Whitney McDonald 0:04
Hello and welcome to The Buzz, a bank automation news podcast. My name is Whitney McDonald and I’m the deputy editor of bank automation news. Joining me today is president of Zeta Gary Singh. He’s here to discuss the essentials of card programs, and how technology can provide transparency and solutions to create individualized program offerings.Gary Singh 0:28
Hi, Whitney, glad to be here today. My name is Gary saying I’m with Zeta services as the president focusing on the US banks at the moment, which is where the company is positioned in terms of what our mission is, for the next foreseeable future. The company itself is roughly about eight years ago, eight years old. And it was started by two founders Palantir rakia and key Counterparty. They’re serial entrepreneurs. And they built, you know, internet sort of software services over the last 20 plus years. And they sort of about eight years ago, was looking at their next big ambition and in terms of looking at opportunities in different industries. And they stumbled upon the fact that the banking industry, for some reason has been sitting in the past or legacy world for the last 40 years. And that prompted them to question why is this industry still sitting on top of stacks that were developed 40 years ago. And then once they understood the challenges and the opportunities in that market, they said, Okay, this is ripe market for disruption, and really bringing the whole market into a modern environment. So they started, self funded the company and they started writing the code, roughly in 2015 timeframe, with no projections on revenue, they said, Let’s just build the right banking stack. And then we’ll figure out the revenue. And that’s kind of where our journey started in terms of these two founders really questioning what’s going on in the market and say, might as well start with a clean slate of paper, because nobody else is doing it. So let’s let’s, let’s say to do it.Whitney McDonald 2:20
Now, before we get into the technology component, component of card programs, maybe we can talk through where card programs stand today and set the scene.

Gary Singh 2:32
Sure, Whitney, let me just take a step back, you know, from a high level perspective on the banking industry first, as I mentioned, in the introduction, I think most of your audience members, if they work at a bank, or a credit union, or even at a FinTech in the market, they all pretty much know that they’re stuck in the legacy world, you know, they have had this challenge, you know, obviously, for even when when 2000 came around, you know, it is rough, it’s tough, 23 years ago, right? The whole idea was, you know, with that sort of change, everybody would move off from you know, older languages like COBOL, etc. But unfortunately, you know, this industry has been stuck there, for various reasons. And I think some of them come down to regulation, lack of options in the market. And then on top of that, you know, just vendor lock in, there’s long contracts, you know, the audience is pretty much stuck with those contracts for five, seven or 10 years. And they just have a hard switching cost from vendor to vendor B. And when they look at the vendor B, they still find it’s going from legacy to legacy, so they’re not getting any better in the industry. The second part of that is, you know, the whole ecosystem is very complex, there’s many, many pieces of software that comes together to deliver you know, the credit card you have in your in your wallet, or the debit card you have in your wallet. So because it’s a highly highly integrated complex system, you know, it just becomes that much harder for them to look for a solution, whether it’s, you know, incremental innovation, or it’s a leapfrog innovation, you know, our focus is more on leapfrog innovation. But until this time, they never had a solution for it. So the art of possible was never in their minds, they’re basically saying, This is what the, this is what I have in my hands, and this is all I can do with it. And unfortunately, the problem that has come out of this is that because everybody’s working on the legacy stacks from 40 years ago, everybody’s caught up there everybody’s product is identical from one one to the other. There’s no differentiation your card from you know Bank A or your Card from Bank B has a APR, a fee or award program, and then you kind of try to build around you know, which rewards is better versus the others who’s your acquisition strategy, etc. But generally speaking, everybody, this is a commodity product in the market thanks to the legacy stacks, because they don’t allow you to differentiate. So that’s, you know, part of the problem second part of the problem is that, that they the way they try to build their portfolio is they try to do core brands, right. So you can do a co brand with merchant X merchant, why travel, airlines, you know, hotels, even that space is basically fully exhausted, right? There’s only so many large core brands. And now you basically shopped around, but the corporates do the merchant side is, which bank can give me the best deal. Again, it’s a race to the bottom. So now you have a commoditized product, and everything is based on price. So it’s a tough business to be in that sense, scale does matter, when you have a large scale, you can survive longer. But disruption is starting to happen, just like it happened in the depot space, etc. So that’s kind of like, you know, the basic sort of stage of the industry, if you will, where the market is now what the market is, obviously, there will be thrilled to see, you know, alternate options in the marketplace. And the first sort of view into that came into the prepaid market. So, you know, when the early, you know, fintax, or neobanks, came into the market, you know, whether it be bar or chime, and some of the others, they showed that, hey, look, you know, buy a differentiated product, which is more personalized to the audience that they’re trying to serve, which in most of their cases, was a younger demographic, they were able to differentiate the product and grow their business rapidly, right, from zero to 10 million of zero to 2 million, or 14 million in the US population at a population that is bankable, you know, it’s roughly about 100 and 80 million right at the end of the day. So for them to have that kind of inroads, you know, fundamentally on a differentiated product, you know, tells the banks that there’s an opportunity to fundamentally transform their whole business all the way from, you know, credit cards, to debit cards, to prepaid cards, to checking accounts, savings accounts, and perhaps even loan products, whether it’s auto or mortgage, I’m talking predominantly retail now, not necessarily commercial or, you know, small business at this point. So, hopefully, that gives you an idea about, you know, where the market is today, highly, highly commoditized, highly price sensitive, with long term contracts and vendor login. So it’s not really a good position for a innovative bank, to really say, hey, what can I do to really, you know, grow my business, or drive loyalty with my customer base, etc, everybody’s trying to fight for the four cards you have in your wallet? Which one, as they call, it is the top of all that right? And it’s hard, it’s hard to basically say, which one is the which one, are you going to prefer make the toggle, you will change your patterns and behaviors, you know, based on the best deal you get in the market?

