Transcription:
Gary Singh: (
The topic we are gonna talk about right now actually is a nice segue from the previous session, as well as the session before that BNPL. And also are there gonna be cards or no cards? Our thesis says is that you are gonna have a million plus cards for each one of your banks or financial institutions because we think there is gonna be an interesting sort of dynamic as digital starts to take hold of where the market is. Now I do have a bit of a problem because I was expecting a clicker but I do not have a clicker in my hand, so I can't move the slides forward. So if somebody can just give me a clicker that would be great.
Gary Singh: (
So, like I said, my name is Gary sing. I am with Zeta and I am the president of the company we have been here for only about nine months in terms of post stealth mode. We launched our company at money 2020 last year. So really excited to be here today. So some stats, I think you are really aware of what is happening in the industry, but sometimes putting a number to it, to refresh yourself is always a good thing. So 33 trillion, right? That's a spending power of the gen Z. We all know the gen Z Mar industry. We all have talked about it, but I would argue at this point that nobody's really serving them. I will also argue with the fact that nobody's really done a good job with the millennials as well, especially when it comes to financial services, which is why all the fintechs exist today, right?
Gary Singh: (
If there was no such, the fintechs have seen an opportunity to basically capitalize on understanding how the market is shifting and how you can use technology in other methods, using digital as the forefront to drive fundamentally new paradigms in the marketplace, which in the financial industry market, we have sort of missed the market this point. So big opportunity obviously and you have to start early from a strategy perspective. Why is this important? Like, and I think you probably went to a lot of different sessions talking about, how gen Z is different. And some of you probably have gen Zs in your house. Some are actually working at this point I have two nephews who are working at Amazon at this point. And both of them do not own a car. They have no plans to own a car.
Gary Singh: (
That is not in their DNA at this point. And they resisted it. My daughter is 19, same thing. She does not want to own a car. She does not see the need for owning a car. Does not even want to get a driver's license. And why is that? Because digital has changed their life. They do not need a car anymore. They do not need gas anymore. Right? The fundamental shift is happening in front of us. And we need to recognize those shifts in the marketplace to fundamentally understand how are we gonna sell financial services to this category that fundamentally is so disruptive in terms of how they think about spending money and where they wanna spend the money. Obviously we know about the grocery shopping, the pandemic definitely accelerated that people do not want to go to the stores anymore. We order food at home and I will give you a funny example of the food.
Gary Singh: (
How people are getting a little bit caught up in that. And this is pre pandemic, by the way, a very good friend of mine. Mine is a millennial lives in San Francisco. And I went to his house for dinner one night. And he says, Gary, I got, I am gonna order the best stuff in the city today. I am like, how are you gonna do that? We are gonna eat the dinner at the house. He says, I am gonna order my best dishes from three different restaurants. I said, great. So he orders the three different dishes. Of course the three dishes come over to the house. And I said, by the way, did not you mention that you are really into climate control and what's happening with the climate in the world. He said, yes, I guess you just used three cars to deliver your food.
Gary Singh: (
That is three times the gas. You burnt to get these three dishes to the table. But anyways, interesting things happening in terms of the shift in what is happening in the industry for hotel travels. I do not think the last time I can remember when I went on a vacation and I went to actually a hotel, every room looks the same, right? There is no diversity in those areas. Obviously we are here because it is a conference, but on a personal front, I don't think I can remember last time I spent money in a hotel it is always VRBO OS or air and B. And I am not even part of that generation at this point. And then of course, how you consume media all this stuff, right? We all know all this stuff. However, we also know that nothing really has changed in terms of how we serve these customers or these segments of the marketplace.
Gary Singh: (
You have seen the industry sort of evolve over the last 20 plus years and that acceleration just continues, right? There is so many different iPhones that have come since it was launched in 2007 to early 2021. But if you look at the fundamentals of a credit card, they have not shifted much. Now we can talk about NFC and we can talk about things like it's contact less but that does not drive something meaningfully different for the consumer. If, as a matter of fact, we just talk about the behavior has not changed because there is still friction from acceptance perspective or actually the act of using a wallet or the act of fundamentally pulling out your phone versus the card etc. So we really have not seen any innovation there. And there is a reason for that obviously. And the reason for that is we are stuck in really a whole bunch of legacy tech that does not allow itself to deliver cards at scale in a digital environment.
