Women in Fintech: Pathways to Positive Change with Jennifer Valdez of intelliflo

Women in Fintech: Pathways to Positive Change with Jennifer Valdez of intelliflo

Supporting more than 30,000 advisors, representing more than three million end-investors, and servicing more than $1 trillion in assets across its platforms, intelliflo has delivered SaaS-based solutions for the financial advisory industry since its founding in 2004.

Headquartered in the U.K. and recognized as one of the leading technology platforms for financial advisors in the country, intelliflo announced earlier this year that it had successfully integrated five advisory solution businesses – Jemstep, Portfolio Pathway, RedBlack, i4C, and intelliflo U.K. – under the Intelliflo brand. The move to consolidate its advisory services was designed to enable the company to better compete with rivals like Finovate alum Envestment.

We chatted with Jennifer Valdez, intelliflo’s President of the Americas, to discuss the company’s rebrand and how the wave of digital transformation has impacted the financial advisory space. We also talked about the role of women in financial services and the importance of changing mindsets as a key step on the path toward positive change.

What was the driving force behind intelliflo’s recent rebrand?

Jennifer Valdez: Earlier this year, Invesco brought together its five separate software businesses to form the new intelliflo, a single, API-driven platform to run the end-to-end advisory experience. intelliflo’s technology is comprehensive, representing a broad spectrum of capabilities including financial planning, practice management, digital account opening, reporting, as well as trading and rebalancing capabilities. The open architecture drives new levels of flexibility, efficiencies, and personalization across financial advice, empowering organizations of all sizes with digital tools to better serve modern investors and widen access to financial advice. intelliflo supports over 30,000 financial advisors worldwide, representing more than three million end-investors and over $1 trillion in assets serviced on the platform. 

What tips do you have for clients beginning to embark on digital transformation projects?

Valdez: Before starting any major digital or business transformation project, it’s critical to pause and really think through the pain points you’re trying to solve. This includes listening to your internal team members, advisors, and clients. Technology simply for technology’s sake won’t be effective or productive; you must be solving a true business problem that will move the needle and better position your organization for meaningful change and success. Once that direction is clearly defined, then it’s time to engage your technology partner(s) to ensure you are fully maximizing technology to support your future vision.

Why is it so important for women to have a seat at the table? What steps can individual organizations and the industry as a whole take to ensure greater representation?

Valdez: Representation matters, and in order for organizations to accurately and comprehensively represent all audiences, these groups must have a voice (and vote) when making decisions. This doesn’t mean just women, but all traditionally underrepresented groups such as people of color and those in LGBTQ+ community. 

As a collective industry, we can all choose to do more to raise awareness against bias and stand up for equality, giving everyone an opportunity to thrive. Challenging current mindsets is the pathway to driving positive change.

How have the last 18 months changed the industry?

Valdez: The past year and a half have significantly impacted the financial advice space. Financial advisors are not regularly sitting across the desk from their clients, which challenges them to determine how to continue to meet investors’ needs and help improve their overall financial health. At the same time, investors are increasingly wanting tailored advice, so financial advice professionals are being challenged to deliver a high level of service in a new digital way.

While this has been difficult, it’s also created an opportunity for the industry to embrace modern technology in new ways, digitizing workflows and back-office capabilities to help increase efficiencies and reduce costs. Streamlining the advisory experience in this way is not only beneficial for the financial advice professionals, but also the end investors – it enables quicker, more transparent communication and collaboration all around, while also driving greater personalization.

Can you share a recent professional accomplishment and/or a goal you hope to accomplish?

Valdez: Being asked to lead the Americas for intelliflo has been a significant personal milestone. I’ve always recognized the importance of financial advice and have been passionate about helping investors strengthen their financial wellness. In my role, I get to lead an amazing team that executes on our company’s mission to widen access to financial advice.

At intelliflo, we firmly believe that financial advice should be accessible to all, not just the wealthy. That’s why we’re dedicated to providing the digital technology necessary to make this a reality, helping advisors improve the financial lives of their investors. I’m excited for what’s to come.

How do you see the advisory experience evolving this year and next? What role does technology play?

Valdez: Looking toward the end of this year and into next, I expect more financial services firms to embrace a hybrid advice model, a strategic, flexible mix of digital and human advice. Such an approach enables advisory firms to meet investors whenever and wherever they want to be met, while also allowing these firms to deliver products and services more efficiently and effectively.

Another significant benefit of a hybrid advice model is the ability to close notable product gaps. Many firms have clearly defined offerings for those who want full advice and for those who are primarily self-directed, but more choice should be made available to those investors that fall somewhere in between. With a hybrid strategy, financial services firms can cost effectively provide products and services that meet the needs of every investor on the continuum – and in their engagement models and delivery channels of choice.

Technology is key to making the shift to a hybrid model successful. More firms will forgo bespoke software solutions in favor of a single platform that can support the end-to-end advisory experience, allowing them to boost efficiencies. Leveraging open architecture and sophisticated APIs will be critical in helping to optimize margins, reduce costs, and enable greater personalization across the advisory experience.

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Women in Fintech: Empowering Small Businesses with Sophie Gorman of Metro Bank

Women in Fintech: Empowering Small Businesses with Sophie Gorman of Metro Bank

Founded in 2010 by Anthony Thomson and Vernon Hill, Metro Bank was the first new high street bank to go live in the U.K. in more than 100 years. Currently led by CEO Daniel Frumkin, the institution offers banking services to both retail and business customers, buttressed by its acquisitions of SME Finance in 2013 and of the loan portfolio for P2P loan marketplace RateSetter in 2021.

We caught up with Sophie Gorman, Lead Product Owner with Metro Bank to learn more about how the institution leveraged its hybrid, digital, and physical model to better serve both individuals and small businesses. We also asked Ms. Gorman about the meaning and importance of agility in banking and what women can do to succeed in the male-dominated world of finance.

Tell us about yourself.

Sophie Gorman: I have worked in the financial services space for almost 10 years, spanning roles at several banking organizations in the U.K. like Silicon Valley Bank and Lloyds Banking Group. During this time, I gained valuable experience across a wide range of customer segments and channels.

For the past three years, I have been a part of the Metro Bank team. Metro Bank is the first new retail bank in the U.K. in over 100 years; we launched in 2010 and now serve more than two million customers with leading banking services. At Metro, we’re bringing together digital and physical experiences to provide a personalized approach to banking, challenging the big banks and traditional players.  

I’ve worn several different hats at Metro, and I now serve as lead product owner. I am responsible for delivering new digital products and services across our mobile and online banking platforms to help small businesses manage their finances. I am excited to continue to build out Metro’s business banking division, delivering value to our customers by leveraging existing and new technologies to make their financial lives easier.

How can banks embrace agility from an organizational level?

Gorman: It’s easy to believe your institution needs to deliver every feature from day one, but such thinking is actually counterproductive to embracing an agile approach. It’s important for banks to be able to pivot and tweak their offerings based on factors like user feedback, market research, and usage trends from the get-go. Such an approach to agility ensures the organization can evolve and innovate more quickly, ultimately proving to be more helpful for developers and stronger for overall team morale.

How do you support small businesses, especially those who aren’t ready to work with accountants?

Gorman: We are committed to empowering small businesses with easy, convenient digital tools to manage their finances. Recently, we’ve been focusing on providing internal bookkeeping capabilities to help businesses that may not work with accountants. One of the services our partner Sensibill provides is digital expense management, which helps our small business customers digitally capture, store, and organize their business receipts with plans to expand the services to include invoices.

The spend data captured by Sensibill helps us know and understand our customers better, which allows our bank to surface more relevant products and services based on their unique business needs. We are committed to leveraging this data to enrich our customer segments and deliver services to help our business customers grow. Our data is starting to demonstrate insightful trends that can help inform decisions.

I’m especially excited about our team building open banking APIs to allow customers to integrate transactional data with their accounting providers. With this functionality, customers can seamlessly share transactions in real-time. And as these businesses grow and become more sophisticated, they’ll be able to easily take advantage of additional tools.

Tell us about Metro Bank’s hybrid model.

