Women in Payments Honoree Panel: Predicting the Payments Innovations that will Last

John Adams, Executive Editor, PaymentsSource; Kristy Carstensen, Senior Vice President, Payments CFO, U.S. Bank; Rosemary Stack, SVP Enterprise Payments, Bank of America; Aleksandra Teichman, Senior Business Development Lead, Payments, Cross River

Transcription:

John Adams: (00:08)
I'm John Adams, I'm from American Banker. And, this panel, this panel is predicting the payments innovations that will last. And with me today is Rosemary Stack, the SVP of Enterprise Payments for Bank of America. Christy Carstensen, the Chief Financial Officer for U.S Bank Payment Services and Aleksandra Teichman, Head of Business Development and Strategy for Cross River Bank. you guys each explain your job and what you do and some of your responsibilities.

Rosemary Stack: (00:42)
Sure, Hey everyone, Rosemary Stack with Bank of America, I'm a leader on a team called enterprise payments. And what we do is look after really all the innovative ways money moves. It's one of the three most important things. We offer our clients and customers. We move their money, we lend to them and we help them invest. And so when we're thinking about moving money, we look after technology initiatives, we look after helping our business areas, understand how to bring this to their clients. And then we actually do a lot externally facing thinking about, external stakeholders, whether it's in, legislators, regulators, or other registered parties who wanna know more about how payments work and how we can all move this forward.

Kristy Carstensen: (01:21)
Good morning, Kristy Carstensen, Chief Financial Officer for payments at US Bank, so in my role, I am responsible for making sure that we've optimized our investments to bring the best that we can to our businesses and consumers as it relates to, moving money so that's a whole spectrum of things it's managing the, financial statements. It's managing the investment choices it's managing and, working with partnering with the, product owners to develop product in the best way possible. So, a diverse role where I get to see the full spectrum of payments activity.

Aleksandra Teichman: (02:04)
Thanks, Alexandra Teichman, nice to be here, I am with Cross River bank leading the acquiring and payments kind of business development and strategy efforts, my team and I, we focus on kind of driving payment innovation. We live on intersection of kind of FinTech and payments. And so when we work with our FinTech partners, we offer solutions that range from kind of consumer, lending payments, crypto issuing, kind of BA best products. So, you know, our focus within kind of my team is to focus in on how do we take acquiring business and then also payments business, whether it's money movement, or processing to the next level, leveraging our kind of core banking infrastructure, leaning in to our APIs and ensuring that our partners are doing it. And a kind of from regulatory standpoint in a sound way

John Adams: (03:10)
Now, there has been a lot of innovation in a lot of different areas of payments over the last three years. This is in response to the pandemic. There was a lot of innovation that was going on before growth of eCommerce, contactless, payments, FinTech the growth of super apps, the crypto blockchain what are for each of you, what are two or three of the big, most important innovations that have happened over the past couple years and, and what has made them so important to you, your organization, or to the market in general?

Aleksandra Teichman: (03:47)
So, you know, I the one word I probably use the most is ubiquity, and when we think about offering consumers or customers at the end of the day, their choice and the way they want to pay, and then the way that they feel comfortable making a payment, whether it's Peter, Peter, or for goods and services, I think that above and beyond stands out, and then you kind of take a step back and you say, okay, well how will I do that? How do I ensure that I make that, easy transition or smooth, payment transaction for my and customer there's different ways in which we do that, most of the, kind of the value proposition that cross river is BA kind of embedded within our APIs, and the ability to have our FinTech partners do it in a very scalable and sound way, is becomes kind of probably our biggest value proposition when it comes to payments. You know, we talk about RTP and fed now and all of those kind of specific payment rails, but really at the core, it comes down to how do I do it in a way that I'm solving a problem for my customer? so yeah, but I'll let the others,

