use, you still need to go through the implementation in any implementation, where you have a core integration is going to be difficult. But once you go through the core integration for receive, you need to, you know, just figure out how it works. And you should be up and running. So you just need to think about as a small, smaller financial institution, what kind of resources can you put towards that implementation? And then, you know, once you get up and running on it, it should be easy to manage. And then you know, think about the second part Are there things, you know, you’re just going to need to assign people who know what they’re doing, you know there, and you’re probably not going to have a whole lot of people, the smaller financial institution. So you just need to think about that.

    Whitney McDonald 15:13
    Now, I know I mentioned 2024, slightly in the last question, but just looking ahead here, What trends are you watching in the payment space looking into next year? How are consumer expectations shifting and how to financial institutions really keep up with that shift? Yeah,

    Jeff Bucher 15:30
    I’m definitely looking at the adoption of the number of financial institutions. I mentioned the 300 for RTP. And, you know, fed now just crossed over the 100 100. Mark. I’m looking at that to see how quickly things are being adopted fed now is definitely taking off faster than RTP. Does. I mentioned before, I’m also looking at the use cases. So we’re trying to look at data around what type of use cases are being implemented for the send portion of things with both RTP. And with fed now, eight, a seems to be very popular, and then b2b and b2c seem to be picking up businesses, in my experience, as businesses can be a little bit slow to adopt. They have processes in place as a business, especially if you’re a commercial business, and you’re not going to adopt something right away. Just because it can cause a lot upset to your business to be able to take on another rail. But that’s definitely going to start to pick up I think, in 2024, you know, and I’m gonna keep a close eye on that. Yeah, those are the things that kind of stick out to me.

    Whitney McDonald 16:34
    You’ve been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time, and be sure to visit us at Bank automation news.com For more automation news,

    Transcribed by https://otter.ai

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  • Podcast: Why an FI’s digital maturity matters | Bank Automation News

    Podcast: Why an FI’s digital maturity matters | Bank Automation News

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    Financial institutions must review their digital maturity to remain competitive in a tech-forward market. 

    The first step toward improving digital experiences is ensuring the FI has a solid digital foundation, Robin Smith, chief revenue officer of Praxent, tells Bank Automation News on this episode of “The Buzz” podcast. FIs need to establish a starting point to progress digitally, he says. 

    For example, Smith said, FIs must review the entire consumer experience: How does the bank interact with customers? What technology is in place for originations, servicing and transactions?    

    Once the review is complete, FIs should determine how they compare with their competition, noting where operations less or more efficient, he said.  

    Comparing operations with competitors gives an FI a road map for further digitization, whether for selecting partners or purchasing solutions to “achieve more maturity,” Smith said.  

    Listen as Smith explains Praxent’s digital maturity model.  

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:03
    Hello and welcome to the buzz of bank automation news podcast. My name is Whitney McDonald and I’m the editor of bank automation News. Today is November 21 2023. Joining me is Robin Smith. He is the chief revenue officer of praxent and he was appointed CRO in September and brings decades of experience in financial services and digital transformation. He is here to discuss how financial institutions can understand where they stand in terms of digital maturity and competitiveness.

    Robin Smith 0:30
    This is Robin Smith, I’m the Chief Revenue Officer for praxent and I’ve been involved with FinTech work for about the last 30 plus years, primarily from the core banking side of the equation. And as customers members and technologies have advanced and evolved, my role in working with institutions around you know, core banking type of activities, has kind of ever increasingly become more complex as the ecosystem around core banking has evolved in, you know, the surrounding solutions that are required to really support a bank and completely from a technology perspective have evolved, but particularly over the last several years, you know, as the emphasis has shifted towards advanced digital enablement, across the full spectrum of an institution’s offerings, a lot of my time has been spent in helping institutions, you know, create that ecosystem that allows them to, you know, digitally enable their organizations, as you know, customer demands have increased around that, that arena. And so that’s really kind of what led me to, you know, come to work and to work with practice. And, you know, as I’ve worked with both on the consulting side, as well, as, you know, on the product side, the solution side of the business, increasingly, you find, you know, both credit unions, banks, fintechs, a variety of different folks are struggling and are frustrated with the ability that they have to create your unique customer experiences, member experiences with their digital offerings. And so when you look at practice, and as a company, we are a financial services, digital consulting and development firm. And really, what we help our clients do is solve those frustrations, the frustrations that they have, with creating unique digital experiences for their customers and members. And we do this because, you know, we, we specialize in all things digital for financial services, and creating, you know, ways that they can leverage their legacy system technology, but do so in a more advanced digital environment. We’ve done over 400 digital transformations, in that regard, and again, exclusively focused on working with banks, insurance companies, credit unions, anybody that’s in the FinTech space, to help them achieve that. So that’s kind of what I do. And, you know, we’re, we’re looking forward to the rest of our conversation today.

