The Future of Digital Banking and Payments

We’re only halfway through 2019, and it’s already been a big year for fintech. The last few years have given us exciting fintech developments with a lot of potential, and it looks like this is going to be the year where those promising new technologies make the transition to real-world solutions.

And no area of fintech exemplifies this trend more than AI and machine learning. With such a wide variety of applications on show at FinovateSpring, and beyond, it’s clear to see the conversation moving beyond getting started with AI to how to leverage it for best use.

Of course, fintech is about much more than AI, and this issue of the Finovate eMagazine takes more of a deep dive into digital banking and payments, and the technology shaping this particular section of the industry. Read on for a recap of FinovateSpring, insights from some of our exciting speakers, an overview of the 8 companies that the audience selected as Best of Show, and more.

Read it now >>

Experts Look Beyond the Incumbents: Why Smaller Players are Winning

In the world of fintech, you would be forgiven for thinking that all the major developments and collaborations are happening within the four walls of the largest incumbent banks and their startup partners. But, there is a whole world of exciting opportunity and expansion happening within smaller community and challenger banks, as the recent FinovateSpring showed. With an entire stream dedicated to community banking and many more sessions and speakers looking at the potential of SMEs, it was hard to miss the importance of this sector. Here, we catch up with some of the leaders in the space to hear what is exciting them and what they think the future has in store.


Rick Winslow, Chief Experience Officer at Kabbage talks about responsible borrowing behaviors and the importance of being able to provide much smaller lines of credit to small businesses.

Almost half of Americans own or work for a small business, yet they often are not given the priority. We spoke to Karen Mills, Senior Fellow at Harvard Business School and former cabinet member under President Barack Obama as Head of small Business Administration, about how important small business lending is to the health and well-being of businesses and ultimately the economy, and how technology may transform this process.


Jill Castilla, President and CEO of Citizens Bank of Edmond sits down with Steven Ramirez of Beyond the Arc to talk innovation in community banking, pushing the norms with legacy technology companies, and being organically invested to seek out new opportunities.


Tyler McIntyre, Founder and CTO of Bank Novo and Steven Ramirez, CEO at Beyond the Arc, talk challenger banks and why they’re needed in the current financial services and banking ecosystem.

Women in FinTech: “The Ability to Serve Customers in the Best Manner Possible is Where I Draw Energy.”

As part of our #WomeninFinTech series, we sat down with Kristin Marcuccilli, executive vice president and chief operating officer at STAR Financial Bank.

We talked about her transition from the world of college football to the world of banking and finance, what technology she thinks will lead the way, and why it is important to work with like-minded individuals to drive a business forward.

Finovate: How did you start your career?

Kristin Marcuccilli: STAR Financial Bank is a privately-owned family bank that’s been around for more than 75 years; in fact, my grandfather’s name is the “T” (Thomas) in STAR. Despite this family history, I didn’t always aspire to become a banker. I earned a bachelor’s degree in psychology and pre-medicine from the University of Notre Dame, and my student work in football operations and player development ultimately led me to my first job in the Notre Dame Football office for three years.  It wasn’t until later that I decided to pursue a master’s degree in business administration and management from Indiana University.

While working toward my master’s degree, I asked my dad about potential opportunities with the bank – though I still was unsure if this was the right path, I became more curious as I progressed in my studies and job experiences. When an opportunity to join the bank arose, I had to follow the same process as anyone else. Our bank has strict rules about family employees: we must work somewhere else for five years first; new positions won’t be created just for family members; and we must pursue an MBA or banking certification to even be considered for a senior management role.

In 2008, I joined the bank as a project manager, and haven’t looked back since. Over the past 11 years, I have worked my way up to chief operating officer, and I now help oversee our technology partnerships, project management efforts, bank operations and strategic direction. During my time at the bank, I’ve helped establish a strategic vision, oversaw a website redesign, helped implement 55 Interactive Teller Machines and have enhanced our digital banking strategy.

Finovate: What sparked your interest in fintech?

