Banking on Digital Growth
Banking on Digital Growth

Episode · 4 months ago

213) #ExponentialInsights - Banking as a Service: Optimizing Your Product


By bringing value through the right technological channels, banks can generate a clear vision for their customer service goals - that’s digital transformation.

I talked with John Dangoia, Vice President Head of Product Management US and Europe at Infosys Finacle, about the present and future of banking as a service.

Whether through investments in omnichannel platforms or focus on differentiation, banking as a service is starting to take shape.

Join us as we discuss:

- Current trends in regard to banking as a service (6:10)

- What is holding financial brands back from digital transformation (10:07)

- How financial leaders deal with exponential change (23:32)

Check out these resources we mentioned during the podcast:

- Leaping Forward: Scaling Digital Innovation in Corporate Banking Report 

- John Dangoia

- Infosys Finacle

You can find this interview and many more by subscribing to Banking on Digital Growth on Apple Podcasts, on Spotify, or here.

Listening on a desktop & can’t see the links? Just search for Banking on Digital Growth in your favorite podcast player.

Some of our biggest success stories have been when our clients have a great vision and then we can go in and listen carefully and help and enhance that vision and then go make it a reality. You're listening to banking on digital growth with James Robert Lay, a podcast that empowers financial brand marketing, sales and leadership teams to maximize their digital growth potential by generating ten times more loans and deposits. Today's episode is part of the exponential insight series, where James Robert Lay interviews the industry's top marketing, sales and FINTECH leaders, sharing practical wisdom to exponentially elevate you and your team. Let's get into the show. Greetings in Hello, I am James Robert Lay and welcome to episode to thirteen of the banking on digital growth podcasts. Today's episode is part of the exponential insight series and I'm excited to welcome John Dan Golia to the show. John is the vice president and head of product management in the US and Europe at Inphasis Finnical, and today we're going to be talking through some of the biggest insights shared in the INPHASIS finical. Two trends report. Welcome to the show, John. It is so good to share time with you today. Buddy. Well, it's great to have me here today. James Robert. I appreciate the invite and look forward to our conversation today. Before we get into talking top trends that you're seeing through the research that you're doing over at inmphasis, what what is good for you right now, personally or professionally? Always like to get started on a positive note here on the podcast. Yeah, well, I'll tell you what. What's good for me personally is just came back from a wedding in Chicago last weekend and it was just wonderful to get back and see family. You know, we've all had such a crazy couple of years with the pandemic and some of the folks I had didn't seen for three years, so it was great to celebrate life. Great too, you know, have a wonderful time with some family. Professionally, working on some really cool stuff over here in emphasis pinnicals. So looking forward to talk about that a little bit today, in addition to the trends report. Absolutely, and speaking about that report, you know, I think one of the things that really stuck out to me of financial institutions are increasing investments in Omni channel platforms. And why? Why is this like what is really driving this ship forward here from an investment perspective? Yeah, I mean I think it's a it's a really interesting trend we're seeing right now. The proliferation, I'd say, of banking as a service is really starting to take shape. Uh, not just in banking, also in insurance and wealth management. You know, banks are just wanting to find ways to to serve customers in different ways ways, to you come up with ideas, whether it's embedded finance or other type platforms,... kind of launch in the two new industries, and it's very exciting. I mean, you know, you're seeing a lot of the big players doing I think now some of the mid tier, you know, institutions are also starting to take notice and it's just a really, really exciting time. One other data point, I'd say, as we have projected the growth of the bank as a service market from two point eight billion, which is still very big today, right to over twelve billion in the next ten years. So that's that's pretty incredible. And as you as you know, where the money goes, the investment skill exactly and one of the case studies that you referenced in the report is Marcus, which I think is you know, we've been watching Marcus now for years and I think it's a very interesting story because Marcus being spun out of Goldman Sacks and and and incumbent doing some very progress of work. What are they doing marcus by Goldman Sachs, from the perspective of of banking as a service? Well, I think that what Marcus is doing is they're sort of rethinking the entire customer experience. You know, they've been well publicized, but they had a vision to kind of spend this new bank out of their investment bank and just turn the industry a bit on their side, and they've done that with retail customers as well as commercial uh as you know, they also partner with apple and some other, you know, huge companies and they're just a terrific partner of ours. We really enjoyed working with them. The emphasis finical platform is one of their key partnerships and, you know, on a day to day working basis they're just terrific to work with. Their Super Innovative, they've got great ideas and we really really enjoy working with them and helping all their visions come to life. When you look at this idea of banking as a Servi and the fact that it has massive growth opportunity across the industry, what are you seeing in regards to trends Um with with banking as a service? Because it's there's so much. It could be embedded banking, it could be a FINTECH incumbent playing. There's there's just so much. I think that's where it's almost there. It's the paradox of choice, right. There's there's so much choice, there's so much opportunity. How do we simplify this down? How do we distill this down to maybe simplify the complexity so that it's like, okay, here's a really great opportunity for the dear listener to consider, to take back and have some conversations within their own organization. Yeah, you know, it's it's a great question and coming out of this pandemic, we we talk a lot and think a lot about that. You know, we can all debate whether the pandemic accelerated digital transformation five years or ten years. You've heard people say that. Right, right, and we talk about that. But the fact is, you know,...