    Whitney McDonald 3:00
    Great. Well, thank you, again, for joining us on the visor. It’s great to have you. Now, before we get into the technology that financial institutions can really implement, let’s get started kind of with a setting of the scene for the state of digitization today, within the finance industry, it’d be great if you could talk us through why it’s so important that financial institutions are investing in technology right now just keeping up with consumer demand and being competitive in the market. Can you talk through that importance? Yeah,

    Robin Smith 3:31
    it’s probably a worn out analogy. Because you hear it a lot. But I think you have to start from, you know, a consumers perspective, and what they expect in terms of digital experience. And you know, the foundation for that the standard bearer on that the Northstar on that is people look at their digital experiences, and they’ll immediately compare it to the experiences that they have from an Amazon or the experiences they have, from a Netflix or from some of the other large, you know, organizations that are exclusively, you know, digital and focused on, you know, enabling, you know, their customers to interact with them digitally. And so the expectation the bar is set very, very high in terms of what consumers Small Business commercial, regardless of what segment of the market you’re talking about. They all have very high expectations on what a good digital experience looks like. And so I think that’s the challenge that financial institutions face, you know, there’s an expectation to have very rich, data driven, digital experiences, very customer friendly, digital experiences, you know, that standard that’s been set, and they struggle with how to do that in a financial services arena. And a lot of that challenge that they face is because, you know, they have, in many cases, very old legacy systems. Have that sit behind the digital customer experience? And so it’s not only the challenge they have to upgrade and to modernize those legacy systems, but then also how do they take those legacy systems and empower them, you know, in the right way to service their customers, you know, with high quality digital experiences. So I think that’s where we start, right is, is that, you know, every financial institution out there is faced with that same challenge as to, you know, I’m going to be competing against, you know, expectations that are set by the likes of Amazon. But I’m also going to be competing against folks that are, you know, non traditional financial institutions, be it folks like chime, or borrow money, or, you know, or other Neo banks that have popped onto the market that I’m competing against, that’s focused on that customer experience. And so that’s the real challenge banks have banks credit unions have is how do they compete in that marketplace? With very, very high expectations? Does that answer your question? Yes,

    Whitney McDonald 6:05
    thank you. No, before getting into where you can invest, or where you should be investing, let’s talk through this, this starting point. So how can financial institutions determine where they stand today on this digital banking maturity spectrum? How do they analyze Okay, here we are today before getting ahead of themselves into where they need to go.

    Robin Smith 6:30
    Great question, Whitney. I appreciate it. You know, one of the things that we’ve spent a significant amount of time on, you know, you know, with specific clients, as well, as, you know, in a more broader market sense, is, you know, creating and executing on helping an institution determine that, the answer to that question, through a, what we refer to as the digital maturity model, where basically, it starts with a heuristic view of what are they doing today? Right. So taking a look, I think that’s the first step towards remediating or improving or enhancing any of your digital experiences, is really getting a solid foundation of what are you doing today. So with the digital maturity model we’ve developed and that we’ve worked with, and, you know, a handful of our customers is basically about a 12 point, you know, review of their current digital experiences, and then basically working through, you know, looking at every aspect of how they interact with their customers and their members, from an attraction perspective, from a account, origination perspective, from a servicing perspective, from a transaction processing perspective, looking at, you know, their entire experience that they have today. And then level setting around how does that compare to other institutions in the marketplace. So for instance, was working with a small bank in Southeast Texas, who had basic, you know, internet banking capabilities that they enabled their customers with, but there was no transactional support, there was no account opening support, there was no, you know, ability for you to initiate bill payment transactions, you know, those types of things were not present in their current digital experience. So establishing, you know, that you know, what level they are. And we have kind of five levels that we talked about in terms of where an institution falls, establishing what level you’re at today. So that then you can target where you want to be. And then completing, once you’ve completed the analysis of where you are, today, you’ve assessed where you want to be, then that gives you the framework that you can build a roadmap around in terms of how you’re going to get there, whether that’s through working with a firm like practicin, whether that’s through working with one of your ecosystem providers, to you know, enhance their solution. It’s, then you’ve got that, that that roadmap that you can then work off of to achieve more and more maturity, in terms of what your digital experiences are. Does that make sense?

    Whitney McDonald 9:16
    Yes, it does. Now, when it comes to monitoring what you have versus what you want to what you want to implement? How do you look at your own digital usership? what your clients are asking for where you should be investing to make sure that you are maintaining a strong digital presence? And what could some of that technology look like that would help you achieve more of a digital presence that your clients are looking for?

    Robin Smith 9:47
    So I think there’s two sides to that equation. There’s a functional side to that. There’s a functional side of what functionality do I need to have present in my digital experience? You And then secondly is what’s the underlying technology, you know, that is supporting that functionality. So on the functional side, what you’ll see, particularly with a lot of community banks and credit unions, is you’ll see that they’ve done the basics, right, as I was describing earlier, they’re providing information they’re providing, you know, where their branches are, they’re providing, you know, what types of services and, and product offerings they have. But it’s highly informational in terms of the functionality. As you move up the maturity curve, what you find that this is the functionality needs to start progressing towards more transactional type activities and more directed informational type information for a bank’s customers in a credit unions members. So for example, being able to incorporate from a functionality standpoint, that if you’re a member of the credit union, and you want to, you know, apply for a new loan, and you want that loan to be processed, you know, from a, an automated perspective, incorporating that type of functionality, you know, into your digital experience, is part of moving up that curve, moving up that maturity curve, to the far end, right. So you know, if your informational today, you know, which we would consider to be a level one, then in a level two type scenario, you’ve added new account opening, or you’ve added new account opening for consumers, and for folks like you and me. But then as you move to the next stage, where you’re, you know, optimizing that maybe you’re extending that type of capability to your small business customers. So it’s a, an evolution, you know, of functionality as you move up that curve. Now, identifying the functionality you want to, you know, incorporate, you know, as you move up, the maturity curve, is probably actually the easy part of the equation, right, in terms of, you can look at what your peer group is doing, you can look at what your competition is doing, you know, if you’re competing against Bank of America, you kind of know what that threshold is. And so you can identify fairly ease, delay the functionality that you want to add to, you know, mature from a digital experience standpoint, where the real challenge becomes, then is the underlying technology that you’re using to do that. So things like what types of mobile apps are you going to use? Are you going to, you know, create mobile apps for both iOS and Android? Are you going to do that in a native fashion using, you know, react and some other tools to help you, you know, create those, you know, mobile experiences? What kind of data do you need from your core and your legacy systems to be able to feed those digital experiences? And that’s where really the long pole in the tenant is? What kind of technologies do you have in place today? What kind of technologies do your other vendors employ? And how easy is it then to use those technologies to be able to, you know, incorporate that functionality. So if you’re working with vendors who haven’t provided or don’t provide, you know, API enabled micro services enabled, you know, technologies with their solutions, it becomes much more difficult to be able to architect, you know, those digital experiences from a functionality perspective. So part of what we do with our clients is not only review the functionality, but review all aspects of their technology stack. And in many cases, they own that technology stack. But in a lot of cases, particularly with community banks, and credit unions, they’ve outsourced that technology stack to, you know, some of the major providers in the industry like Fiserv FIS Jack Henry, you know, other people like that. And so you’ve got to then, you know, connect the dots, right? You’ve got to connect the dots between what capabilities, what technology capabilities are available from your vendor community, and which ones you have internally within your organization? And how does that fit in then to you being able to fulfill you know, what those functional requirements are that you need to increase, you know, the digital experience and improve the digital experience for your customers and your members. So that makes sense.

