Digital Banking 2023: Closing roundtable: Emerging future trends predictions for 2024

A panel of senior digital bank executives give their predictions for next year. 

Transcript:

Penny Crosman (00:09):

So we have right to left Matt Maxey, who's CIO of Synovus in, I am sorry, Columbus, Georgia. And we have Christian Ruppe, chief Innovation Officer at Colony Bank in Fitzgerald, Georgia. And we have Danielle Doyle, who's Chief Innovations Officer at Atlantic Union Bank in Richmond, Virginia. Why do you think it is innovations rather than innovation? Do you know?

Danielle Doyle (00:37):

It was actually, it was a typo to begin with, leaned in on because it is important to acknowledge that there's more than one innovation, right? It is not just technology, it is across the enterprise. So I think it was a very fortunate typo.

Penny Crosman (00:51):

Okay. So just to kind of level set here, where would you say each of you are in your so-called innovation journey? What are things that are important to you, things you are trying to innovate, things you are trying to do? Let's start with you, Danielle.

Danielle Doyle (01:10):

So I would say knowing my colleagues on the stage here, that my organization is definitely on the less mature side of that, which is I think fantastic. You have to start somewhere and every step, a step in the right direction. So we're absolutely in the ideating phase, getting into the scene, starting the grassroots of collaboration and trying to determine where our roadmap needs to go in the future.

Penny Crosman (01:35):

Any particular goal that you are striving for or we can talk about that later maybe. Yeah. Okay. How about you, Christian?

Chris Ruppe (01:42):

So our journey is new. I have only been with the bank about 10 months, and I think that we're doing deeper, very, we're starting at the base. We're middleware rebuilding our entire infrastructure of data warehouse, redoing the entire customer journey, digital banking, online account opening, all of that. But because we're focusing so heavily on rebuilding everything, I think you'll find that we are doing less, I'll say ancillary, the flashy type things that would sit on top of an infrastructure. So the stuff that we're doing is big and innovative and fun. We're rebuilding everything and making it very flexible and portable, but there's a little bit less, we see a lot of opportunities that we're like, that's a great idea. I see the ROI, but it is just not a part of the phase one kind of where we're at. So we're younger on our journey, but we're starting at a point where in six months I think we'll be really far down the line compared to most in the banking industry just because we are willing to.

Penny Crosman (02:45):

So you are kind of building out a middleware layer that newer components could be plugged into relatively easily.

Chris Ruppe (02:50):

Exactly. As we're replacing all of the tools that people touch, whether it be bankers or customers, we are building those tools into our middleware and putting the data from those tools into our data warehouse so that we're kind of benefiting from rebuilding all this stuff and not having to plug and play things out of the gates. We're kind of doing it as it happens and this very efficient way to do innovation. And we're thinking three to five years down the road and investing in that now, rather than just trying to go quick and build the flashy stuff fast, we're trying to do it with that end goal in mind.

Penny Crosman (03:30):

How about you, Matt?

Matt Maxey (03:32):

So this is the second full year of me being in this role at the bank. It was a new role for the bank, but Synovus has been a very innovative company for a very long time. Going back even to our early TSIs days in the late seventies, early eighties, some of the work we did with Steve Street with Green Dot and building his model and product set and sponsoring that for a number of years. And so my role in the organization is more as a catalyst driving strategy and investment, exploring new markets along with trying and deploying and making the case for new tech that really moves the needle for us in various areas of our strategy. Most of the time I look multiple horizons out, but I do have some near term horizon work, and we do all of that in partnership with business partners.

(04:23)

That said, the goal of my role and my team, which is very small by design and like I said, is to act as a catalyst for the organization. So we do a lot of organizational equipping, a lot of training, helping executives in our markets and in various parts of the bank really think through how do they work through ideating on a concept. When do they put it down, when did they pick it back up? How do they make the case for it? But we have innovators all across our company in multiple lines of business within our technology and operations areas, building great tech and modern stacks in the cloud, and we just work really well together in that regard.

