JJ Hornblass 0:01
Hi everyone. I’m JJ Hornblass and welcome to FinTech Unfiltered from Bank innovation, the leading digital news service for the financial technology and FinTech sectors. This is our weekly wrap for what’s going on in banking innovation during the week of October 12 2020. Before we get into the heart of our discussion, want to thank the bank innovation advertisers for their support, and they are Blend, Q2E Banking, and Mambu. So thank you to them for their support. And I am pleased to be joined by Bianca Chan, the newly designated and promoted deputy editor of bank innovation. welcome our new deputy editor. It is Friday, October 16 2020. This week, new Coronavirus cases again started rising nationwide heading towards a third peak as cases spiked in 41 states and the number of Americans known to have been infected by COVID topped the 8 million mark. Third quarter third quarter earnings season started with banks reporting mainly positive results or at least positive within the context of COVID. We’re gonna talk about earnings in just a moment. Data released this week showed that retail sales increased 1.9% in September, as consumers spend strongly on clothing, vehicles and sporting goods. President Trump this week confirmed that his deaths exceed $400 million. And finally, tab, as the Wall Street Journal put it is getting can’t Coca Cola will stop selling tab. Its first diet soda and a 1970s pop culture icon by the end of the year. And I know I am saddened by the news. But we turn our attention to earnings. So the major banks reported this week Bank of America chase city among others, and shared some of their digital numbers for the third quarter, a pivotal quarter I would say Bianca in regards to digital banking considering what has happened nationwide. So what are some of the kind of Gleanings that we can we can extract from earnings as it relates to banking innovation and digital banking? From this week’s announcements?

Bianca Chan 3:10
Yeah, so this week, JPMorgan Chase, third quarter earnings, and we also took a look at Bank of America has earnings as well. And now, two things that kind of stuck out to me was the year over year growth in active digital users and active mobile users. I expected it to be higher, kind of given the coronavirus pandemic. So let’s see Bank of America Act digital users were flat year over year mobile banking users were only up 300,000 to 30 point 6 million from q2, which is very surprising. Given that, you know, people were expecting these Digital Trends to kind of accelerate and it seems like they’ve kind of flattened out the curve is I guess you would say flat though. At chase the digital users up only 3% year over year mobile users up 9% year over year. So despite the fact that these these major banks continue to make investments on these platforms, it doesn’t really seem like it’s translating to in like a notable increase in in new users.JJ Hornblass 4:23
Yeah, I had the same. I had the same reaction. I was kind of surprised to see the growth rates not exceeding what they did. I mean, especially when even though the mobile active users at chase were up about 9%. Still when you look at you know the last few years, that’s a that’s kind of a that’s kind of par for the course, type a number not necessarily the type of significant increase that I would expect. Do you have theory on why the growth rates were in is at whirring greater despite the pandemic.Bianca Chan 5:08
You know, it’s it’s so strange the year we are numbers just they don’t make sense kind of given what services were available in person and which ones were available digitally, I think at least at Chase, now, they’ve got definitely, I think, upwards of 60% of their customer, their total customer, retail customer base on mobile. So maybe it’s just that kind of stubborn last 35% that we kind of hear people speak about, you know, kind of being hesitant or unwilling to adopt these digital channels. But it seems like, I’m unsure if it’s a reality that these banks will ever reach, you know, 100% of their retail customers on on these digital channels.JJ Hornblass 5:51
Yeah, I mean, we’re talking, you know, ma use. So I think part of this is not sure we have a standard definition or criteria for what each of these financial institutions considered to be a mobile active user. And, and also, you know, we really don’t have as much of a window into the usage trends. So it could be that that usage usage went up, it’s just that new users didn’t necessarily increase that much. I mean, overall, you can, you know, you’ve have, you know, the growth rate in customers, in new customers, at these large institutions isn’t necessarily growing at, you know, internet rates, as we would say, so, um, you know, it, it’s a, it’s an interesting, if there was some surprises in it, but I think you could kind of chalk it up to maybe some, you know, maybe, maybe there’s more underneath that number, then then we recognize, so we can see at this point,Bianca Chan 7:12
that’s actually a really good point. also highlight in the chase earnings was that quick deposit, which is there, the mobile deposit service, jumped to 40% of all check deposits in q3 up from 30%. So we’re seeing you know, and, you know, if you, if you were a person who, you know, wasn’t using mobile check deposits prior to the pandemic, I’m sorry for you, because it’s kind of a, it’s a very easy service to use. And so we’re seeing a check, deposit, mobile check deposit. And then also on the bank of america side, while the retail numbers were kind of flat, in terms of, you know, new users, we did see in the earnings, some acceleration on their cash pro platform, which is the bank’s platform for businesses, to manage their payments, invest, receive funds, whatnot. So it’s on the business side, we’re seeing cash Pro, gain, some traction, some numbers here, mobile logins are up 54%, year over year on cash Pro, and there are now about 500,000, online cash pro users. And it just so happens that bank of america launched three new API’s on cash Pro, about two weeks ago, they announced at the cybus conference. And that brings the total number of API’s offered on that platform to more than 50.