Kristy Carstensen: (04:57)
It's hard to add on to that. We, you know, we talked a little bit before this and we certainly were all saying, it's, it's real time. It's the ubiquity, it's the fact that we need to show up. Now, it's the fact that we need to embed that we need to become, simple, that we need to be convenient, the kind of consumerization of payments. So we've, there's been a ton of evolution on the consumer side. How many times do you pull out your phone and you make your payment? It's not via check it's, it's not even via card sometimes anymore. And the expectation of that is carrying into our businesses and, and we're behind in getting it businesses to there, but we're moving fast. So the pace at which the pandemic has kind of forced all of us to move in this digitization of being there for our customers, for our businesses, when they need us, where they need us in a fast, simple, convenient way, helping them run their businesses in the most efficient manner manner, which is a real transformation in the way in which banking meets payments.

Kristy Carstensen: (05:59)
And, and we show up for our customers.

Rosemary Stack: (06:06)
Do you want me to answer? I'm happy to, yeah. Terrific answers by most colleagues. You know, we think about, what changed during the pandemic is acceleration of adoption. So a lot of the, you know, whenever some new thing comes out on payments early adopters, come in and wanna try it, or they wanna move money, or they're willing to do the app or share their information. What changed was you know, people were all needing to adopt at a much greater rate. And then once you saw there was trust that payment actually moved and it was safe, then you say, okay, well, I probably should have looked at this before, but now let me try it. And then there's also cases where you had to look for options. So some of the options were cut off from you. You couldn't go deposit an item. You weren't gonna go, you know, in person to do it, you weren't gonna accept cash. And so all of a sudden you had to go look and find other solutions, and what'd you do, you asked other people you trust. And they said, oh, I use a, I use B I U C and they go, oh, okay, let me try that. Right. So it was almost this cool way of like accelerating adoption. What do your friends and family use or colleagues use, and then you try it and if it goes well you know, that's really gonna increase your adoption.

John Adams: (07:09)
Now, you mentioned the early adopters how has the pandemic changed that in other there's a lot of people, a lot of businesses, a lot of people who were not digital forward before who all of a sudden became digital forward when it comes to matching technology to the user demand, how does that change the equation for development and for, you know, looking at how something's gonna be positioned in the market where the early adopters may not have been who they were four years ago.

Rosemary Stack: (07:36)
Yeah. I could start with that, I would say you break it down to core tools. So what is it? Clients and customers are trying to do read, they're trying to push money or pull money, how do they know the other party? So if you break like payments down into its basics, what we wanna do collectively as an industry is provide those combinations and then consumers and clients will come up with the use cases, right? So am I pulling money? Am I pushing money? How do I know the other party? Do I use a directory? Do they know they're checking to get information? Do I have some alias of some kind? And then how secure is this payment? How fast does it need to move? Does it need to move with additional information, like an invoice receipt or no, I can just make this payment. So if you kind of break money movement down to its components, and then clients will decide those use cases, it's really, how do they leverage what you've got to then accelerate the speed of what their business needs or what their like personal life needs. But what would you all add to that?

Kristy Carstensen: (08:32)
I just pick up on the term use case and the co-development that's now happening in everything we do. So it's, it's very much everything we push out is under a co some sort of co-development methodology between us and our customers and the fact that you push a use case out and that people try it. So if I think back to history, right, we used to write the descriptions of what we wanted. We put everything in place from a to Z of what we thought it would take to make the development happen. And we would push it out. And half of our customers would be happy and the other, half it wouldn't meet their needs. And now this, this co-development, and this use case approach, I think has really accelerated the push to market, and then adoption across the industry and the pace at which we're now moving.

