Fireside Chat: An Interview with Fremont Bank's Vivian Yeung

In an candid one-on-one interview, Fremont Bank's Vivian Yeung, Chief Digital and Technology Officer, talks about how to identify fintech partnerships that make sense and in what parts of the organization, while also establishing practices to mitigate operational risks.

Transcription:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.

Holly Sraeel (00:14):
Welcome to everyone listening in on today's summit on community banking and partnering with FinTech. I'm Holly Sraeel, senior Vice President of American Banker Live Media. I'm delighted to have Vivian Yeung, chief Digital and Technology Officer of Fremont Bank, joining me today. We're going to talk about how banks can select, structure, and scale FinTech partnerships that measurably improve the digital customer experience, from here on forward referenced as DCX. Vivian brings a wealth of experience to the discussion and will share her expertise based on her work at Fremont Bank and previous roles at Wells Fargo and Bank of the West that have informed her partnership identification with FinTech. Vivian, welcome. Why don't you quickly tell us a bit about yourself?

Vivian Yeung (00:58):
Great. As you mentioned, I'm Vivian Yeung. I'm the Executive Vice President, chief Digital and Technology Officer at Fremont Bank. I oversee the digital originations and servicing bank-wide technology, enterprise portfolio, project management office, and information security. As Holly had mentioned, I've had about 12 years of experience prior to Fremont Bank at Wells Fargo in a variety of different roles, very technical as well as the product strategy and product management areas of focus. And then I had six years at Bank of the West heading up their online and mobile banking digital payments group responsible for product strategy and product management. Why I share this experience is because I hope that it'll inform a diverse perspective and insight into what we're discussing here with partnership identification with fintechs since it's such an important vehicle in our current ever-changing ecosystem here in the landscape of financial services. I know Holly and I are both very passionate about it.

Holly Sraeel (02:01):
It's true. Before we get into the details, at a high level, what problem are banks trying to solve in terms of customer experience with FinTech partnerships?

Vivian Yeung (02:13):
I would talk about Fremont Bank. We're a very high-touch client-centered and relationship-focused community bank. Our offerings, whether they're digital or non-digital, really need to meet the needs of our clients. I'm interested in continuing to evolve the digital connections and experiences with a human touch. I know that's a little bit different, but it is something that's really important. It's not just about the technologies, but how we're interfacing and interacting with our clients and outreaching to them. So what that means is that the digital technology needs to connect with our clients. Having bankers that are experienced that they can actually reach out to and connect with and not feel like it's hard to actually find a banker to work with. Those products and services offerings—retail, business, lending needs—are part of our integral strategy in partnering with fintechs. Why? Because it really enables our time to market. It leverages some of the core competencies when we identify a FinTech to work with to make sure that we can align our overall client and segmentation needs and our strategic focus for all of these various experiences with the FinTech partnerships.

Holly Sraeel (03:32):
Okay. So that's a good setup to my next question. Specifically, can we talk a little bit about Fremont Bank and how it's partnered with fintechs to improve the digital customer experience? It would be great if you could also share for the audience some examples of the measurable impact that you've had.

Vivian Yeung (03:49):
At Fremont Bank, we're looking at replatforming and reinventing our digital banking experience right now. Especially around business and commercial experiences, we've aligned with a strategic FinTech partner, the same strategic FinTech partner that we rolled out with our consumer mobile and online banking. Some of the main consideration sets as to why we chose the partner was really to ensure that we had a platform that we could scale and support our clients' needs, but more importantly, our future business, commercial, lending, and consumer client needs. We like the platform for its flexibility to introduce other FinTech partners within the digital ecosystem. Allowing for that is a critical piece, which we'll probably talk about a little bit more, but having various fintechs that have those core competencies that we're looking for to align with and partner with will build that ecosystem. We really wanted to find somebody who had that flexibility, being able to introduce the fintechs and then having the core platform experience so that we can look at development in a modularized way. There's the core platform itself, and then there's the availability of having a modular way through a software development kit, or what we call an SDK, to be able to custom develop features specifically to meet the needs of our clients. There's that flexibility around the platform and it's a really attractive value proposition for the size of our financial institution to be able to do that with client segmentations.