    Whitney McDonald 14:27
    Yes, and I know that you’ve talked through the functionalities. I know you talked about the different levels that you could implement, you gave some great examples of some of the technology that is implemented, and I know that you could go very basic on the needs depending on what your clients want, or you could go kinda way up the charts go crazy with some of the capabilities that that some FIS are implementing just kind of depending on the competition you’re keeping up with. Maybe we could kind of talk through some of those non negotiables what’s the technology that’s just like a must have maybe Give me more on the basic side of what’s a good building block.

    Robin Smith 15:07
    So at the very least, as, as we see it with with institutions that are looking to evolve, and to move up that curve, they have to have kind of the fundamentals that you and I expect as consumers, right. So, you know, there’s your basic snacking transactions, I call them snacking transactions of, you know, what’s my balance, when, what were the, what were the transactions that I processed yesterday, I used my debit card last night, you know, is that showing up, you know, on my transaction history, I mean, those are kind of basic fundamentals from a functional standpoint. In today’s world, though, you also have to, you know, consider things like electronic bill pay, right, your ability to pay your utility bill, you know, from the website, or to pay your mortgage payment. From, you know, your the website that you have your, your primary banking relationship with, those are really kind of table stakes. From a functionality standpoint, if you don’t have that fundamental transactional capability, then you’re really at risk that your customers are going to go somewhere else are going to perform those traction those transactions somewhere else. And every time you know that a customer starts performing transactions, you know, through their primary financial institution, that relationship becomes stickier and stickier, I don’t know, if you’ve ever had the experience of having to move from one bank or one financial institution to another and set up your online bill pay, you know, solution, again, right. So the you know, you have to go through everybody you’re spending bills to you have to reset it up on a new site, they may be using a different platform for bill pay. But so once you secure your customers and your members with those types of transactional activities, you’re you’ve got a very sticky relationship that you can then grow, right. So I would say those fundamental transactional type of capabilities are really the table stakes for you know, where you need to be. And then if you’re below that, that needs to be your highest priority. As you then move forward in terms of digital maturity, you start to get into those topics around, okay, I’ve attracted you to my website. Now, how do I get you not just to transact on my website for those daily transactions? But how do I get you to initiate new relationships with the financial institution, whether that’s opening up a new account on the deposit side, whether that’s applying for a loan, applying for a mortgage, those types of activities become the next stage. So that’s where we see the progression. I think, from a table stakes on the technology standpoint, that’s where it becomes real, you know, it can becomes real critical that a financial institution is working with their, particularly their core providers to make sure that they have easy access to the data, easy access for integration, you know, that whether that’s enabled through micro services, or through open API’s, those become kind of the the long pole in the tent for them to work through with their core providers as to whether or not they have that kind of support, and how easy and how cost effective the core provider can make that support. And that’s some of the work that we help our clients navigate is not only working with those technologies that the vendors have, but you know, putting in other technologies that will ease that integration.

    Whitney McDonald 18:48
    Yeah, absolutely. I mean, you talk through those, those basic kind of getting the clients a frictionless experience from the get go, but also retaining that client as well seeing how else they can interact with the bank, and where else there’s frictionless experiences to be had with the technology at hand. Now, speaking of what consumers want, and the frictionless experiences, wondering if we could kind of get out the crystal ball here, look ahead to 2024. Any thoughts on how consumer demands might change or what digital capabilities might rise up as most popular next year? Just kind of wondering what you’re looking for or watching for in 2024?