Gary Singh: (
So this is fundamentally what is happening in our industry. We try to compete on the basis of rewards and fees and that is about it FIA and FI 10 fundamentally have the same product. And if you look at their websites, you may have two cards or maybe you have seven cards. It is fundamentally a challenge to basically serve a market that does not care about this model anymore. And you have to think differently in terms of how you can basically drive a certain level of innovation that has been stuck for the last 30 years in terms of the plastic and the fundamentals of the plastic in the industry. So, changing the status quo and embarking on a new journey, if you really want to think about serving not only the gen Z and the millennials, but also gen Xs, which is where I sit.
Gary Singh: (
And I will tell you out of some of my personality traits. I do not think I have gone to an ATM in the last eight years. This is a fact I have not carried cash for the last eight years stopped doing it because I do not see a need for it. And I think it is pretty much true for most people at this point, but there is a lot of people still doing it because they do not understand why they do not need to carry cash. I live my life. I travel all over the world, but never, ever have carried a single dollar in my pocket. Over the last eight years, I have also not written a check in the last eight years. And that is also interesting, although my wife has written some checks in certain unique cases, and I ca not even find a checkbook.
Gary Singh: (
If I have to go look for one, so you can do business today and you can transact without check and cash. However, we have just not provided the right set of tools and services to the market to fundamentally eliminate that. We believe the answer to this is hyper personalization. This is something that has not been possible until recently. And the reason for that is because our tech technology stacks have been, I would say archaic at this point, and I think most of you have gone through those pains. We talk about conversions sort of pains and the cost of switching, etc. But after you switch, it's pretty much the same old stuff. There is nothing fundamentally that is changed our industry from that perspective. But we think that if you really personalize your products and rather than having seven credit cards maybe have in finite number of credit cards based on behaviors and psychographics of the users, you are trying to serve, my daughter tried to apply and we are talking still 2022.
Gary Singh: (
At this point, she started school last year in college and I thought the fintechs had made it, she applied at chime. She applied at discover and she applied at another provider. And she was rejected, not a credit card. I am talking a debit card. She was rejected at all three and nobody has the time to call them back and say, Hey, why did you reject my debit card at this point? So technology is still not working even in 2022, even though there is a lot of success happening in the marketplace. So we feel that hyper personalization is the answer. However, the technology is not there today. In terms of delivering a very specific use case to a specific person at the time of their transaction or before the transaction or after the transaction, there are certain things coming into play that we will see, but definitely there is a lot of things that need to be addressed.
Gary Singh: (
So what are the personalization building blocks? And this is the shift that is happening from a banking tech stack until this point, these were all there are still legacy systems as we like to call it. You do not really have the right set of data available to think about personalization. You definitely have some data to understand card behavior, but you really do not have enough data in the right client form to decide to say, hey, if I have a hundred thousand sort of customers, can I have a hundred thousand sub-segmentation for those customers? And what is the right sort of service that I wanna offer to them based on who they are and what they do. It is not possible today, but with data, it is possible. The fundamental secular thing that needs to be addressed for that is your systems have to be in the cloud.
Gary Singh: (
So you can really mind the power of the cloud to drive the analytics, to drive the data that you really need to use to create these hyper personalized experiences. Second thing, which is unique about this is real time. Everything has to be real time in today's world. So when you talk about psychographics and things like that don't think just about when you are going home from, work, there is certain people who are spontaneous, they basically just need to buy a meal on the way and they will pick anything that they can spontaneously attract them. Some people are emotional in their thinking. They think about, I had a tough day at work, so I need some kind of comfort food today. Some people are gonna be more structured in the sense that they have, they ate something for lunch.
Gary Singh: (
So they are gonna go pick something else on that particular day. So same thing can apply to financial services. Everything does not have to look exactly the same for everybody that you are serving in the marketplace. So real time really plays a big role in that. So far, all our products were created at a time in time in your product strategy. And they stay like that for the rest of their journey. I have never seen a your credit card basically evolve into something different. It is always the same credit card for the last 10, 15 years. There have to be contextual. So that goes without saying, so what is the right use, value proposition you wanna deliver at the moment of truth or in the moment that matters to that person. So thinking about somebody who is a gen Z who may have just, okay, maybe a millennial at this point who has just bought a house.
Gary Singh: (
So when they have a credit card, what type of thinking do you want to apply to that person? That they have just used all their savings to go buy that house at this point. And now they have to think about buying some furniture and other things. Do you really want to charge them the 18 or 20% APR? Or do you wanna think about BNPL? How do you infuse those things into the conversation? And then finally it comes down to ecosystems. You can not do this alone. You have to marry this with other surround services, whether its insurance, whether it's automobile servicing and the merchant ecosystems delivery ecosystems. So you have to infuse your products with multiple different entities to make that happen. That's where the building blocks come into play. And until this point, you cannot do this today because you are stuck on legacy stacks.