...the world was in lockdown, the branches were closed. You know, Um, the banks and other financial institutions had to step back in and change processes. Some cases they threw a lot of bodies at it, in some cases they built new portals just to be able to take customer information. So as we come out of this, I think the biggest thing we need to be thinking about is how banks can differentiate right Um, in all banks for that matter. I think sometimes we think it's just the large tier one banks, but you know, also a Community Bank and rural the Rascar and you know in Rhode Island. Um, they still need to figure out a way to differentiate in their market. Now that's not new, but what is new is the rate of changes accelerated, the competitive threats have accelerated and I think we all have seen that banks are really becoming more and more technology companies in the value they bring right, and that's changed a lot Um. So it goes back to starting with a true business strategy. You Reference Marcus. They had a true business strategy. A lot of our other partners have taken time to do that. So we we urge our clients and the people worked to think through their strategy and it's got to be more than just improving customer service or just improving technology. We all know that right. It's about how they can win more business at the end of the day, how they can different in the market where their target customers, target segments. So some of our biggest success stories have been when our clients have a great vision and then we can go in and listen carefully and help and enhance that vision and then go make it a reality. This is not just about some technology strategy. This is business strategy. This is really getting back into I think the deeper question is to why we exist as an organization. Who are we here to serve and create value for? And am I correct and rolling this back just a little bit to reinforce these these points here, John Um you know, thinking through how they can compete in their markets and thinking through that strategy is absolutely critical, because what we can do and what other providers can do is them to help them get there and find the fastest path to R O, I. Fastest Path to achieve their financial goals and just work with them to get there. And you know, you're seeing a lot of that happen, whether it's buying out pay later. New creative deposit products are rolling out pretty quickly right now, or other creative lending products, and then the big embedded finance thing that we've talked about about earlier. You know, when when you've got a vision and you're committed to it and you're willing to invest in it, I think you've got a winning combination that can get there and you can also find ways to deliver value much quicker than just saying we're going to transform everything in our platform. Right I'm curious to get your take on the because you...