    Robin Smith 19:30
    But you can’t you can’t address that topic. I don’t have that ball. I wish I did. I probably be with Warren Buffett right now. Case, but you can’t have the crystal ball conversation moving into 2024 without dealing with the 800 pound gorilla that’s on the table right now, which is all things generative AI, right. So when you think about the popularity and the emphasis that has gone on on for the last year with the introduction of tat GPT, and all the other generative ATM AI projects that are and solutions that are out there, I think that’s one of those things that everybody has their eye on. And everybody is trying to figure out where that fits into the whole, you know, ecosystem of the digital experience for customers. And so, you know, money 2020 This year, which was, you know, a major conference back in October, that was probably one of the hottest topics that money 2020 was, you know, the use of generative AI, and how and where you incorporate that into, you know, the overall, you know, experience in financial services. So, I think that, to me, is going to be kind of the area in 2024, that gets a lot of attention. You know, there’s been a lot of work over the last few years, you know, on pre generative AI types of activities, right, so you’re on a website, and based on your previous interactions, we’re recommending this next product, right, or we’re recommending, you know, this approach to your investment management criteria. That’s all been pretty much done with a data analytics and data science and other tools. And I think what’s going to happen as we move into 2024 and beyond, is there’s going to be much more emphasis on the real time nature of that, and performing those types of activities via the integration of generative AI, that you’ll see more and more institutions start to look at, you know, using AI to empower their websites and their digital experiences, you know, across channels and across platforms in a more intelligent way. You know, that’s, that’s got lots of positive benefits to it. But there’s a whole lot of issues around that in terms of, you know, you know, regulatory issues, identification issues, all of the issues that you’re hearing about K, what about, you know, AI, are going to be forefront issues that have to be addressed, it’s not as easy as turning on a chatbot. And, you know, being able to script that chatbot, once you start to invoke generative AI into the equation, there’s a lot of variables there that you don’t have any control over. Right, is the information being presented that accurate? Is it, you know, in compliance is that, you know, causing you to go down a path that, you know, is reliable and trustworthy, you know, for your customer to work with? You know, that’s one of the things that banks and financial institutions credit unions have, you know, in their, in their, you know, strengths is that they’re considered very highly trustworthy organizations. And so when you start to bring in AI into the equation, you’re you’re opening up that field of information as to how reliable and trustworthy that information is that then your consumers are going to use, you know, to drive some of their banking and financial services activities. And so there’s just some caution around that. But I think that’s going to be the hot topic for the next couple of years.

    Whitney McDonald 23:18
    You’ve been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time, and be sure to visit us at Bank automation news.com For more automation news,

    Transcribed by https://otter.ai

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  • Podcast: IBM studies embedded finance | Bank Automation News

    Podcast: IBM studies embedded finance | Bank Automation News

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    Embedded finance is a key strategy for financial institutions as consumers demand the integration of financial products within organizations that provide nonfinancial services.  

    In fact, 70% of banking executives have named embedded finance as a core or complementary business strategy, according to the report “Embedded finance: Creating the everywhere, everyday bank,” by IBM and Banking Industry Architecture Network (BIAN).  

    The September study surveyed more than 12,000 consumers across 12 countries and interviewed 1,000 industry leaders from banks with assets of more than $10 billion across 32 countries, Shanker Ramamurthy, global managing partner for banking and financial markets, at IBM Consulting, tells Bank Automation News on this episode of “The Buzz” podcast. 

    “We defined embedded finance as the integration of financial products and solutions within the customers’ journey of nonfinancial services organizations, thereby eliminating friction and enriching the overall experience,” Ramamurthy said.  

    Although embedded finance appears to be a priority for FIs, only 20% of banks offer embedded finance solutions, according to the report. 

    The  Mumbai, Maharashtra-based State Bank of India has been working with IBM Consulting on its embedded finance offerings for several years and has “created an online marketplace with over 100 partners in the ecosystem,” Ramamurthy said. 

    Financial institutions must recognize that embedding their finance capabilities into organizations that customers use daily will increase customer satisfaction and overall usership of finance solutions, Ramamurthy said.  

    Listen as Ramamurthy discusses embedded finance, open banking and how FIs can approach new regulation.  

    Get ready for the Bank Automation Summit U.S. 2024 in Nashville on March 18-19! Discover the latest advancements in AI and automation in banking. Register now. 

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:05
    Hello and welcome to The Buzz a bank automation news podcast. My name is Whitney McDonald and I’m the editor of bank automation News. Today is November 14 2023. Joining me is Shanker Ramamurthy. He is global managing partner and banking at IBM. During his time at IBM he has served as general manager of strategy and market development, CTO and general manager of strategy and solutions and global Managing Partner of strategy and analytics. He is here to discuss how FIS can approach embedded finance in order to maintain competitiveness in the industry. Thanks for being here.

    Shanker Ramamurthy 0:37
    Hey, thank you Whitney. My name is Shanker Ramamurthy. I’m the Global managing partner for banking and financial markets in IBM consulting. IBM consulting is an over $20 billion plus consulting practice worldwide, and banking and financial markets. It’s a substantial part of what we do. I’m really looking forward to this discussion with me.

    Whitney McDonald 1:02
    Great, well, thank you again, for being here. We can kind of get right into things with setting the scene here. Maybe you can tell me where we stand today on embedded finance and where embedded finance is headed.

    Shanker Ramamurthy 1:14
    Good question. So we recently completed a major study between the IBM Institute for Business Value and bi on the banking industry, architecture network.org. And the paper was recently released, it’s called embedded finance creating the everywhere everyday bank. And for this particular study, we spoke to over 12,000 plus consumers across 12 countries. And in all age groups. We interviewed over 1000 banking executives across 32 countries and banks really with assets in excess of $10 billion. For the purposes of this study, we defined embedded finance as the integration of financial products and solutions within the customers journey of non financial services organizations, thereby eliminating friction and enriching the overall experience. So CIO Stated simply, it’s about embedding financial services products into the workflow of other ecosystems. And there were five key takeaways, really interesting and compelling study, five key takeaways. Embedded finance is essential for modern banking strategies. And over 70% of the banking executives we spoke with, talked about embedded finance as either core or complementary to the business strategy. second takeaway, ecosystem based business models are rising, and financial institutions are increasingly investing in the platform economy. And we can get into some of the data if you’d like, as we go. Yeah, that would be great. And bank executives priorities, really, when we when we actually aligned their thinking with that of the customers, the 12,000 customers, it showed that there is kind of a bit of a disconnect between the priorities that bank executives are focused on in the embedded finance space, versus customer expectations and demands consumer expectations and demands. And the last two takeaways, genuinely, it’s clear from the study that monolithic architectures and processes are hindering banks ambitions in the space. And last, but not least, privacy and security concerns and challenges are legitimately so slowing innovation across the open banking ecosystem in the embedded finance space. Let me just pause. Yes,