Gary Singh: (
That is the reason for that. So we think that there is a number of different things. This is just a starting point for this conversation. The way we like to talk about it, that from a card program perspective, and a lot of the stuff that I am gonna say will sound obvious to you, but when you take that information and you try to personalize it from a segmentation perspective, it becomes impossible. You just can not think about how to take a program and make it into a personalized program. So you start with data. So that is number one. So how do you basically start to use the data? Not only at the user level, but at the aggregate level structured and unstructured data. And if most of you here have seen over the last three to five years, the big thing from a consumer experiences, data enrichment, right?
Gary Singh: (
Clean the merchant data and then enrich it. And that is a big project by itself, but why, why is that not part of the technology stack? Why do you have to make that special effort to clean the merchant data, right. And you invest money into it, and then you don't really clearly see what the value proposition is on the other end, because you are still having to deal with another separate system that is not fully integrated into your payments platform, so to speak. So these are disparate products that just like your debit and credit programs, don't talk to each other, your credit program and data enrichment. Yes. They are integrated, but are they driving the right experiences for your customers when you connect that those two elements for together? Next one is form factor. I think in the previous conversation they talked about is at the end of the card, we think there is so many possibilities by going digital.
Gary Singh: (
And I think the underlying technology on the form factor will be the virtual card. And we think you can create one too many relationships, whether it's a one time transaction or whether it's a family distribution, whether it's a small, the Gigster economy, whether you have temporary or small business owner, who is just started to do delivery services. And they bring in temporary workers and they create cars to deliver those services, to those delivery drivers. And they use gas to pump into their cars, not a fleet card, very cumbersome, very expensive. You are not gonna serve somebody with, who is got a independently owned operator with five or seven drivers who change rapidly with a fleet card. That is not gonna work. So there is form factors gonna play a big role in that configurations. This is the power of the technology today.
Gary Singh: (
Configuration, what we mean by that is product configurations. So it's impossible to create a hundred different products for your audiences, let alone create two or five, cuz each one of them becomes a massive project for you. You, we believe that flexible configuration where you understand the dynamics of your SEG sub segmentation. So you take the macro level segmentation and sub-segmentation, and then massively create these. I would call it a product factory so you can serve each one of them through a digital mechanism. The plastic will always be there. We are not saying it's gonna replace the plastic, but taking it to the next level through digital harness that power as you go forward and then card behavior. So how does a card actually perform? Is it a one time use is a multiple time it use? Is it gonna be certain spend limits based on the type of virtual cards you were creating or other, it could be a QR code for that matter for a certain transaction.
Gary Singh: (
We were at a very large entity recently. And one of the things they shared with us was they approve people, pre-pro people on auto loans. And then these folks basically are running around with their checks to the dealerships. And there is these verification of the whole process that is very cumbersome using fax machines, etc. Why not just give them a virtual credit card? They can go to the dealer and just use that virtual card to buy a card that is totally possible. Then you will talk about, okay, there is interchange fees, etc. You can solve those problems through a digital mechanism. Do give a refund to the customer for the interchange transactions that may have occurred because at the end of the day, you are making the money on the interest rates, not necessarily on the interchange on that.
Gary Singh: (
So there is many different ways to think about using these cards for other use cases that we have not thought about. And finally, the ecosystem who are the other people who are gonna play a role in personalizing this experience or this use case, this becomes partnering with merchants, partnering with other service providers, especially digital providers and really creating a new paradigms of products that you are gonna basically personalize. Maybe you won't do. If you are a hundred thousand accounts, maybe you won't do a hundred thousand different products. Maybe you'll do at least maybe a hundred. Maybe it's a thousand, but that possibility should be available to you so that you can serve your market and retain that market as you go forward. And of course the partners come into play. Doesn't matter if you are a community bank or a small credit union or a large bank, you have the ability to partner at the local level or at the national level to drive better experiences and better personalization of the products.
Gary Singh: (
So data we believe is in three categories. So it comes down to capturing all the data across the life cycle of the users and at the macro level, and doing even crowdsourcing to some extent, it has to have real time access of this data. So you are making these decisions in real time to influence the personalization of the product. And then finally the analysis of this data structured and unstructured data to decide to define the value propositions in the cards, life cycle the human being who is using that card as they go and it's not gonna stay static for the rest of their life. They start in a new job, they basically get married. Your card has to change. That experience has to change as you go from being the first time, as an intern to getting it the first job all the way into retirement, if you will, can't be the same card for those 40 plus years.
