Since his days as a college-age, back-office worker, Michael Lindsey has turned heads with his technology acumen. In recent years he built a national profile, championing mobile services and payments as the future of relationship banking. As the electronic delivery services executive at Mississippi's BancorpSouth he also was keen on customer tactics, an interest that culminated in his new role as head of the $13.2 billion bank's retail arm. The Tupelo native now has the chance to practice the channel-integration strategy he's preached and show the industry how to make this second wave of mobile banking a winner.
Michael Lindsey's leap into mobile banking came with some caveats, as well as a cup of coffee.
Back in 2005, the BancorpSouth svp traveled to Atlanta to meet with Peach State entrepreneur Tripp Rackley, the president and CEO of upstart wireless banking vendor Firethorn Holdings. They gathered at a local Starbucks, as Rackley recalls, where the Firethorn team filled Lindsey in on the progress of their second-generation mobile banking application. The colossal bust of mobile banking 1.0 was only four years prior, when several major banks such as Bank of America and KeyCorp abruptly shut off their mobile banking trials due to customer apathy, divides with carriers, channel-integration issues and other potholes.
This time, Firethorn wasn't simply reformulating an online service, but building a dedicated mobile-only platform with the recognition that "this is bigger than Internet banking," Rackley recalls saying. "This is a new medium that's going to take a new vision, and a new strategy."
Lindsey, who at the time led BancorpSouth's electronic delivery services and chaired the payments strategy committee, agreed. But mission statements don't solve business and technical hurdles. To get BancorpSouth and other institutions on-board, Firethorn's system had to be a gateway, not a gimmick, that could lay the foundation for later progress in areas of m-payments, contactless form factors, and new product lines. That day Firethorn laid out just how that would occur: through an on-board, embedded application that would be integrated into a bank's existing infrastructure across processing and payments. The business plan would enlarge the ecosystem by bringing along wireless telecom and vendor relationships (such as Cingular and CheckFree, respectively), all of which Firethorn would supply itself.
Yes, there was big risk with venturing out into mobile banking so soon after its first-iteration failure. There were still carrier arrangements to work out (AT&T/Cingular still wasn't on board at the time), and alternatives to Firethorn would be ramping up with offerings that could confuse the market -quick-launch SMS-based text banking, browser-enabled services on specialized "mobi" sites, and other banking platforms like that of California-based mFoundry that would later get a boost from a deal with Citibank to provide a customizable, and carrier-neutral, foundation.
But Lindsey knew the market could freeze bankers out of the game if they chose to sit out a second chance. "There are plenty of non-financial institution competitors out there that are very interested in taking ownership in that payment space," says Lindsey. "So I think it's really the financial institutions' position to lose."
Synovus Financial would be Firethorn's first announced client in 2006, but that day at the coffee house Lindsey was the first to shake hands and agree to a pilot run of the seminal Firethorn mobile banking platform. BancorpSouth would be among the first four banks to launch the service in 2007.
"There's no question I would put [Lindsey] in the top" of essential early clients, says Rackley, who now heads Firethorn as a Qualcomm-owned subsidiary. "He went with us to all the major carriers, telling them the story. He was with the regulators and all the compliance companies well before anyone was talking about mobile banking. We talked to a number of banks about [mobile], and their initial reaction was 'I don't see it, I don't get it.' But Michael did."
From the beginning, Michael Lindsey was all about mobility. As a college student at Ole Miss in 1989, the 18-year-old banking and managerial finance major drove 100 miles a day between Oxford and Tupelo, where he had landed work on the second shift in the back office for his hometown's Bank of Mississippi, the predecessor bank to BancorpSouth. The Tupelo native admits "my parents didn't want me traveling 400 to 500 miles a week at midnight," but he loved the job. His Jimmy Buffet tapes helped pass the time on the road, and the work was worth the sleep deprivation for a lifelong computer enthusiast. How geeky? Today he can still tick off the features of a Commodore Vic 20 he got when he was nine years old ("3.5k of ram," he boasts).
Several times a week Lindsey would bring work back to school on his IBM P70, the classic neon-screen, 16-pound PS/2 system that was the height of portable convenience for a high-end 386 machine. His former supervisor, IS manager David McLeod, encouraged Lindsey to stick it out. "Dave said, 'You're getting great experience and it's going to pay off for you'," says Lindsey. "Technology was just getting ramped up. ...It was an exciting time, and just a great opportunity to learn."