Penny Crosman (05:02):

I just noticed your socks are monogrammed. I think that's so awesome.

Matt Maxey (05:05):

Yeah, father's Day president from my wife. Thank you.

Penny Crosman (05:09):

So I wanted to ask you guys about how you build the right foundation for innovation. I think Christian kind of answered that already. How would you answer that?

Matt Maxey (05:19):

Yeah, so I think there's two things I would say. One is it is about mindset of the organization. Innovation has to be sponsored from the top, and Synovus has a very forward thinking, very supportive executive suite from our CEO all the way down. And the idea is is that if you equip your leaders and your teams with the resources financially, with teams, with technology, and you kind of set them loose with some guardrails, they can do some great things. And so I think that the support from the top is really, really important. And we have that, and it has helped kind of continue to think and refine our model, what we want to work on, what we don't want to work on, what's valuable, when do we stop, when do we start? And so I would say that that's a big part of our innovation program is that the buy-in that we have across the org, and like I said, the partnerships too that we have across our lines of business, we're meeting with our lines and our strategy folks all the time, evaluating new tech, new solutions. So support from the executives and partnerships within the lines of business are absolutely critical to what we do.

Penny Crosman (06:27):

And what about having a tech stack that is ready for

Matt Maxey (06:30):

New staff? From a tech stack perspective, we've got great technology leaders. They're building things in Azure on modern stacks with integration layers that give us the ability to have modularity, the ability to try fintechs and kind of put them aside and say, that's not really for us faster. That's really important. Maybe a little later on I'll mention we're doing some work with both Azure Labs internally as well as external lab partners that help us accelerate some of those yes's and no's. And we're starting to get some real tailwind on some of those capabilities as well. But the platform upgrades and the new tech that's being installed is being done. So kind of independent of my role in paving the road ahead for our product teams to do really cool stuff on top of it.

Penny Crosman (07:23):

Alright. How about you, Danielle?

Danielle Doyle (07:26):

I mean, I absolutely agree with everything I already said. I think that to kind of add on to that too, it is not only just the buy-in from the top, but it is actually enabling our teams to feel empowered to make decisions and to bring up innovative and new ideas and making them feel like they have every right to think outside of what their day-to-day is. I think that's been a huge culture shift, especially in the sleepier, mid-size, smaller community banks, really enabling people to feel like even if it is a bad idea, even if it is something that we don't want to do, making them feel like there's a safe space that they're able to bring it up has been a massive culture shift in our organization.

Penny Crosman (08:08):

How do you shut down bad ideas?

Danielle Doyle (08:10):

Politely? No, there's no real bad idea. Anytime anyone's thinking about how to solve a problem, problem creatively, that's a good thing. We want to support that. We want to make people feel like they have every right to do that because they do that helps us be a better organization. But that said, I mean, we're not all going to open five Bitcoin wallets every day. So just letting people know that it is okay to say something that's not going to work out without there being any type of repercussions whatsoever.

Penny Crosman (08:42):

So we want to talk a little bit about some of the challenges. Have any of you ever had to creatively fund a project? And if so, how did you do it?

Chris Ruppe (08:53):

Well, I don't know how creative, anytime that we have a project, the main goal is how does this solve the current problem and how has it put us in a position to solve or fits into the future vision future problems? So when we do that, a lot of the times it is what products is this going to potentially displace currently and in the future? Things like that. And then, yeah, how can we get creative? I think having a relationship with the companies that we work with to solve our problems helps a lot because when they understand your goals that it is long-term, whatever it is. So most of the innovations or technologies that we've brought in since I have joined has been, we've added very little costs overall because we will take something that's really flexible or wasn't really built for the banking industry to come in and replace something that has a premium cost on it because it was specifically built for banks and because we're willing to do a little bit more work sometimes to get a little bit more custom or to make it work more for banks, we'd get the cheaper prices and then we can cut the cost.