Gorman: Metro Bank is bringing together digital experiences and the physical stores to provide our customers with the best possible experience for their individual needs. We recognized that customers still craved face-to-face interactions with our store colleagues and Local Business Managers in certain instances, but still wanted the optionality and convenience for digital at their fingertips. We’re in a unique position because Metro isn’t a true neo-bank, but it’s not one of the U.K.’s Big Four either. We’ve been in the market for a little over 10 years, so we’re still relatively young and growing quickly. It’s been a fun ride so far, and I can’t wait to see what comes next.

How can women grow within organizations? 

Gorman: For women looking to grow in the banking or technology space, I’d encourage them to lean into their transferable skills. Oftentimes women make the mistake of thinking they have to fit into a certain box based on their current role, making it difficult to transition into other roles or find opportunities in a new area. But by nurturing and harnessing those transferable skills, women can gain the confidence to apply their knowledge and diverse skill sets to other areas, continuing to deliver value to the organization in new ways and grow.  

I’d recommend finding a mentor in the organization with influence outside of your immediate team to provide you with visibility and push for opportunities that will stretch you. This helped me transition into a more technology based role. I also loved reading Viv Groskop’s How to Own the Room: Women and the Art of Brilliant Speaking which has some fantastic practical tips for those suffering from the dreaded Imposter Syndrome.

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Bringing Financial Services into the 21st Century: A Conversation with N26’s Stephanie Balint

Bringing Financial Services into the 21st Century: A Conversation with N26’s Stephanie Balint

We sat down with Stephanie Balint, Head of U.S. Strategy & Operations with N26 Inc. in New York, to talk about her experience in the fintech industry, and the continued evolution of technology to solve old and new problems for consumers, and create new opportunities we have yet to think of.

How you get involved in fintech?

Stephanie Balint: I got involved with fintech very early on in my career. Right out of college, I started working in investment banking, and one of my first areas of coverage was fintech, which included players within market structure, exchanges, trading, and technology platforms. By covering that space, I learned a lot about the industry, and eventually moved on to work for a fintech company because I wanted an opportunity to have direct impact in day-to-day operations and scaling fintech businesses. One of the reasons this industry stood out to me is because of the unique aspects of the business models; unlike consumer retail businesses, fintechs are less subject to short-term trends and the whims of consumer demand, and have higher margins and therefore more scalable and profitable economics.

How have you seen the industry change across your career?

Balint: I have seen the industry change immensely over the past 10+ years. When I was first getting started in 2009, there was much more of a focus on established and mature companies who were utilizing older, legacy tech stacks and serving traditional financial institutions, but starting to do so in more tech-forward ways. Over time, I saw an evolution begin to take place with lots of new entrants in the space trying to better serve retail and commercial customer needs by replacing legacy tech. It was incredible to see so many talented people, who had previously worked at older financial institutions, come back to identify a problem in the space and propose new solutions that would eventually improve financial services as a whole and bring it into the modern age.

There have been so many interesting companies founded over the past 10+ years. Many of the small fintech concepts I was watching during my banking career have grown significantly, including neobanking. This was a category that was barely considered or on the radar, and now is its own massive category within fintech – with no signs of slowing down. Q2 2021 was the largest quarter on record for fintech with nearly $31B invested worldwide across 657 deals.

Some of the innovations I’m most excited about are around what I call the “plumbing” of financial services. Things like enabling faster payments, like ACH payments, foreign money transfer, and trade settlements. A lot of companies – like Plaid, Orum, or Wise – have already brought forth incredible solutions. Behind the scenes, as a consumer, you would never know what is driving your ability to get money faster or facilitate complex transactions.

Can you tell us a bit about your current role?  How is your company impacting the future of fintech?

Balint: In my current role, I am the interim GM of N26 US. With that, I oversee our operations in the U.S. market, focusing primarily on the strategic and operational side of things. This includes working closely with our legal and compliance team to manage critical business partners, selecting new partners, and overseeing customer service and banking operations. A large part of my role is creating a shared strategic vision for the entity to work towards, as well as developing roadmaps and long, medium, and short term goals to achieve our vision in the U.S. 

Where do you see fintech heading in the next 12 months?

Balint: There is a very strong appetite from investors who are trying to find the interesting companies that will rise to the top. I believe there is still a huge opportunity in the “plumbing” side of financial services, particularly with B2B businesses who are working to do things like speed up payments, improve infrastructure, and provide solutions to help globalize money movement. Generally, these businesses are working to bring financial services into the 21st century and it’s fascinating to be a part of this evolution.

What more do you think can be done to support women in fintech?

Balint: At an entrepreneurial level, I think foundational change needs to occur. Encouraging female founders by providing access to capital is essential to helping generate a more diverse fintech startup economy. The issue is that historically women have been underrepresented within VC investing. There are generally not many women in VC investing, compounded by not enough representation and funding of women at a founding level, which in turn leads to underrepresentation of women in fintech across all levels over time. 

Within startups, I think it’s important that leaders take steps early on to build out a team that ensures diversity across all facets of the business. Seeking individuals with various social and economic backgrounds will ultimately contribute to a stronger and more inclusive product and diversity of thought within and across teams.

For individuals, I think having strong mentorship from other influential leaders is key to building a strong supportive network that will pay dividends throughout your career.

Where did you find support in the fintech world?

Balint: I had a lot of support early on in banking. As the only revenue-generating female senior managing director, and the only one in an advisory role leading fintech as a practice, my mentor in investment banking took a keen interest in me and helped me to build my network and coverage area to do things earlier in my career than I would have been able to on my own.

Once I moved directly into fintech, I found most of my support from other peers, not necessarily women. Especially at N26, many of the early employees at the company were like-minded and we found similar comradery in terms of drive, motivation, intellect, and general interest in how to navigate a small and growing organization, think critically about things, handle tough negotiations, optimize contracts for best possible terms, and build the team. I found that support from early employees who had gone through it together with me incredibly valuable as I grew in my own career.

What advice would you give to women starting their careers in the industry now?

Balint: First, know your worth. Figure it out early and don’t be afraid to ask other people you know in the industry for comparisons/benchmarks. Demand the pay you deserve and don’t be afraid to negotiate.

Second, invest your money early and often. You may make the same salary as your peers, but if you don’t put your money to work, you’ll be left behind in the long term in terms of wealth creation.

Last, don’t be afraid to ask for things you want. I feel strongly about the “don’t ask don’t get” approach. Ask for a seat at the table, to be included in meetings, for someone to mentor you … what’s the worst that can happen? You can always move on from a rejection but you can never get back a missed opportunity.

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Leading Transformative and Innovative Change in Fintech: A Conversation with Karen G. Mills

Leading Transformative and Innovative Change in Fintech: A Conversation with Karen G. Mills

As part of our #womeninfintech series, we spoke with Karen Gordon Mills, a Senior Fellow at the Harvard Business School and a leading authority on U.S. competitiveness, entrepreneurship, and innovation. She details her perspective and experience with small businesses and lending, and highlights several other women leading the charge to create a better future with fintech.

How did you become interested in fintech?

Karen Mills: My interest in fintech grew out of my work with small businesses.

As Administrator of the U.S. Small Business Administration (SBA) from 2009 to 2013, I had a front-row seat to the challenges that small businesses face when accessing bank capital. Getting a loan is an onerous process even for the most creditworthy small business owners. It often involves carrying stacks of paperwork to a local bank and waiting months for a decision. That’s because for banks, lending to small businesses is actually pretty hard. They tend to lack complete information about the business that would allow them to determine profitability or cash flow, and since small businesses are such a heterogenous group, it’s difficult for loan officers to develop expertise in a specific sector. These frictions have led to a credit gap, especially among the smallest and most vulnerable businesses.  

The traditional lending process wasn’t working for this critical part of our economy. Yet it had been this way for decades and only started to change in the late 2000s, around the time I was at the SBA. That’s when a wave of new fintechs entered the market. The fintechs gathered nontraditional data streams from their small business customers (like daily transactions) to get around the lack of information, integrated them using application programming interfaces (APIs), and deployed machine learning tools to quickly generate insights about the business and automate loan decisioning. All of a sudden, small businesses could submit applications, receive decisions, and find new funds in their accounts in a matter of days.