Whitney McDonald 7:32
So to solve for that, where does technology really fit in to ensure that card programs do stay relevant and profitable?

Gary Singh 7:43
Yeah, I mean, first of all, they’re already they are profitable, I would say that, with all that in place, the opportunity in front of the banks is tremendous. Because even today, I think, in most cases, the car program is the most profitable asset, a bank has more profitable than a mortgage more profitable, I’m talking just from, you know, a return on equity or return on the investments that they’re making into this. So but you have to run it the right way. Meaning that you have to drive the consumer to select your card as a preferred card, you’re driving transactions on it, and then perhaps even using the car, if you think about a loyalty program, right? At the end of the day, Whitney, this is the only loyalty program that a bank has, is a credit card, you don’t have a loyalty program with debit, you don’t have a loyalty program with a mortgage, you know, that’s a transaction that happens every 10 years, or if the interest rates close down, everyone wants to refinance every two years. Again, that’s also race to the bottom and then you have the you know, auto loans, you know, which typically these days you buy pretty much from the manufacturer, because they can get a very better deal from from the Toyota’s then they can do from a large bank. So the credit card definitely should be the tip of the spear to basically develop a customer relationship that is long, standing from a loyalty perspective, because there’s a stickiness to it, right, because you get hooked on the rewards. And if you if that becomes your primary, you know, product, then you can basically start to showcase the value proposition on your debit or checking your savings, your mortgages, as well as your auto loans, etc. And you can basically make that into a seamless journey where the modern stack comes into play. First of all, it’s a LeapFrog. And that doesn’t mean that there’s a huge risk and conversion, you know, banks have always been converting from vendor to vendor B for price and efficiencies. So, so there’s no risk in sort of the technology conversion. In this case, you’re going from legacy to modern, which is gonna get better, your life is gonna get better, your efficiency is gonna get better. But there’s definitely an awareness that you need to have a new in terms of what a modern stack could do for you. But the core of a modern stack is a it is built on, you know, a cloud native of architecture that’s most, that’s where monostatic, Zeno’s is built as well, we also go one step further, we make it cloud natives, so are agnostic as well. So you can run it on Azure, or, you know, Google or you can run it on AWS, again, we’re trying to make sure there’s no vendor lock in across any of the assets that we bring to the table. But what what the bank, what we do from a modern perspective is because we sort of decomposed it, and then rebuilt the whole stack, all of these payment products are unified on a zebra platform, or a modern platform like ours. So in other words, you know, if you’re a bank, you can basically have a credit card program and a debit card program in the same platform. That’s like unheard of in the industry today. These are not only separate technology stacks, but they’re also separate business units. So there’s really no cooperation between the debit team at a bank and a credit team and a bank. And therefore, they’re not able to cross sell and drive value or extract value in a customer relationship. So having a unified stack that can do, you know, debit, credit, prepaid, you can just imagine, let’s start with a clean sheet of paper, let’s say, you know, there’s a person who’s 15 years old, who’s starting to get into the financial markets, you know, today, they may be getting, you know, hard currency from their parents to go spend, as you know, allowances and things like that. But let’s say you know, as Apple card did, you know, give them a credit card to start working with that with controls in place. And then as their journeys evolving, and they go 18, and they go to college, or they go into a trade or whatever their next career development plan is, you give them a credit builder product, right, which is fundamentally a prepaid card, operating as a as a credit card, but they’re running on the same system, right? It’s not running on a prepaid system and a credit system. And then you open up a debit account, which is on a different system. That’s why today, your your banking, relationships are all fragmented, I’m sure you have, personally, but you probably have three or four banking relationships, if not more than that, right. So if you start the journey the right way, and say you start with a sort of a control product first, which is a parent’s product that you’re basically using, then you move into a credit builder product, and then you graduate into a full blown credit product. Now that you have that you have now started building your credit file, and therefore as you graduate from college and getting your first job or your crate, whatever you’re you’re, you’re 21 years old, you start to graduate from there into a, you know, a full blown savings account or a checking account, because you’re making money now, right, and then you graduate from there into an auto product, if you want to buy a new car, because you’re using your parents car or your you know, Henry down car at this point. And then as life goes on your mortgages, you know, start. So all of that sitting on the same system is what the power of the new platforms is, versus having 19 different systems that don’t talk to each other. And each one of them has its own relationship with the consumer in the marketplace. So so that’s the power of the future with a modern tech platform, such as as.