    Whitney McDonald 3:58
    thank you so much for going through all of those takeaways in the data. We can definitely get into that. Maybe before we do that we could maybe just talk about why it’s necessaries why it’s necessary for FIS to have a seat at the embedded finance table. Maybe from a competitive perspective,

    Shanker Ramamurthy 4:15
    a great question. Effectively, what’s happening is the combination of fintechs and what we call tech firms. These are the large technology enterprises backing into financial services between the fintechs and the tech fence. They’re going after some of the most profitable parts of the banking franchise, and they’re backing into financial services, areas like payments, and other products, which are particularly profitable for financial institutions. I mean, this is a trend that started in Asia PAC going back more than a decade ago with the likes of Alibaba and Tencent, but a trend that’s kind of playing its way around the world, whether it be in the US context, the likes of Amazon or or Shopify or, or square, and others, they’re all providing a range of financial services capabilities that are backing into financial services. And of course, regulations like open banking are also opening up financial services to other participants.

    Whitney McDonald 5:29
    We will definitely get into the open banking to maybe this could be a good chance to talk through some of that data that you were talking about, as we get into a little bit deeper discussion on how financial institutions can really execute on embedded finance, maybe talking through some of those strategies or priorities that you did see in that report? Yeah,

    Shanker Ramamurthy 5:49
    sure. Maybe the first point I would want to make is that, you know, I did say something like 70% of the financial institutions are saying that embedded finance is at the core context to their strategy. When you double click on that, something like 20% of the financial institutions are already live with embedded finance initiatives around the world, and another 51% are in the process of implementing now. So that’s about that’s how you get to that 70%. It turns out that only 10% of the financial institutions from that universe have actually achieved the, their objectives. And turns out that for that 10%, it took them on average about six years. So this is not a one and done it. There’s a meaningful learning curve for financial institutions. And it takes about six years or so for them to fully achieve their objectives. Which in itself is interesting. It’s a long term game. It’s not a one or two quarter game.

    Whitney McDonald 6:56
    Now, you mentioned the open banking regulation. So maybe we can get into that how the CFPB is latest open banking regulation does fit into embedded finance, does this create a more level playing field that FIS have been asking for? How does this all kind of fit into the embedded finance puzzle? Yeah,

    Shanker Ramamurthy 7:14
    great question. So the CFPB with its new open banking rule. Now, by the way, this role is, you know, is still being worked through with comments and submissions being accepted until the end of this year 20. December, the expectation is that the bureau anticipates finalizing the rule by the fall of 2024. And, and when I look at the timeline, they’re initially going to apply to the largest financial institutions, the ones with, you know, assets in excess of $500 billion, if you’re a depository institution, and over 10 billion in revenue for non depository institutions. And then over a period of four years, it’s going to play out in that even the smallest depository institution will have to comply. So the meaningful amount of time in which this is, you know, this is going to play out, and this is kind of a long awaited, you know, program and it’s gonna apply to everyone, right, financial institutions, card issuers, digital wallets, and any other kind of consumer facing entity that holds, you know, consumer financial data. And the and the regulation is mandating that a consumers financial data will be shared with authorized third parties at the consumers request. So so it is going to open up the Financial Services landscape, you know, more so to everyone, you know, beyond financial institutions. And it’s also going to intensify competition between financial institutions in that they can reach in and access data, you know, for customers got more than one financial, in a banking relationship with more than one financial institution, that that data is going to be shared. Now. This is a regulation that’s played out in every other part of the world. It’s playing out here in the US as well. This is one more reason why financial institutions have to get into embedded finance, because it’s, it’s, it’s increasing competition. And it’s reducing the barriers for non financial services players to get access to financial information.

    Whitney McDonald 9:46
    Now, maybe it would be a good idea to talk through some examples of embedded finance and action, maybe some FIS that are ahead of the game or what embedded finance that you’re seeing in the space today.

    Shanker Ramamurthy 9:59
    Excellent. Question, I’d say, much of the most successful embedded finance initiatives actually have have been from, you know, what we call the growth markets. So if I and by the way, I started by talking about Asia PAC, some of the most compelling examples are really from Asia, Pac in Latin America, and so on, I’ll give you a couple, where we we as IBM have been very active IBM consulting have been very actively involved. The largest bank in India is called SBI, the State Bank of India, we’ve been working with them the last several years on their program called yono, you only need one, that’s a mobile, that’s a mobile based, you know, application. And, and effectively, what state bank of India have done through your now is they’ve created an online marketplace with over 100 partners in the ecosystem. So anything that you as a consumer might want to do related relating to electronic commerce, or, or travel or, or, or, or other, you know, things you might want to buy on the, you know, equalent of Walmart, you know, in India, you are able to through the yono app, access all those 100 Plus partners, and you as a consumer will get a better value proposition by going through the yono app to those 100 Plus partners, rather than approaching them directly. Now, what that did is it enabled state bank of India and yono to embed itself into a much broader range of workflows. Because people don’t wake up as an example, as a consumer, you don’t wake up in the morning saying, I want to use my credit card, you, you know, you wake up in the morning and say maybe I want to get myself a cup of coffee. And if you’re embedded in if a financial institution is embedded into that workflow, chances are, your products are going to be used by the consumer. So that was the journey that State Bank of India started on many moons ago, and their Chairman’s been up on stage, talking about how you know, has created Oh, well in excess of $40 billion of of incremental market capital State Bank of India, we’ve done similar work for, you know, other clients around the world, one of the more recent ones, is a piece of work we did for a Latin American bank. And this is about helping them embed themselves into the agri ecosystem, we created a platform working together with them. And whether it be advisory services, farm equipment, access to live Monday data, logistics, seed fertilizers, and so on weather patterns and a whole bunch of things that a farmer would would want to know, through this app that’s owned by this bank, your the farmer is able to get access to all these things. And as they do all these things, as they transition into needing financial services, this bank becomes the default for all the financial needs of the farmers. There’s similar work that we’ve done with DBS and Singapore, in multiple ecosystems. And you can, as you can see, this is a global phenomenon and a global trend, with extraordinary opportunity for financial institutions, to embed themselves into customer journeys, and drive a lot of economic value, both to the customer, and to the financial institution.

