Shaping the Future of Digital Banking from Strategy to Scale

Explore how AI is redefining the digital banking landscape, from strategic planning to scalable execution. This session highlights how CDW, in collaboration with industry-leading partners, is helping financial institutions build intelligent, secure and agile infrastructures. Learn how AI agents are enabling real-time fraud detection, personalized customer engagement and efficient transaction management, all supported by responsible governance and seamless IT orchestration. Discover how your organization can harness this innovation to deliver next-generation banking experiences.


Transcription:

Aaron Cheiffetz (00:10):

Good morning. How's everyone doing today? Late night last night. It's a surprise. We have as many people in here at nine o'clock, but thank you for taking the time to join us here today. We have sort of a 20 minute TED talk type sort of flash speed round session prepared for you. So we're going to hit the tops of the waves in terms of some of the capabilities that CDW has, some of the things that we bring to the marketplace specifically for financial services, how we service many of the firms that are here in attendance at this conference over the course of the past couple of days and into tomorrow. And I'd love to spend some time and have some interaction. If you have any questions, anything you'd like to ask, we'll certainly try to answer that for you. If we can't, we will get back to you with the answers. So before we get things kicked off, just want to ask just a broad sweeping question for the audience. How many in here are familiar with CDW?

(01:09):

Okay, good. Handful. So I asked that question to say we have a lot of sort of name recognition in the marketplace, but I think a lot of times when we're meeting with clients specifically in this particular vertical, there isn't as much awareness as to some of the broad capabilities that we bring to bear. And a lot of that is through m and a activity over the course of the last several years. Some of that has grown organically and we'll talk a little bit about that and really how we can help accelerate the digital transformation for each and one of your firms, whether you're a partner, whether you're a client, or whether you're an industry peer or colleague. So again, thank you and we will, we'll sort of get things going here.

(01:59):

So if we look at what the future of digital banking looks like today, and one of the things that's front and center to how CDW interacts with our clients is we really make a very conscious and meaningful and thoughtful effort to meet our clients where they are in their digital transformation journey. So we worked with firms of all different shapes and sizes from smaller regional banks and credit unions to some of the largest banks in the United States and globally. So if we look at what are the core dimensions of what instantiates the future of digital banking, we break this down into sort of four different pillars, if you will. So you look at proactive security, having the security framework and a 360 degree dragonfly view around each one of your individual applications, tools, transaction flows, and how it is that you service your customers. Over on the right hand side, we look at personalized advice.

(02:56):

How do you create a more intimate customer experience? So we heard a lot yesterday from industry leaders in this space that work in industry, and what does that mean in the context of artificial intelligence? We'll talk a little bit about artificial intelligence, probably something you haven't heard in any other session since you've been here. And what does that mean for your individual institution? What does that mean for your clients? How do you drive ROI out of the investments that you make in artificial intelligence? And then what is that business impact? What are the use cases that are most impactful to your business to drive client engagement through digital platforms? Through personalized advice, through seamless transaction and payment systems? If anyone had the opportunity to join the open banking session yesterday, you heard a lot of dialogue around what that means and what that sort of API framework looks like and what it could look like in, I would say a regulatory landscape that's moving and changing very rapidly with some uncertainty around it.

(04:04):

And then over in the lower right hand corner, we look at real time agents. So AI agents from our point of view at CDW, have a role to play. We've seen clients that have deployed these mass for fit for purpose, task oriented, repetitive things inside the construct of the financial institution that can be then decomposed and repurposed. And we've seen some financial institutions that are just sort of dipping their toe in the water with agentic AI and understanding what impact that has on their business. Again, our sort of overarching theme is to meet our clients where they are. And so we'll talk a little bit about what the future looks like. Just if you look at 2024, this is a Gartner statistic from this year. 12% of banks had deployed artificial intelligence agents in some way, shape or form. And then you fast forward to the present to 2025, Gartner's prediction is somewhere around 50%. So you'd have an increase there by a factor of three x basically, in terms of the number of banks and financial institutions that are adopting these types of services into their technology ecosystem.

(05:27):

We had a handful or more of folks that raise their hand and are familiar with CDW and sort of what we do and how we do it. And maybe that's at the transaction level. There may be some, we saw a lot of devices, OEM reference architectures for high performance compute frameworks. And so there's a lot of both off the shelf and custom bespoke builds that we do for our clients as it relates to sort of digital infrastructure. But if you look at rewind the clock, about 40 years or so, CDW began its roots. Were sort of grounded in Chicago, Illinois as a technology, your traditional VAR selling computers. And then over the course of time, what we've done is we've both organically and through m and a activity, we've developed deep industry expertise. And so today we have a fully formed vertical channel inside of CDW that does nothing but serve the financial services industry.