Whitney McDonald 13:10
So I guess the key is getting there getting to that. Getting to that type of program where it works that way. What will that entail?

Gary Singh 13:24
Yeah, so this is, you know, so it’s a great thing that, you know, companies like Zetas are producing these modern stacks, right? It requires the bank or the credit union to really think about, okay, what do I do with this modern stack? How do I start my journey? And, and we’ve seen both models, we’ve seen some strategic bets by large banks. And there’s a large bank and international bank that we work with, they’re they’re the number one, you know, bank in their own country as an example. So their CEO said, Look, I understand the value of the stock, this is the future. And I no longer want to drive my bank by looking at the rear view, rear view window. Right, let me see what I want to take this bank into the future as my country’s economy is growing. And I want to basically you know, gain my my fair share at the marketplace. So they made a big bet, they said fundamental transformation of every single product. So I’m gonna bring all my new customers on a modern platform. So let me just make that switch they want I don’t want to do any conversion because, you know, that’s people who are using my product seem to be okay with it, but I’ll move them because my growth is so spectacular in the market because the economy is booming, the GDP is great, etc. In this particular case, so they made a strategic map to say I’m gonna go all in but then they phase it out. They say okay, product A, B, C, and D over five years. I launched these five products and then after the imperil I’ll start the conversion so that in five year time or six years time, everything is on the new platform. This is credit debit, prepaid commercial fleet, saving As loans and checking accounts, right one platform, and then the other ones basically say, hey, and this is more more, I’d say US centric, let me just launch a credit card program on a modern platform. And then I slowly start to bring the next project and the next project because I have these vendor lock ins, right, my contract for credit is, with a vendor a maybe expires in two years, and my debit expires in three years, I can phase these in and also get more comfortable with this new technology. Because the other piece with this transformation is there’s so much possible with it, that I could spend four hours with you today to talk about what the possibilities are. But at the very surface, right, you’re going to drive more revenue for the company or for the bank, you’re gonna have a competitor, you know, a differentiated product, which is unheard of, you know, you can create anything you want, in the bank that you want, you’re not limited by a legacy stack. And you will drive efficiencies in terms of your cost, right, because the legacy, what you do is you put more people on the on the problem. And sometimes you putting people on the problem and outdated technology. So just imagine you’re trying to restore a car from 1940, it’s going to cost you $100,000 to restore that car, you know, versus having a brand new car that you know, is going to be driving in out of the parking lot. It’s faster, quicker, efficient self drives itself cuts all these things, right? It will be less cheaper to do that, right? In terms of the transformation. So when you do these transformations from legacy to modern, there’s a lot of efficiencies that comes down to people processes and operations. So you have to think about okay, what does this mean for my Dysport dispute group? What does this mean for my customer service group? What does this mean for my product managers? Because not you want finally, you’re not in a brake fixed mode, you’re basically into an innovation mode. So that shift needs to happen in the banks simultaneously. So our approach typically is okay, where are you strategically at the CEO level at the division level? And then based on that decide, you know, what your entry point is? Is it going to be a debit program? Is it going to be a credit program, build a lot of learnings and best practices from him and then rapidly start to implement other other payment programs and products? For the bank itself?

Whitney McDonald 17:23
Yeah, I know, you just talk through the improvements that this can bring to an institution. Any anything else regarding kind of what what this brings for the either future of card programs or even just the future of payments?