I thought fintech’s potential to transform small business lending was so transformational that I wrote a book describing its evolution and possible outcomes: Fintech, Small Business & the American Dream. I’ve continued to speak about and research fintech developments in my current role as a Senior Fellow at Harvard Business School.

How have you seen the industry change across your career?

Mills: Lots of people initially thought the fintechs would knock traditional banks off the map. But that hasn’t happened. Although banks might be less nimble or tech-savvy, they have established customer bases and low-cost capital—which most fintechs don’t. One big change we have seen in recent years is a rise in bank-fintech partnerships, with each seeking to benefit from the other’s strengths. Another important development is the presence of Big Tech companies, like Apple and Amazon, whose wide reach and ability to create seamless user experiences allow them to make rapid and large-scale inroads with small businesses.

The pandemic has obviously brought massive change over the last year, and accelerated the uptake of digital technologies for both lenders and borrowers. The Paycheck Protection Program (PPP) played a key role, pushing banks to overhaul their systems and get money out the door at an unprecedented pace. Fintechs were especially important in distributing aid dollars to the smallest businesses, and they may be able to leverage that success into new customer relationships. Meanwhile, with more and more activity occurring online, small businesses will likely adopt new digital tools to serve their various needs—in everything from lending to advertising.

How have you seen female leadership influence the fintech space, particularly around small businesses?

Mills: Women have developed some of the most transformative and innovative fintech solutions that I’ve seen for small businesses. For example, Kathryn Petralia co-founded Kabbage, a company that pioneered the use of alternative data and machine learning to automate small business lending. As the head of Square Capital, Jackie Reses built out Square’s similarly data- and technology-driven strategy for providing small business loans. Both of these women, and many others like them, have created crucial new opportunities for small businesses to grow and thrive.  

Women’s leadership has also been influential in other, related spaces. In traditional banking, women like Jill Castilla, the CEO of Citizens Bank of Edmond, a community bank in Oklahoma, are spearheading digital transformations intended to provide better service for small businesses. In academia, female economists like Professor Sabrina Howell of NYU are doing crucial research around fintech’s impact on small businesses—including demonstrating how fintechs like Kabbage and Square played an outsize role in delivering PPP funds to minority-owned businesses during the pandemic. 

What more do you think can be done to support women in fintech?

Mills: First and foremost, we need more women in fintechs, in banks, and in the research and policy areas too. There are talented women coming up in banking and in other areas of finance who will push the industry to adopt more innovative solutions.

And, yes, there are things we can do to help. Investors need to funnel more money to female founders in fintech, and established companies and organizations need to implement better recruitment and selection strategies. There are brilliant, highly-qualified women out there who may well have the next big idea or innovation for small business customers. We just need to be more deliberate about bringing them on board and promoting them to the highest leadership levels – in ways that account for the biases and obstacles that women often face.   

We also need to be aware that simply recruiting more women isn’t good enough. It’s crucial to actively foster cultures of diversity, equity, and inclusion that provide women—and all underrepresented groups—with the resources and opportunities they need, and with an environment in which their contributions are valued. Organizations that do this well will be more successful in innovating and winning in a rapidly changing environment like the worlds of banking and fintech.

What advice would you give to women starting their careers in the industry now?

Mills: Fintech is a great industry to be in. Traditional banking is being challenged and organizations are more open to innovative thinking – because they have to be. Female leaders are most often excellent problem solvers. The solutions that fintechs put forward are game changing. Better access to capital can have a significant impact on the success and wellbeing of small business customers, and on the American economy.

My advice to women is that this is a critical time to get involved. Work to build a new environment that closes gaps in the market and improves access and opportunity for a more diverse set of small business owners. Get engaged, build relationships (and help each other out), pursue your ideas, and stay committed to your goals.

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PayNearMe and the Path to Frictionless, Flexible Payments

PayNearMe and the Path to Frictionless, Flexible Payments

The payments space is one of the areas within fintech that has benefitted from the acceleration in digital transformation trends over the past year. And within the payments industry, innovation in billpay has been especially vigorous, as a growing number of individuals and businesses turned toward digital channels to make and receive transactions during the COVID-19 crisis.

We caught up with Anne Hay, Head of PayNearMe’s consumer research initiative, to discuss the company’s new collaborations with Green Dot and Walmart, as well as PayNearMe’s findings from a study of consumer payment preferences the company launched earlier this year. Have consumers become more or less interested in digital payment solutions since the pandemic? And what can financial services organizations do to take advantage of these trends? Anne Hay explains.

What problem in the payments space does PayNearMe solve? And for whom does it solve it? 

Anne Hay: Today’s consumers are used to making quick, easy payments when shopping online or sending money to friends, and they now expect that same level of convenience for all their payment interactions.

PayNearMe clients are largely recurring billers, such as consumer lenders, mortgage companies, municipalities, and iGaming operators, and we are helping them bring that frictionless, flexible payment experience to their customers.

With PayNearMe, their customers can choose how, when, and where they want to pay. For instance, they can pay with all major payment methods including cards, ACH, and mobile-first payment methods including Google Pay and Apple Pay, as well as with cash at more than 31,000 retail locations, including 7-Eleven and Walmart.

This focus on the customer payment experience is crucial as it is often the most frequent touchpoint our clients have with their customers. Our modern payment experience platform is also the first to enable our clients to fully own the customer payment experience — from facilitating transactions across payment types and channels, to sending payment reminders, to analyzing data for business insights.

PayNearMe recently announced an expanded partnership with Walmart and Green Dot. Can you tell us more about this collaboration? 

Anne Hay: PayNearMe is rethinking payments with an emphasis on the payment experience, customer satisfaction and, of course, increasing our clients’ ability to get paid reliably. This expanded partnership with Green Dot makes on-time bill payment more convenient by bringing easy cash payments to the same location where customers do their everyday shopping. Now millions of consumers who prefer to — or need to — pay in cash can quickly and easily pay their rent, car payments, and utility bills at Walmart.

Customers simply show their scannable PayNearMe cash barcode on their smartphone to an associate in the Walmart MoneyCenter, pay with cash, and collect a receipt confirming that the payment is complete.

The expanded partnership with Green Dot adds participating Walmart locations across the country to our ever-expanding electronic cash network, and we expect to launch additional retailers in the near future to extend the convenience of our cash pay experience to our clients and their customers.

Enabling cash payers is a strategy that can help retailers, such as Walmart, bring more shoppers into their stores on a regular basis. Each visit to Walmart to pay a bill presents an opportunity for these customers to make additional purchases.

PayNearMe recently took a look at consumer preferences with regard to modern billpay options. What were the top takeaways from that survey?

Anne Hay: With all the innovation going on in e-commerce and peer-to-peer payments, we wanted to better understand consumer expectations around bill payments. There’s already a lot of research and data out there about how consumers are paying bills, but we wanted to ask consumers about what would make their bill payment experience easier.

Overall, the study uncovered a significant disconnect between consumers and businesses regarding how consumers want and expect to pay their bills, and the current bill payment options offered by most businesses today. About 75% wish managing and paying bills were easier, with 38% even preferring to do laundry over paying bills.

We found three big issues that need to be addressed.

  1. Billers are slow to offer bill payment choices consumers have come to expect in other facets of their lives, such as Venmo, PayPal, and Apple Pay.
  2. Consumers are struggling with disorganization, and it’s causing bill payment problems, including late payments.
  3. Accessing bill payment information and paying bills is a cumbersome and difficult process for a good portion of those surveyed.

A couple of interesting and surprising findings were the number of consumers, especially young adults, that call in, likely when they are not able to seamlessly complete their payment transactions on their own, and the number of respondents willing to use QR codes to make bill payments.

Respondents said that the billpay experience itself was a more significant stressor than the fear of not being able to pay the bill. What does that tell you? Where is the experience going wrong? 

Anne Hay: According to the bill pay study, nearly 1 in 3 adults revealed that paying bills causes them stress and anxiety. Surprisingly, for 70% of them, it’s not because of money issues.