Marcuccilli:My interest in fintech stems from the reason I choose to work in community banking – it’s a relationship business, and our team’s involvement in creative thinking that will ultimately help change and influence the way people and businesses interact with their bank is an ever-present and ever-evolving challenge. A passion for fintech calls for an entrepreneurial spirit and the ability to embrace failure and change nearly every day. For me, that’s an exciting challenge.

Finovate: What technologies have you seen lately that have excited you?

Marcuccilli: New technology seems to appear overnight. Years from now, we expect that real-time payments will be the norm – no more waiting for money to move overnight or over the course of several days via check. The application of biometrics and advanced analytics for enhanced security will continue to expand and evolve, and artificial intelligence will support personalized customer experience through digital channels. Electronic delivery of documents, signatures and account opening will also likely be dominating a once paper-intensive banking environment. Self-service kiosks will also have advanced to replace much of the standard transaction activity both as in-branch and as standalone options. All of this excites me, as the ability to serve our customers in the best manner possible is where I draw energy.

Finovate: Why is it important for banks to embrace new tech? How is Star Financial Bank doing this?

Marcuccilli: In our rapidly changing industry, banks that are slow to adapt risk falling behind and losing critical business. Bankers have a significant advantage when it comes to building valuable relationships and supporting their local communities, but they must also add modern technology to remain nimble and relevant.

At STAR, we place a strong emphasis on maintaining our community focus while optimizing delivery channels and meeting customers where they are on their financial journey. We take a collaborative approach when evaluating and implementing new technology, starting at the top with our CEO who encourages the team to embrace change.

I am proud to be part of a powerhouse team, working alongside innovators and leaders who dedicate significant time and effort toward studying technology and client behavior to best meet our community’s needs. We have a group of smart, data-driven individuals who ensure our technology and services align with our business and customer demands.

Finovate: Where do you think the future of fintech is heading?

Marcuccilli: Delivery channel optimization (to ensure convenient and engaging customer experience), security threats and payments are all rapidly evolving and will continue to be a major focus in the fintech space. To effectively address these trends, there will be a growing demand and emphasis on the selection of third-party partnerships.  Finding the right technology partner – both a technical and cultural fit – will be important in facilitating the best experience for customers.

Finovate: Why is the #WomeininTech movement important?

Marcuccilli: There is a general lack of female representation in financial services, especially when it comes to the technology side of the house.  As industry professionals, we can help influence this by supporting and encouraging women to join and contribute to the field. Series like these are a powerful way to highlight how women are innovating and making a difference in their local communities through financial services and technology.

Finovate: What piece of advice would you give women starting out their career in finance/ fintech?

Marcuccilli: My advice is to be open to different possibilities within the financial services and fintech space as there are no shortage of opportunities. It’s important to surround yourself with strategic and smart individuals who help build up the team, supporting professional goals and development. I’d also encourage women to become involved in their local communities. Learning and growing from individuals outside of your organization can also be key to professional success. When we commit to staying attuned to business and industry trends and recent developments, we’re able to better support an ecosystem of entrepreneurship and growth in our local communities.

Finovate: And what piece of advice do you have for other banks to attract and retain more star female talent?

Marcuccilli: At STAR, we prioritize collaboration and innovation, and that’s been very attractive to top talent. Showing potential employees that the bank cares about exploring new ideas from all levels of the institution, not just from management or the C-suite, can be a powerful differentiator. Institutions that break down silos, encourage cross department collaboration and transparency, and embrace change will find more success in attracting and retaining star female talent.

Webinar: Don’t Disrupt – Avoiding the Dangers of Transformation

Webinar: Don’t Disrupt – Avoiding the Dangers of Transformation

Register now for the latest Finovate webinar: Thursday June 27, 11am ET (4pm BST).

Challenger banks shouldn’t stand a chance. Incumbent banks have tens of millions of customer relationships, decades of risk-management experience, and petabytes of data.