Gary Singh 17:38
Yeah, absolutely. So I think there’s a, you know, there’s two sort of schools of thought, right? One is, you know, tried and tested legacy, I know how it works. And I feel comfortable kind of staying there into the near future as well. Is that a riskier decision than trying a more modern platform and saying, hey, I can really set myself and my bank for the future. Right? Those are the decisions most of the banks are making, I think I would say 100% of them are at that junction, some people are, you know, ready to move today. Some people say, Hey, I’m gonna wait it out for a couple more years. And kind of see where I, the thing I will caution your audience on is that when you’re when you talk about modernization, and you talk digital innovation just accelerates at an exponential rate. So for you to fall behind, is much easier in the modern world than it is perhaps in the legacy world, the physical world, right, because things just move slowly. So you had ample time to catch up, like I said earlier in the, in the conversation. So with that sort of, you know, mindset, if you will, you know, you have to start thinking about, you know, what is my strategy? What is riskier strategy? Do I stay with the legacy? Do I go with a modern platform? And then, you know, the, the, it’s all about thinking about what is the roadmap that you want to drive? First of all, there is a fundamental mindset shift, because today, they don’t have a roadmap. The reason they don’t have a roadmap is because the vendors can provide them a roadmap. Now suddenly, they have the keys to the to the to the to the wall, oh, my God, I can do all these things. Now. Now, it’s a question of prioritization of what should I start delivering to my customers? What’s the strategy that I want to build around it? And also, keep in mind that digital capabilities will go exponentially through the roof, their efficiencies will go exponentially through the roof. And finally, they have to look at new trends, right, new trends that we see today in the market are embedded banking. So if sets themselves for embedded banking, so what’s their roadmap for that modern platform will get you there, but you need to have a strategy to execute a bet in banking on top of this, you can’t do that some legacy, you can do it on modern. So suddenly, that sort of opportunity opens up for these for the banks, ups and barrel, the regulation is always changing, right, sometimes faster than the innovation of the banks itself. So how do you keep up with the regulation and how do you basically make that as a friend for example, In the credit card space, there’s a lot of conversation or banking in general, right? The fee structure is under in under threat today, by the by by the regulators. So how do you basically say, okay, if I’m going to lose this revenue stream, how do I offset this with this revenue stream, a simple example of that would be in the payment space, what you know, the example I gave in the market is the Apple card again, because they have definitely been innovative, and we have to give them credit for that. So how basically as a primary cardholder easily within my app, I can issue a secondary card to my spouse or to my kids, if I’m at that stage of my life, right, with a couple of clicks to the the app, you’re able to get get there. You’re able to think about hyper personalized solutions for your audiences today, the credit card and your your that you have in your in your purse, there is no digital voice there, right? I mean, if you look at your app, it’ll tell you when to pay your bill. That’s pretty much the extent of your app. So how do you make that app a little bit more informative? educative every transaction transaction, in other words becomes information for you and meaningful for you. So you can start to look at how are you spending the money? How are you getting the rewards, what’s the best bang for the buck in terms of where to spend the money with this credit card, etc, how to basically optimize your payment schedules and things like that. And so those are the capabilities that start to come in terms of the modern platforms. So that’s kind of, you know, kind of the the main points that I would make on, you know, the areas of opportunity of how to really transform your, you know, payment products, whether it’s credit, debit, prepaid doesn’t really matter, it comes down to the bank strategy, but the art of the possible is there. And the most important part is, you now have control back from your vendors, the way like I said, the switching cost as high as you locked into these legacy systems. And you’re really at their mercy, like if they get a feature up, and it’s takes two years or five years, or whatever it is. Now, it’s all digital, you have all the API’s that you that, that the platform can offer you. And you can construct those products, you can start with a credit builder product that automatically graduates into a full credit product, from a credit product, you can automatically create BNPL offerings, so you don’t have to have BNPL as a separate segment of the industry. It’s all about okay, do I have a high value transaction? Because I’m going to Home Depot, why are we losing by this bank lose that sale because Home Depot is selling you a better solution for that, for buying that refrigerator than the bank does, right? You lose that transaction. So that journey goes from start to finish with these modern platforms, you can start integrating it and like I said, you know, this is kind of like you’re basically have a treasure box in your hand. And now you’re just trying to figure it out. What am I going to do with this? And you can start slow and say I just got better at like what I’m doing today. Let me replicate that in modern, get a little bit comfortable. Think of this as a you know, tricycle when you’re learning with three wheels and then move from there to say, okay, you know, for my audiences, you know, this is what’s important. Let me go start delivering the services to the market.