Holly Sraeel (05:42):
In terms of the flexibility of the platform, can you give us a couple of quick examples on measurable impact?

Vivian Yeung (05:50):
Yeah, some of the measurable impacts that we look at. For example, in our low interest rate environment with residential lending, we had just had an introduction of an integration with mortgage digital originations with a FinTech company. We leveraged that and then looked at the loan originations volumes when we had higher volumes within the mortgage space. What are the number of originations that came about through the digital loan originations applications? What is the turn time? Because now we've digitized that process. We no longer have the manual processes that occur through the loan originations process, and it also gives control for the clients and their experiences to be able to upload their documents and also see what the status is of their originations process. The other piece is from a mobile standpoint; our app store reviews prior to our digital metamorphosis with the banking environment was about 2.1, and now we've moved into 4.7 and 4.6 respectively for our Apple App store and the Google Play Store reviews. That's one aspect of being informed about how our clients are enjoying the digital services experiences, but we get a lot of feedback from our clients using feedback loops as well.

Holly Sraeel (07:22):
Let's get into this a little bit. I get asked this a lot by banks when I'm interviewing them or talking to them about various things that they're working on. The question that I get often is: what criteria matters most when you're evaluating FinTech partners for digital customer experience? If you could tick off a couple of the criteria that matter, the audience would be grateful.

Vivian Yeung (07:51):
Definitely vision and strategic alignment, ensuring that the fintech's mission and the roadmap aligns with our financial institution's strategic goals and digital objectives. Having that conversation upfront, making sure that the fintechs are able to augment and enhance some of our existing capabilities. I would say making sure that the value proposition and what we're trying to achieve aligns with what the core competencies of that FinTech is. That is of huge importance because one might say that they're aligned, but really when you start to look at the product and service offerings, making sure that there is alignment and doing some of that due diligence is really important. Technology assessment itself—many times the fundamental criteria is overlooked regarding technology assessments, and this really could cause rework and misalignment if not reviewed. So ensuring that the FinTech is able to have technology integrations, a scalable infrastructure for availability and support, and then making sure that it's modern technologies, whether it be APIs or microservices, being able to evaluate that with the FinTech partners.

(09:22):
What we would typically do is have a technical discussion and it's brief, and then if we can maybe even do a proof of concept, being able to do that in a moderated way with the FinTech to be able to suss out that capability at a high level, but at least you've done that. And then really making sure that not just the business roadmap, but the technical roadmap and innovation also aligns with our objectives as well, because a part of that is not just the core capability, but the technology that you're actually buying and partnering with.

Holly Sraeel (10:07):
Okay. You and I talked about this previously—the intensity and frequency with which banks will turn to FinTech partners is going to grow over 2026 and the following years. At the same time, we all know that the introduction of a FinTech partner increases risk or the potential for risk. In terms of your vetting process, can you give me an estimation of the period of time you take to evaluate a FinTech partner before you even get to a proof of concept stage?

Vivian Yeung (10:46):
Yeah, so there's a few pieces to it. Holly, you're talking about from the start of us introducing ourselves, because the vendor management process in and of itself could be quite lengthy. But really the vendor management, the due diligence—I cannot overemphasize this. Also, if there are compliance-related items and regulatory-related items, what are they so that the FinTech understands and knows what the banking institution is dealing with and what the risk posture looks like? Vet that out with the FinTech company as well. It really depends on how big the effort is relative to the FinTech partnership.

Holly Sraeel (11:41):
Because

Vivian Yeung (11:41):
If, for example, it's something that's quite large-scale for us—we went through an enterprise contact center overhaul, from on-premise to more of a cloud-based solution—that took quite a bit more time. We're talking about a good six months just to make sure the vetting process is occurring, because you have to do the analysis, matching the vendors up, getting the buy-in, and all of the rest of the pieces. But it's well worth it because what happens is towards the back half of it, you already know what you're going to be doing. The planning process has occurred, and then it's a part of the execution with the FinTech partner.