In the two decades since, Lindsey's made the most of his prospects-while cutting that commute down a bit. As the institution grew into a $13.2 billion-asset holding company across eight states under influential and longtime CEO Aubrey Patterson, Lindsey rode up the bank's operational ranks to put his stamp on nearly everything in operations-teller and core platform deployment, mainframes, Internet banking, the call center, merger systems integrations and even the corporate help desk. In June, the 37-year-old svp moved up from his electronic delivery channels management role to run the entire retail side of BancorpSouth. So in addition to mobile banking, payments and call-center direction, he's now got hundreds of branches under his wing, guiding overall cross-sell product strategies including the debit/credit card portfolios. He's also taken oversight on marketing, promotion and the sales organization, for which he's revamping the incentive compensation program.
Although Lindsey also holds an MBA in banking management, BancorpSouth surprised some analysts when it bypassed the traditional retail executive feeder route for a guy who used to do FORTRAN. But the bank, which many analysts would agree has been ahead of the IT curve among its circle of regional peers, is probably recognizing how it "really needs to have a cohesive strategy across all channels," says Bob Egan, TowerGroup's chief analyst. Lindsey "came up from the operations side, he has a good foundation in the mechanics of what it takes to get done. It sounds like the powers that be are recognizing that these are not fluff-and-puff strategies."
"What it may reflect for BancorpSouth is how important the technology aspect is for the retail franchise," adds Kevin Fitzsimmons, a banking analyst with Sandler O'Neill & Partners. "They've always been on the forefront with mobile banking...so this is just a sense of them putting their money where their mouth is."
Indeed, Lindsey's signature mobile banking play has put him and BancorpSouth on the national map. He's a frequently tapped go-to source for banking peers, research analysts, the press and even federal regulators trying to grasp how fledgling m-banking services are working-and what the prerequisites might be for launches. His "coming-out" party in May 2006 had him featured on a keynote panel at a TowerGroup conference alongside influential mobility evangelist Joseph Ferra, the chief wireless officer who began working on freeing Fidelity advisors from their desktops back in the late '90s. "One of the things Michael is very smart about, is he not only developed a tight relationship with a startup technology supplier, but he helped with creation of definition of requirements he believed would make his bank successful," says Egan.
Lindsey's influence on mobile banking, and his elevation into the retail hierarchy of BancorpSouth, is an outcome not only of his bent for what's next, but, say former colleagues and observers, he's also a product of a city that has shown that exceptionalism can arise from unlikely places. Elvis, anyone?
Tupelo is a place that by all rights shouldn't be what it is. No navigable rivers or natural resources, and it's an hour to get to the nearest interstate. You have to travel 90 miles to find the nearest international airport, up US 78 to Memphis.
But for nearly 70 years, this Northeast Mississippi micropolis best known as the King's birthplace has a surprising history of lifting its ceiling. Legendarily progressive newsman George McLean, besides being an editorial thorn in the side of segregationists in the '50s, established a community development foundation that rescued Tupelo from its desperately poor agricultural roots. Sojourners Magazine has described its economic rebirth as a manufacturing hub that still exists today as "The Tupelo Miracle," thanks in part to cheap electricity from the Tennessee Valley Authority. Most recently, civic leaders pulled off a coup by landing a new Toyota plant in a city business development park to assemble hybrid Prius models.
There are many who'd place BancorpSouth's Patterson in a class of community icons. Patterson, now 65, has been president since 1982, and was a former chairman of the American Bankers Association. He has been with the bank since its humble days as a $300 million-asset community institution. He led it to become an eight-state regional holding company that diversified around banking, mortgage, and insurance-and it avoided the subprime trappings of the last few years. "That geographic growth has contributed to the need for technology," Patterson says.
Most specifically, Patterson decided shortly after assuming control that he would meld the tech-side and marketing arm of the bank. He'd always felt that ops teams tended to be more isolated and self-contained, where the end-goal of any plan or investment "tended to be very functionally oriented," says Patterson. Putting marketing and tech people together is "an odd marriage sometimes...but it gave us a different sense of product planning."
The combined departments may explain why the bank has never established a CIO role, and instead created an oversight technology steering committee "where we make our presentation of technology to make sure everyone inside of the company is aware of what we're doing from a division standpoint," says Lindsey. Former vice chairman of marketing and operations, Harry Baxter, was at the centerpiece of the strategy. As marketing chief, he was put in charge of operations in the early '90s, during which time he mentored Lindsey. He personally doesn't think BancorpSouth was that far above its peers in terms of technology, but "we might have been ahead of the curve," says Baxter. "I remember hiring a guy into the marketing department who came from [Jackson, MS rival] Deposit Guaranty, and he was surprised to find that everybody had a PC on their desk."