Whitney McDonald 23:18
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Whitney McDonald 0:04
Hello and welcome to The Buzz, a bank automation news podcast. My name is Whitney McDonald and I’m the deputy editor of bank automation news. Joining me today is president of Zeta Gary Singh. He’s here to discuss the essentials of card programs, and how technology can provide transparency and solutions to create individualized program offerings.Gary Singh 0:28
Hi, Whitney, glad to be here today. My name is Gary saying I’m with Zeta services as the president focusing on the US banks at the moment, which is where the company is positioned in terms of what our mission is, for the next foreseeable future. The company itself is roughly about eight years ago, eight years old. And it was started by two founders Palantir rakia and key Counterparty. They’re serial entrepreneurs. And they built, you know, internet sort of software services over the last 20 plus years. And they sort of about eight years ago, was looking at their next big ambition and in terms of looking at opportunities in different industries. And they stumbled upon the fact that the banking industry, for some reason has been sitting in the past or legacy world for the last 40 years. And that prompted them to question why is this industry still sitting on top of stacks that were developed 40 years ago. And then once they understood the challenges and the opportunities in that market, they said, Okay, this is ripe market for disruption, and really bringing the whole market into a modern environment. So they started, self funded the company and they started writing the code, roughly in 2015 timeframe, with no projections on revenue, they said, Let’s just build the right banking stack. And then we’ll figure out the revenue. And that’s kind of where our journey started in terms of these two founders really questioning what’s going on in the market and say, might as well start with a clean slate of paper, because nobody else is doing it. So let’s let’s, let’s say to do it.Whitney McDonald 2:20
Now, before we get into the technology component, component of card programs, maybe we can talk through where card programs stand today and set the scene.

Gary Singh 2:32
Sure, Whitney, let me just take a step back, you know, from a high level perspective on the banking industry first, as I mentioned, in the introduction, I think most of your audience members, if they work at a bank, or a credit union, or even at a FinTech in the market, they all pretty much know that they’re stuck in the legacy world, you know, they have had this challenge, you know, obviously, for even when when 2000 came around, you know, it is rough, it’s tough, 23 years ago, right? The whole idea was, you know, with that sort of change, everybody would move off from you know, older languages like COBOL, etc. But unfortunately, you know, this industry has been stuck there, for various reasons. And I think some of them come down to regulation, lack of options in the market. And then on top of that, you know, just vendor lock in, there’s long contracts, you know, the audience is pretty much stuck with those contracts for five, seven or 10 years. And they just have a hard switching cost from vendor to vendor B. And when they look at the vendor B, they still find it’s going from legacy to legacy, so they’re not getting any better in the industry. The second part of that is, you know, the whole ecosystem is very complex, there’s many, many pieces of software that comes together to deliver you know, the credit card you have in your in your wallet, or the debit card you have in your wallet. So because it’s a highly highly integrated complex system, you know, it just becomes that much harder for them to look for a solution, whether it’s, you know, incremental innovation, or it’s a leapfrog innovation, you know, our focus is more on leapfrog innovation. But until this time, they never had a solution for it. So the art of possible was never in their minds, they’re basically saying, This is what the, this is what I have in my hands, and this is all I can do with it. And unfortunately, the problem that has come out of this is that because everybody’s working on the legacy stacks from 40 years ago, everybody’s caught up there everybody’s product is identical from one one to the other. There’s no differentiation your card from you know Bank A or your Card from Bank B has a APR, a fee or award program, and then you kind of try to build around you know, which rewards is better versus the others who’s your acquisition strategy, etc. But generally speaking, everybody, this is a commodity product in the market thanks to the legacy stacks, because they don’t allow you to differentiate. So that’s, you know, part of the problem second part of the problem is that, that they the way they try to build their portfolio is they try to do core brands, right. So you can do a co brand with merchant X merchant, why travel, airlines, you know, hotels, even that space is basically fully exhausted, right? There’s only so many large core brands. And now you basically shopped around, but the corporates do the merchant side is, which bank can give me the best deal. Again, it’s a race to the bottom. So now you have a commoditized product, and everything is based on price. So it’s a tough business to be in that sense, scale does matter, when you have a large scale, you can survive longer. But disruption is starting to happen, just like it happened in the depot space, etc. So that’s kind of like, you know, the basic sort of stage of the industry, if you will, where the market is now what the market is, obviously, there will be thrilled to see, you know, alternate options in the marketplace. And the first sort of view into that came into the prepaid market. So, you know, when the early, you know, fintax, or neobanks, came into the market, you know, whether it be bar or chime, and some of the others, they showed that, hey, look, you know, buy a differentiated product, which is more personalized to the audience that they’re trying to serve, which in most of their cases, was a younger demographic, they were able to differentiate the product and grow their business rapidly, right, from zero to 10 million of zero to 2 million, or 14 million in the US population at a population that is bankable, you know, it’s roughly about 100 and 80 million right at the end of the day. So for them to have that kind of inroads, you know, fundamentally on a differentiated product, you know, tells the banks that there’s an opportunity to fundamentally transform their whole business all the way from, you know, credit cards, to debit cards, to prepaid cards, to checking accounts, savings accounts, and perhaps even loan products, whether it’s auto or mortgage, I’m talking predominantly retail now, not necessarily commercial or, you know, small business at this point. So, hopefully, that gives you an idea about, you know, where the market is today, highly, highly commoditized, highly price sensitive, with long term contracts and vendor login. So it’s not really a good position for a innovative bank, to really say, hey, what can I do to really, you know, grow my business, or drive loyalty with my customer base, etc, everybody’s trying to fight for the four cards you have in your wallet? Which one, as they call, it is the top of all that right? And it’s hard, it’s hard to basically say, which one is the which one, are you going to prefer make the toggle, you will change your patterns and behaviors, you know, based on the best deal you get in the market?