Gary Singh: (
So on the form factor, we think that it's anything is possible. You can go all the way from virtual cards to variables, to XP wallets, tokenized cards, physical cards, all of these basically are allowing you to personalize, not only at the specific form factor level, but also at the time of transaction and certain cards you want to use for virtual capabilities, certain cards you want to use for the physical capabilities, certain cards you want to do, instead of tap and pay, maybe it's a scanner based solution, which is very effective as well. QR codes. We all use QR codes every single day. For those of you who go to Starbucks very, very quick and efficient way of making a transaction. So think about those things in terms of personalizing those capabilities based on the transaction side and flexible and dynamic, and configuration.
Gary Singh: (
This is the heart of personalization at the end of the day, all these things that you see when you create a new card program is something you do, but it takes you six months, nine months, sometimes a year to come up with these elements and then you launch the product. And then that product never changes. We believe that if you have a product factory, you can basically dynamically and flexibility on the fly, basically build new programs and new products. You do not need your processor. You do not need your technology provider to sit down with you and create a six month project for you. You can do this in a day. If you think about it the right way and personalize it at the level, that is where we believe the technology needs to be, to really think about how the other industries have been disrupted.
Gary Singh: (
This is a super exciting time for all of us. Financial services is gonna look very different in the next 10 to 15 years. We know everything that is been going around in the VC industry. Everything we that's going around with the FinTech banks, credit unions, all, if you are innovating every single day and it's gonna look different and we feel that personalization is gonna play a huge role in who is gonna win, and who is gonna lose, as this disruption continues, card behavior, a lot of you are used to card controls, but you have to think differently about them as you go forward. It is not just about turning the card on off. It is really about how you distribute those services with a family member who starts with I am the primary account holder. I have four virtual cards for my family. You do not have to get involved in that. You are giving the power back to the account holder.
Gary Singh: (
And then the account holder understands their family better than you will. And they are able to offer them a customized, personalized virtual card or a physical card the way they want to define it, not how you want to define it. So card behavior and the controls that could go into fleet, it could go to small businesses. All of that is possible as you go into the modern era of digitization. So finally it comes to rewards and offers. This is the anchor of loyalty in a card program. We believe that this, again also does not have to be a very static approach. I give you 2% back, or I give you five points per dollar spent. We feel that these rewards should be changing on a daily basis. You have to think about how do you basically interact with digital providers who want to serve your market, right?
Gary Singh: (
You are fundamentally, once you have a mobile app and a presence in the market, in the hands of a consumer, you are a publisher. So might as well leverage that and think about how to basically allow others to add value to your program. Now, I am not trying to say you are monetizing the customer. Of course you can do that. It's really about how to add more value to their consumer so that they start to think about that this is the program that I wanna stay with because it understands my needs. Simple example, here, you buy a new car. Well, guess what? You are gonna need insurance. So why not integrate with some digital provider? There is a lot of those. And you will see this, the fintech's do this all day. These days, every single FinTech offers insurance services as part of their card program.
Gary Singh: (
Why can't you do that as well? If you're a FinTech, let's go take it to the next level. So, you know, those things are so super important, real time communication at the time of that decision has to be important. And then finally flexible APIs to make this whole program really effective in the marketplace. So there is a whole bunch of stuff behind there. This is just the tip of the iceberg finally context, right? So context is all about before, during and after a transaction is taking place. How are you really engaging with your customers? And the card holders during those transactions, does it have to be a virtual card? Does it have to be a physical card? Should it be a QR code? Should it be a loaded, separate BNPL category for them to go buy furniture? Should it be basically buying a car?
Gary Singh: (
Right? All those things sort of come into place in terms of where the transaction is happening. What is the transaction for, when is that transaction happening and how is that transaction happening? That is a personalized way of thinking about a cardholder's journey during a transaction before, during and after a transaction. Here is a quick, simple example, right? Contextual BNPL somebody just made a transaction of 200 bucks at Amazon. You send them a in notification, instant notification, understanding the data, understanding the customer beforehand, and you can convert that into a loan product. This is BNPL here, basically. So you can compete with the BNPL players and with one click, you have just fundamentally changed the dynamic, meaning that user, that millennial or gen Z, or even myself, if they want to take advantage of that, they can do that in seconds. And you do not have to create a new product for that to happen.