(06:29):

We have something similarly situated for our healthcare clients, for example. And so we've taken the platforms, the offer sets, and the capabilities that we think meet the needs and based on feedback we received from our financial services clients and built that into a fully formed vertical. And so what you have today is we'd like to think that could potentially serve as a trusted partner to your organization. We may be doing business today, I will just sort of a PSA. There are a lot of different organizations, just like your firms have a lot of different organizations. And so really the conduit into CDW is through our sales organization. You should have someone that's client facing and able to get you to the right people and synthesize the right team to coalesce around what your initiatives and objectives are. And then we can sort of work backwards from those outcomes to the actual tech stack.

(07:29):

And so just a brief snapshot, so who we are and how we fit into the market landscape, you could put CDW today into the service integrator sort of category. So there's no shortage of sis out there, but we feel like we're a little bit unique in terms of the depth and breadth that we bring around the different technology stacks. And we certainly recognize that it's not a one size fits all. Each of your firms have different needs. And so we want to look at risk, we want to look at regulatory compliance. We want to look at in the context of artificial intelligence of fairness, make sure that the models are fit for purpose and then where is the best place to run this? Is it best to run it on-prem? Is it best to run it in the cloud? And so those type of upfront strategy sessions are something that we very much engage with our clients.

(08:22):

And so how we transaction, how we interact with our clients varies. It could be clients will enlist CDW just to sort of build out a strategic 12, 18, 24 month roadmap. Some they understand that they have a need to move 10 workloads to the cloud, but they're not really sure how to get there. So we can really serve our clients from an end 10 perspective. And as we'll see here, we partnered with more than 20,000 organizations. And from a banking perspective, we support 99%, excuse me, we support about 99% of the top US banks. So we're probably doing business with you today. You probably bought a laptop from us or you probably bought a server from us or a cable for that matter. But we do business with almost all of the banks that are based in the United States. And we look at 55% of the top United States credit unions that we do.

(09:23):

Business are capital markets is a little bit of a unique sort of demographic of customer. The needs there are a little bit different, but we have an entire team who's led by a gentleman in the room here today that does nothing but focus on capital markets. And so that same framework of strategy all the way through scaling through the technology stack and helping those capital markets firms even inside an institutional bank, separate the noise from the signal and come up with creative and strategic ways to drive alpha. So these are different areas where we've placed our bets and made significant investments in. And with that, we have over 150 dedicated salespeople that are out in the field. They're out visiting our customers, mainly here in the United States, but also in Canada. Also in the uk we have a United States based support model. We can also tailor that to a follow the sun model. It really depends on what best fits your organization.

(10:21):

So when we look at partnerships, one of the things that I would say is sort of a differentiator for us. You've heard from and seen some fantastic demonstrations and heard from some of the tech suppliers and vendors here at CDW. We have some e-procurement capabilities that are unique to us. We have some artificial intelligence. I had the honor of listening to one of the chief technology officers from a major firm yesterday that talked about how do you hedge against different threat vectors, whatever those look like. And so whether they're coming from a foreign nation or whether it's coming domestically from a cyber attack group, and I think his answer was something along the lines of 95% we can solve for with sort of off the shelf security products and services. And then that other 5% are proprietary tooling that we built in-house. We sort of have a similarly situated approach here at CDW where we have some proprietary artificial intelligence that we use internally to talk about the things that I mentioned in terms of how do we interact with our clients, how do we understand our customer, the know your customer story and how do we glean insights so we can sort of predict what the next thing is and help our customers along that journey.

(11:37):

But from a strategic partnership perspective, we put had the opportunity to put some key partnerships up on the screen. And I think this is important and relevant to your firm because when you engage with CDW for services, whatever that means to you, we come with an opinionated point of view, but unbiased. And that is to say we are not perhaps AWS is the right cloud for a workload. Perhaps GCP is the right cloud, if you will for a workload. But we support the entire life cycle. And some of our key strategic partnerships, I won't go through each individual certification that we have, but having some Google Cloud fellows on staff here to help support our customer journeys that choose to deploy in GCP and build bespoke platforms inside of GCP. Certainly in the center in the lower portion of the slide, we were very proud in 2024 that we were NVIDIA's partner of the year for financial services.