Remembering logins, passwords, and account numbers top the list of what makes bill payment cumbersome. Keeping track of payment due dates is challenging for 41% of those surveyed, especially for younger adults. 30% cite having to navigate poorly designed biller websites and 26% report manually entering payment information further add to consumers’ dissatisfaction with their current bill payment experience. This expectation mismatch is not only potentially damaging billers’ relationships with their customers, but it is also hurting their bottom line as these frustrations can lead to late or missed payments. In fact, more than half of the respondents paid at least one bill late during the past 12 months.

This finding shows just how important focusing on the customer experience is and how much that experience is shaped by expectations. Even though consumers have the financial ability to pay their bills, they are still stressed because the bill payment process is not as seamless as making an Amazon purchase or paying a friend with Venmo.

The survey suggested that nearly a third of respondents saw mobile payment options as key to easier billpay. What are the obstacles to broader mobile payment adoption? 

Anne Hay: One of our survey’s key findings was that billers are slow to adopt new technology. Mindsets need to change. They are not just competing against other entities in their industry, but against the consumer experience expectations influenced by Amazon, Apple, and Uber. They are competing against fast, easy, frictionless innovation.

As payments software is not often a core capability for many billers, working with a modern, future-looking enterprise software platform partner like PayNearMe is key to meeting new customer preferences such as mobile. Not only do we offer a choice of mobile payment channel options, including pay by text, digital wallets (including Apple Pay, Google Pay and more to come soon) and QR codes, but we also incorporate the security features needed to protect mobile payments. With 38% of respondents saying they would be likely or very likely to use Apple Pay and Google Pay to pay their bills if they had this option, innovation matters. The right partner can help billers stay ahead of the latest trends and perfect the customer experience.

Given the rise of QR codes, cryptocurrencies, real-time payments, embedded finance, and more, which innovations in payments excite you most?

Anne Hay: More and more we’re seeing that the phone is primarily the way people interact with the web these days. So not only Apple Pay and Google Pay, but digital wallets as well. Apple just broke news that they signed agreements with eight states to embed driver’s licenses and IDs within their wallets; more and more, digital wallets are becoming the de facto way to handle important personal and financial matters.

Consumers are storing everything in their wallets, and this can include their bills. In fact, our survey found that if given the opportunity, 42% of consumers would be likely or very likely to use their digital wallet to store, view, and pay their bills from a single place. By storing bills in their digital wallets, consumers can access all of their billing information, including their history, which solves a key pain point our survey found.

For those living on their phones, digital wallets give them everything they need, including reminder notifications and payment channels. With a thumbprint or face scan, payment is done. It’s about meeting the consumer where they live. It’s more than just payments; it’s about making the experience as easy as possible for the customer and merchant.

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Women in Fintech: Creating Shared and Seamless Experiences with Mithu Bhargava of NCR

Women in Fintech: Creating Shared and Seamless Experiences with Mithu Bhargava of NCR

How are fintechs helping financial institutions make successful digital transformations? What is required in order for financial institutions to maximize the opportunities available from increasingly ubiquitous enabling technologies to better engage and serve their customers and members? What lessons can we draw from those banks, credit unions, and other financial services providers that have prioritized digital transformation over the past several months?

We checked in with Mithu Bhargava, Senior Vice President and General Manager for NCR’s Global Professional Services Organization to talk about the current pace of digitization in financial services, and what financial institutions are doing to meet their customers’ growing expectations for shared, seamless experiences.

What are the most significant changes NCR has seen in the banking landscape over the past year?  

Mithu Bhargava: The pandemic served as an impetus for banks to digitally transform. While the industry has been talking about digital-first banking for years, Covid-19 firmly accelerated this transformation. At NCR, we were prepared to manage the shift; we have been evolving toward a digital-first and self-directed banking approach for years. As a result, we were able to help banks and credit unions continue to serve their customers and keep operations running even while social distancing. Moving forward, we believe digital-first banking will be the route institutions must take to survive.

Over the past year, we’ve also noticed a growing customer demand for cryptocurrency, which is why NCR recently announced that we’ve entered into a definitive agreement to acquire LibertyX, a leading cryptocurrency software provider. We plan to offer the LibertyX capabilities as part of our solutions for banks, retailers and restaurants across both physical and digital touchpoints. This will ultimately provide a complete digital currency solution for our customers.

It’s time for financial institutions to leverage flexible, modern digital technologies to navigate changing business needs and demands. At NCR, we firmly believe that digital-first banking doesn’t just mean adopting new digital banking tools, a common misconception. Rather, digital-first banking is a shift in mindset; it requires re-imagining an institution’s holistic digital strategy to evolve alongside customer expectations, digitizing all aspects of the financial journey and connecting digital and physical experiences. Financial institutions that focus on creating these shared, seamless experiences are able to differentiate their brand and expand existing customer relationships while attracting new ones. 

Obviously digital experienced a significant uptick because of the pandemic – is that here to stay? What role will branches play in the future?  

Bhargava: Yes, we believe that this trend in digital channels will not be reversed; consumers that traditionally shied away from digital (for example, older generations) have now seen how easy and convenient it is. While the branch will always remain a critical touchpoint, the pandemic has forced the traditional branch model to evolve. Branches are elevating in terms of functionality and services offered. Expect to see more banks and credit unions approach the branch from an advisory perspective, serving as a place for customers and members to go for personal financial advice and complex services—not routine transactions. 

We also anticipate the rise of digital bank branches that leverage self-directed technologies like ITMs and ATMs. Such technologies provide convenience and speed to customers while creating efficiencies for the institutions, enabling them to cost effectively extend service hours. More banks and credit unions are expanding the ITM functionality offered, incorporating more video teller capabilities to maintain the human connection. There will be a shift in how institutions manage these machines, as well; more will transfer the burden of machine maintenance and updates to a trusted partner via the cloud. Such a hosting option makes the self-directed banking channel simpler by offering a better, digital-first customer experience while reducing the total cost and onus of ownership. Branches are evolving to build profitable relationships and long-term loyalty.  

What trends should bankers watch out for here in the second half of the year?  

Bhargava: Customers expect a fast and frictionless experience at every touchpoint, and they’ve proven they’re not afraid to walk away when those expectations aren’t met. Looking forward, there will be a continued (and accelerated) convergence of digital and physical channels. What have traditionally been channel-specific experiences are being made ubiquitous across the bank through software that can connect those experiences.

Self-directed banking will also continue to take off. This approach puts the customer in the driver’s seat, allowing them to decide how they would like to engage with their bank or credit union across all channels and touchpoints. The need for a customer to ever have to work in silos is eliminated, creating a seamless, connected experience. Self-directed banking empowers the customer with flexibility and choice and those banks who embrace the shift will be well positioned for success heading into 2022 and beyond.  

Everyone talks about digital transformation, but many still struggle to get it right. What are some key tips and strategies to make it work?  

Bhargava: I have three thoughts on this. First, too often, we see bankers jump on emerging technology trends versus really evaluating their current gaps and needs. The first key to digital transformation is to focus on your bank’s overall approach; don’t just pick a technology but pick a specific problem area to focus on. Those that leverage rationalization to determine which processes are ready to be digitized right now and which need to be reimagined entirely before digitizing will be best positioned to navigate digital transformation. Digitizing a flawed process typically just makes a cumbersome process faster.

Second, once your bank has the right mindset for digital transformation, it’s time to focus on the people. Engaging the right leadership team with the relevant skillsets will be a huge asset. Digital transformation should be something that’s embraced organization-wide, not just at the leadership level. Make sure to secure buy-in from stakeholders across the institution. In addition to leveraging appropriate people from within the organization, most banks and credit unions find significant value in partnering with technology providers where appropriate to extend reach and come to market better and faster.

Setting goals and clearly defining a realistic digital transformation roadmap from the onset will allow the institution to evaluate progress. Technology should be used to help effectively monitor and measure performance against goals to help keep everyone on track. User feedback should also be evaluated throughout when applicable, not just at the very end. Finally, it’s important to remember to keep it simple. Complexity on the institution’s end can result in friction for customers.

The competitive landscape continues to intensify and grow more complicated – how can community and regional FIs protect their market share?  