JJ Hornblass 8:38
So tell us a little bit more about the API’s that they that they introduced last week, what was kind of the could you you know, Was there some underlying strategy? Or are they just covering areas that the previous IPOs did not cover?

Bianca Chan 8:55
They are covering Yes, the previous areas. So the the APIs and cash pro span, eight different categories, real time payments, push notifications, data exchange, so So that sort of thing. And these three API’s, they’re very, they’re very specific use cases, but they kind of fall into those areas. So it seems like Castro focuses on eight main areas, and then they’re kind of fleshing out those areas. So the first is foreign exchange settlement. Second is check image retrieval for Account Reconciliation. And then there’s a reporting API, which apparently of the three has been the most popular so far Since launching and pilot, which basically allows businesses to better pull to more easily pull data and organize and manage it for analysis.

Unknown Speaker 9:43
I mean,

JJ Hornblass 9:45
I guess you can, you can’t link the growth in cash pro logins, or new users. It’s new users, correct? Yeah, New Year’s. I don’t think you can connect the two To the new API’s, they’re just too new to have their influence. But it is interesting to see, it will be interesting to watch like whether or not they’re, you know, whether or not adding API’s from a from kind of a overall usage standpoint, eventually finance, you know more logins and and, and usage of cash pro itself. Because functionality increases or something or it’s like, you know, there’s a pass through dynamic where they get access to cashew cash pro through other means.

Bianca Chan 10:42
Well, you know, what’s really interesting is I spoke with the head of cash Pro, Tom Durkin, and he said that, you know, real time payments are something that are or, you know, operating in real time is something that’s very, it’s almost table stakes in retail banking, but on the commercial side, and business banking, it’s still behind. And so it seems like, yes, while the the acceleration on cash flow usage can’t necessarily be tied to the API’s, it seems like maybe they’re looking at, you know, where can we kind of put our tech resources in, in what we have experience in when it seems like the retail side is maybe topping out?

JJ Hornblass 11:23
Yeah, yeah. Well, I mean, 500,000 users on, you know, Bank of America levels is just pittance. You know, when you consider the number of clients that they have, I don’t know, the business, the commercial banking client number, but it’s got to be, you know, well in excess of 500,000. So there’s probably some, you know, there’s some growth for them to have there. The The other interesting, another interesting news development was the greenlight chase partnership this week. Bianca, maybe give us a little background on that. And my my question around this partnership is, you know, seems like a really big deal for Greenlight. But to what degree is this a big deal for chase?

Unknown Speaker 12:18
Well, maybe this might be the redemption moment

Bianca Chan 12:20
for Chase. It’s not there. It’s not their first it’s not their foray into you know, launching specific, specific brands or products aimed at age groups. We know that the bank shuttered fin, which was the personal finance app that was you know, built outside of the the chase banking app that basically shut down after one year

Unknown Speaker 12:45
after launching this.

JJ Hornblass 12:48
So what are they trying to do with green light, though?