...mentioned digital transformation and when we go out and we look at all of the big global concert consulting firms, BCG and Bain and Mackenzie, doesn't matter who, they're all saying the same thing of digital transformation projects either fail or fail to meet expectations. What's your take on this, because I think it's important that we we have some dialogue around this. Otherwise the future becomes the predictable past because nothing really changes. It's just more of the same and it's my hope that we can escape the cycle of digital transformation failure to truly achieve digital growth and and and back to your point, I do believe it comes back to to not just text strategy but business strategy, which is a deeper conversation. But what's your take on this? Why? Why the challenge? Why the struggle? What is it that holds financial brands back from from really maximizing the digital with potential through digital transformation? Yeah, you know, we talked a lot about that too. It's a great, great question, James Robert. I think that a lot of it comes back to you've got to find a way to improve that value proposition to the customer or the corporate right. You've got to keep them at the focus of building all of your products. You know, because we're in this business, we get all jazzed up about how systems work to move money or originate a checking or loan account. But really, does the customer care? I mean no, they don't. What they care about is they want a friction list, an easy and fast possible product that is super easy to use and that does what they need to do. You know, we we we live with our payments and Amazon today. It's not even a step in the process right, it's right there. And so I think what happens sometimes is when we get into the big digital transformation conversations, we lose sight of the customer and and the end customer. Their process has to be improved, has to be easier for them. Again, not to Labor the point, I embedded finance, but that's one of the reasons why, you know, a lot of analysts are saying that's going to be a seven trillion dollar market, because what you're doing is you're improving the process for the customer. When you do that, the customer will come and they'll buy more of your products. Digital growth is a journey from good to great, but sometimes this journey can feel confusing, frustrating and overwhelming. The good news is you don't have to take this journey alone, because now you can join a community of growth minded marketing and sales leaders from financial brands and fin techs who are all learning, collaborating and growing together. VISIT DIGITAL GROWTH DOT com slash insider to learn more about how you can join the digital growth insider community to maximize your future digital growth potential. Now back to the show. So from my perspective it's just critical to be a thing about the business...

...strategy first and then thinking about how the customer wants to buy products from your organization and when you improve that and and you you work to make that experience a whole lot better and you get a lot of feedback from customers in that process. Right. It's not a we're gonna go build it and throw it out in the marketplace. I'm a big one for live labs and having customer feedback along building in the process. I always like to have a few Beta clients with some of the new things we're working on to get feedback and just simply asked, Um, right, is that what you're looking for? And if they say yes, I think that puts you on a much better path for success in digital transformation. Let's talk about that. The idea of the of the live lab. You know, when we do digital secret shopping studies and we take a financial brands public facing website, Um and we bench market against another financial brand or a Fintag can, we're typically doing it around a specific product line. There's a lot of of insights, there's a lot of clarity to be gained by doing this, but what we find is around eighty five percent or so of financial brands have never done any type of digital secret shopping study like this before. They have historically if they've done studies in the branch and the branch experience and but a lot of times it's the idea of the live lab, the testing, the Co creation is something that we're seeing lagging. What are the opportunities to bring this co creation and, I would say, even a step further optimization, to the forefront, to where it really drives product development product optimization and it's not this kind of secondary, rudimentary thing that we we might do when we have time, but it becomes the core focus for continued growth going forward. Yeah, that's that's a really interesting and I think on the B Two c side, for that it's much more common. Right, it's pretty easy to put some folks in the room in a live lab and test out an APP and basically just observe them, right, and that's what we like to do, and just observe their clicks and asking questions about why they win here and and that sort of thing. But it's much harder on the B two B set. And so what we're doing these days is we're putting together early prototypes of some of our products and then sharing them with our customer basis, or even our prospects for that matter. And getting feedback from them and actually building that into the product. So it's all about that, that great feedback loop that kind of brings information back into the product, and the great thing about that is again, typically you win over more customers, but you also have a great, great product to put out in the marketplace that serves the needs of the clients right out of the gate. Now, once you've launched your products, your job is not done right there. There will be other things that come in and typically we have...

