JJ Hornblass, Royal Media CEO

Hi everyone. I’m JJ Hornblass and welcome to Fintech Unfiltered from Bank Innovation, the leading digital news service on banking technology and FinTech. This is our Weekly Wrap on what’s happening in banking innovation this week. Before beginning a great thanks go out to our bank innovation, advertisers Mambu, Cardlinks and OneSpan for their support. So thank you very much to them. And I’m pleased to be joined by Bianca Chan and Rick Morgan, from Bank Innovation. Hello to you both. It is Friday, December 4, 2020. This week, the United Kingdom was the first nation to approve a coronavirus vaccine; vaccinations in Great Britain are expected to begin within days. President Elect Biden named several members of his economic team this week, and they include Janet Yellen as his Treasury Secretary nominee. Neera Tanden, who is head of the think tank Center for American Progress to be his Director of the Office of Management and Budget. Cecilia Rouse, Princeton University labor economist, as his choice to be Chairwoman of the Council of Economic Advisers. Wally Adeyemo, who was an economic adviser to the Obama administration, to be Ms. Yellen’s top deputy. And Jared Bernstein and Heather Boushey as members of the Council of Economic Advisers alongside Ms. Rouse. Also this week, Salesforce announced that it would acquire Slack for $27.7 billion while Standard and Poor’s said it would acquire IHS Market for $44 billion. This week, a COVID relief bill seems to be closer to reality, as cases continued to surge nationwide, and in South Africa, on Tuesday night, the Powerball drawing featured the numbers 5,6,7,8 and 9. And the Powerball was yes, you guessed it 10. The South African lottery commission said an internal investigation confirmed that no fraud had occurred in this growing in case you are wondering, for us. Our news coverage centered around really highlighted two separate issues. It had two separate highlights. One was an interview that we did with Scott Case, who is the Truist chief information officer, several insights into Truist’s strategy. Bianca, what struck you as most significant about the Truist strategy, you know, post, the BB&T and SunTrust merger?

Bianca Chan, deputy editor of Bank Innovation

Yeah, so Scott mostly talked about, he’s the guy who’s in charge of actually overseeing the day to day operation of the merger, and also just the overall execution of it as well. And he mentioned to us that as they are going through this merger, they’re taking every step they can to modernize their systems. So that is the infrastructure. So how the tech is set up, and also the architecture. And so there’s two kinds of interesting arms to this, the modernizing of the architecture is really what he said comes down to rewriting applications with API’s. So creating more API enabled and across Truist’s systems, which basically comes down to how Truist is connected with other systems like external systems, and then also internally into, you know, like its core deposit platform, let’s say or what’s mainframe modernizing of the infrastructure. He spoke about really automation efforts around the software engineering and software development processes at truist. Ken Meyer at Bank Automation Summit spoke about how Truist is hiring more of its own software engineering talent. And you can see how they’re really kind of putting a lot of focus on making that more of a streamlined approach. So we talked about two different principles. One is called CICD and the other one’s called DevOps. And what they really come down to is, well, CICD stands for continuous integration, continuous delivery, and it’s a way of Kind of automating, and also monitoring, application, testing development, and then also pushing that through testing environments, development environments all the way through to production. And then DevOps is complementary to that. It’s kind of combining development teams, operational teams, and having that kind of shared responsibility between them to ensure just, you know, the smooth delivery of new code changes, and also the monitoring of that. So it’s really interesting to see.

JJ Hornblass

This is clearly like the most significant merger in banking in recent years, and certainly the most significant banking merger this year. So, I mean, did you get a sense for timing and, you know, just kind of how far along they are in this more an automated and an open banking kind of technology posture?

Bianca Chan 

So currently, SunTrust has been kind of modernizing its own back end tech for some years now. It’s really a combination of the legacy bank, SunTrust and BB&T. Currently, they’re about 50% of their back end systems are API enabled. And when they’re through the end of this merger, Scott had mentioned in a few years from now, it should reach two thirds of their systems being API enabled. So that kind of gives us somewhat of a sense. He did say they were being opportunistic in this approach. They’re not just, you know, trying to make their systems API enabled just for the sake of it. They’re doing it with purpose. So he did say, during the call that they’re probably never going to reach 100% of API enablement. And it’s not saying they want to do either.

JJ Hornblass  

I mean, how does that rank? Or how does that sort of jive with what you’ve seen at other financial services? Both to both of you? I mean, is that the 50% API enabled? Or two thirds? Where does that stand on the spectrum of kind of open banking enabled financial institutions?

Bianca Chan 

I think it really depends on the size of the institution, and kind of like how innovation forward they’re thinking, I think, for the size of Truist. The age of the two legacy banks that make it up, I think it’s pretty impressive, to be honest.

Rick Morgan, news editor at Bank Innovation

Yeah, and also, you know, these large banks that have the technology abilities to to create a more API enabled system. Obviously, they’re an advantage compared to maybe a smaller bank that might not have the resources in house to build something like that; they’re more dependent on the core providers to give them that technology. And that makes it more of a struggle.