Bianca Chan 12:50
So green light, it should be noted, okay. So green light is a it’s a FinTech. It’s personal finance, kind of FinTech that focuses on the intersection of, you know, parents and kid money management. And so it should be noted that this this Chase, first banking, which is what the product is called, is built into chases mobile app, and it’s targeting a slightly younger age group. So as young as 12, six, six, and then 212. And then once the kid turns 13, they graduate to the team, the team version, which I which is inside also the Chase Mobile app. So it’s a big deal for Greenlight. It’s their first time kind of white labeling their technology. And it’s kind of it’s kind of signaling maybe they’re going also after a b2b business in addition to their, you know, direct to consumer business, which has also been growing and greenlighted. It should also be noted, just raised over 200 million a few weeks ago.

JJ Hornblass 13:50
Yeah, I can’t help but think about one of the startups in IMV FinTech of Gora services, which is our sister accelerator, that is developing a challenger bank applications for incumbent banks that are segmented teams tene, small business etc. So there’s sort of like segmented bank services, but you know, meaning full stack services. That it seems I mean, clearly chases has has embraced this notion.

Bianca Chan 14:30
Yeah, I mean, I’m not in business marketing at all, but I don’t see how this good. I just don’t see how this really resonates. If I’m a six year old kid, am I really going to be excited about a digital banking app where my parents can monitor my spending? What am I even spending when I’m six?

JJ Hornblass 14:51
Ah, pizza.

Unknown Speaker 14:55
I don’t know. I don’t know.

JJ Hornblass 14:57
We’ll leave that aside. Now, let’s look ahead to next week and to what we’re planning. I know we have earnings coming. More earnings are being reported ally came out with earnings today and there are more. There’s more earnings reports next week. So we’ll be looking at the digital banking side of that. And what else are we planning for next week, Bianca.

Bianca Chan 15:22
We are looking at more core tech integration specifically looking at community banks, which is interesting. You bring up a Gora because I think a Gora is also targeting that kind of community bank segment, which, you know, it’s tough to kind of compete with the big leagues chase launching, you know, similar products. And so we’re looking at how these smaller sized institutions are keeping up. Yeah.

JJ Hornblass 15:48
And until then, so you should check that out on bank innovation dotnet that would be my, that would be the bottom line. And you should also be sure to rate FinTech unfiltered on your podcast platform. And I want to thank everyone for joining us and and once again, congratulate Bianca on her promotion, and we will see you all on bank innovation dotnet thanks so much. Thank you

JJ Hornblass 0:01
Hi everyone. I’m JJ Hornblass and welcome to FinTech Unfiltered from Bank innovation, the leading digital news service for the financial technology and FinTech sectors. This is our weekly wrap for what’s going on in banking innovation during the week of October 12 2020. Before we get into the heart of our discussion, want to thank the bank innovation advertisers for their support, and they are Blend, Q2E Banking, and Mambu. So thank you to them for their support. And I am pleased to be joined by Bianca Chan, the newly designated and promoted deputy editor of bank innovation. welcome our new deputy editor. It is Friday, October 16 2020. This week, new Coronavirus cases again started rising nationwide heading towards a third peak as cases spiked in 41 states and the number of Americans known to have been infected by COVID topped the 8 million mark. Third quarter third quarter earnings season started with banks reporting mainly positive results or at least positive within the context of COVID. We’re gonna talk about earnings in just a moment. Data released this week showed that retail sales increased 1.9% in September, as consumers spend strongly on clothing, vehicles and sporting goods. President Trump this week confirmed that his deaths exceed $400 million. And finally, tab, as the Wall Street Journal put it is getting can’t Coca Cola will stop selling tab. Its first diet soda and a 1970s pop culture icon by the end of the year. And I know I am saddened by the news. But we turn our attention to earnings. So the major banks reported this week Bank of America chase city among others, and shared some of their digital numbers for the third quarter, a pivotal quarter I would say Bianca in regards to digital banking considering what has happened nationwide. So what are some of the kind of Gleanings that we can we can extract from earnings as it relates to banking innovation and digital banking? From this week’s announcements?