Bhargava: The embrace of digital-first banking quickly and completely will position banks and credit unions for success. Why? Digital-first banking creates new and exciting opportunities for traditional institutions who now find themselves up against a slew of emerging fintech companies adept at swiftly closing the widening gaps between yesterday’s and tomorrow’s consumer banking needs. And the world has changed. We will never be the same as we were before March 2020, at least when it comes to how consumers interact and connect with their service providers.

Personalization will also be critical moving forward. Those that continue to leverage marketing campaigns to the masses will quickly turn off customers. Instead, outreach should be intentional and tailored. Institutions have a wealth of data available to them, and it’s time to use it for insights to guide customers in making the smartest financial decisions.

Digital-first banking is all about merging digital and physical experiences to meet customers’ timely financial needs and making it simple to serve the customer across all channels and touchpoints—without breaking the back office. Those that can do this while leveraging their data to personalize engagements will be well equipped to protect their market share and relevance.

Photo by Vraj Shah from Pexels

Scaling Digital Payments Smarter and Growing Businesses Faster with CSG Forte

Scaling Digital Payments Smarter and Growing Businesses Faster with CSG Forte

From the renewed emphasis on contactless commerce to the promise of real-time payments, the business of facilitating transactions for goods and services is as hot a subsector of fintech as any other. To this end, we caught up with Jeff Kump, Head of Payments for recently rebranded CSG Forte, a unified payments platform based in Allen, Texas, to talk about innovations in payments, the power of enabling technologies, and the role played by companies like CSG Forte.

Since 2006, Kump has been tasked with leading and growing CSG Forte’s operational and cross-functional teams. Additionally, he has proven instrumental in advancing CSG Forte’s corporate development and growth strategy, serving as Forte’s COO and CFO before the company’s acquisition by CSG in 2018. During his tenure at Forte, the company was recognized by the Inc. 5000 as one of America’s Fastest Growing Companies for eight consecutive years. The company is an alum of our developers conference, FinDEVr, having hosted presentations on payment technology at events in 2014, 2015, and 2016.

What problem does CSG Forte solve and who does it solve it for?  

Jeff Kump: To start, we offer one of the most complete and customizable payments solutions in the world, enabling companies to scale digital payments smarter and grow their business faster while also reducing costs.  

Offered as a unified end-to-end payments platform, our technology was purposefully engineered to make it easy for companies and integrated software providers to set up, integrate, quickly adapt to changing needs and scale fast—because speed so often translates to success. We have done this by managing the entire payment lifecycle within a single platform, fueled by modern APIs and RESTful architecture that transforms their payments operations into a competitive business strategy. 

This agile foundation has also helped us to succeed across hundreds of industries. It can be difficult to find a partner both competitive on price and legitimately equipped to provide the custom solutions necessary to succeed. Our team leverages deep yet specific channel expertise to support our customers’ verticals, including security, compliance, and integration. 

Our unique approach to payments has enabled us to grow rapidly – outperforming larger competitors and transforming payments from an expense to a critical growth driver. From 2010 to 2018, Forte was, for example, listed on the Inc. 5000 list as one of America’s Fastest Growing Private Companies. Today, we work with over 70,000 merchants across hundreds of industries in North America. 

What impact did the COVID-19 pandemic have on your business? What are some of the biggest takeaways from 2020?  

Kump: When COVID hit, many companies were forced to transform how they interact and support their customers and employees. The pandemic also had a lasting impact on the payments industry, but maybe not in the way that many expected. 

While contactless and mobile payments certainly received their fair share of attention, it was the rapid rally around electric payments that was critical to the success of social distancing, stay-at-home orders and bill payments. Merchants and governments across a range of verticals turned to CSG Forte to get smart in e-commerce – quickly enabling their websites to handle online orders, introducing store-specific apps that allow their customers to shop more easily from home or encouraging pay-by-phone. 

We also saw a surge in self-service payments kiosks and anticipate this interest in these kiosks will increase for businesses and consumers alike who want to arm themselves against future emergencies, rely less on cash, and encourage social distancing habits post-pandemic. Kiosks are a flexible solution, offering a breadth of payment options to support both people using cash (including underbanked populations) and payers who prefer to avoid human interaction. Moving forward, you will see a rise in VR (Voice Response)-enabled and Conversational AI-enabled kiosks that minimize the number of times payers need to touch the screen or keypad. 

Related to the rise of contactless payments, it has not all been hype. As consumers have returned to their normal in-person shopping habits, more and more merchants have turned to CSG Forte in the last year to put in place the point-of-sale infrastructure that supports contactless options and mobile pay.  

Which of the main payment trends – digitalization, tokenization, contactless, the security/fraud challenge etc. – will have the most impact on payments in the near term? What will businesses need to do in order to successfully take advantage of these trends?  

Kump: We think that digitalization is the most important trend for businesses to follow and act on right now – paving the way for the rise in virtual cards, contactless, and other payments advancements.  

Reinforced by COVID, industries are shifting from paper methods to digital processes, and more transactions are taking place online. Digital payment solutions can improve security, accuracy, efficiency and profits, giving businesses a competitive advantage in a digital economy. For instance, ACH payments are more secure and considerably faster than paper checks, cost less to process, and leverage advanced technologies to protect against check fraud, data breaches, and identity theft. 

The challenge of digitalization is addressing the security concerns it presents. With increasing digitalization, hackers gain more access to sensitive data, leaving individuals and enterprises vulnerable. Over half of U.S. merchants have faced a data breach at some point – in 2017, over 19% reported an incident. About 60% of consumers say they will actively avoid businesses that have experienced a recent data breach, especially when it involves credit card information.  

With that in mind, businesses should invest in technologies such as End to End (E2E) encryption, EMV, and tokenization that can mitigate risk related to fraud and security breaches caused by bad actors. E2E encryption can be used alongside digital platforms that support point-of-sale (POS) transactions and IVR phone payments; the technology hides payment information and converts it into an unreadable code as it is transmitted across the payment network that is decrypted with a private key upon reaching the intended destination. Merchants who have POS devices that accept contactless payments are able to securely transmit payment data using EMV technology that works by generating a one-time transaction code. The code is unique to each purchase, eliminating the fraud risk of duplicate credit cards that often occurs with magstripe cards. Tokenization is used for eCommerce, recurring and automated transactions, and stored cardholder data. Tokens replace the payment data with a randomly generated code that can only be exchanged for real data by the payment processor that stores it. These are often used by merchants that offer automatic/recurring payments like subscription- or membership-based services. Tokens are easy to use and effective for the security they provide. Any cybercriminal that gets their hands on tokenized data will find it unreadable, as only payment processors can exchange tokens for real data, ensuring both external and internal protection. 

Implementing secure technology such as E2E encryption and data tokenization can help protect businesses from enduring the negative and costly impact of fraud and data breaches that can also cause reputational harm to their brand. CSG Forte has several solutions that are out-of-box and/or easy to integrate and can reduce the scope and burden of managing PCI and Nacha compliance requirements. Businesses that do not have these protections in place should engage a trusted payment processor, such as CSG Forte, to assist with implementing these necessary security measures. 

CSG Forte announced a partnership with CivicPlus this spring. This reflects one trend – government modernization – that was accelerated by the pandemic. Can you tell us more about the partnership, including how it came about?   

Kump: Government modernization is a hot topic indeed. With many offices closed to the public in 2020 and into 2021, government agencies turned to CSG Forte to quickly evolve the way they do business. In response to sky-high demand, we doubled down on our partnerships and innovations that empower the government vertical in the last year – joining forces with CivicPlus, gWorks, SeamlessDocs, and Accela, to name a few. In 2020, we were also named a preferred partner by Nacha for Government Agency ACH Payment Gateways. 

CivicPlus and our CSG Forte team have been bumping into each other for a couple of years now, having been involved in similar projects with local municipalities and state governments. After a few of these encounters, and one where we helped them to quickly get some new accounts deployed, the idea of a true partnership truly took root – and is what we announced this spring.  

