Among the things you'll learn:
- Data as an integral element in payment processing: By having better data and utilizing that data, many aspects of the payments environment will improve, including enhanced fraud detection and security, an improved customer experience, better risk management and credit scoring, optimized payment routing, increased regulatory compliance, and data-driven insights for businesses.
- Adopting modern payment infrastructure: How using API-driven platforms can facilitate payment processing.
- Cloud-native solutions: By continuously modernizing payment systems, organizations can offer cloud native solutions for increased scalability, resiliency, and availability; enabling rapid updates and integration of new payment methods and capabilities.
- Seamless user experience: Customers can have an improved experience if a variety of convenient payment options – credit/debit cards, digital wallets, bank transfers, and BNPL (Citizens Pay) are available, reliable, and secure.
- Open APIs/banking as a service: By seamlessly integrating financial services into customers' favorite apps and platforms, customers will have greater convenience and faster access to payments and other financial services. This is a personalized and real-time approach that will enhance the overall user experience, saving time and making financial management easier and more intuitive for customers.
Transcription:
Chana Schoenberger (00:11):
Thank you. Good morning.
Michael Ruttledge (00:13):
Good morning.
Chana Schoenberger (00:15):
I am so excited to welcome you to Payments Forum 2025. So over the next two days, we are going to celebrate this industry and we're going to find out exactly what's going on now and what's going to happen next. We have some of the most interesting speakers you could possibly imagine here. We've people from all across the payments industry in all of its varying parts. And the great thing about payments is that it encompasses everything because as we know, nothing in life is free. Yesterday we got to celebrate our most influential women in payments. It was a fantastic day. We talked about leadership lessons, we talked about where the industry is going, and then we got to hand them their awards, which was a lot of fun. So one round of applause for our honorees and I also want to thank our sponsors who are making all of this possible. Thank you. So to kick us off today, I want to welcome up Nageswar Cherukupalli, who is the Business Unit Head at Cognizant. He's going to introduce our next speaker.
Nageswar Cherukupalli (01:37):
Good morning. Thank you very much Chana. Thanks for the opportunity. Thanks to American Banker for giving us this opportunity. Just an introduction. My name is Nageswar Cherukupalli from Cognizant. I lead the Bank and Capital Markets business unit, and it's my privilege actually to introduce Michael Ruttledge as the first keynote speaker for this event. And I've known Michael for many years, close about decade and have worked with him closely and have learned a lot from him, and I'm sure many of you would actually do through this session. But just to quickly share a few snippets, right Michael, he's one of the best in the banking and the payments industry, and he's a Chief Information Officer and Head of Technology Services for Citizens Bank now. And he's responsible for all aspects for banking, banks, technology, the people, process, technology, the client facing applications, the infrastructure, everything. And he's the one who's actually driving the transformation in the bank. Prior to this, he's actually spent 20 plus years with one of the best payments industry leader, American Express. And there he's been recognized as developing the vision strategy and establishing the entire technology infrastructure that's needed to drive transformation in applicant express. So without much adu, I want to introduce Michael and welcome him on to the stage and looking forward to hearing from you Michael.
Michael Ruttledge (03:09):
Thank you Nages, we a great introduction. Thank you, Shana. Thank you Nages. It's great to see a lot of our partners here, ServiceNow, cognizant, Infosys, some TCS people I've known for 20 plus years when we started back in Y2K. Now I'm dating myself, but yeah, so really excited to be here today. Thank you for inviting us. It's great to be here in San Francisco. Lemme tell you a bit about Citizens Banks as we are in California, and you may not all know who Citizens Bank are, but we're a 160 year old financial institution based in Providence, Rhode Island. So New England. I'm from the Old England, but from Leeds Yorkshire if anyone's interested. But we're 220 billion bank. We've got a thousand branches mostly located. You can see the light green there, mostly located in the northeast in Detroit. We just opened up 200 new branches in the New York area, commercial footprint across the states.
(04:20):
In fact, we've just opened up, we just bought six private bank. We got them from First Republic when Chase beat us to the punch and purchased First Republic. But we took six of the private banks who didn't want to work for Chase and now two of them are here in San Francisco, one in Los Angeles. So we're growing our footprint in California. You can see some of the awards we've got yesterday on Tara Hall was here from Citizens. She was one of your awardees for women in banking. She's absolutely awesome. She's our product owner for payments. So thank you American Banker for honoring her.
(05:07):
So obviously we're a consumer bank. We've got about 6 million customers, traditional banking deposits, commercial banks, focus on middle market, and now what we're called in the three legs of the stool is private banking and wealth. So it's really growing in that area. 700 billion in a UM last year, 400 billion in deposits within one year. So massive growth in that area. So we're here to talk about payments and payments is fundamental to any bank. We're really uplifting our end-to-end payment ecosystem. So whether it's for our consumers, we've invested, we've got a program called Leapfrog where we're investing massively in the mobile experience, trying to make it frictionless for our customers who want to move money. And that's underpinning on our data strategy. Data strategy is so important as well as the technology team. I have the data engineering team that reports to me as well, and that's really been fundamental in this journey.