(09:58)

So a good example is our budgeting type tool was built specifically for banks. It was a certain cost and it did exactly what it did and that's it. Well, we knew where we wanted to get with data analysis and being able to create dashboards and reporting and things like that. And so we looked externally and started running into companies like Tableau and Looker and these kinds of products, and we found out that the cost to use that and build all of the things we are currently building inside of our one, we could get everything that we currently were doing and then have the flexibility to build whatever we wanted for less cost than we were currently spending at that one. And then we look at other use cases that we can do with that. So most of the time it is really what product can we use to replace as many of our tools as possible that gives us flexibility for the future and can be built into this ecosystem and infrastructure that we're trying to create.

Matt Maxey (10:54):

Penny, I'll just add to that one thing that we use periodically, and it kind of depends. You have to have the right situation, but we found that having really strong partnerships with our technology and infrastructure providers can sometimes provide the ability to ask them for assistance in deploying or funding projects. I particularly find that approach useful when we're going through r and d cycles to test early tech or early infrastructure and say, Hey, we have a business relationship that looks like X. What are you willing to put into the relationship from a funding and r and d perspective? And oftentimes, not all the time, but oftentimes the ones that you have the best relationship with, they'll bring things to the table. And so it may not cover all of your costs, maybe it will if it is a small investment, but looking at your strategic partner base to help strengthen the approach that you are doing together, remove that layer of just a vendor or a supplier kind of relationship with you and then pull them in into the solutioning and the feedback loop on these types of things that you are going to fund together. So we found that to be kind of a successful approach and something that we'll use periodically.

Penny Crosman (12:11):

Anything to add?

Danielle Doyle (12:12):

No, I think the r and d approach has been incredibly successful. Other than that, I personally don't run a p and l, and that's by design because my responsibility is really to bring the best and the brightest to back to the lines of business and have them invest in it. So one thing that has been different type of creative is kind of crowd sourcing funding for these innovative projects between the different stakeholders and making my lines of business understand why this one piece of technology or this one solution really benefits multiple lines of business. So you get 10%, one area and some money from risk, and all these stakeholders really come together to invest in this new solution and it makes everyone kind of feel vested in the project. So that's been helpful in our organization.

Penny Crosman (12:59):

So what's one thing on each of your drawing boards for the coming year, whether it is a wishlist item or an actual thing that you have the budget and the resources for? Maybe start with you, Danielle.

Danielle Doyle (13:12):

Yeah, I mean, I don't know how much time we have for the wishlist. It is very long these days, but I do think that I top of mind for everyone coming out of the light financial crisis for coming out of it, I think fraud is a huge area of concern, especially with the new tools that are coming out that these generative AI issues, they're already fooling our VR systems and all of these different ways for fraudsters to access the bank. So I think that's top of mind finding ways to creatively fix those problems.

Chris Ruppe (13:49):

My answer is going to be boring because it is not particularly innovative, but it is where we're at because we're having to kind of catch up and clean the cobwebs and do stuff. We're replacing digital banking, adding online account opening, replacing a lot of our customer facing journeys to apply for different products. So all of the middleware and data warehouses happening in the background. And I could tell you some fun stuff that we're working on, but the things that are happening and will be live, and I know the exact dates that we're spending most of our time on is just up updating and catching up as fast as we can.

Penny Crosman (14:23):

That doesn't sound boring.

Chris Ruppe (14:25):

Well.

Penny Crosman (14:27):

If people here won't find that boring.

Penny Crosman (14:30):

How about you Matt?

Matt Maxey (14:30):

Yeah, so two things I would offer up. One of them is looking at differentiating ways for us to increase in drive are low cost or no cost deposit base. And so we've got some products and features and some, I would say fairly unique areas of ideation and development right now that will be important for us to continue forward on. And then the other one I would say is we've got several solutions right now that we're piloting or in deep conversations on that really will accelerate our ability to increase and improve experiences for our commercial customers and back office lenders, particularly in things like our renewal cycles, portions of our commercial book from an origination and servicing perspective. We're in the middle or probably the second part of implementation of a large lOS and servicing platform. And so once that's done, there's some components that we're going to add on top of it that are AI driven and we've been looking at and testing with some time that we think will be very accretive to our business. And we're already getting really, really good feedback from our internal teams that are running some live transactions through with our customer base in a very throttled manner. So those will be investments that we'll be looking to push forward and spread across those ecosystems.