By partnering with CivicPlus, we can offer over 4,000 local governments a full end-to-end payments solution that accelerates the evolution of traditional payments services and meets the needs of today’s digital-savvy citizens while providing key capabilities needed to drive an industry-leading online payments experience. This includes: 

  • Enhanced security: E2E encryption protects sensitive card data throughout the transaction lifecycle 
  • Seamless payments: Secure, online payments received instantly through an intuitive, easy-to-use platform 
  • Check processing with verification: Gives government agencies the ability to accept checks with confidence, providing checking account validation. Verification capabilities meet new requirements set forth by Nacha 
  • Updated payment status: Automatically records the payments status to keep the system updated in real-time 

What else can we expect from CSG Forte over the balance of 2021?  

Kump: First off, we just rebranded the business. Previously known as Forte Payments Solutions, the holistic CSG Forte rebrand includes a new logo, website, and social pages that position CSG’s payments business for rapid growth into new regions and across the hundreds of verticals it serves.  

As we look at innovation and product enhancements for the remainder of the year, our focus at CSG Forte is to simplify the customer experience and improve their journey. Consumers are increasingly interested in Apple Pay and Android Pay, among others, so we are enhancing our product roadmap to include digital wallet options for merchants. Additionally, we are transforming the way that we manage transaction monitoring to ensure a seamless processing experience for merchants.   

Our customer-centric approach is also focused on developing solutions that minimize compliance burdens such as Nacha’s “Supplementing Fraud Detection Standard” mandate, which impacts many of our merchants who leverage ACH services, as well as accelerating value delivery to merchants by reducing onboarding time so they can begin processing transactions faster. We will continue to evolve our payments platform to align with the voice of the customer and ensure we are not only meeting but exceeding their expectations, making ordinary customer experiences extraordinary. 

Jeff Kump is Head of Payments at CSG and leads the newly rebranded CSG Forte business, where he oversees go-to-market strategy and new opportunities in the global payments market. Kump previously served as Head of Operations for Forte, focusing on continuous business process improvement, risk and fraud management and providing an unparalleled customer experience.

Photo by SevenStorm JUHASZIMRUS from Pexels

Women in Fintech: Learning to be Nimble in the Face of Uncertain Circumstances

Women in Fintech: Learning to be Nimble in the Face of Uncertain Circumstances

Our Women in Fintech Series continues with an interview featuring Kathryn Petralia, co-founder of Kabbage, an American Express Company.

We caught up with Kathryn Petralia to discuss her journey to success as the co-founder of Kabbage, an American Express Company, how alternative lending is democratizing access to financial services, and the importance of advocating for inclusion for every employee and end user.

Can you tell us how you got involved in fintech?

Kathryn Petralia: I was always interested in technology, its possibilities and impact, but I never considered it a career until much later. I was on track to earn a masters degree in English when a family friend asked me join a tech company he had invested in at the time. I ended up ditching the graduate program to take advantage of the opportunity.

From there I spent close to 15 years working in the credit, payments, and e-commerce industries, leading strategy and corporate development, as well as founding multiple companies. When my co-founder, Rob Frohwein, approached me about the idea of Kabbage, I immediately saw the potential to help small businesses gain access to capital via real-time data.

What drew you to the world of alternative lending? 

Petralia: I’ve been in alternative lending since the late ’90s, and my passion for helping small businesses has always been a driving force.

I was drawn to alternative lending as it’s a very interesting area of financial services that was ripe for disruption as new technologies paved a path to give customers a better experience.

At the time, I could see that automation and access to real-time data could do away with the lengthy, manual processes which were the status quo in the industry, and democratize access to financial services.

Where did you find support as you were starting out? 

Petralia: It’s important to have a strong partner and support system at home and in the office. I’ve been fortunate that my husband has been an at-home dad for our kids. And I’m an advocate of having a co-founder in business, someone that compliments one another’s strengths and weaknesses, and I’ve been lucky to have Rob a part of this journey.

Kabbage has grown into a hugely successful company. Can you share some of the challenges you have faced on your journey? 

Petralia: It was very challenging to raise money when we first launched Kabbage, especially in Atlanta where the venture community was small and there was not a lot of competition at the time. This unfortunately tends to drive down company valuations. It was hard to get Silicon Valley investors behind Atlanta businesses, but we ultimately succeeded and really raised the profile of Atlanta as a fintech and startup hub.

What advice do you have for small businesses coming through the pandemic?  

Petralia: While businesses were forced to adapt their processes to stay afloat during the pandemic, it’s crucial for them to continue evolving for long-term success. According to our Small Business Recovery Report, 77 percent of small businesses agreed they’re more open than ever before to replace old systems and adopt new technologies to run their company more efficiently.

Be nimble in the face of uncertain circumstances and adopt new technologies that will aid in the success of your business.

Where do you see fintech heading in the next 12 months?

Petralia: The pandemic highlighted where small businesses have cash flow gaps and operational blind spots, so fintechs should shift their focus and offer more comprehensive solutions that address these concerns. Offering a full suite of solutions and integrated platforms can provide business owners with the tools they need to solve their immediate needs while instilling more confidence in how they run their company with data.

What more do you think can be done to support women in fintech?

Petralia: There is so much more we can do to create equality in fintech. The gender disparity in fintech is due, in part, to the tendency of white-male-dominated industries to invest in other white-male-dominated businesses (which is of course true for technology companies generally). We can ensure this situation doesn’t endure by building inclusive products and encouraging leaders to make diverse hires. It’s crucial that we continue promoting policies and products that minimize biases and create a more inclusive industry.

What advice would you give to women starting their careers in the industry now?

Petralia: Women in Fintech must advocate for inclusion not just for leadership, but also for every employee and end user. But as for those women—or men, frankly— just joining the industry or pursuing their goals, I always advise to really take the time to be the smartest about your field, job, or industry. That will earn you seats at tables and trust among executive teams that will help propel you and your career.

Photo by Tim Gouw from Pexels

Imagination is Fundamental: A Conversation with First Internet Bank President Nicole Lorch

Imagination is Fundamental: A Conversation with First Internet Bank President Nicole Lorch

This summer, as part of our Finovate Fintech Halftime Review, we helped make the case for the U.S. midwest as an under-recognized source of fintech innovation.

Today, our conversation with Nicole Lorch of the First Internet Bank is a reminder of what “America’s Heartland” has to offer in terms of leveraging technology to make online banking a reality for small businesses and families. Founded in 1999 and headquartered in Indiana, First Internet Bank was the first state-chartered, FDIC-insured financial institution to offer exclusively online banking services. At the same time, First Internet Bank has continued to emphasize the importance of personal connection and service to the community.

We caught up with Ms. Lorch recently to talk about First Internet Bank, the evolution of online and digital banking, and her goals as the institution’s new President and Chief Operating Officer.

You joined First Internet Bank as Director of Marketing at its launch in 1999. How has the idea of an “Internet bank” changed over the years?

Nicole Lorch: At the time of our launch, we operated as a direct-to-consumer bank with a fairly standard lineup of products: checking, savings, CDs, and credit cards.

While we actually were the first state chartered, FDIC-insured bank to operate entirely online, a number of competitors quickly emerged.  However, many of them couldn’t make it work or were absorbed into another entity:

  • Compubank (Acquired by NetBank)
  • Netbank (Closed by OTS, 2007)
  • Wingspan Bank (Closed by its parent, BankOne, in 2001)
  • ING Direct (Divested U.S. operations, sold U.S. relationships to Capital One)
  • Security First Network Bank (Acquired by Royal Bank of Canada)
  • Telebank (Acquired by E*Trade)

Even with our early successes, many industry pundits believed that moving to more complex banking services, like mortgage and real estate lending, could not be done on a direct-to-consumer, nationwide basis. While we considered ourselves trailblazers in the new world of digital banking, it was critical that we created processes that allowed us to function in a sustainable, repeatable, and compliant way. As a result, we were able to efficiently – and profitably – become leaders in lending.

Imagination has always been fundamental to our existence.  Our innovative approach to banking has continued to play an essential role in the development of First Internet Bank – and with it our ability to build a national lending platform with digital DNA behind it.

How has the challenge of educating the public about the Bank’s offerings changed from a time when there were very few if any “Internet banks” to now when the idea is more commonplace?