(12:38):

So we worked very closely with Nvidia, both from a core GPU perspective all the way through the NIM microservices and the enterprise AI stacked to build custom applications for clients depending on what the need is. And then in the lower right hand corner and the upper right hand corner, so it's sort of two sides of the same coin. So IBM, red Hat and then Hashi who's not mentioned on the screen. So we support the full lifecycle. In 2021, CDW acquired a company called Sirius. And Sirius was IBM's largest business partner. And so that gives us a unique set of capabilities as a lot of the firms that are present here today at the conference running workloads on mainframe. And so you may or may not have upgraded yet to the Z 17. We're actually going to be with IBM at one Madison Avenue next week for an artificial intelligence briefing.

(13:31):

So you're welcome to join us at IBM's Innovation Lab in New York. But having acquired Sirius in 2021 and being IBM's largest business partner, that gives us the unique set of capabilities around mainframe modernization, around power around Z. And then the tie in as IBM begins to tie in some of the Red Hat portfolio and then some of the things that Hashi brings to the table like Vault and Terraform. So those are all sort of piece parts that we support as part of our DevOps practice, which again is part of the broader ecosystem of partners that CDW brings to bear. And so the theme of this session was from strategy to scale. And I think that's important in the context of partnerships. What we've seen and what the feedback we've received from a lot of our financial services clients is that there's a desire to have deeper partnerships, but less partners, if that makes sense. So skinnying down the number of vendors, but having deeper partnerships with those GSIs in which they transact with today is to really get an opportunity to understand and know your business in a very intimate way. And so that's our aim for each and every one of our clients is to have an impactful and meaningful engagement that drives value.

(14:56):

So we'll talk a little bit more about AI. We look at the role that those autonomous AI agents play today, and there's an area of passion for me personally, and I think that probably where each of you are in your AI journey is probably in a different place. Again, I think it's a McKinsey statistic from the last couple of months or so that there were 92% of the firms that have some sort of budget for artificial intelligence and just north of one in between one and 2% had reached what McKinsey deems to be full maturity. So I think we're still in the early days of that. But I will say our point of view at CDW and what we're seeing more and more of from our customers is, okay, I've made an investment here. Now how do I actually yield revenue from that investment? How do I shorten that ROI curve?

(15:55):

And so that's one of the areas through our advisory practice where we can come in and actually look at the IT economics. And so we take a very thoughtful and meaningful approach looking at cost versus performance. Is this amount of compute required? Is this amount of cloud, are these amount of cloud resources required to actually run your workload? Our large language models is bigger, better, or is a smaller three 6 billion parameter model that's fit for purpose that can be repurposed throughout the organization? Is that a better fit? So those are all sort of different dimensions that we can help your organization with. And so you look at this Gartner statistic that I've quoted here, about 15% of the daily business decisions are going to be made by autonomous agents, and that comes within the next three years or so by 2028. So we see that curve and we see that adoption growing at an even faster pace than what this chart represents.

(16:59):

And so I'd be curious to understand, we certainly have time here for a little bit of q and a, but the different roles that these sort of AI agents play in the context of a financial services firm. If there's one key takeaway that I had from listening to some of the industry leaders speak over the course of the past day and a half or so is that when it comes to artificial intelligence and the role that plays inside of a financial institution, it's all about enhancing the customer experience. It's all about understanding your customer. It's all about how do I actually glean more revenue? One of the sessions quoted on average, an individual has at least three bank accounts. So the notion that, and what does that look like? And so understanding how to tailor that message to that individual client.

(17:51):

So sort of six tiles here in the interest of time, I'm not going to go through all of them, but these are sort of the components where we see this playing. And this is based on direct feedback that we have from our clients. And so you look over on the left hand side and the different sort of use cases, if you will, which is what this chart represents is sort of just some ideas and what some use cases might look like. But we look at real-time fraud detection and where that plays with each and every one of our customers. And certainly with all of these things viewed through the lens of risk, we talked a little bit about client insights and I think that's critically important and certainly based on the feedback that we receive at a macro level based on the number of institutions that we do business with today. And then we look in the lower right hand corner of the chart, what does that personalized experience look like and how does that individual customer have a more intimate relationship in a digital and seamless way where it's outside the brick and mortar of a traditional branch bank?