Yet incumbent banks struggle to adapt to rising customer expectations quickly enough. This has encouraged well-funded, design-led, new market entrants to pose serious competitive threats. Incumbents struggle with rapid change because of the legacy systems, silos, and data volumes that exceed human capacity to analyze them.


In pursuit of disruptive innovations, banks have embarked on digital transformation programs and big data projects. But the low odds for success for these initiatives make them dangerous. Seventy percent of digital transformations fail, according to McKinsey. And 60% of big data projects fail, according to Gartner. These are investments with high risks and mostly uncertain return.


Join this webinar to learn about a new approach. You will learn how to:
• Leverage legacy systems and understand data across systems and silos
• Turn inhuman amounts of data into information for human decision-makers
• Reduce the cognitive burden on employees so they can use their unique skills
• Increase revenue and cost productivity while reducing risk
• Scale solutions with natural language processing and machine learning

Featuring:

John Finneran
Senior Product Marketing Manager, Financial Services
Sinequa

Finneran is the Senior Product Marketing Manager, Financial Services at Sinequa. He is responsible for go-to-market strategy and designing industry-specific use cases and solutions. Sinequa helps financial institutions become information driven. The platform extracts real-time relevant information and insights from large amounts of data across all formats.

Register now >>

Analyst All-Stars – Global Fintech: What’s Hot & What’s Not…

At every Finovate, we welcome four leading fintech research analysts to take the stage for seven minutes each to present key opportunities for the future. Take a look back on our most recent set from FinovateSpring 2019 featuring Michelle Evans, Global Head of Digital Consumer Research at Euromonitor International; Jacob Jegher, Senior Vice President, Banking Head of Strategy, Javelin Strategy and Research; Dan Latimore, Senior Vice President, Banking Group, Celent; and Paul Berg, Senior Managing Consultant, Gallup.

Early booking for FinovateSpring 2020 is also now open! Book your tickets now at the lowest possible price!

FinovateSpring 2019: “You have to be at Finovate if you want to be an innovator”

1100+ attendees. 60+ demoers. 120+ speakers. Only at Finovate.

Across 3 main days and one specialist summit day during FinovateSpring 2019, we were joined by hundreds of senior financial and banking executives, venture capitalists, press, industry analysts, bloggers, regulators and entrepreneurs from the Bay Area and beyond to explore fintech’s real-world solutions and share cutting edge insight.

Early booking for FinovateSpring 2020 is now open!  Book your tickets now at the lowest possible price!

Webinar: Digital, Data and Disinformation – Modern Banking

Webinar: Digital, Data and Disinformation – Modern Banking

Take a look back on the latest FinTech Futures and Finovate webinar, Digital, Data and Disinformation: Modern Banking with Jon Deutsch, from Information Builders; and Dave Birch, Global Ambassador at Consult Hyperion.

Technology and increasing competition have rendered the financial services sector very much under pressure. Banking is not what it used to be, and it’s becoming clear that new players are appearing by the minute, who will take a seemingly marginal share.

However, these changes are not as bad as they seem. If we focus on the potential of fintech disintermediation, digital transformation, and data proliferation, it’s easy to see that the industry is ripe for disruption.

Future growth and success belong to those institutions who align on strategy to marshal these forces to build and retain market share through superior products, service, and customer outcomes.

Banking and financial services industry leaders must now look to push the boundaries of innovation even further and question exactly how the implementation of emerging technology enablers can help them to truly redefine the customer experience.I

Is There a Role for the Branch in The Digital World?

Alex Jimenez, Vice President Senior Strategist, Zions Bancorporation, will be joining the Leaders Debate on the new platforms and technologies transforming banking at FinovateSpring, coming to San Francisco in two weeks. Here, he considers the role of physical bank branches in the digital world.

I often hear people ask if there is a role for the bank branch. This question consists of several components:

  • In this increasingly digital world, customers still go to bank branches, why?
  • How do digital technologies affect in-person experiences?
  • How do digital technologies change the setting where those experiences happen?

I’d like to tackle each of them separately.

Why do customers still use branches?