Lorch: One thing is certain: it is much easier for people I meet to wrap their heads around the concept of a branchless bank now than it was 22 years ago! The world has changed, and consumers have adapted and embraced the digital realm. From shopping and ordering food to conducting financial transactions, it’s all available instantly at our fingertips. But we need to remember, this is a very human business, not one that should be labeled “contactless.”  We still pride ourselves in delivering the personal service our customers deserve.

Consumer demand and the way people want to access their money has moved in the direction we predicted: more electronic transactions, fewer cash-based transactions … with so few paper checks these days.

What are your first priorities as President and Chief Operating Officer?

Lorch: My new role with First Internet Bank is evolving. But our strategic agenda remains unchanged – which is good for our team because we move fast and get a lot of things done!  We continue to concentrate on improving the customer experience by creating new solutions that foster greater efficiency and ease of use, strengthening our existing business and personal banking relationships, and diversifying our revenue streams. We have a great team that responds to challenges head-on, which makes achieving all our priorities much easier.

What are some of the bigger challenges that financial institutions like First Internet Bank are facing right now?

Lorch: Disruptive fintechs will continue to challenge our industry, bringing with them new consumer expectations and innovation. Fintechs have the ability to disrupt four primary categories of any traditional bank’s business: market share, margins, information security/privacy, and customer churn. However, financial institutions still maintain a greater sense of consumers’ trust. 

Many fintechs do not face the same regulatory demands that chartered, insured depositories do, nor do they face the shareholder expectations of a publicly-traded company.  Having a leaner virtual operation, more flexibility through not being regulated as a deposit-gathering institution and, in many cases, significant venture capital cash allows fintech startups to attract customers with competitive pricing and to move in a more nimble fashion when market conditions dictate. 

We must continue to evolve and look for opportunities where they exist, to meet the changing demands of consumers.  There is, however, one important area where we can continue to win: by providing great, high-touch (human) service that backs up our customer-facing technology.

What do your small business customers need most from First Internet Bank? And what kind of help do your retail customers most frequently request? 

Lorch: Our customers need us to be creative. Sometimes they think they need a line of credit when they really need a term loan. Sometimes they think that they need a conventional product, when they need an SBA loan. We listen to their needs and customize our responses to their situation, instead of talking at them or selling them something they don’t need or want. If we can’t help them, we go so far as to make introductions to other financial institutions that can help them.  

Most importantly, we have always believed that customers need surety of execution and respect for their time. On a loan request, a fast “no” is better than a long, drawn out “maybe.” Whether they are buying a business or a home, they need to know they can count on us to get them to the closing table – and closed – on time.

What of the popular enabling technologies have been most effective in helping First Internet Bank grow its top-line and better engage customers?

Lorch: AI allows us to leverage the data we have to acquire new customers as well as enhance our relationship with existing ones by identifying and offering products, services, features, and partnerships better tailored to their evolving needs. It also assists in fraud prevention.

APIs allow us to extend our platform and rapidly integrate new features, partnering with best-in-class service providers to create a robust, constantly-improving user experience while limiting the burden of legacy technologies and in-house coding.

What are some of the bigger initiatives the bank is pursuing this year?

Lorch: The last eighteen months have really tested our nation’s small business owners. We are poised to help entrepreneurs rebound and accelerate their growth. The pandemic pulled forward consumer acceptance of digital delivery of services by several years. We have a small window, albeit brief, to capitalize on the opportunity to layer our more than 20 years of direct-to-consumer know-how, with a next-generation user-interface, to give consumers a better way to bank.

We are growing our small business lending team while we overhaul the customer experience and our back office processes. It’s like flying the plane while we’re tuning the engine and refurbishing the cabin, but it’s necessary to ensure that our customers receive the level of service they expect from us.

Photo by Allan Mas from Pexels

Women in Fintech: Finding Community and Investing in Social Capital

Women in Fintech: Finding Community and Investing in Social Capital

Our Women in Fintech Series continues with an interview featuring Pauline Roteta, Co-Founder and CEO of Pasito.

We spoke with Pauline to discuss the importance of DEI in current fintech trends, the benefits of finding one’s community, and her journey to founding Pasito, the fintech that delivers financial wellness through inclusive employee benefits.

Pauline will be joining our Women In Fintech Power Panel: Paving The Way For The Next Generation Of Female Founders & Executives – How Can We Reach A Gender-Neutral Future In Financial Services? at FinovateFall next month.

Tell us about yourself.

Pauline Roteta: I went to college to be a Civil Engineer. Growing up in a small town in Argentina, I was awestruck by the sheer size of development in New York and wanted to be part of that continuous cycle of growth. While I cherish the process thinking engineering gave me, after a couple of civil and construction internships, I was hired by Goldman Sachs for the summer and have never looked back.

In finance, I found a community of the sharpest minds tackling global challenges and saw the opportunity to effect impact at scale.

Now a decade later, I can safely say that finance has given me the development and growth I was after. I’ve been part of teams that grew multi-billion dollar businesses from scratch, led acquisitions, raised private equity funds, and I have been the most senior female investor of a private markets investment fund. In 2021, with this experience under my belt, I co-founded Pasito, a female-led fintech delivering inclusive benefits for working parents. As a founder and business leader, I am now even more excited than at the start of my career for the tremendous growth opportunity ahead for fintech companies like Pasito.

How have you seen the industry change across your career?

Roteta: So much has changed in 10 years. When I first joined BlackRock, we were focused on the European Debt Crisis and unraveling legacy portfolios from the 2008 Financial Crisis. While technology was important to the business model, most of our analysis and delivery was in person. The active-passive debate was just starting. Fintech wasn’t mainstream and wasn’t seen as a threat by incumbents.

Fast-forward to today: we’ve seen a proliferation of fintech companies that are effectively competing with long-time incumbents in wealth, banking, and payments. In the space where we are building, there has been less disruption. Plan administrators continue their manual processes. Technology looks like it’s from the first days of the internet. Customers haven’t yet been delighted. Pasito is working on changing that.

Where do you see fintech heading in the next 12 months?

Roteta: After the events of 2020, financial health and diversity, equity, and inclusion will remain top of mind for businesses and the government. We’re seeing employers treat financial and mental wellness with the same care that they treat physical health. That’s a huge win for the retail consumer and creates an opening for new business models in fintech to fill in the gap left behind by wealth management.

When it comes to DEI, we see fintech pushing the boundaries of financial product and service personalization.

While we’ve seen an explosion in fintech, it’s important to remember most of the big problems remain without a solution. The U.S. has never been more unequal. The wealthiest families, who are primarily white, own most of the stock market. Black and Latinx families have limited access to financial advice, and their assets amount to a fraction of the average American household wealth. At Pasito, we are working on closing this gap, one product at a time. Our hope is that more fintechs will build with this mission in mind, rather than continuing to develop products that solidify the status quo.

What more do you think can be done to support women in fintech?

Roteta: We have a long way to go in fintech to reap the benefits of a diverse workforce. The easiest way to begin this work is for leaders in the space – both men and women – to first look inward and ask:

  • What am I doing to actively advance women in fintech?
  • How am I contributing to female-founded and women-led companies and initiatives?
  • How many women are working for my company? (if the answer is not many, then ask WHY?)
  • How is my culture inclusive and inviting to women?

The second easiest way to support women in fintech is to simply listen. What do women need to join the industry? If you ask, they will tell you. (Hint: it usually boils down to equal pay, family-friendly benefits, and flexibility.)

Lastly, invest social and financial capital in women. Women with powerful ideas will not only increase the return on your investment, but also the overall positive impact you can have on the world.

Where did you find support in the fintech world?

Roteta: We’ve seen tremendous support from Startup BostonParenthood VenturesThe Capital Network, other fintech founders, and personal mentors. The insight and community from these networks have been invaluable for Pasito’s early growth stage. Our leadership team is now paying it forward to other founders, so we can collectively level the playing field in hiring, building, and fundraising.

What advice would you give to women starting their careers in the industry now?

Roteta: Be confident. Find your community. Listen to founders who have been there before. Conduct market validation before spending your money. Be selective of your investors. Above all else, stay true to your mission and values.