JJ Hornblass 

Rick, the second thing that we can have featured this week was a really deep look into new ways that banks are processing customer feedback, and then also expressing, you know, presenting user experience. What are some of the key highlights from that reporting endeavor that you undertook? 

Rick Morgan

I found it interesting, just how much stock banks are placing in qualitative data and not just quantitative data. So feedback through the app store feedback through customer service channels. In addition to the hard, you know, quantitative data is still important. But you hear a lot about banks, you know, bringing customers in to do desirability testing, where they look at the app, and they just list emotions, or they pick from a group of emotions, in terms of how it makes them feel. You see banks, bringing in customers to actually help them out with card sorting, or like mapping out the customer journey with, you know, post it notes. And that premium on emotion and how that makes you feel is informing a lot of what things do in addition to the obviously, you know, important hard data, and those, you know, dwell time, you know, monthly active users, the number of times a user opens an app per month, that’s still important, but tying in that, that qualitative data is becoming increasingly important.

JJ Hornblass  

I mean, doesn’t the bottom line really matter? Right, doesn’t the quantitative performance really matter in terms of consumption of banking products and even time and so on. I mean, we want banking to be emotional?

Rick Morgan

Yeah, I mean, that’s an interesting conundrum because banking by its nature is transactional, you don’t go into a banking app to, you know, scroll through feeds or anything like that you go there to pay bills, you go there to check on your balances. So that hard data in terms of how you use the bank on a consistent basis, probably still is a major driver of banks. And, you know, banks, look, they still mentioned this, and they, they still talk about how important it is. And I think that probably is the gold standard in a lot of ways. But I think it’s just, I don’t think qualitative data is replacing quantitative data, I think it’s just, it’s complementing and they’re trying to use it in a way that makes the app a little bit more engaging, and a little bit more inviting.

Bianca Chan 

Which makes sense also, because you hear a lot about banks talk about, you know, we want to be there where our customers are, and we want to be embedding our experiences into where our customers are spending their time. So it makes sense, as banking kind of makes this move almost outside of what traditional just transactional banking is, it kind of makes sense that they’d have more of this emphasis on, like, lifestyle approach.

JJ Hornblass  

Look, you’ve got a circumstance right now in this country, for also around the world, but let’s just talk about the United States. I mean, you know, the mental health issues as a result of the pandemic, have skyrocketed, at levels of anxiety among people. I mean, it’s it, you know, it’s, it’s too soon to tell, you know, the sort of really hardcore results from the pandemic on, unfortunately, suicide and overdoses and so on. But it’s pretty much accepted that these are on the rise. That they’re higher as a result of the pandemic. So, you know, to tie in the emotions, or to seek out the emotions among their customers, for how, you know, they’re how the experience is, from an emotional standpoint. I mean, I think there’s, there’s so much it, we have so much work, there’s so much pent up these days, they would, it seems like it’s a it’s a reasonable thing to say, you know, are we amplifying the anxiety that is in, you know, American society today? Through our, you know, expression of financial state, and so on?

Rick Morgan  

Yeah, I mean, that’s definitely something that I think banks are conscious of, and a lot of what I heard was, you know, we want this to be the opposite of anxiety inducing, we want you to open the app, and feel like you have control of your finances and not just have it be a stressful experience. So yeah, I think that given this mental health crisis that’s emerging from the Coronavirus is, of course, very serious. And I think it’s something that banks are doing their best through their UX experience to, to trying to make those banking experiences less intimidating and not add to the stress of, you know, Americans are already facing that they don’t need more than when they open their bank app.

JJ Hornblass  

I guess the question is kind of like, to what degree can that? Can it be impactful or meaningful? I don’t know what opinions you have on this. To what degree can they modulate the anxiety of, you know, how many millions of people are unemployed in the United States today?

Rick Morgan

Yeah, I don’t think they can, you know, nullify that by any means. But I think it probably the best course of action for banks would be through their services and through their products to mitigate anxiety, you know, deferrals on repayments and low interest loans when customers need them. And when they’re in a pinch, and on helping small businesses that can’t stay open, I think that’s gonna probably be more impactful than the UX of an app.

JJ Hornblass 

For sure. So, next week, Bianca, what’s on the slate at Bank innovation?

Bianca Chan  

Yeah, we’re gonna be taking a deep dive on some new technology and projects coming out of TD and then also taking a look at some new automation technologies as it relates to the identity verification process and KYC.

JJ Hornblass  

Right. Thank you. And thank you all so much for joining us. We really want to hear from you. So let us know how we’re doing. Either rate the podcast or drop us a note. You could visit us on Twitter and LinkedIn. And of course, visit us at finainews.com where there’s just a whole ton of information for you on fintech and banking technology. Thank you all so much for joining us. We’ll see you next time.