In the past few years several opinion surveys have come back with similar responses to this question. Americans surveyed say that they still want bank branches for when they have issues with the bank, or because they still frequent the bank for their everyday banking activities. These two reasons don’t make much sense in the aggregate. 

Bank call center metrics indicate that when people have an issue with a bank, they call the bank rather than visit the branch. In addition, branch transactions are down across all types of customers and FIs. People use digital channels for everyday transactions, like checking balances, transferring funds, and depositing checks.

The gap between survey responses and data indicates that a vast difference exists between how people respond to these questions and how they behave

How do digital technologies affect in-person experiences?

The main concern that branch traditionalists describe is the inability for a customer to reach a person. Do digital technologies potentially eliminate the banker, or can they help them?

As noted earlier, digital technologies have impacted rote branch transactions. There is still a need to visit branches to deposit checks and cash, but the use of both is also diminishing. 

Customers still use branches to open new accounts, apply for loans, and get advice. Account opening and application can be done digitally, and are slowly being impacted. The pace of the decline has more to do with banks’ clumsy technology or policies than the actual availability of technology.

If rote transactions and account opening move to digital channels, advice and selling remain the activities most often cited as reasons for a physical branch. Digital technologies, however, can augment advice, selling, and even in-person account opening very simply. Yet, many banks have not extended digital capabilities to today’s branch. Many years ago at a previous organization, my team deployed a self-service tool on our website that allowed a small business customer to answer questions and receive offers to address their specific needs. The service relied on a simple algorithm that helped the customer navigate through a 15-minute session. The tool did not succeed online. However, we deployed it at the branch where it became successful. Apparently, the combination of the human touch, and the algorithm, resulted in a better experience. Previously, the branches had used paper pamphlets to help them highlight services. 

Call centers have knowledgebases at their disposal, yet they are not often offered to branch staff. Similarly, sales teams have access to CRM dashboards that are used sparingly by branch staff. Branch staff can use these technologies to enable themselves to provide better experiences.

How do digital technologies change the settings of where those experiences happen?

If banks provide branch staff with digital tools to optimize all person-to-person customer experiences, do they need the physical real estate? Probably not, in the longer term. 

Many banks have begun and continue to transform and consolidate branches because of the changes that digital technologies bring. The industry has focused on rote transactions and their impact on the branch, but the reality is that people perform most transactions remotely. 

Many years ago, various FIs like Coastal Credit Union in North Carolina rolled out video ATMs which allow for video conversations with bankers sitting in their call center. Aside from cash transactions it doesn’t take much to allow those same video bankers to be able to have video chats with customers through any internet-connected device. As more and more people become accustomed to having video chats with others, these channels will naturally become more popular than the local branch.

So, is there a role for the branch in the digital world? It depends on how branch is defined. In the short-term the branch as it is configured today will continue to slowly decline. Future branches will not bear much resemblance to the branch of today. The branch of the future may not be a location at all. I expect it to be sets of experiences, some of which will be facilitated by bankers with access to digital tools, on various delivery methods many of which aren’t available yet.

The Human Side of Digital Transformation

This is a guest post written by Dave Jones, VP of Product Marketing at Nuxeo, a Silver Sponsor of FinovateSpring. Jones is a strategic marketing leader and information management expert with 20+ years of experience in the technology space.

Today, consumers embrace a willingness to experiment with new ways of doing things. This, in turn, is driving the need for financial services companies to accelerate their digital transformation initiatives in order to compete and remain relevant to customers.

But digital transformation should not mean customers never talk to a human being. A digital business should look to exploit technology to create new sources of value for customers above and beyond their products and services. They should also look to increase operational agility in the service of those customers—and that service does not always have to be digital. It can, and often should, be a human interaction.

Many describe this human element within an organization as the culture – but what is culture?

It’s a shared set of values and beliefs that drive behavior. It’s not what you say, it’s what you do. It’s how people behave when no one is looking and when no one is telling them what to do that will pave the way for great innovation.