Penny Crosman (15:57):

So what kind of consumer behavior trends, consumer behavior changes do you guys try to keep track of to incorporate that or trends you see outside banking that kind of help you or guide you in some of the things you want to do or give you ideas for things you might do in the future? Start with you Matt.

Matt Maxey (16:24):

Yeah, so we're actually having a sidebar about this recently about this. The idea that part of how we think about innovation is not just looking at financial services and banking and how do we take the thing we're already doing to the next level That's table stakes. We should be delivering on that on a consistent roadmap basis. But what I find more interesting is looking outside of finance and saying, what are consumers very interested in? Where are they entrenching say with experiences that are driven by newer technologies where we're not really sure what that means for banking if and when it will ever intersect with us, should we care? And so what we do is we take those types of things and plot them on farther out horizons, so where your strategic kind of possibilities is much wider. And then we decide if we want to start incubating ideas around them.

(17:10)

One example is immersive tech AR VR stuff. And you can kind of I guess draw that a little bit into the metaverse and say we don't know what that means for banking, but what we know is that that technology is getting scale and conference tech and collab tech with the ability to train folks. I mean, there are some really cool companies now that have commercially available software platforms with those hardware sets that can train employees whether they're new or new to the job or even upskilling compliance, like 60 to 70% faster than traditional in-person or 2D training methods. And so that's real data that you can play with and you can say, well, we're not sure if this is a finance thing, but let's pull that in. Let's run a pilot. Let's incubate something, let's become familiar with the technology, maybe do some of that development internally ourselves and be prepared and say, can we walk our way softly into some type of ROI on an interim basis? And if it doesn't come to fruition, we've not spent a lot of money, we just kind of throw it away. And there's a series of those things that you are doing on a continuing basis and making start, stop or continue decisions as you go along that path. So just a couple of examples of how we think about that and things that we think could be interesting, but we didn't really know what that means for banking and finance yet.

Penny Crosman (18:27):

How do you decide who gets to play with the fun new toy?

Matt Maxey (18:32):

Yeah, that's somewhat of a sore subject.

Chris Ruppe (18:34):

 Matt gets it first and then.

Matt Maxey (18:36):

Yeah. So it is interesting, in one case in particular that we're doing right now is we went straight to the business and said, we think we found something very interesting. We're not sure how interesting are you willing to jump in with us? And so we had multiple stakeholders, got them all together, did independent kind of meetings with them. And then back to the earlier question, we asked the potential partner that we were looking at for this, we were like, look, here's what we want. We want you to your hardware with content that looks like this and these variations on these topics, send it to us and let us play with these things in working groups and do studies and then we'll kind of take it to the next step if we're interested. And so in that example, we got it and I just turned it on to make sure I wasn't going to want into a wall and hurt myself, just familiarize myself with it.

(19:25)

And then my team did the same thing and then we immediately took it to the business and started sitting down and saying, does this address your pain points? Are there areas where say for example, you can deploy technology like this to deescalate customers or talk about high risk situations or team member coaching or whatever that is, what we're finding is yeah, there's probably some opportunity there and we're going to explore that and just see what it looks like sometimes. Excuse me. Sometimes it is us and oftentimes it is our stakeholders in the bank get to see that stuff first.

Penny Crosman (19:58):

That's cool. How about you Christian? Do you try to look at consumer trends or other cool stuff in other industries?

Chris Ruppe (20:05):

Yeah, I think there's two sides of it, which is the famous quote, people need banking, they don't need banks. And so the two sides I look at is one, as behavior changes, as new technology introduces itself, how can we provide banking as a bank in ways that make more sense? How can we provide them that banking? It doesn't have to be in our banking app, it doesn't have to be in our branch. So what's the best way to do that? Is it embedded banking? Is it providing it through something like different toys so to speak, the AR, VR, where we're going? And then the other side is how do we become more than a bank? What can we do to help our customers? Do we have a customer base that all has a specific need that might not be what a traditional bank provides, but it is adjacent to that banking piece?