Aleksandra Teichman: (09:26)
So slightly different lens maybe is, I think there's been and rightfully so a lot of attention on consumer adoption or consumer changes that were affected by the pandemic. I think another lens perhaps is also the speed to market that it's created for, I think all of us here and our partners, and when we think about how quickly I know, we did, and then of course, others and our partners that as well, pivot because the pandemic kind of, landed on our doorstep and so, for cross river, as an example, you know, we were able to leverage our, our kind of lending consumer lending platform to roll out PPP loans, and ended up being, I think top three or top four in the U.S Market to support small businesses and kind of, and PPP loans that they needed. and we were really able to do that because of our technology, our, because of our API based, kind of lending infrastructure, and so that, I think really helped us realize how quickly we can move because of our, and the agility that we had, because of the, you know, kind of our core tech, that was really, I think, I don't wanna, I don't know if I should call it the silver lining, but it was, it was an eye opener for us and how quickly we need to move in order to support, not only obviously events and crises that happen, but also our partners that wanna move quickly.

John Adams: (11:07)
Now, as banks, how has it changed the way that you work with that you work with partners, you know, that either developers or technology companies is, has there been changes there and you know, how may that guide what, you know, the next few years look like?

Aleksandra Teichman: (11:29)
Yeah, I think there's constant change there, I think there has to be because as much as we are based very much in kind of regulation and compliance, and we wanna make sure things are done in the right way very much. So we also need to be very forward thinking and constantly move as, as quickly as our partners do. And often they are technology first and banking and regulatory environment second. And, we end up being kind of that lens for them that, but I think in terms of speed, it's only gonna get faster, I think as we go down this path and in terms of payments, you know, real time payments obviously is has been a big one over the last, I think, couple of years and, and will continue to grow and continue to win kind of market share from some of the other payment rails, so to speak, and there'll be continued evolution there.

Rosemary Stack: (12:39)
The one, maybe I can add is the pandemic also realized for us not just speed to get services out to the market, but all the folks here are focused on fraud prevention. How do I know the party at the other end? How do I prevent someone from hacking my account, whether I'm a business. And so I've, you know, had a business email compromise or someone else's, you know on my side, come in to attack. So actually I would say a lot of our collective innovation is also what's that trust factor, and that cannot be, you know, really minimized at all. In fact the more remote you are, the more critical it is, you have that trust factor. And so you see a lot of our focus turning towards innovation in that fraud prevention, validate who the other party is. What's the purpose of why this money's moving. And then really, you know, thinking about when do we put hurdles in front of customers or clients versus let, when do we let them sail through? I think there'll be a little more balance in ease of use versus we might need to put some pause points in there for an, are you sure moment?

John Adams: (13:39)
How do you go about determining one of the things we're discussing is which innovations will last, which are sustainable. How do you, do you try to determine that in other words, is this something that is of short term emergency response to a health crisis, or is this accelerating something that would've happened in five years anyway, or that, you know, the people will go back? You know, the digital will go back to a more brick and mortar environment. How do you, how do you go about determining that or try and gain to gain vision into that?

Kristy Carstensen: (14:14)
You know, I refer often to everybody's crystal ball is as good as mine these days because we do make educated guesses and we do push innovation. But I do think that the speed of the innovation, the co-development that I mentioned earlier associated with it, and the fact that lines are blurring, right? So they're, they're, I think used to be a very siloed approach. I do this for the consumer and I do this for the business, and now we're learning, what's working and the root of what's working is extendable across the portfolio, but we're learning faster. We're also learning to look at the data exchange that's happening. So with as fast as things are moving the real time nature of it, there's a lot of power in the data that we receive that our customers receive and learning from that and adjusting the agility that I think we've all put into our processes, enables an adjustment quite quickly quicker than what we've ever done before. So what's working sticks and we develop it further. What's not working, we adjust it and we adjust it quickly. And, I don't know that I see that, methodology changing, but exactly what sticks and exactly what will change, I'm not certain I can define.