    Whitney McDonald 13:48
    Now, speaking of that opportunity, and thank you so much for providing those examples of embedded finance in use today. Those, those are great. So thank you so much for breaking those down. But speaking of that opportunity, maybe I can ask you to look ahead and give us kind of what’s ahead of us for the future of embedded finance, maybe what adoption might look like or what you’re seeing from a technology perspective, when it comes to embedded finance. And I mean, you can look into next year and the next five to 10 years, kind of however you want to take that future look.

    Shanker Ramamurthy 14:22
    Alright, so let me let me break it into maybe I’ll make three points. The first point is that we did we did notice a gap between consumer preferences and bank where banks are kind of focused on an embedded finance. And that’s going to kind of take care of itself over the coming years. So and what I mean by that on the first point is that banks are focused more on security and protection and new capabilities like buy now pay later, and peer to peer payment, while consumers are focused on areas like really good care. Customer Service, mobile wallet. And by the way, mobile wallet is going to be the capability for all sorts of other things, including digital currencies that are going to come in many countries over the next three to five years. And things like rewards. So it’s a bit of a disconnect between where banks that are investing in where consumers are really looking for capability that’s going to that’s going to take care of itself. The second point I’d make is, like I said, it’s a, it’s a six year journey, and about 10% of the banks are already there. 70% of the banks are on the journey. And we know for sure that those financial institutions are going to continue. And for the entire banking ecosystem, it’s going to create a lot of economic value. The third point I would make this kind of an important point is that a technology like generative AI, is going to accelerate the ability of financial institutions to provide greater and superior value, both in the context of embedded finance, but but also much, much more broadly. And so this is an area in which we as IBM are doing a lot a lot of work and up I’m, I’m, I’m sure you’re aware that we made announcements around technologies, like what’s an X, an investment and standards based, open generative AI technology, because we’re gonna live in what we call a multi model world, there are going to be multiple models that are going to be built. And when you think about embedded finance that requires consolidation of a lot of structured unstructured data, the ability to collaborate broadly across ecosystems, and partners requiring again, the need to traverse through multiple contracts, multiple documents, work with voice and text and other technologies. Generate to AI is going to be a profound and compelling technology is an area in which we’re making a lot of investment. And we know from the work we’re doing on the consulting side with our clients, that they are investing aggressively in it. So the combination of these exponential technologies, cloud, plus generative AI and ecosystems and partnerships, plus standards being either imposed by regulators, such as open banking, or collaboratively created through organizations like Biocon are going to provide an extraordinary capability for financial institutions to take advantage of embedded finance and drive a lot of value for the customers and for themselves over the next three to five years. Really exciting times ahead of us.

    Whitney McDonald 18:12
    You’ve been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time and be sure to visit us at Bank automation news.com For more automation news,

    Transcribed by https://otter.ai

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  • Podcast: Approaching AI with a plan | Bank Automation News

    Podcast: Approaching AI with a plan | Bank Automation News

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    Financial institutions are investing in AI and, as they do, they must consider application, talent and regulation.  

    Card issuing fintech Mission Lane has created an internal framework to help implement new technologies, including AI, head of engineering and technology Mike Lempner tells Bank Automation News on this episode of “The Buzz” podcast. 

    Mission Lane has a four-step framework when approaching new technology, he said: 

    Listen as Lempner discusses AI uses at the fintech, monitoring risk and maintaining compliance when implementing new technology throughout a financial institution.  

    The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

    Whitney McDonald 0:02
    Hello and welcome to The Buzz, a bank automation news podcast. My name is Whitney McDonald and I’m the editor of bank automation News. Today is November 7 2023. Joining me is Mike Lempner. He is head of engineering and technology at FinTech mission lane. He’s here to discuss how to use the right type of AI and underwriting and identifying innovation and use cases for AI, all while approaching the technology with compliance at the forefront. He worked as a consultant before moving into the FinTech world and has been with Mission lane for about five years.

    Mike Lempner 0:32
    I’m Mike Lempner, I’m the head of our engineering and technology at mission lane. Been in the role where I’ve been leading our technology group and engineers to help build different technology solutions to support our customers and enable the growth of mission lane. I’ve been in that role for about five years prior to that mission Lane was actually spun off from another fin tech startup, and I was with them for about a year as an employee prior to that as a consultant. And prior to that time, I spent about 28 years in consulting consulting for a variety of different fortune 500 companies, startups, but mostly all in the financial services space.