...very aggressive road maps on new products to bring those enhancements to light in the coming months after that. You know, one of the things that you mentioned around this idea of engagement. You noted this in the report. Uh, to engage better, banks need to consider a holistic model and you have identified a what you call a unique, quote unquote, golden engagement circle to enable banks to drive purposeful growth. And I like that word of purposeful growth. In fact, when looking at the model and the report, it reminds me of what I wrote about in banking on digital growth, the book with the Digital Growth Blueprint, where purpose sits at the core, purpose that's at the middle. But I like how this is framed around. You have tech, you have people, you have processes and then you have on sell, onboard, converse and service. What drove some of the thinking to bring a model like this together? The golden engagement circle that I do see as a as a path for to enable banks, to empower banks and credit unions to drive purposeful growth. Yeah, I think it really comes from the learnings we've had and working with customers and, you know, I mentioned before about some of our biggest success stories and that's how it worked to really drive success. So, you know, you've got to have a holistic strategy and then you've got to have the holistic feedback mechanism that you're talking about, you know, to to make sure that the project and the program is successful so the business can meet their votes. You know, the other thing that I think is is really important is to find time to really really get to know the people within the process because, you know, even some of the UH project people, right down the deep levels, can give you the best ideas for enhancements. You know, it's such a it's also such an and business right now with with partnerships with fin techs, with partnerships with other other companies, that you can't have any sort of closed feedback loop system at all. Um We did an interesting survey a bit ago around a p I s on the corporate banking side, for example, and here was the stats. So eight of the respondents had said Apis are either as essential or very important to put that whole feedback loop together and to move data faster. But yet in that same serve I only ten percent believe they had achieved significant success. So that shows how far we have to go as an industry. But the important thing is we're starting on our end, from our systems. We have a a great open system. We've got, you know, over a thousand API s now today that are out there for use for for all the partnerships that we have. You know, we've talked a lot about opportunities available to either create or capture. I want to move into some possible roadblocks that the dear listener needs to... aware of that could slow them down, that could hold them back from making progress. And one of the points that you noted here was in the report of banks identified workforce Skills Improvement as extremely important to their business in the next three to five years. From our research we're finding obviously there's there's a knowledge gap, Um, but we're doing even deeper work around this to where there's a training gap, there's an education gap that is leading to this knowledge gap. What's the opportunity to overcome this this knowledge gap roadblock? That I think it. It really boils back down to just creating awareness into opportunities. But but where's the danger here if we don't bridge this gap and we really spend time to double down on what I would just say is just training, education, helping the unaware become aware of opportunities, because one of the greatest fears that hold holds leaders back is simply fear of the unknown. Yeah, this this is a big one, James Robert. I think that the talent shortage we have in our industry is one of the biggest challenges that we face and you know, you hear about that. In fact, it was just done the news today talking about our just our overall talent gap and technology in the country. Right, forget about financial services and all technology. And so, at the end of the day, try and find ways to upskill, reskill, bring in new talent, even from other industries. Right, we've had some succes bringing a lot of folks in from retail. Now they didn't know the whole heck a lot about building products and financial services, but they sure did have the you know, the customer experience side of this, and so it worked quite well having a diverse group of people on team like that. So we'll continue to do that. Um, I think the other thing is you you mentioned the worry and the and the pitfalls, if you will, you know, finding partners like emphasis or other companies that can sort of add to the skills that you have on your team, not take away from the skills. When you start to get involved in these digital transformations or bigger programs, it can be a pretty big burden on the resources that you have in a business, and so we always look for ways to try to make that easy. So find partners they're willing to fill in your gaps, again, whether even could be a consultancy or just a technology partner, but find ways to do that. But longer term we all need more talent. We all need to upskill the talent we have. We've got to have a very diverse workforce of people that can come in with a lot of different experiences and you know what, it can work. That's that's the biggest thing. I would say when when I work with some of our designers that were kind of...

APPS, some of them are absolutely, you know, retail kind of experts. I say, you all use your bank apps every day, right, there's things you hate about them. Will help us to make it better and help us to make this an experience that is completely different than what we have today and it's better for the customer. You know, I I am a big advocate for looking outside, to to bring talent into the industry because they bring a different perspective and the idea of retail, and we'll even take this a step further digital retail. I think it's a tremendous opportunity to to bridge some of this this this talent, this knowledge gap. But then an ongoing training, ongoing education, I think is critical as well. Um, and then I liked your perspective to about the partnership, the collaboration. Um Dan Sullivan, who's been a guest on the podcast, wrote a fantastic book with Dr Benjamin Hardy, who's an organizational psychologist, called who, not how, and the thesis of the book is a lot of times, when it comes to achieving future growth, we get so stuck in asking ourselves how are we going to do this or how are we going to do that, when the opportunity is to train the mind to not think the how, but really begin to the first start should be, okay, this is what we want to achieve. Who Do I need to be my how? And so there's a bit of a mindset shift going on here and I want to I want to stay in the idea of mindset for just a minute because you know, all of this idea of digital transformation and change. We've experienced a lot over the last couple of years. I'm predicting that we're going to to continue to experience massive change and massive transformation and multiple levels. That will impact US within financial services for the leader. What's your take on this? Just your maybe it's just your own personal anecdote. How how were you you and how can others deal with exponential change from a positive standpoint? Because we can either lean into that or we can retreat into the Cave of complacency, which isn't the best place to be, because we saw brands do that and either they didn't fare so well or they're no longer here. But how do we, how do you deal with just exponential changes going on in the marketplace from all of these different areas that we're experiencing. Yeah, you know, it's it's as a leader, it's one of the most important things that that you need to be thinking about day in, day out. And this industry has had so much change thrown at it and we're probably about to see even more right with some of the economic issues we're having as a country. So there'll be a different type of stress coming out as soon. You know, it starts with, first of all, having the right talent on the team. We just talked about that. I cannot emphasize that enough. Looking at your team's thinking about...