Gary Singh: (
So this is a quick, simple example that we thought we would resonate, especially when you talked about the session before that, ecosystems really comes down to distribution mechanisms. We think about this in two ways. One is distribution for acquisition and better banking, and the other is to deliver value. So delivery mechanisms. So how do you bring in, into your ecosystem, other players that will help you create a better experience or a personal experience for your cardholders new use cases. Those are the new revenue generation, elements, or just pure value creation for your cardholders. If they spend more, everybody's happy if they revolve more everybody is happy and then customer experiences, right. Tools and capabilities. So those are the ecosystems that you have to think about in pro personalization and all of this is starting to be possible in the marketplace.
Gary Singh: (
So when you think about creating a personalized use cases, you think about yourself as a financial institution, you are creating these programs or cards, as a product factory you start to work with what we would call as delivery partners. These are the ones that enhance that value to the consumer, right? So think of this. What would be in the old days, a co-brand program, we think that is gonna die very fast. It is already dying to some extent and it is gonna die even faster because it is very limited with one particular merchant. So you think you start to think about local and you start to think national as well. And these delivery partner, it could be insurance company. It could be anything you can imagine, that is specific to your community bank, to your bank, to your credit, COO, it's up to you.
Gary Singh: (
It's your imagination that comes into play. And there is acquisition partners to expand your base, to basically go after new customer segments in or grow your existing segments. And the combination of the three is the cardholder value creation. And that's how you start to think about personalization at scale using modern technologies in the marketplace and how you do that is a high level architecture I wanted to share with you. We have a concept called virtual bank operators, and it's all a hundred percent API based. So you think from all the way across, from product setup, to sending in receiving money on the card, you have issuer APIs, and you can segment those APIs by your partners. And then finally, you can go into open APIs for the consumers. This is where the distribution partner comes into play, or your acquisition partners come into way.
Gary Singh: (
So allowing you to create more value for your cardholders and really starting to differentiate yourself. So I already talked about this. What is preventing you from doing this today. It is your technology. It is outdated. That is a matter off act. I think everybody knows that and if you do not change that rapidly, it's gonna become difficult. You become the blockbuster of Netflix from what happened in that industry. So product rigidity is definitely one of those things, one size fits all ability to manage partners. You don't know how to do that because the technology providers don't enable you to do that. And if you wanna do anything with a partner, it costs you a lot of money to make that happen. So these are impediments to you to deliver these values to your consumers advantages are obvious, right?
Gary Singh: (
Differentiated value proposition. You can really start to think about what is meaningful to you guys, stickiness multiple customer segments, of course, top a wallet and all that sort of good stuff goes along with that, and really understanding your customers. And that is where the mode comes in. So they are gonna stay with you for the next 40 years and not have five cards in their pocket and try to decide which one they are gonna pick. And finally, the impact is significant. This is a research that came out of a Deloitte, and 2020 in terms of the impact of personalization, it starts with looking backwards in terms of what can you do to your cardholders, which is sending an email to them to do this, that, and the other field insertions basically saying, Hey, you just did that.
Gary Singh: (
Maybe you want to try this and then you basically go into aggregation, segmentation etc. That is all sort of reactive, but now you can start to think about being proactive, which goes along with behavioral recommendations and personalization comes as part of that omnichannel optimization, how is the cardholder using the spend? How are you acquiring them etc. And then predictive personalization you are predicting the approach so that the technology is personalizing it for you in terms of the cardholder journey, so to speak and their long-term relationship with you. So how do you basically make that happen? This is like I said, we are relatively young, just came outta stealth mode last year in money, 2020. And we just designed the whole architecture to deliver what we call as a product factory at the base level is a data.
Gary Singh: (
So that is the cloud layer at the next level up is the intelligence. So basically create any type of product in matter of days and weeks. And then on the top level is the interaction with the ecosystem. That is a consumer or a partner. So that is kind of what we do, we would love to tell you more about this. We are here today and tomorrow, we have a small little booth at the backend. We are also sponsoring the evening cocktail. So we would love to see you guys there. So with that, I will take any questions if you guys have, if not think about personalization and how it can really fundamentally change your financial institution, starting with credit cards, perhaps as an experiment, and then moving into other assets and liabilities products. We think the whole thing is gonna come together, which is why you see that purple box is fundamentally a product that does both assets and liabilities.
Gary Singh: (
So you can do revolving credit. You can do BNPL, you can do prepaid, you can do debit and you can do loan product etc. And we think that level of very tight integration is what enables you to deliver personalization at scale, without breaking the bank, so to speak. So with that, I will, I have like 30 seconds for some questions, if not, we are gonna be outside, taking more questions and helping explain who we are all about. So thanks very much really appreciate your time today and look forward to spending some more time with you doing the rest of the sessions.