Whitney McDonald 7:32
So to solve for that, where does technology really fit in to ensure that card programs do stay relevant and profitable?

Gary Singh 7:43
Yeah, I mean, first of all, they’re already they are profitable, I would say that, with all that in place, the opportunity in front of the banks is tremendous. Because even today, I think, in most cases, the car program is the most profitable asset, a bank has more profitable than a mortgage more profitable, I’m talking just from, you know, a return on equity or return on the investments that they’re making into this. So but you have to run it the right way. Meaning that you have to drive the consumer to select your card as a preferred card, you’re driving transactions on it, and then perhaps even using the car, if you think about a loyalty program, right? At the end of the day, Whitney, this is the only loyalty program that a bank has, is a credit card, you don’t have a loyalty program with debit, you don’t have a loyalty program with a mortgage, you know, that’s a transaction that happens every 10 years, or if the interest rates close down, everyone wants to refinance every two years. Again, that’s also race to the bottom and then you have the you know, auto loans, you know, which typically these days you buy pretty much from the manufacturer, because they can get a very better deal from from the Toyota’s then they can do from a large bank. So the credit card definitely should be the tip of the spear to basically develop a customer relationship that is long, standing from a loyalty perspective, because there’s a stickiness to it, right, because you get hooked on the rewards. And if you if that becomes your primary, you know, product, then you can basically start to showcase the value proposition on your debit or checking your savings, your mortgages, as well as your auto loans, etc. And you can basically make that into a seamless journey where the modern stack comes into play. First of all, it’s a LeapFrog. And that doesn’t mean that there’s a huge risk and conversion, you know, banks have always been converting from vendor to vendor B for price and efficiencies. So, so there’s no risk in sort of the technology conversion. In this case, you’re going from legacy to modern, which is gonna get better, your life is gonna get better, your efficiency is gonna get better. But there’s definitely an awareness that you need to have a new in terms of what a modern stack could do for you. But the core of a modern stack is a it is built on, you know, a cloud native of architecture that’s most, that’s where monostatic, Zeno’s is built as well, we also go one step further, we make it cloud natives, so are agnostic as well. So you can run it on Azure, or, you know, Google or you can run it on AWS, again, we’re trying to make sure there’s no vendor lock in across any of the assets that we bring to the table. But what what the bank, what we do from a modern perspective is because we sort of decomposed it, and then rebuilt the whole stack, all of these payment products are unified on a zebra platform, or a modern platform like ours. So in other words, you know, if you’re a bank, you can basically have a credit card program and a debit card program in the same platform. That’s like unheard of in the industry today. These are not only separate technology stacks, but they’re also separate business units. So there’s really no cooperation between the debit team at a bank and a credit team and a bank. And therefore, they’re not able to cross sell and drive value or extract value in a customer relationship. So having a unified stack that can do, you know, debit, credit, prepaid, you can just imagine, let’s start with a clean sheet of paper, let’s say, you know, there’s a person who’s 15 years old, who’s starting to get into the financial markets, you know, today, they may be getting, you know, hard currency from their parents to go spend, as you know, allowances and things like that. But let’s say you know, as Apple card did, you know, give them a credit card to start working with that with controls in place. And then as their journeys evolving, and they go 18, and they go to college, or they go into a trade or whatever their next career development plan is, you give them a credit builder product, right, which is fundamentally a prepaid card, operating as a as a credit card, but they’re running on the same system, right? It’s not running on a prepaid system and a credit system. And then you open up a debit account, which is on a different system. That’s why today, your your banking, relationships are all fragmented, I’m sure you have, personally, but you probably have three or four banking relationships, if not more than that, right. So if you start the journey the right way, and say you start with a sort of a control product first, which is a parent’s product that you’re basically using, then you move into a credit builder product, and then you graduate into a full blown credit product. Now that you have that you have now started building your credit file, and therefore as you graduate from college and getting your first job or your crate, whatever you’re you’re, you’re 21 years old, you start to graduate from there into a, you know, a full blown savings account or a checking account, because you’re making money now, right, and then you graduate from there into an auto product, if you want to buy a new car, because you’re using your parents car or your you know, Henry down car at this point. And then as life goes on your mortgages, you know, start. So all of that sitting on the same system is what the power of the new platforms is, versus having 19 different systems that don’t talk to each other. And each one of them has its own relationship with the consumer in the marketplace. So so that’s the power of the future with a modern tech platform, such as as.