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Women in Fintech: “Driving Value and Generating Results” with Izabella Gabowicz of Sensibill

Women in Fintech: “Driving Value and Generating Results” with Izabella Gabowicz of Sensibill

Our Women in Fintech Series returns with an interview featuring Izabella Gabowicz, Chief Operating Officer of Sensibill.

An innovator in the field of SKU-level data insights,Toronto, Ontario, Canada-based Sensibill made its Finovate debut in 2017 at FinovateFall. At the event, the company won Best of Show for its Insights solution that helps institutions identify and act upon revenue opportunities from on- and off-card purchase data.

We caught up with Izabella Gabowicz to talk about her work with Sensibill, the importance of achieving a work-life balance, and why everyone benefits when women have a seat at the table when decisions are being made.

Tell us about yourself.

Izabella Gabowicz: I graduated from the University of Toronto with a degree in Cognitive Science and AI, and I joined IBM as a developer in 2001. During my 14 years at IBM, I had the opportunity to work in the airline, banking, and telecommunication industries, improving customer and employee experiences via technology and processes, as well as normalizing data and interfaces to connect disparate systems across enterprises.

The lessons I learned from IBM, such as the importance of value creation, helped me transition into my next role at Sensibill where I became one of the founding team members. Moving from a global organization of a few hundred thousand to a startup of five was energizing. I contributed to product strategy, built client relationships and our client success division from zero, as well as shaped the company’s vision and organizational structure. Today, as COO, I’ve been directly involved in finalizing agreements and rolling out technology to large financial institutions and core banking providers. It’s been a rollercoaster ride, but an incredibly rewarding one.

When I’m not working, you’ll find me trying to stay physically active, which is often outside in nature where I feel connected. I enjoy spending time with my  family — whether that’s weekly dinners with my parents or walking through a nearby creek with my daughters. Over the years, I’ve learned the importance of making time to “refill my cup” in order to show up as my best self at work, while also approaching each new phase of my career as a learning opportunity.

What are some tips for balancing work and life?

Gabowicz: The reality is you can’t do that perfectly, and that’s okay. There’s this myth that successful women always have it all together, and that holds us back because we keep believing we should be able to do it all, all the time. Instead, let’s accept the fact that everything is a series of trade-offs. On the days that I’m pitching to an important client, I’m looking at a messy house – or my parents are helping with childcare so I can travel for business, or my partner is making me dinner when I’m putting in longer days to negotiate an agreement. Sometimes I get the balance right, sometimes I don’t. But giving myself permission to drop some of the balls I’m juggling from time to time and being kind to myself when they do has been game changing.

Why is it important for women to have a seat at the table?

Gabowicz: Businesses need to have decision-makers who reflect and represent the people they serve, which is why it’s critical for women to also be part of the teams making the decisions – at each level. While this concept hasn’t been successfully done at the top levels, technology companies are becoming more mindful of their efforts to be inclusive. Financial institutions have, however, made huge strides in including women – from the working teams that are designing the customer journeys and the leadership teams that are choosing the initiatives to be prioritized, to the board and executives who identify the strategic direction, mission, and corporate objectives. When you belong to the group that is being targeted for a product and/or service, often it can be easier to empathize with their needs and understand them. And since half of the population are women, having a seat at the table is that much more important.

For women who have a seat at the table, be yourself. There are so many of us who feel as if we have to be reserved and polished to be seen as respectable professionals. But I argue that women can be respected because of the concepts and thoughts they bring to the table, as well as their competence, while still feeling empowered to be themselves. And that might include being a little quirky and awkward at times, but that’s okay.

How can women having a seat at the table help drive personalization?

Gabowicz: The key to personalization is to avoid thinking of everyone in any targeted group as having the same thoughts, valuing the same things, and having all the same needs. To humanize the experience, we need to look at customers as microsegments. That requires analyzing additional data, aside from demographics, to inform messaging and advice. Harnessing deeper, contextual data like SKU-level insights can reveal interests, lifestyles, spending habits, and behaviors. This alternative data enables the financial institution to speak to customers on an individual level using language, messaging, and imagery that’s relevant to them, creating an emotionally compelling experience where the customer feels listened to and understood. 

How can financial institutions benefit from harnessing SKU-level data?

Gabowicz: People typically don’t buy products for the sake of making a purchase; they buy them to solve a problem or satisfy a need. A financial institution has a myriad of products it can offer to its customers, involving cards, investments, loans, and so on. But the uptake won’t be there unless the institution is presenting an offer that is personalized, meaningful, and compelling to their customers, at the right time to fit their unique financial needs. If the 360-degree view of a customer is only looking at their interaction patterns, but not the details of their spending and expenses, then there is a lot of rich information being left on the table.

Such details can help pinpoint micro-moments and tailor messages that attract and retain customers. For example, the bank or credit union might see two customers spend $100 at Costco, but SKU-level data can reveal customer A might be an expecting mother and B a small business owner. Messages and interactions will need to be personalized for individual financial needs, which can look very different person to person.

What advice would you share for women professionals looking to break into the field?

Gabowicz: What’s exciting to me about technology today is that “business” and “technology” are no longer separate. It’s not sufficient to build software that just meets basic requirements. There must be value created, the experience must be compelling, and companies must consider how they position the innovation in the market, onboard users, and explain its value proposition. Today’s technology jobs are not limited to writing code but can include designing the user experience, architecting systems, creating go-to-market plans, and more.

Future professionals should not shortchange any industry experience they have already amassed, but consider how they can leverage and sell it when looking for opportunities in tech. People are graduating every day with computer science and engineering degrees, and they need to work with talented professionals who can help them build products that serve the needs of all people. Together, they can create AI algorithms that are less susceptible to bias, considering all types of people in the training set.

As I think about my professional journey, I’ve learned the following:

  • There is substantial value in learning and growing — anything can be attainable, and there are always multiple paths to any one destination.
  • We’re all humans, which means we need connection, empathy, space to be ourselves, ease, and convenience. This knowledge can apply to building solutions for customers, fostering diversity in the workforce, or encouraging women building their careers to be as kind to themselves as they are to others.
  • And lastly, outcomes matter. You need to consider both data and behavioral psychology when building strategies to drive value and generate results that make a difference.

Photo by Scott Webb from Pexels

Quantum Metric on Agile Operations and Fintech Innovation

Quantum Metric on Agile Operations and Fintech Innovation

The partnership between Quantum Metric and U.S. Bank was major part of the conversation on digital transformation in financial services at FinovateSpring in May. Quantum Metric, headquartered in Colorado Springs, Colorado, and founded in 2015, leverages its Continuous Product Design (CPD) platform to enable business, product, and technical teams to build better digital products faster. With partners ranging from Alaska Airlines to Western Union, Quantum Metric helps businesses access the customer insights that guide and inform development process.

We caught up with Michael Hanson, Regional Vice President of Banking and Financial Services at Quantum Metric, to find out what banks and fintechs can learn from Quantum Metric’s experience in collaborating with U.S. Bank. A textbook case of “two great tastes that taste great together,” Quantum Metric and U.S. Bank showed attendees what’s possible when companies with track records of innovation and a shared commitment to collaboration come together.

On the breadth of digital experience in financial services

When you think about digital experiences, it’s more than just a website. It can be a native application. It could be your tablet experience – depending on the demographic. It could be ATMs – ATMs are essentially a branch within a digital device – as well as kiosks in the traditional storefronts and branches that tend to be the bridge between the traditional banking relationship and a digital self-service relationship.

On the value of a company-wide embrace of agile operations

That means that marketing is now going to be agile. So instead of trying to craft some type of new product or new pitch and then releasing it out in the wild and seeing maybe in six months if it worked and delivered … No! We want to launch something, but we want to know immediately, in real-time, (and) understand if it’s working or not working, if there’s an opportunity to drive some type of improvement. It’s literally agile operations, which has been around for decades, but is now being deployed across the organization.

On the challenge of overcoming “technical debt”

There are long-term contracts and on-premises solutions that are baked into current workflows and current processes. And so as you’re learning new tricks, so to speak, (the question is): how do we quickly retool and empower our employees with the technologies that are going to support those new processes and support some of those new tricks that we’re teaching folks?

Photo by Brett Sayles from Pexels