Holly Sraeel (12:28):
Based on your experience, since you've worked for large banks and regional banks also, is it your experience that too many banks perhaps cut corners on the evaluation period? Should that be a greater focus?

Vivian Yeung (12:45):
I think overall it should be because—and I'll call this like a playbook—there's the vision alignment, the strategic alignment. I would say the roadmaps are essential, not just the business roadmaps, but the technology roadmaps. A clear understanding of what's being built, even at a technical vetting stage, is important because that piece is the understanding of the integrations and what it takes to make sure that the effort's going to work. And then really, I would say the other piece is the operational viability. Making sure from a finance perspective that the FinTech is able to continue during that duration of time, and then thereafter, there should be some form of vetting annually with that FinTech partner on their financial health and their resource capabilities.

Holly Sraeel (13:52):
So FinTech partnerships are going to continue to increase in frequency and sophistication along with some embedded risks that banks will have to pay careful attention to. These partnerships occur with banks of all sizes, but it's particularly challenging for smaller banks to decide whether to partner with a FinTech versus build or buy. Larger banks can do anything they want—they have the budget, the in-house team, and resources. How do you decide which fintechs to partner with versus building or buying?

Vivian Yeung (14:42):
Yeah, and I think that it goes down to some of the core capabilities of the FinTech partners. What are they offering and does it meet the needs of what we're looking for? As a smaller financial institution, it's that much more important to find the right partners because, as you mentioned, with larger financial institutions, there's a lot more CapEx and OpEx leeway. Where I think it's hugely important on the build custom versus buy software-as-a-service is with custom work—you're really building either a fully custom solution, which larger financial institutions sometimes do, versus integrating with a FinTech company. Larger financial institutions tend to want to build in-house, and that may or may not be the right choice relative to the timeliness to market. But then there's the piece that is software-as-a-service.

(15:52):
Just because we say that it's out-of-the-box doesn't mean that it's going to be ready and integrated. You have your core systems and other third parties that you might need to interact with to make the whole software-as-a-service work. So there are component pieces around being able to work with the FinTech to make sure that you're actually able to build the solution. There is most of the time some form of integration or customization that has to occur. But on the software-as-a-service side, it's really about faster time to market, proven solutions, and general predictability around pricing because you have a subscription-based model that you've already negotiated. You already know your scaling and the cost associated relative to what's needed for your clients and book of business. When I take a look at that and ask how banks make those decisions?

(17:06):
I put on my tech hat and then I also put my banker hat on. We don't talk about this a lot, but it's absolutely a must-do around financial ramifications: weighing up the upfront capital expense it takes to build the asset, whether that be an in-house customized solution or even if you're customizing the asset relative to a software-as-a-service model. There's some sort of inherent CapEx cost associated with that. And then on top of that would be the operating expenses—not just the one-time operating expenses, but what are the ongoing operating concerns of that effort? And then the last one is depreciation. When you build from a CapEx perspective, you carry over that expense on an annualized basis for the duration of that asset. When you're really doing the financial modeling, it gives you a good sense of whether build versus buy works out for the financials of that institution. To me, that is essential to do. I'm sure any type of financial institution should be doing that as a part of the due diligence when you're embarking on an effort. We don't talk about that a lot. We talk about digital experiences, but there's also what that really means to us from a P&L standpoint.

Holly Sraeel (18:49):
Yeah, it's a huge point and I'm glad you raised it. Let's go under the hood a little bit. I want to get some clear insight into what have been some of your biggest challenges integrating FinTech solutions into legacy systems. It's an issue for all banks. Tell me what you've experienced in terms of challenges.

Vivian Yeung (19:10):
Legacy systems—you've got to love them. I think first and foremost is talent. Finding the talent to be able to support those legacy systems continues to dwindle if you think about it.