Whitney McDonald 13:10
So I guess the key is getting there getting to that. Getting to that type of program where it works that way. What will that entail?

Gary Singh 13:24
Yeah, so this is, you know, so it’s a great thing that, you know, companies like Zetas are producing these modern stacks, right? It requires the bank or the credit union to really think about, okay, what do I do with this modern stack? How do I start my journey? And, and we’ve seen both models, we’ve seen some strategic bets by large banks. And there’s a large bank and international bank that we work with, they’re they’re the number one, you know, bank in their own country as an example. So their CEO said, Look, I understand the value of the stock, this is the future. And I no longer want to drive my bank by looking at the rear view, rear view window. Right, let me see what I want to take this bank into the future as my country’s economy is growing. And I want to basically you know, gain my my fair share at the marketplace. So they made a big bet, they said fundamental transformation of every single product. So I’m gonna bring all my new customers on a modern platform. So let me just make that switch they want I don’t want to do any conversion because, you know, that’s people who are using my product seem to be okay with it, but I’ll move them because my growth is so spectacular in the market because the economy is booming, the GDP is great, etc. In this particular case, so they made a strategic map to say I’m gonna go all in but then they phase it out. They say okay, product A, B, C, and D over five years. I launched these five products and then after the imperil I’ll start the conversion so that in five year time or six years time, everything is on the new platform. This is credit debit, prepaid commercial fleet, saving As loans and checking accounts, right one platform, and then the other ones basically say, hey, and this is more more, I’d say US centric, let me just launch a credit card program on a modern platform. And then I slowly start to bring the next project and the next project because I have these vendor lock ins, right, my contract for credit is, with a vendor a maybe expires in two years, and my debit expires in three years, I can phase these in and also get more comfortable with this new technology. Because the other piece with this transformation is there’s so much possible with it, that I could spend four hours with you today to talk about what the possibilities are. But at the very surface, right, you’re going to drive more revenue for the company or for the bank, you’re gonna have a competitor, you know, a differentiated product, which is unheard of, you know, you can create anything you want, in the bank that you want, you’re not limited by a legacy stack. And you will drive efficiencies in terms of your cost, right, because the legacy, what you do is you put more people on the on the problem. And sometimes you putting people on the problem and outdated technology. So just imagine you’re trying to restore a car from 1940, it’s going to cost you $100,000 to restore that car, you know, versus having a brand new car that you know, is going to be driving in out of the parking lot. It’s faster, quicker, efficient self drives itself cuts all these things, right? It will be less cheaper to do that, right? In terms of the transformation. So when you do these transformations from legacy to modern, there’s a lot of efficiencies that comes down to people processes and operations. So you have to think about okay, what does this mean for my Dysport dispute group? What does this mean for my customer service group? What does this mean for my product managers? Because not you want finally, you’re not in a brake fixed mode, you’re basically into an innovation mode. So that shift needs to happen in the banks simultaneously. So our approach typically is okay, where are you strategically at the CEO level at the division level? And then based on that decide, you know, what your entry point is? Is it going to be a debit program? Is it going to be a credit program, build a lot of learnings and best practices from him and then rapidly start to implement other other payment programs and products? For the bank itself?

Whitney McDonald 17:23
Yeah, I know, you just talk through the improvements that this can bring to an institution. Any anything else regarding kind of what what this brings for the either future of card programs or even just the future of payments?