Bianca Chan 3:10
Yeah, so this week, JPMorgan Chase, third quarter earnings, and we also took a look at Bank of America has earnings as well. And now, two things that kind of stuck out to me was the year over year growth in active digital users and active mobile users. I expected it to be higher, kind of given the coronavirus pandemic. So let’s see Bank of America Act digital users were flat year over year mobile banking users were only up 300,000 to 30 point 6 million from q2, which is very surprising. Given that, you know, people were expecting these Digital Trends to kind of accelerate and it seems like they’ve kind of flattened out the curve is I guess you would say flat though. At chase the digital users up only 3% year over year mobile users up 9% year over year. So despite the fact that these these major banks continue to make investments on these platforms, it doesn’t really seem like it’s translating to in like a notable increase in in new users.JJ Hornblass 4:23
Yeah, I had the same. I had the same reaction. I was kind of surprised to see the growth rates not exceeding what they did. I mean, especially when even though the mobile active users at chase were up about 9%. Still when you look at you know the last few years, that’s a that’s kind of a that’s kind of par for the course, type a number not necessarily the type of significant increase that I would expect. Do you have theory on why the growth rates were in is at whirring greater despite the pandemic.Bianca Chan 5:08
You know, it’s it’s so strange the year we are numbers just they don’t make sense kind of given what services were available in person and which ones were available digitally, I think at least at Chase, now, they’ve got definitely, I think, upwards of 60% of their customer, their total customer, retail customer base on mobile. So maybe it’s just that kind of stubborn last 35% that we kind of hear people speak about, you know, kind of being hesitant or unwilling to adopt these digital channels. But it seems like, I’m unsure if it’s a reality that these banks will ever reach, you know, 100% of their retail customers on on these digital channels.JJ Hornblass 5:51
Yeah, I mean, we’re talking, you know, ma use. So I think part of this is not sure we have a standard definition or criteria for what each of these financial institutions considered to be a mobile active user. And, and also, you know, we really don’t have as much of a window into the usage trends. So it could be that that usage usage went up, it’s just that new users didn’t necessarily increase that much. I mean, overall, you can, you know, you’ve have, you know, the growth rate in customers, in new customers, at these large institutions isn’t necessarily growing at, you know, internet rates, as we would say, so, um, you know, it, it’s a, it’s an interesting, if there was some surprises in it, but I think you could kind of chalk it up to maybe some, you know, maybe, maybe there’s more underneath that number, then then we recognize, so we can see at this point,Bianca Chan 7:12
that’s actually a really good point. also highlight in the chase earnings was that quick deposit, which is there, the mobile deposit service, jumped to 40% of all check deposits in q3 up from 30%. So we’re seeing you know, and, you know, if you, if you were a person who, you know, wasn’t using mobile check deposits prior to the pandemic, I’m sorry for you, because it’s kind of a, it’s a very easy service to use. And so we’re seeing a check, deposit, mobile check deposit. And then also on the bank of america side, while the retail numbers were kind of flat, in terms of, you know, new users, we did see in the earnings, some acceleration on their cash pro platform, which is the bank’s platform for businesses, to manage their payments, invest, receive funds, whatnot. So it’s on the business side, we’re seeing cash Pro, gain, some traction, some numbers here, mobile logins are up 54%, year over year on cash Pro, and there are now about 500,000, online cash pro users. And it just so happens that bank of america launched three new API’s on cash Pro, about two weeks ago, they announced at the cybus conference. And that brings the total number of API’s offered on that platform to more than 50.

JJ Hornblass 8:38
So tell us a little bit more about the API’s that they that they introduced last week, what was kind of the could you you know, Was there some underlying strategy? Or are they just covering areas that the previous IPOs did not cover?

Bianca Chan 8:55
They are covering Yes, the previous areas. So the the APIs and cash pro span, eight different categories, real time payments, push notifications, data exchange, so So that sort of thing. And these three API’s, they’re very, they’re very specific use cases, but they kind of fall into those areas. So it seems like Castro focuses on eight main areas, and then they’re kind of fleshing out those areas. So the first is foreign exchange settlement. Second is check image retrieval for Account Reconciliation. And then there’s a reporting API, which apparently of the three has been the most popular so far Since launching and pilot, which basically allows businesses to better pull to more easily pull data and organize and manage it for analysis.

Unknown Speaker 9:43
I mean,

JJ Hornblass 9:45
I guess you can, you can’t link the growth in cash pro logins, or new users. It’s new users, correct? Yeah, New Year’s. I don’t think you can connect the two To the new API’s, they’re just too new to have their influence. But it is interesting to see, it will be interesting to watch like whether or not they’re, you know, whether or not adding API’s from a from kind of a overall usage standpoint, eventually finance, you know more logins and and, and usage of cash pro itself. Because functionality increases or something or it’s like, you know, there’s a pass through dynamic where they get access to cashew cash pro through other means.