Or, in Lindsey's case, a bowling-ball weight, portable computer.
The combined marketing/operations arm is where Lindsey learned to bridge his technical background into the practical functions of the bank. His first major project, in only his second or third year at the bank, was a green light from McLeod to oversee the development of an in-house teller application. "That gave me a great appreciation for keeping projects on track, and meeting objectives, and [the] credibility you get from other departments within a bank when you do meet your objectives on your projects," says Lindsey.
"That's where he garnered a lot of his retail experience," says McLeod, now CTO at another BancorpSouth rival, BankPlus in Jackson. "If you're building a teller platform from the ground up, you get right into the nuts and bolts of it."
Lindsey, who has also long chaired the bank's payments strategy team, was later instrumental in the bank's decision to move forward into Internet banking by working with nFront, then a small-bank platform founded by Rackley that was later sold to Digital Insight. "He was our first big customer, the first multi-billion dollar bank," says Rackley. Back in '98, Lindsey felt that customers wanted a seamless relationship across ATM, branch and online channels. He won his bet-the 2,500 customers that enrolled in PC banking has ballooned to more than 200,000 at the bank.
All this early work also honed his research skills. A rabid follower of industry developments, Lindsey was a regular attendee of technology conferences and seminars in the '90s, getting a handle on what technologies would help and which were ones to avoid. "Back in those days, we were reading those articles about technology projects gone wrong at at different banks, having large budget overruns and project delays. If you wanted to do something new, we would get Michael to research it," says Baxter.
Research is the lifeblood of a techie. And Lindsey's no exception. He's only got time for nonfiction books, and he banks on numbers to guide decisions.
That's not to say Lindsey isn't opinionated. In past discussions, he's dismissed the hope some have of open spectrum and open wireless networks that will free banks to offer services outside the telecom industry's closed-loop noose. But mostly, he's a regular Detective Friday. During the rollout phase of the mobile banking test in late 2006, BancorpSouth carefully recorded customer and in-house employee usage. Would it support Firethorn's conclusions, and Lindsey's hunch, that mobile could be a customer's main relationship channel?
Overnight, mobile banking became the second-most preferred self-service vehicle, Lindsey says. For at least 25 percent of them, it was ahead of Web banking. Some felt more confidence with the device, knowing their personal info would be confined to a small cell phone screen instead of a 17-inch monitor for any shoulder-skimmer to pick up. Surveys also showed 29 percent of people would use ATMs less often, since in a large number of cases they were using them for mere balance inquiries. "We had log-ins to bill-pay increase 24.7 percent," Lindsey says. "Once on mobile banking, the payee setup increased 18 percent, and the payment schedule increased 11.7 percent." One customer even used his mobile device to make a mortgage payment.
BancorpSouth, like most banks with mobile deployments, hasn't shared any enrollment numbers to date. "But we're still seeing that user adoption grow-that's the critical phase that proves us right or wrong in the future," says Lindsey. "In 2000, banks approached [mobile] like Internet banking and didn't consider the carrier. Now with iPhones and other high tech devices...with data plans, more and more people have more functionality on their phones than we had on bank PCs four or five years ago."
In his new role, Lindsey has some tough decisions ahead. BancorpSouth is one of those banks caught in the middle of MasterCard's plans to require its signature debit card issuers such as BancorpSouth to permit transactions on an optional basis through MC's Maestro PIN network. That could threaten lucrative and exclusive PIN debit deals like that of the bank's arrangement with Discover's PULSE network. He and other contactless proponents eager to move ahead are also frozen in a chicken-and-egg stare-down between handset manufacturers, card issuers and merchant terminal vendors on who will lead the critical mass exodus to RFID-enabled payments.
One stable factor in the midst of all this change is Lindsey's penchant for working with only those third parties he's engaged previously, such as Rackley and the Firethorn executives. Besides mobile banking and the nFront connection, Lindsey also has taken a shine to the telecom expense management offering of BroadSource, another Atlanta company where Rackley is a lead investor. To Lindsey, trust in a long-time partner is important so his risk-taking is confined to the project at hand.
"We learned a lot by getting out there with Internet banking; we learned a lot by getting out there early with mobile banking; and I guess that's where we are with the payments piece of mobile," Lindsey says. "We're trying to get out there and explore, run our models, and see how the world is going to come out, and hopefully play a role in shaping that."(c) 2008 Bank Technology News and SourceMedia, Inc. All Rights Reserved.http://www.americanbanker.com/btn.html/ http://www.sourcemedia.com/