    Whitney McDonald 1:09
    And maybe you could walk us through mission Lane give us a little background on what you guys do. Sure,

    Mike Lempner 1:16
    Mission lane is a FinTech that provides credit products to customers who are typically denied access to different financial services, largely in part due to their minimal credit history, as well as poor credit history in the past. For the most part, our core product that we offer right now is we have a credit card product that we offer to different customers.

    Whitney McDonald 1:39
    Well, thank you again for being here. And of course, with everything going on in the industry. Right now, we’re going to be talking about a topic that you just can’t seem to get away from, which is AI and more specifically ai ai regulation. Let’s let’s kind of set the scene here. First of all, I’d like to pass it over to you, Mike to first kind of set the scene on where AI regulation stands today and why this is an important conversation for us to have today.

    Mike Lempner 2:08
    Yeah, sounds good. As you mentioned, Whitney AI has been really all the the conversation for about the past year, since Chechi. Beatty, and others kind of came out with their capabilities. And I think as a result, regulators are looking at that and trying to figure out how do we catch up with that? How do we feel good about what what it does? What it provides? How does it change anything that we do currently today? And I think for the most part, you regulations are really stand the test of time, regardless of technology and data. But I think there’s always kind of the lens, okay, where we are today with technology, has anything changed where we are in terms of data sources, and what we’re using to kind of make decisions from a financial services standpoint is that also creating any kind of concerns and you’ve got different regulators who look at it, you’ve got some regulators who are looking at it from a consumer protection standpoint, others who are looking at it from the soundness of the banking industry, others who are looking at it from an antitrust standpoint, privacy is another, you know, big aspect of it and as well as Homeland Security. So there’s there’s different regulators looking at it in different ways and trying to understand and and try to stay as much ahead of it as they possibly can. And so I think a lot of times that they’re looking at things and trying to kind of look at the existing regulations, and understand are there adjustments that need to be made an example of that CFPB, I think recently provided some some comments and feedback related to adverse action notices, and how those are basically being generated in the light of artificial intelligence, as well as like new modeling capabilities, and including, like new data capabilities. So I think there’s there’s some specific things in many ways it doesn’t change the core regulatory need. But I do expect there’s going to be some fine tuning or adjustments that get me to the regulations to kind of put in place more more protections.

    Whitney McDonald 4:10
    Now, for this next question, you did give the example of looking at existing regulation, keeping all the different regulatory bodies in mind what already exists in the space? How else might financial institutions prepare for new AI regulation? What could that preparation look like? And what are you really hearing from your partners on that front?

    Mike Lempner 4:33
    Yeah, I think it’s, it’s not just specific to AI regulations. It’s really all regulations, and just kind of looking at the landscape of what’s happening. You know, where we are. I think the one thing that we know for sure is regulation changes will always happen and the they’re just a part of doing business and financial services. And so that need is not going away. So There are different privacy laws that are being put into place some, in some cases by different states. There’s other things, you know, as I mentioned with AI are emerging and growth, how do regulators feel comfortable with that as well? So I think in terms of preparing, just like you would with any regulatory activities going on, it’s important to have the right people within the organization involved in that in for us, that’s typically our legal team or risk team who are working both internally as well as getting external counsel, who will help us understand like, what are some of the current regulatory ideas that are out there being considered? How might that impact us as a business and we’re staying on top of it. And then as things materialize over time, we work to better understand that regulation, and then what it means for us, and then what do we need to do to be able to support it. So I think that’s a biggest part of it is getting the right people in the organization to stay on top of it know what’s currently happening, what might be happening in the future, leveraging external resources, as I mentioned, is they may have expertise in this area, and just staying on top of it so that you’re not surprised and then really kind of reacting to the situation.

    Whitney McDonald 6:14
    Now, as AI regulation does start coming down the pipeline, there’s definitely not been a a waiting period, when it comes to investing in AI implementing AI and innovating within AI. Maybe you can talk us through how you’re navigating all of those while keeping compliance in mind, ahead of further regulation that does come down. Yeah,

    Mike Lempner 6:39
    absolutely. The, you know, for for us in AI is is a really kind of broad kind of area. So it represents, you know, generative AI like chat GPT. It also involves machine learning and other statistical kinds of algorithms that can be applied. And we operate in a space where we’re taking on risk by giving people credit cards and credit. And so for us, there’s a core part of what we do the underwriting of credit. That is is challenging involves risk. And so for us, it’s important to have really good models that help us understand that risk and help us understand like who we want to give credit to. We’ve been ever since we got started, we’ve been using AI and machine learning quite a bit in our our models. For us, one of the important things is to really look at and where we may have many models that support our business. Some of them are credit underwriting models, some of them are fraud models, some of them may be other models, we have dozens of different models that we have is making sure that we’re applying the right AI technology to meet both the business needs, but also taking into account regulation. So as an example, for credit underwriting, it’s super important for us to be able to explain the outcomes of a given underwriting model to regulators as an example. And so if you’re using something like generative API, AI or chat GPT, where accuracy is not 100%. And there’s the concept of hallucinations. And while hallucinations might have been cool for a small group of people in the 60s, it’s not very cool when you talk about regulators and trying to explain why you made a financial decision to give somebody a credit card or not. So I think it’s really important for us to use the right type of AI and machine learning models for our credit underwriting decisions so that we do have the explainability have it. And we were very precise in terms of the outcome that we’re expecting, versus other types of models. And it could be marketing models, there could be, as I mentioned, fraud models or payments models that we may have as well that support our business. And there, we might be able to use more advanced modeling techniques to support that.