(19:25):
Right? We're now traversing toward cloud and artificial intelligence and all the skill sets needed there. It wasn't too long ago we were talking about Y2K and where we would find COBOL programmers, and now you have these legacy systems that are still there with our different core systems. There's a unique subject matter expertise that has to happen there and documentation pieces as well. In order to facilitate the integration, you really need to make sure that you have the right infrastructure around web services capabilities at both a fine-grained and a more macro-level service architecture to do that facilitation with your legacy system.

(20:31):
And that's why when I talk about fintechs, we need to discuss whether they are capable of doing that integration with the financial institution. If they are, what are their ongoing updates and at what cadence are they making those updates to make sure that the integration occurs? Data exchange is another piece. What we found is very interesting with software-as-a-service—there are typically some sort of single sign-on connections between different FinTech companies. With a software-as-a-service, they might have an adapter that's very out-of-the-box.

(21:20):
A good example would be with Zelle, being able to single sign-on from your current online mobile banking platform. They might have an out-of-the-box adapter that has a payload of information. When you traverse over to Zelle, you'll get that normal experience. But when you want to augment it to do some fraud prevention, as an example, you need extra data. So the integration needs to change so that you're able to support some of the fraud prevention tools or interrogations upfront. Have you actually made a money movement transaction within the last 30, 60, or 90 days? What is the age of your account opening? You typically don't want to have too big of a transaction happening in a time period where a new account opening happens, as that is where most of the fraud occurs.

Holly Sraeel (22:21):
Correct. Outside looking in, how do you maintain a seamless customer experience across multiple partners? Because that's really what we're here to talk about, right? Customer experience. How do you do that?

Vivian Yeung (22:39):
It's important to look at the customer journey. Whatever experiences you're trying to achieve with the fintechs and the business need you're trying to solve for, you want to make sure there's a holistic view of that journey. With that, there will need to be some form of integration and authentication that occurs between the different FinTech partners. So making sure that you're able to have the right integrations and technologies—whether that be OAuth, single sign-on, or SAML—will help to traverse the different FinTech platforms and provide a better experience for the clients so they don't have to be on bifurcated systems or be introduced to friction points. In addition to that, it's just making sure you can work with the FinTech to modify the experience so it will meet the needs of a more seamless experience for the client.

Holly Sraeel (24:01):
Great. When do you begin identifying success factors and pitfalls in partnerships? Is it periodically reviewed or done over a lengthier time? What's your best advice on how to identify success factors and pitfalls?

Vivian Yeung (24:24):
When I think about pitfalls, the initial pitfalls could be rushing into a sales activity because you're trying to meet some time-to-market objective and not doing the right level of due diligence. Sometimes sales activities take place and you feel compelled because the partner is saying they need a decision. But no, we need to discuss what we are trying to achieve. Make sure both parties understand it, and aside from the upfront sales activity, make sure there's an understanding of what we're trying to achieve together. If that doesn't happen, there's a lot of misaligned expectations. Not going through the vetting process would cause many ongoing problems, such as availability issues because it wasn't known that the vendor couldn't actually stay up and available.

(25:40):
It could be a whole variety of items. So making sure that not just in the initial part of the cycle, but ongoing after you've launched, there should be scorecard metrics—those KPIs that are a part of the contractual agreement. I think about fintechs as a relationship. When you have a relationship with a person, you have expectations and a mutual understanding about what you're expecting. The contract is a way to bind that understanding of the relationship, whether it be service level agreements, or what a breach looks like if they weren't meeting their end of the bargain. You've got to make sure that's there. Take the contract after launch and say, "Okay, these were our success criteria, these were our KPIs." Then making sure on an ongoing cycle that it's happening with the FinTech partner, and also internally, right? From an organizational perspective, did we meet what we were trying to achieve in terms of adoption goals and utilization?