Gary Singh 17:38
Yeah, absolutely. So I think there’s a, you know, there’s two sort of schools of thought, right? One is, you know, tried and tested legacy, I know how it works. And I feel comfortable kind of staying there into the near future as well. Is that a riskier decision than trying a more modern platform and saying, hey, I can really set myself and my bank for the future. Right? Those are the decisions most of the banks are making, I think I would say 100% of them are at that junction, some people are, you know, ready to move today. Some people say, Hey, I’m gonna wait it out for a couple more years. And kind of see where I, the thing I will caution your audience on is that when you’re when you talk about modernization, and you talk digital innovation just accelerates at an exponential rate. So for you to fall behind, is much easier in the modern world than it is perhaps in the legacy world, the physical world, right, because things just move slowly. So you had ample time to catch up, like I said earlier in the, in the conversation. So with that sort of, you know, mindset, if you will, you know, you have to start thinking about, you know, what is my strategy? What is riskier strategy? Do I stay with the legacy? Do I go with a modern platform? And then, you know, the, the, it’s all about thinking about what is the roadmap that you want to drive? First of all, there is a fundamental mindset shift, because today, they don’t have a roadmap. The reason they don’t have a roadmap is because the vendors can provide them a roadmap. Now suddenly, they have the keys to the to the to the to the wall, oh, my God, I can do all these things. Now. Now, it’s a question of prioritization of what should I start delivering to my customers? What’s the strategy that I want to build around it? And also, keep in mind that digital capabilities will go exponentially through the roof, their efficiencies will go exponentially through the roof. And finally, they have to look at new trends, right, new trends that we see today in the market are embedded banking. So if sets themselves for embedded banking, so what’s their roadmap for that modern platform will get you there, but you need to have a strategy to execute a bet in banking on top of this, you can’t do that some legacy, you can do it on modern. So suddenly, that sort of opportunity opens up for these for the banks, ups and barrel, the regulation is always changing, right, sometimes faster than the innovation of the banks itself. So how do you keep up with the regulation and how do you basically make that as a friend for example, In the credit card space, there’s a lot of conversation or banking in general, right? The fee structure is under in under threat today, by the by by the regulators. So how do you basically say, okay, if I’m going to lose this revenue stream, how do I offset this with this revenue stream, a simple example of that would be in the payment space, what you know, the example I gave in the market is the Apple card again, because they have definitely been innovative, and we have to give them credit for that. So how basically as a primary cardholder easily within my app, I can issue a secondary card to my spouse or to my kids, if I’m at that stage of my life, right, with a couple of clicks to the the app, you’re able to get get there. You’re able to think about hyper personalized solutions for your audiences today, the credit card and your your that you have in your in your purse, there is no digital voice there, right? I mean, if you look at your app, it’ll tell you when to pay your bill. That’s pretty much the extent of your app. So how do you make that app a little bit more informative? educative every transaction transaction, in other words becomes information for you and meaningful for you. So you can start to look at how are you spending the money? How are you getting the rewards, what’s the best bang for the buck in terms of where to spend the money with this credit card, etc, how to basically optimize your payment schedules and things like that. And so those are the capabilities that start to come in terms of the modern platforms. So that’s kind of, you know, kind of the the main points that I would make on, you know, the areas of opportunity of how to really transform your, you know, payment products, whether it’s credit, debit, prepaid doesn’t really matter, it comes down to the bank strategy, but the art of the possible is there. And the most important part is, you now have control back from your vendors, the way like I said, the switching cost as high as you locked into these legacy systems. And you’re really at their mercy, like if they get a feature up, and it’s takes two years or five years, or whatever it is. Now, it’s all digital, you have all the API’s that you that, that the platform can offer you. And you can construct those products, you can start with a credit builder product that automatically graduates into a full credit product, from a credit product, you can automatically create BNPL offerings, so you don’t have to have BNPL as a separate segment of the industry. It’s all about okay, do I have a high value transaction? Because I’m going to Home Depot, why are we losing by this bank lose that sale because Home Depot is selling you a better solution for that, for buying that refrigerator than the bank does, right? You lose that transaction. So that journey goes from start to finish with these modern platforms, you can start integrating it and like I said, you know, this is kind of like you’re basically have a treasure box in your hand. And now you’re just trying to figure it out. What am I going to do with this? And you can start slow and say I just got better at like what I’m doing today. Let me replicate that in modern, get a little bit comfortable. Think of this as a you know, tricycle when you’re learning with three wheels and then move from there to say, okay, you know, for my audiences, you know, this is what’s important. Let me go start delivering the services to the market.

Whitney McDonald 23:18
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