    Whitney McDonald 8:57
    No great examples. And I like what you said about explainability as well. I mean, that’s huge. And that comes up over and over again, when it does come to maintaining compliance while using AI. You can have it in so many different areas of an institution, but you need to explain the decisions it’s making, especially with what you’re doing with with the credit decisioning. I’m moving in to something that you had already mentioned a little bit about, but maybe we can get into this a little bit further. is prepping your team for AI investment implementation. I know that you mentioned having the right teams in place. How can financial institutions look to what you guys have done and maybe take away a best practice here? For really prepping your team? What do you need to have in place? How do you change that culture as AI as the AI ball keeps rolling?

    Mike Lempner 9:52
    Yeah, I think for us, it’s similar to what we do for any new or emerging technology in general. which is, you know, we’ve got a an overall kind of framework or process that we have like one is just identify the opportunity and the use cases. So we’re really understanding like, what are the business outcomes that we have? How can we apply technology like AI or additional data sources to solve for that particular business challenge or outcome. And then so that’s one is just having that inventory of where all the places that we could use it, then to like really looking at it and understanding the risks, as I mentioned, credit risk is one thing. And that we may want to have a certain approach to how we do that, versus marketing or fraud or other activities may have a slightly different risk profile. So understanding those things. And even when we talk about generative AI, for us, using it for internal use cases of engineers writing code and using it to help write the code is one area where it might be lower risk for us, or even in the operations space, where you’ve got customer service, who maybe we can automate a number of different functions. So I think understanding the use cases understanding the risks, then also having a governance model, and that is, I think, a combination of having a team of people that are cross functional to include legal risk, and and other members of the leadership team who can really look at it and say, here’s our plan. And what we would like to do with this technology, do we all feel comfortable moving forward? Do we fully understand the risk? Are we looking at it like holistically, then also, governance? Like for us, we already have model governance that we have for that really identify what are the models we have in place? What types of technology do we use? Do we feel good about that? What other kind of controls do we need to have in place. So I think having a good governance framework is another key piece of it. Investing in training is a another key thing to do. So particularly in the case of emerging generative AI capabilities, it’s fast evolving, it’s really important to kind of make sure that people just aren’t enamored by the technology, but really understanding it, understanding how it works, understanding the implications, there’s a difference to whether we’re going to use a public facing tool and provide data like Chet GPT, or whether we’re going to use internal AI platforms using our internal data, and use it, you know, for more proprietary purposes. So there’s a difference, I think, in many ways, and having people understand some of those differences and what we can do there, it’s important. I think, lastly, the other key thing from an overall approach standpoint, is to really iterate and start small, and get some of the experience on some of those low risk areas. In for us the low risk areas, like we’ve identified a number of different areas that we’ve already built out some solutions around customer service. And engineering, as I mentioned, you can use some of the tools to help write code, and it may not be the finished product, but it’s at least a first draft of code that you can, you can start with that. So you’re not basically starting with a blank sheet of paper.

    Whitney McDonald 13:09
    Yeah, and I mean, thank you for breaking out those those lower risk use cases that you can put in action today. I think we’ve seen a lot of examples lately of AI, that is an action that is able to be launched and used and leveraged today. Speaking of maybe more of a future look, generative AI was one thing that you had mentioned, but even beyond that, would just love to get your perspective on potential future use cases that that you’re excited about within AI, where regulation is headed. But however you want to take that future look, question of what’s coming for AI, whether in the near term, or near term or the long term? Sure.

    Mike Lempner 13:53
    Yeah, it’s I think it’s a very exciting time and insane, exciting space. And to me, it’s remarkable just the capabilities that existed a year ago where you could kind of go and and put in text or audio or video and be able to interact and and get like, you know, interesting content that could help you just more whether it was just personal searches or whatever be productive, and to now where it’s available more internally for different organizations. And even what we’ve seen internally is trying to use the technology six months ago, may have involved eight steps and a lot of what I’ll call data wrangling to kind of get the data in the right format, and to feed it in to now it’s more like there might be four steps involved in so you can very, you can much more easily integrate data and get to the outcomes and so it’s become a lot simpler to implement. And I think that’s going to be the future is that it will continue to get easier, much easier for people to apply it to their use cases and to use it for a variety of different use cases. And I think different vendors We’ll start to understand some patterns where, you know, there might be a call center use case that, you know, always occurs, you know, one example I always think of is, I can’t think of a time in the past 10 plus years where you called customer service and get transferred to an agent, where they don’t say, this call may be recorded for quality assurance purposes, with quality assurance of a phone call usually involves people manually listening to it and taking notes and kind of filling out a scorecard. Well, now with you know, AI capabilities that can all be done in a much more automated way. So there’s, there’s lots of different things that like that kind of use case, that pattern that I’m guessing there are gonna be vendors who will now put that type of solution out there and make it very easy for people to consume almost like the AWS approach, where things that AWS did are now kind of exposed as services that other companies can kind of plug into very easily. That’s an example where I think the technology is headed, and you’ll start to see some point solutions that will emerge in that space. from a regulatory standpoint, I think it’s going to be interesting, you know, similar to death and taxes, I think, you know, regulate regulation is always going to be there, particularly in financial services. And it’s to do the things that we talked about before protecting customers protecting the banking system protecting, you know, different areas that are important. So I think that’s, that’s a certainty. And for us, you know, I think it’s, there’s likely to be different, different changes that will occur as a result of the technology and the data that’s available. I don’t see it as being drastic changes to the regulations. But more looking back at some of the existing regulations and saying, given the new technology, given the new data sets that exist out there, are there things we need to change about some of those existing regulations to make sure that they’re, they’re still controlling for the right things?

    Whitney McDonald 16:59
    You’ve been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time, and be sure to visit us at Bank automation news.com For more automation news,

    Transcribed by https://otter.ai

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