(20:52)

So yeah, we're trying to pay attention to where people are currently running their business, where they're running their lives, and how can we fit more naturally into that? And maybe that's not our brand. Maybe that's something with banking as a service and the embedded banking stuff. Maybe it is our brand, but it is not the typical tech access like an app. And then the other side is if they're going to be in our app, how can we make it more than just a banking app? How can we provide them the tools that they need and provide them cool capabilities that only we can provide uniquely? Because we may have data that other companies don't have their transactions, their accounts. So that's what we're trying to be prepared for. But there's a lot.

Penny Crosman (21:40):

How about you Danielle?

Danielle Doyle (21:43):

Yeah, I mean meeting our customers where and when they want to interact is paramount importance, but I think on top of that, consumers have never been more educated about financial services than they are now. So making sure that we're thinking ahead of what types of products, different ways to finance payments and the next generation of credit cards and those types of things. Making sure that we're interacting with clients how they want to receive services, not just how they want to interact with their bank.

Penny Crosman (22:14):

Alright, awesome. So is there, what's one emerging technology besides virtual reality that you guys think could be practical for the financial industry in the future? Is it, I'll let you throw out Danielle, what do you think?

Danielle Doyle (22:36):

That's a great question. I hit on it a little bit before, but I do think that the future of fraud is incredibly important to where we as financial services organizations are looking. Some of that is AI, but some of that is really re-imagining how our technology works and recognizing that fraudsters probably know more about our technology than we do. So making sure that we have really robust infrastructure that we know very well and we know where the pain points are in order to mitigate that risk to our clients.

Chris Ruppe (23:13):

Now you probably all haven't heard of Chat GPT, but No, we're looking at that, but that's not going to be my answer this time is by far the thing that I don't think is getting talked about enough in terms of what we can do with it. We're trusting a lot of vendors to do so many different things. I mean we have countless oss and pos and lots of different things that do the same thing but for different kinds of products. And we don't have developers, a lot of banks, but we know exactly what we need in the product. So there's a way that we can build things without having to hire a bunch of developers and increase costs a lot. So we are moving a lot of our customer facing applications to being a no-code tool that we're using and building it all in it. I mean it is specific to banking, so they've got the integrations, we can do the automated, the plaid for pulling funding, all that stuff.

(24:13)

But whenever we need to change a couple of small things or there's a compliance change or we see an opportunity to be more automated or more efficient, I can go in and click on something, change the name and do it and then run it through the normal compliance checks and everything. I don't have to wait on my vendor to get me an SOW and put me on their roadmap and do all this for a couple of changes that might take two minutes. It is something that is giving us a crazy amount of flexibility and we're able to move quickly with changing products and providing more unique products and different product lines, specifically medical lending. There's only a few things that we need different compared to a normal loan, but if I go to a traditional vendor, it is going to take me months to explain to them what I need, why I need it, what it needs to touch, and then pay them where in our case I literally asked our person that's leading it, the questions who sent me a document, I went in and changed the forms and sent it to compliance. So I think is where banks that are trying to get more custom and flexible are going to see a lot of benefit and the price is cheaper than what you would pay to have someone else running it.

Penny Crosman (25:21):

Yeah that makes sense.

Matt Maxey (25:22):

One of the things that I think is going to really pick up, and we're starting to see this with a number of solutions oriented around what is referred to as SilverTech, so technology that is designed to meet needs of aging customer bases. There's a few examples out on the market that are really interesting in getting some scale. Some are driving financial transactions and somewhat of a family wallet so that you are protecting say, older members of your family against say internal family fraud or financial fraud. But there's also really cool platforms that are giving insights out to say, Hey, we noticed your mom paid her electric bill three times last month. Have you thought about early onset dementia? Just things like that. With all the data that we as banks have, you can really pull those customer bases much closer to you and drive experiences that are meaningful not only to them but to their family members that may or may not be in your banking enterprise.