...a cup of your team, thinking about the making sure that you have not only the right skill sets but the right leaders that are working for you on your team. And then it's about coming together with that cohesive strategy on where you want to go as a team, bringing everybody along with you. And then from that point it's about giving them the resources or the the investments or the the other things they need to get it done and being part of that positive change. And and just as as things come at us, handling them one by one, right and and and working through whatever challenge we have as quick as you can so you can get to the next thing and keep moving through the innovation. But you know, a lot of it is communication. I know that's just a very basic thing, but you know, one of the routines I have as a leader is I am just absolutely methodical about having my structured meetings on a regular basis and having good one on ones with your leaders Um to make sure you've vetted out all the challenges and listening right, spending time to actually listen on what's going on and then helping, helping them to be successful. There's a term I use. Probably others have heard it, but I really like it and I talked a lot about it and it is setting people up for success right. Have you put them in the role, right role to be successful? Have you given these leaders the right tools, the right training, the right, you know, resources to really be successful? And when you've done that, you'll find that most people will figure it out and will be very successful and then the change isn't such a big deal. I think it just the kind of roll with the punches. They're excited about what they're doing, they're excited about the organization and uh, from there comes good things and good team dynamics and you win. Yep, no, I do appreciate your perspective on what Gino Wickman writes about right people, right seat. And when you get the right people and the right seat, you're all going in the same direction together, which really comes back to what you started this conversation with around vision, Um and, and I think that's so important, is having a vision or having a purpose that is far bigger than the present moment. Is something that gives people hope, it gives people excitement, it builds optimism. Even if things might be tough in the present moment, we're always working towards creating a bigger, better, brighter future for ourselves by creating a bigger, better brighter future for our account holders. And and speaking of this idea of hope and optimism, as we start to wrap up here, looking ahead just we'll call it the next three to five years, what are you feeling most hopeful and excited about when when you look out at the landscape of just financial services banking as a whole? Yeah, you know again, think about that a lot. I think more investment in digital transformation. I think Core Modernizations. We've talked about for many, many years, but there's actually a lot of progress happening there, whether it's standalone digital...

...platforms for new entrants or subsidiaries or large entities, or just the good old fashioned core modernization. Um Low code, no colode. Low code platforms are going to gain in popularity. We are doing some really exciting work on digital onboarding where we've built on a low code tool and I could talk for a whole hour about what I've seen on that and the the reason why these low code tools are are, in my mind, going to be one of the next game changers for our industry is that you've got ability to configure new customer journeys in a few hours versus or months when a client creates that vision and they decide as part of that vision they've got new checking or loan accounts or investment accounts or whatever, for example. You know we can literally get that implemented in that journey in place without a lot of technical talent once the platform is built. So I think low code, Note Code, is going to be big for us. There's gonna be a lot more use cases for AI. I'm sure you've you've talked a lot about that Um. On that subject, I would just urge the banks to focus on AI use cases that make that customer experience better. I mean, look, I'm all for cost reduction. I think that's important too, but when you focused at least a percentage of your time on that, I think your ai use cases will really work well with your strategy. Um P FM tools. I think they're gonna continue to be more important, particular as as consumers are stretched with with the inflationary things we have going on. And lastly, you know, unfortunately, we'll probably see delinquency and credit losses rise and when that happens we need more technology, we need better models, we need more AI tools to to try to automate that process versus just throwing tons of body at at at the situation. So those are some of the things that I think are coming our way. There's a lot more happening, but it sure is an exciting industry to be and I'll say that it really is. And to your point of low code, no code, it's something that I'm writing about now in my second book, banking on change. There are what I call the four exponential growth environments to where you you have to cycle through all of these, like the seasons. You can be learning, you can be thinking, you can be doing, you can be reviewing, and the most dangerous place to get stuck is in the doing of digital and a lot of my my my my thinking around that is is if you're stuck doing, you're not creating space and time to review what you've done, to learn through those experiences and then really to think about how to make them even better. And that's where things like automation, AI, Loco, no code, it really puts more of an emphasis on the thinking, because the technology does the heavy lift thing of what has historically...