At Nuxeo, we believe that a digital culture is critical to the success of a digital transformation project. Below are four ways that culture can play a pivotal role in digital transformation projects:

  1. To drive digital experiences, strive for a culture that fosters customer empathy and that values a deep understanding of customers’ needs and ecosystems.
  2. To drive digital operations, focus on things that customers value, and reward digital experimentation and collaboration. Nurture a culture that embeds metrics (customer metrics) into the scorecard of every employee. And foster customer empathy and customer-led decision making.
  3. To leverage digital ecosystems for broadening platforms and partnerships, nurture a culture that promotes internal and external collaboration.
  4. To place digital innovation at the intersection of experiences and operations, support a culture that encourages speed instead of perfection. Develop a healthy tolerance for risk, and a willingness to fail fast and learn from failures.

In order to become a digital business and move up the digital maturity curve, no financial institute can ignore culture because it impacts everything. The traits found in strong digital and customer-focused cultures include:

• Customer Obsession

• Empathy

• Speed & Agility

• Collaboration

• Experimentation

These are the traits that successful digital businesses have in common, and they’re the traits that allow organizations to drive their digital transformation to the highest level. However, these traits are missing from many digital transformation programs, despite assertions by many who say “Yeah, we’re doing that.” This is a problem.

Most organizations are still addressing digital transformation as a tactical, short-term savings focused exercise. Some are getting some cost savings and functional agility, but very few are creating end-to-end digital businesses with a sustainable and long-term competitive advantage. What we have are organizations that think they are done with digital transformation who were never truly on the journey, and never addressed the human and cultural piece of the puzzle.

To those organizations, we implore you to rethink your strategy and to factor culture into your digital transformation journey. But to those organizations who are using empathy, collaboration, and the natural human instinct to help others as a way to deliver a stronger and more sustainable offering to their customers – bravo. You are in the enviable position of having all the right pieces in place for your digital transformation journey – all that remains is for you to push ahead, build on the strength of your new human-digital culture and enjoy the trip.

To learn more about the trends driving digital transformation and strategies for success, download this complimentary Digital Business Playbook for Financial Services. Nuxeo is a Silver Sponsor of FinovateSpring, coming to San Francisco in less than one month! Find out how you can get involved with FinovateSpring here >>

PayTech Awards 2019: Celebrating Innovative Projects and Inspirational People

PayTech Awards 2019: Celebrating Innovative Projects and Inspirational People

PayTech Awards, brought to you by FinTech Futures, are exciting awards in their second year that recognize excellence and innovation in the use of IT in the finance and payment industry worldwide, and the people who make it happen.

The 2019 Awards are now open for entries in the following categories:

Judged awards

  • Best Consumer Payments Initiative
  • Best Corporate Payments Initiative
  • Best Mobile Payments Initiative
  • Best Use of Biometrics in Payments
  • Best Prepaid Initiative
  • Best Cards Initiative
  • Top Paytech Innovation
  • Best E-commerce Initiative
  • Best Paytech Partnership
  • Paytech for Good

Leadership awards

  • Rising Paytech Star Award – free to enter
  • Woman in Paytech Award – free to enter
  • Paytech Leadership Award – free to enter
  • Paytech Team of the Year

OVUM Payments Innovation awards

  • Best Real-Time Payments Solution Provider
  • Best Open Banking Solution Provider
  • Best Solution Provider for Payment Systems in the Cloud

Think your project deserves to win this year? Or do you know someone that should receive special recognition? The deadline has now been extended to the 19th April, so get nominating >> 

Last year attendees of the PayTech Awards enjoyed the hospitality of a luxurious Silver Sturgeon yacht as it cruised along the river Thames. This year the awards will be announced on 5 July, and will be hosted at the HAC (Honourable Artillery Company), a historic 18th Century mansion accompanied by a six acre garden in London’s Moorgate. Check out last year’s highlights and see what’s in-store:

For more information or to enquire about sponsorship opportunities, please visit the PayTech Awards website or get in touch with Jon Robson via email jon.robson@knect365.com.