Bianca Chan 10:42
Well, you know, what’s really interesting is I spoke with the head of cash Pro, Tom Durkin, and he said that, you know, real time payments are something that are or, you know, operating in real time is something that’s very, it’s almost table stakes in retail banking, but on the commercial side, and business banking, it’s still behind. And so it seems like, yes, while the the acceleration on cash flow usage can’t necessarily be tied to the API’s, it seems like maybe they’re looking at, you know, where can we kind of put our tech resources in, in what we have experience in when it seems like the retail side is maybe topping out?

JJ Hornblass 11:23
Yeah, yeah. Well, I mean, 500,000 users on, you know, Bank of America levels is just pittance. You know, when you consider the number of clients that they have, I don’t know, the business, the commercial banking client number, but it’s got to be, you know, well in excess of 500,000. So there’s probably some, you know, there’s some growth for them to have there. The The other interesting, another interesting news development was the greenlight chase partnership this week. Bianca, maybe give us a little background on that. And my my question around this partnership is, you know, seems like a really big deal for Greenlight. But to what degree is this a big deal for chase?

Unknown Speaker 12:18
Well, maybe this might be the redemption moment

Bianca Chan 12:20
for Chase. It’s not there. It’s not their first it’s not their foray into you know, launching specific, specific brands or products aimed at age groups. We know that the bank shuttered fin, which was the personal finance app that was you know, built outside of the the chase banking app that basically shut down after one year

Unknown Speaker 12:45
after launching this.

JJ Hornblass 12:48
So what are they trying to do with green light, though?

Bianca Chan 12:50
So green light, it should be noted, okay. So green light is a it’s a FinTech. It’s personal finance, kind of FinTech that focuses on the intersection of, you know, parents and kid money management. And so it should be noted that this this Chase, first banking, which is what the product is called, is built into chases mobile app, and it’s targeting a slightly younger age group. So as young as 12, six, six, and then 212. And then once the kid turns 13, they graduate to the team, the team version, which I which is inside also the Chase Mobile app. So it’s a big deal for Greenlight. It’s their first time kind of white labeling their technology. And it’s kind of it’s kind of signaling maybe they’re going also after a b2b business in addition to their, you know, direct to consumer business, which has also been growing and greenlighted. It should also be noted, just raised over 200 million a few weeks ago.

JJ Hornblass 13:50
Yeah, I can’t help but think about one of the startups in IMV FinTech of Gora services, which is our sister accelerator, that is developing a challenger bank applications for incumbent banks that are segmented teams tene, small business etc. So there’s sort of like segmented bank services, but you know, meaning full stack services. That it seems I mean, clearly chases has has embraced this notion.

Bianca Chan 14:30
Yeah, I mean, I’m not in business marketing at all, but I don’t see how this good. I just don’t see how this really resonates. If I’m a six year old kid, am I really going to be excited about a digital banking app where my parents can monitor my spending? What am I even spending when I’m six?

JJ Hornblass 14:51
Ah, pizza.

Unknown Speaker 14:55
I don’t know. I don’t know.

JJ Hornblass 14:57
We’ll leave that aside. Now, let’s look ahead to next week and to what we’re planning. I know we have earnings coming. More earnings are being reported ally came out with earnings today and there are more. There’s more earnings reports next week. So we’ll be looking at the digital banking side of that. And what else are we planning for next week, Bianca.

Bianca Chan 15:22
We are looking at more core tech integration specifically looking at community banks, which is interesting. You bring up a Gora because I think a Gora is also targeting that kind of community bank segment, which, you know, it’s tough to kind of compete with the big leagues chase launching, you know, similar products. And so we’re looking at how these smaller sized institutions are keeping up. Yeah.

JJ Hornblass 15:48
And until then, so you should check that out on bank innovation dotnet that would be my, that would be the bottom line. And you should also be sure to rate FinTech unfiltered on your podcast platform. And I want to thank everyone for joining us and and once again, congratulate Bianca on her promotion, and we will see you all on bank innovation dotnet thanks so much. Thank you