...been the doing. And that's where, in banking on digital growth, I wrote about the idea of of financial brands really and becoming experienced engineers. Um We're thinking through experiences and then we're using technology as a tool, a transformative tool, to realize those experiences, through Ai, through automation, and you're right, this is a fantastic industry to be in because it is one that can truly transform lives Um in in in the communities that that we're all serving, whether we're bank, Credit Union, Fintech, and that's what makes me most hopeful and excited is is you know, money is such an emotional subject Um and it is one particularly over the past couple of years, and we'll probably see this, you know, over the next few years, get even louder. But financial stress, it just takes a toll on people's health and their relationships and and their well being. I want to get real practical here at the end, John Um, the dear listener. They're they're listening. We've talked about a lot, but they might be thinking this is great, what can I do next? What should I do next? Because there is just there is a lot to do here for many. But if we could maybe just take it down to just that next best step, because all all transformation that leads to future growth begins with a small, simple step forward, what would that next best step be? Given we're sitting here in July, it's it's usually the time most companies are thinking about their three year strategy. Well, dusting that off, sitting down, making sure that that's going to take your your bank or your financial institution to the next level. What are the things, Um, that you need to do to make that vision, to make that strategy come to life? Are Your projects aligned? Are Your investment a lot are you spending too much money on just keeping the lights on. You know, we we see that a lot. To survey a while ago, it's at eighty four percent of the budgets. We're going to keep the lights on. Is that the right formula you want, or should you be thinking about making some good investments for next year? Can help to drive your strategy and, most importantly, win more business, but by improving your experience for your customers. Again, whether you're in the retail or the corporate side, you know the game is similar and that you've got to find a way to differentiate in this market, what we talked about earlier. You've got to find a way to provide additional value to the customers and when you do that you'll have a very successful year and many years to come. So it's a great time to think about those things as you're lining up your three year plan. It's a great time to think about budgets for next year and, you know, it's it's time to make sure the team is aligned and where you're going. Yeah, you know, I love July. Is My favorite...

...time of year because it really is you know, we're almost at the pinnacle of the mountain with the apex and we're able to look. We're able to look back over the past six months, we're able to look down where we're at today, and they were able to look ahead towards the future, whether it's the next six months, twelve months, twenty four, thirty six months, and then make adjustments accordingly so that we can continue forward on our journey of growth. And speak about continuing forward on the journey of growth. If, if someone wants to connect with you to continue the conversation that we've started here today, John, what is the best way for them to reach out and say hello? Yeah, first thing is I just say reach out to me on Linkedin. I'm there. John Dan Doyle. Love to hear from you. Can also reach out to us on Pinical DOT com, or you can just reach out to us right on our finical page in Linkedin. Yeh, look forward to talking to anybody that that's excited about good stuff. John. Connect with John, learn from John, grow with John. John, this has been a great conversation. Thanks again for joining me for another episode of banking on digital growth. Thank you so much for having me as always, and until next time, be well, do good and make your bed. Thank you for listening to another episode of banking on digital growth with James Robert Lay. To get even more practical and proven insights, along with coaching and guidance, visit digital growth dot com slash insider to join a community of growth minded marketing and sales leaders from financial brands and fin techs. Until next time, be well and do good.

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