(27:12):
When we talk about pitfalls, one area is not using feature capabilities that cost money. When you don't leverage those capabilities and you don't deprecate or remove them, you're paying for it. The periodic review of how the relationship is going—based on the success criteria, the KPIs, and the ongoing alignment—is essential. You should discontinue anything that doesn't make sense anymore because our business environments change so much. We were talking about such low interest rates and we had a beautiful mortgage uptick, and now we're swinging back into deposits and deposit gathering. All of those pieces need to be looked at at least on an annualized basis because we do it as a part of our budget process. On an annualized basis, you take a look at your various vendor partners.

(28:45):
You do the pre-planning, you hopefully have the requisite scorecard, and you take a look at whether or not that's meeting the needs. Then you have different levels of conversation based on how it's going with those partnerships.

Holly Sraeel (29:03):
Okay. I want to ask you—and I'm going to put you a little bit on the spot—given your work with Fremont, Wells Fargo, and Bank of the West, I'd love you to share one lesson learned or best practice for other banks considering FinTech partnerships at this moment.

Vivian Yeung (29:29):
It's a great question. I think for banks that want to do more in-house customization work, it's really thinking about: is it really worth it to do all of that work?

(29:55):
I do think it's a critical factor. What is the total cost of ownership and does it make sense to continue to do that to have the differentiated experience, or is there a capable partner that can do that effort? Making the wrong decisions could potentially have pretty big financial and strategic impacts. As far as other lessons learned, taking the time upfront to do that due diligence pays off in dividends when it comes to time to market. I know that sounds a little bit counterintuitive, but that upfront work and being able to align on business goals, having partners within the financial institution see the demos with the fintechs, and being immersed in the digital technology together means you're bought-in together.

(31:07):
Having a technical debrief so there are no mishaps during the implementation and execution timeframe makes for a much better experience and time to market. That's what I'll call internal-external conversations to make sure there's alignment there. And then the other pieces are really the contractual and vendor management pieces. That framework is important to make sure there's no misalignment in understanding of what success and KPIs look like, as well as the expectations—whether they be compliance, data, or information security related.

Holly Sraeel (32:05):
I don't think that thorough due diligence is counterintuitive to the time-to-market consideration, because if you don't do the thorough due diligence, you end up potentially in a situation where there is a risk or a vulnerability that then is a much bigger issue than taking the time to do things properly. I think the due diligence probably is going to become longer for banks as things like AI and other innovations come to market, which is great, but it does introduce new risk levers. I've been talking more in my travels about the end-to-end transformation of risk, and we could do a whole other session on that.

Vivian Yeung (32:58):
Oh my goodness. You're absolutely right on that. Risk is embedded as every part of the fabric, just like technology. We could talk about organizational components to that in another conversation.

Holly Sraeel (33:25):
My next question for you: how do you ensure alignment with your long-term digital roadmap when you bring FinTech partners into the fold?

Vivian Yeung (33:40):
I am very blessed. I have a great executive team at Fremont Bank that I work with as business partners. First, what are the areas of focus for the business planning? That effort and strategic planning is hugely important because you want to make sure you are looking down the pipe about where the business is headed and what parts of the business are important to have the right fintechs or experiences to support. Being able to articulate the business goals and objectives first, and how the digital technology roadmap maps to those capabilities. I mentioned residential lending—that was a good example where we had quite a bit of volume and wanted to meet that demand.

(34:59):
We planned that ahead of time. If the due diligence process takes a pretty decent amount of time, you need to plan what the roadmap is going to look like ahead of time so you can catch market opportunities. That piece is important. Annually, we do have what we call a small group where we talk about the business objectives and the projects that the businesses have requested.

(35:44):
Sometimes the conversation is, "I have these needs and I don't know exactly what digital technology solution is out there." That's on me and my product teams to identify the right vehicles for our business partners. Once we get through the prioritized efforts, we then take that to the requisite board and make sure we're all aligned to meet those objectives. But I think management alignment is important. The other thing is giving the employees—we call them associates—visibility into demos. If they're able to see some of the technologies, it gets them excited because it will make a difference in how they're doing their work.