(26:26)

There are others that do financial wallets similar to prepaid wallets and kind of approval bases and giving transparency to spending patterns and financials of parents or grandparents. So I think SilverTech is going to pick up and in the room, I am sure you are all thinking about the silver tsunami that's on the horizon and the trillions of dollars that are going to change hands. If you layer that on top of say over the next five to 10 years, the acceleration of real-time payments within the banking ecosystem and everybody cares about liquidity and stable retail deposit bases. That is something that I think banks should be thinking about. And like I said, there's a few out in the industry we're aware of, but I think SilverTech is really, really going to pick up and gain some steam here in the next 12 to 18 months.

Penny Crosman (27:20):

And I think elder fraud is also a large and rising problem. I have spoken with a few banks trying to do more monitor accounts to sort of vet anybody who's a co-signer on accounts and make sure they're not their motives or try to ascertain their motives. And I think to me that's kind of fascinating and there are a number of fintechs that kind of specialize that. And AARP has a whole innovation group that focuses on that. So yeah, that's a super interesting area. We're almost out of time. Can each of you offer one prediction for the coming year? And it could be anything. It could be in digital banking, it could be technology, it could be somewhere else. How about you Danielle?

Danielle Doyle (28:12):

I think the next year is going to be the year of collaboration. I think it is going to be collaborative on three fronts. I think banks are finally looking to each other to help solve problems in a way that benefits everyone. I think we are going to need to be more collaborative with fintechs and big tech to implement a lot of these solutions our clients are wanting. We need to be collaborative with our regulators. I think there's going to be a wave of new rules coming out. I think we all see that and making sure that we're at the table and working with the teams that are making sure that there's a safe and sound environment for everyone. So collaboration is the key.

Chris Ruppe (28:47):

Christian, I am actually going to say chat GPT. This is my actual answer this time. And it goes back to the collaboration. I think typically when these cool technologies come out, the people in the bank looked at me to answer how are we going to use it? And my answer is, I am focusing on all the other things. I haven't been able to play with it, whatever. But because I am able to work with Matt and Danielle and Chris Nichols and all the other innovation people in the industry, the things that Chris has spent a lot of time actually diving into it. And so he's able to talk to us about what they're looking at it and then gets our perspective and we can play with it. There's some legitimate use cases and I think that you'll see, I don't know how much it'll be customer facing, but I mean last night we were talking at dinner about some things that we're legitimately working on that we can implement that will help us with fraud, help us with compliance and help us with internal knowledge. So I think that's here to stay. And I'll echo the collaboration. We're not salespeople. So when I see Synovus, I don't think of all they have branches in our market. I think, oh yeah, me and Matt got to talk about some fun stuff. So I think the industry itself is going to benefit from the nerds not being competitive. Alright,

Matt Maxey (30:01):

Last word. From my perspective, I think it is similar to the collaboration piece, but maybe more on the enablement side. I think there'll be more solutions that come to market and banks will aggressively be more willing to invest in technology labs based or early stage vetting technologies that help us make decisions much faster Earlier in the product development cycles, if you think about what happened to us with crypto right around covid and how we all felt overwhelmed by how fast that moved and came on the banking sector. And then you look at how the AI movement just very recently has even more so come upon us, the waves and the inertia picking up. And so the reality is that's not going to slow down. It is only going to move faster. How are we going to equip both from a tech R&D perspective, but also the organizational change component risk management, third party risk compliance to be able to test and say, I like this, it has value, or no it doesn't. And move to the next thing. Those disciplines and those technologies in the marketplace will be really important for banks to adopt and really kick into high gear to be competitive.

Penny Crosman (31:09):

Okay. It is no shortage of things to do. Well, thank you so much. You guys have all been great. Great panel.

Chris Ruppe (31:15):

Thank you.