Aleksandra Teichman: (15:30)
So, I come from a very kind of traditional card world, I spent a couple of two different networks at processors and kind of from a very card present world, I guess, and I can't help, but feel also that as much as we want to move very much into the digital environment, that at the end of the day, consumers are still people. And a lot of times they still want to interact face to face, and we can't lose sight of that. I think as much as we want to digitize everything and make and automate everything and put a process behind everything it's very much about also, where do you find your customer and where do you meet them? And a lot of times that's in a car present environment. so I think that's important to keep in mind as, as we kind of think about all of these innovations that move forward and go down this path of, kind of real time payments, whether it's from a bank rails perspective or a card rail perspective connected commerce, I think, is gonna become much more prevalent as we go kind of continue down this path and ensuring that wherever the customers, you can meet them and you can also connect all the different points in which you're interacting to ensure that at the end of the day, they're making a payment or that they're moving, that those funds that they intended on moving.

Rosemary Stack: (16:52)
Yeah. And I'll add to that, you know, we used to say to customers, do you wanna send this by wire or ACH? Why would you do that? Like, you know, can anyone here quote, all the, unfortunately, actually this is the one group who could probably quote all the details of those two decisions, but we really wanna ask you, where are you sending the money? How, when do you want it to get there? Is there anything else about this payment that is important? Like you're paying for a thing, or it's a recurring service, or there's an invoice that goes with it and then we'll figure out the best rail. I mean, it really should be on the industry to figure out how do we move this money for the client, but it's really around, where's it going? How do you know the other person, you know, do you just know their cell phone number? do you have a high trust, you know, with this person or do you know the full, you know, checking account number and routing in transit and all that kind of stuff. So it's really around us, where, what are you trying to do, right. To move this money? or if you're the person receiving the money, are you getting authorization to pull it? And then how do we find the best rail to cause that to happen? What kind of safety and security levels are you looking for? And then do you want a safety net, or this is a high trust transaction. You wanna just let it go? You know, so really, I think that's what we're trying to do is create multiple tools so that clients can drive their use cases as they adapt and compete in the market themselves.

John Adams: (18:01)
Alexandria, you mentioned connected commerce. If you were to, to each think of two or three things that have emerged that you think really have staying power, that, you know, we're not where there's not going to be a resettling or you know, that this is how payments is going to happen now, what, what would they be, what do you think makes them, you know, important and, you know, having that that's staying power.

Aleksandra Teichman: (18:28)
I'll be the black sheep and say crypto as much as there's like, obviously we've seen a lot of volatility. I think there's a lot of staying power in the different ways that cryptocurrency can be used and then the, whether it's for cross border payments and making that easier, whether it's in an institutional side, I think it's a very continues to be evolving and very dynamic kind of space. And, that's just one, but I'll let the others to chime in.

Kristy Carstensen: (19:01)
I'll do a little more general. I, don't think the expectation for real time goes away. The expectation for embedding and driving efficiency through the tools that we provide to move money in a fast the most efficient way. I don't see that going away.