(37:04):
Being able to see it, they're more bought-in to that process and not as hesitant. I think training is also a big item. When we go through a project with the fintechs, we make sure there's a component about communication with the clients and communication with our employees. That training is a key part of adoption. AI is a good example, too. We have a working group pilot right now utilizing Microsoft Copilot. We get folks to leverage it and have a shared community of what's working and what's not working on prompts. It's the same thing for any type of technology; you've got to make sure you have the training components for your employees. It'll be much more important moving forward because the pace of change is getting much faster and steeper. Having that awareness and education inside of the financial services ecosystem is hugely important to keep up pace.

Holly Sraeel (38:40):
And it's only going to continue to accelerate in big ways.

Vivian Yeung (38:43):
Huge ways.

Holly Sraeel (38:46):
Once a FinTech partnership is established, the product is in the market, and you're looking to drive adoption, tell me a little bit about how you measure success. What metrics are most important for you to track?

Vivian Yeung (39:03):
I would say there are metrics related to what the clients are experiencing. We typically have assumptions of what the adoption rate might look like, and we use that to model growth for our software-as-a-service. You have to have the growth factor, not just for success metrics, but also for projecting what the cost for the financial institution is going to look like. The other pieces are the feedback loops. We like to have feedback loops with our clients. Some of it is through surveys, but sometimes we outreach to our clients and ask, "What did you think about this new experience?" Our business online mobile banking is a good example of that. We'll get some pointed feedback around what's working and what's not. Then it's just making sure the actual utilization is ongoing. If it's not, then we need to decide: is this the right product or do we need to pivot?

Holly Sraeel (40:42):
How often have you had to pivot in your career away from something?

Vivian Yeung (40:50):
It happens. I don't want to say it's not going to happen. But I do think in most cases we've been very successful because I believe in the planning process and having the right level of discussion around due diligence. If a pivot needs to occur, it's usually because markets change.

Holly Sraeel (41:24):
Yeah, markets change, and let's be candid—sometimes partnerships just don't work out.

Vivian Yeung (41:32):
That's right.

Holly Sraeel (41:33):
What does the next phase of bank-FinTech collaboration look like?

Vivian Yeung (41:47):
Oh, wow.

Holly Sraeel (41:50):
Answer that however you want.

Vivian Yeung (41:53):
I have a little bit more of a "out there" answer to that. When I think about the next stage of bank-FinTech, I think about what artificial intelligence looks like in the context of our digital experiences. What is the modality that we're using and not using? It's evolved so much that we have to, as a banking industry, be aware of how that's changing our landscape. A good example is glasses—people are starting to really integrate them into their overall experiences. Why do we have to download a mobile app? That might change the way we interact with financial services. I think it'll be more integrated in our experiences. The insights that artificial intelligence might offer in the future and the changes in modalities will be so different from how we interact with technologies today.

Holly Sraeel (43:37):
We're down to two minutes. This is my last question. In your entire career in this world of FinTech partnership, what's been the best FinTech partnership you've ever had?

Vivian Yeung (44:00):
I would say the best one I've had thus far is the one we're currently working through with our digital banking experiences. I love the fact that there's innovation around what they call the "marketplace," and it brings together different FinTech partners almost like an app store-like environment. We're exploring this. I think it's interesting because it gives our clients the opportunity to work with other fintechs to meet their needs, whether that be accounts payable or international wires. There are inherent capabilities with these different fintechs that you can leverage as a part of the digital banking ecosystem. I think that's a very interesting concept for us to utilize for our clients.

Holly Sraeel (45:12):
We're at time, but before I sign off, Vivian is happy to take questions. Vivian, why don't you give everybody your email address?

Vivian Yeung (45:21):
It's Vivian V-I-V-I-A-N, Yeung Y-E-U-N-G, at fremontbank.com.

Holly Sraeel (45:34):
I'd like to thank Vivian for sharing her insights with our audience today. We're going to take a 10-minute break. We'll be back with our final session at 1:50 ET with a superb panel to discuss pushing for innovation while mitigating risks. Stay with us.

Vivian Yeung (45:50):
Thanks, Holly.

Holly Sraeel (45:51):
Thank you.