(19:01):

So I'd be remiss if I didn't talk just briefly about infrastructure and where CDW fits into that context of infrastructure. So our point of view is around hybrid cloud and ai and you sort of can't have one without the other. And so we don't really see too many, unless it's a very specific FinTech that was sort of born in the cloud. Most of our customers and many of your firms, you have investments that you've made in premise-based architecture. And so when we start to take a look at what is the life cycle of that architecture, what sort of needs to be, refresh again, fit for purpose, workload placement, what could possibly be deprecated inside of your organization? Those are all areas in which CDW has a role to play. And so in the context of artificial intelligence, which has been a through line of this presentation, we really pride ourselves on our hybrid infrastructure capabilities.

(19:57):

And so we partner with all of the OEMs, including some of whom you saw up on the screen in terms of whether it's nvidia, whether it's some of the others that have AI ready infrastructure. But we actually take the OEM reference architecture. And because of our sizing and scale, we sort of have unique access to some of the OEMs and that it can be built on Nvidia, for example. We work within the mainframe and the IBM stack and that ecosystem, and then through all of the sort of hyperscalers. And so what we have and what we bring to the table are validated reference designs. And so that's the sort of beginning point of the journey in that reference architecture and understanding that no two customers are alike, no two firms have sort of unique requirements If there are, we have one customer, for example, that wants to deploy OpenShift in a customized way.

(20:52):

And so we were able to accommodate that for this particular financial institution on an OEM reference architecture. And then actually building through our platform engineering capabilities, an agile DevOps factory and retooling how this particular firm does business today from an intake outtake perspective in the context of centralized it. So the good news is there's a lot of different things that we can do. The bad news is there's a lot of different things we can do, but if there's nothing else that you take away from this session, I hope that you'll sort of have a broader understanding of some of the depth and breadth that CDW brings to financial institutions and the different capability sets that we have, again, across the technology stacks across all of the major hyperscalers and then across all of the OEM reference architecture plays. And so some of these things that tie into the IT orchestration mechanism, we have a lot of in-house talent.

(21:52):

So we have all of the certifications that you saw up on the chart across the different platforms. But what we also do in a way that we also serve a lot of financial institutions is through our talent orchestration capabilities. And so we have firms that will come to us that say, I need seven people that can do this, this, and this. And we have the ability to spin up what I'll call it in a box. And that can be on a project basis or that can be on an ongoing staff augmentation basis. And I'm sure that some of you have sort of recognized some of the challenges in the skills gap that we have in being able to hire the right people for the right tasks. So again, whether it's an interim solution or whether it's something longer term, those are all areas in which we can assist.

(22:40):

And lastly, as we sort of wrap up, I know we're almost out of time here again, I'll sort of throw the invite out there one more time and we can get this to you in digital format. For anyone that's located in the New York City area that would like to join us June the 12th would be at one Madison Avenue with IBM. It's a thought leadership session with some of the folks from CDW and some of the leaders from IBM to talk about ethical and responsible AI and what that means in the context of financial institutions. But we really align to industry standards from that perspective. So building trust in autonomous AI systems is paramount. And so we align closely to Gartner's AI government's framework, and that's across all of the different ecosystems and tools that we use. And the last thing that I'll say on this is that we really try to drive business outcomes for our customers.

(23:32):

I know that's a bit cliche. We really embrace it at CDW. So for us, it's less about the technology and more about the business outcome and whatever that means, and whether it's trying to drive more engagement through digital channels, whether it's trying to increase the average revenue per individual client, whether it's in a capital markets organization inside your institution trying to drive more alpha. We want to look at what are those business outcomes. There are components of ai. We're talking about enhancing and unleashing human potential as opposed to actually replacing the human, although some of that is occurring and will continue to occur. The things that you're probably already doing today in terms of automation and things that are sort of mundane and can be automated in the back office. And then again that really intimate customer experience and having the ability to anticipate what the next thing is for your individual client, particularly as we look at the tokenization of assets and what that means in the context of banking.

(24:30):

So with that sort of an eye chart, so I appreciate that, I apologize for that. But we just look at the dimensions that we play in here at CDW as it relates specifically to this particular sector. We really appreciate your time. I think we have time for maybe a few questions here. But thank you for taking the time to join us today and learn a little bit more about CDW. And again, I would encourage you, if you know who your salesperson is, feel free to reach out to that individual and we'd be happy to sit down in a working session with the appropriate subject matter experts. If you don't know or if you would like to know, we can get that information to you. So that's what I have today. I'm very appreciative of everyone taking time out of their day. If anyone has a question, we'd be happy to take them. Any questions? No. Alright, silence is golden. Thank you everyone. Appreciate it. Have a good rest of the conference. Thank you.