Rosemary Stack: (19:19)
I think one thing that also shifted as well, is it, there used to be the logic that you get money fast and you send it slow, think about payments, you're managing, oh, I want to hang onto my cash flow and whatnot. But what changed with some of these newer payment forms is pushing out money fast actually can win you business. Mm-hmm so getting money into the pans of someone, whether it's an insurance claim, whether it's paying your gig economy, workers, whatever that is getting that money and knowing it's final, enables them to start moving commerce themselves. And that is a 180. So it's, it's sort of fascinating as you think about one of those innovations is getting money out the door faster, can really win you, you know, business in the marketplace and then actually accelerates, leverage downstream, and I think that's opening up a whole lot of new thinking about how money moves as well. John Adams: (20:10) And in terms of, faster payments or realtime payments, what still needs to happen in terms of, bringing more banks on board, more credit unions in terms, you know, to get full adoption of real time payments and then to move into, billing request for pay and, and some of these other renovations, what are some of the things that need to happen to mature that part of the market? Rosemary Stack: (20:33) You know, I think, just as adoption happens, you can go from, gee, we'll take a look at that to, oh my gosh, everyone else is doing it. My customer's expected. It's the new bar gotta move. Kristy Carstensen: (20:44) Yeah. John Adams: (20:46) And, on the subject of crypto, do you see crypto being used for let's say mainstream payments that stores or e-commerce, or is it more a case where there'll be other types of digital assets, whether they're stable coins or another, you know, the, a version of crypto that's not necessarily Bitcoin Aleksandra Teichman: (21:10) Handing it to me, so if you would've asked me a year ago, I would've probably said that crypto can be used in many use cases, but for, for purchases of goods and services is probably later on, like, we'll wait a couple of years, but then you see even retailers, right. Enabling crypto at acceptance at, at their point of sale or eCommerce, and that's growing substantially. So, you know I don't have the eight ball. I'll be the first one to say I was wrong a year ago because adoption and kind of accepting crypto as a form of payment has is on the rise. I think it will continue to be on the rise mainly maybe because brands wanna align and want to ensure that they're kind of appealing to their customer, but at the end of the day, I think it will absolutely be maybe not the main form of currency. Aleksandra Teichman: (22:14) Right. But I think it will be another option. When you think about payments thus far, at least for goods and services, you think about kind of card, right. Plastic being front and center. Cash has been kind of the old Ty, and then of course you can pay via ACH and you can plug in plaid. And so on now we've got V NPL as options and as options at checkout, I think you'll have crypto as an option as well, whether it's U S C or some other type of stablecoin is to be decided, but I think so John Adams: (22:55) What about cash? We just mentioned cash pretty much for the first time about more than halfway through, what kind of role does cash have moving forward and where there, may be areas that are more reliant on cash. What can be done to ensure access? Rosemary Stack: (23:14) I could start, being a big bank, talking about cash, cash. We'd all like to go away, but cash has its uses, it's not reportable. That's pretty attractive to a lot of folks, that's the same reason why crypto might be, attractive to some segments is because you don't know who I am and you can't track it, so that's always out there but there's also just other reasons that cash can play a role. although I would say one thing about the COVID issue is that that germ stayed in the fibers of dollars and so dollars that were coming at a certain markets that had extremely high, incidence of disease actually were just stored in vaults and never left their physical country. And so all of a sudden, like there was a massive amount of additional cash that had to be created just physically paper bills, because there was a bunch stored in vaults, I don't know where they are around to you. Rosemary Stack: (24:05) But they didn't move countries because they actually are, you know, they don't know how long the virus stays in the actual physical, you know, piece of currency kind of strange thing to think about, but that's, you know, just cash has a role and it's also, if you think about it's the one way to actually pay the person with high trust, it's right there. And, you know, you can control who gets the money, but we'd love it to go away. We think it's just you can accelerate payments, you can, get into an account, but it has a role John Adams: (24:39) In terms of let's say, financial inclusion. What are some of the important things in terms of extending this technology to new, through underserved markets? What are some of the things that you've seen that are promising there that will improve those conditions? Moving ahead? Aleksandra Teichman: (24:56) Do you wanna take that? Yeah, there's, that's, you know, I think for us, that's super, that's super exciting because what we are able to do with our partners and is enable financial inclusion at, for different segments of the market and throughout so many different use cases. So when you mentioned Earl earned wage access, being able to pay your employee same day, Uber does it, right. a lot of other, Uber-like organizations do it as well in the midst of the pandemic, a lot of fast food was looking to enable earned wage access so they can attract more employees and more folks to come in and work for them, and you go down the path of how do you ensure, how do you enable democratization of payments, the ability for consumers that perhaps weren't able to either have a bank account or get paid, in a timely fashion for them to be able to pay their bills in a timely fashion, how do you extend, capital to them? Aleksandra Teichman: (26:07) How do you ensure that they're able to, improve their life? And there's, you know a large number of use cases in which we can, we can, we can do that leveraging payments at the core, because now you're able to literally give them that cash in a digital way faster. I think, you mentioned cash. This is really the first time where we're able to digitize cash. And it's not because it's instant. When you go and you buy a cup of coffee, you give them $5 or maybe it's eight now, it was instant, right? You pay them, you walk away, this is the first time I think, in our kind of, financial evolution where you're able to do that in a digital way and bringing that to consumers that are unbanked, or, haven't had the ability to have the benefit of that instant payment really comes full circle. Kristy Carstensen: (27:09) Yeah. I agree with everything there. The only thing I would add where I think we have opportunity around financial inclusion is the education around it, right? So I think we have done there's been a ton of innovation around, you know, gig economy workers or, or making cash via a prepaid card or, or some tool instant for the unbanked, but the education and the extension of it further into the market. I think there's an opportunity there, but I think the tools are, are certainly evolving and, and really will bridge a certain gap when it comes to financial inclusion, across payment rails. John Adams: (27:52) We have a couple minutes left to, we have any questions from the audience, I see a couple of hands. Good. Audience Member: (28:06) Thanks very much, I actually had a question related to the innovation that's happening in payments with COVID we've seen a high influx of people, you know, making purchases online, right. we've seen new ways of making payment. We have apps such as Venmo, we have face recognition, you know, for payments. So, maybe Alexander, you mentioned something earlier about that personalized experience, right? People wanna see people face to face. So in the era of this digitized experience, how do we really personalize this? You know, what does the new experienced look like for people which is more personalized for anything, in your retail or any other forms of payment. Aleksandra Teichman: (28:52) So maybe I can answer it in two ways. One is, I think even if it's a digital experience, it can still be somewhat personalized. I think at the core, when we build financial products or tools that are going to be consumer facing, we need to be kind of grounded in who is our customer and how do I make it easy for them if that happens? I think that kind of inherently becomes, customer friendly and customer first, and then kind of on the other side, bringing it back to connect to commerce. I think for payments that are purchased related for brands specifically for enterprise it's, it's being able to bring all of the various connected points of, contact together. So just by way, an example, if you go into a retail store and you scan a barcode and you're interested in that item, right, and then you're gonna go on social media and perhaps there's gonna be an ad that pops up that already. Aleksandra Teichman: (29:56) Does they already hear you? perhaps it's connecting those two kind of connections together and ensuring that you're continuing the value chain for that customer, inevitably, if they log on and they wanna make that purchase via your website or via your app, once again, ensuring that you are continuing that level of interest or that product, for example, throughout the experience. I think that inevitably is what connected commerce means is kind of bringing all of those different points of, communication and contact together, and speaking to your customer and kind of inherently saying, I know what you want, it, I think technology is already doing that to a certain degree, right? You say enough things near your phone, and inevitably you're gonna have an ad pop up about that item, which is a little scary, but continuing down that path and ensuring that when your customer is whether at, checkout in person or via social media or any other way that you're able to connect those, experience experiences that helps both the consumer kind of, pick up where they left off. But then also ensure that there's less checkout a management, there's less, instances where the payment doesn't go to fruition, so to speak. Rosemary Stack: (31:24) And if I can just add to that, thinking back to the last presentation, you know, what you didn't hear, there was necessarily deep technology skills. It was understanding that customer journey, who am I trying to pay? How much, how much do I trust them? And so, as we think about women wanting to have careers in payments, we all use money. We all use these services and there's such great roles in saying, I need to know how this works. I wanna get into this. I wanna help design this. I have ideas on how people wanna use this, that others might not have come, you know, forward with. And so I think that's just where this tremendous opportunity. It's not necessarily just a technical discussion, although, you wanna get into the technology, but it's, what's the experience that you're gonna have, to make this payment. And what's the interface I'm gonna use. And those are, you know, really quite open they're, you know, really different kinds of skills that can come to bear there. John Adams: (32:15) Well, we are out of time. I want to thank a great panel, for participating and the most influential women in payments lunch is up next. It's next door. So again, thank you. Thank you again.