(06:18):
We've moved everything to a data lake on AWS and now we're really taking advantage of that by bringing real time insights to our payment platforms, whether they're our retail platforms or in fact our commercial platforms. So we're going to talk in a bit more depth about infrastructure and resilience. It's so important in this ecosystem that we're always on and we're moving towards hardening and making the platforms much more resilient. And at the same time we're growing a lot of strategic partnerships. So we're doing a lot in terms of embedded finance and I'll talk once again a bit more about that later on.
(06:57):
In terms of our ecosystem. What have we done? Well, we launched real-time payments on Fiserv's platform on Dovetail a few years ago. We've now moving off our ECH processing off of PET Plus on the mainframe onto Fiserv. We'll be completing that. We've started the journey, started the migration. We'll complete that by the end of this year. So we we're really excited about that. In terms of business banking, we just launched Cashflow Essentials, which is an award-winning payments platform for our small business. We just received, actually, I think it was American Banker Award for that platform as well, fully built on the cloud and it's really going to help our small businesses really understand what they do with their cash. We've launched that recently. And then commercial was starting to, we've launched Embedded banking. So last year we partnered with FDX. We've implemented FDX, the 5.2 spec.
(08:09):
So before we had all these aggregators, screen scraping, like most banks, now, 95% of our traffic comes through these open APIs that we've partnered with FDX to build open standards. And we've not only enabled our retail customers who want to come in through Plaid and all the other aggregators we've launched last year we launched Plaid and about three other aggregators this year. We'll finish that 6% is actually across 10 different aggregators. So we'll complete that work this year. But it's not only consumer data, it's actually commercial data. So 1500 of our commercial clients are now coming through that open API and leveraging it, and we're actually embedding our payments into their website. So companies like Carter, you can access now Citizens through their website. You don't have to log off and log into their website. Naveen that's mentioned, here's a travel company doing the same thing with them, embedding it right in their website. So making it frictionless for our clients to do business with us.
(09:24):
So I talked about modernization. What are we doing there in terms of we we're moving to the cloud. So at Citizens we are 70% now into the cloud. We will have moved a hundred percent by the end of this year. That's our plan. And along that journey, we've exited about 25 different data centers. We've exited 18 of those 25 right now, got seven to go by the end of this year. It'll be completely out of all our data centers. So mainframe is at Z Cloud at ndl. And then all the other systems we're moving this year, including the 30% of course includes payments. We left the crown jewels to last, right? And we're excited about moving. That's going to move in a June timeframe and I'll come on and talk about that. Very focused at Citizens on what we call the three Cs. So customers, colleagues, and community.
(10:28):
And everything we do is based on what can we do to improve the customer experience. And a lot of that is the availability of these platforms. So what we've done with, as an example with our online mobile platform is you, we've now replicated that data to operational data cache and it's always on. So even though the mainframe might be down, some components might be down in the ecosystem. This operational data cache is always available. So you can always see your balance 24 by 7, 365 days a year. And we're doing that with the payment ecosystem as well. And I'll come onto that in a minute.
(11:10):
So what's the focus on 25? I mentioned real-time payments. That's been big for us moving ACH onto their payment hardening and operational resilience. So critical. What do we do to modernize? What are we doing to make it more resilient and hardened? So really you've got to look at the end-to-end ecosystem. So yes, we're on EPP, which is our primary platform, but broader than that, if you think of the payments landscape, it's fraud. It's AML. So you've got to look at everything end to end to really make sure that you are really, really truly available. I met with, and we're moving to the cloud to do that. I met recently with NAB Bank in Australia. What they've done is absolutely fascinating. So they've taken it one step further. We're implementing a active active solution where if one goes down, we always have another one, but on Amazon.
(12:13):
So we're using different availability zones, different regions. What they've done is they set up the complete payments infrastructure on AWS and a complete payment infrastructure on Azure, and then they run active, active on both of them. And if one goes down, they can immediately flip over to the other, which is a fascinating is something I don't think anyone here has done. Now they have to do that because of regulatory needs. We're not being forced to do that where we're using multiple cloud providers. We are only using AWS, but we've created this secure enclave in AWS where all of our payments ecosystem is being built and certainly our aspiration is five nines. That's what we're trying to get to in terms of our availability.
(13:11):
I talked a bit about embedded payments already. I think that's a really exciting area for, as I said, we want to be where our customers want to go. We don't want 'em to have to log off and log in to our payment systems. Cash management, cashflow essentials, we launched this year, got really great adoption, great feedback from our small business community and then our online banking suite, our leapfrog program, as I said, really uplifting our mobile platform, making it very easy for people to move money in and out of citizens, preferably keeping it in citizens actually.
(13:53):
So this is that end-to-end picture that I talked about. And this actually is probably really, really simplified, but when you look at the payment ecosystem, it's not only the payments platform, as I said, it's all the systems that you need to connect to, whether they're fraud or they're AML, we actually have, I think it's 28 different platforms within our ecosystem that we have to harden and make resilience so that we can make sure that we're always on in terms of our payment ecosystem. So it started with doing that analysis, making sure that we have that workflow across all of them, and then bit by bit we've been moving those systems to the cloud and we've been hardening them as we've been moving him to the cloud. We've improved our incident support response. Looking at when I started five years ago, citizens was owned by Royal Bank of Scotland and we spun out of them about 10 years ago and they hadn't really invested in citizens.
(15:03):
So the infrastructure that we took over needed a lot of need, a lot of help, significant issues. We reduced the number of incidents from 50 a year, five years ago, significant incident to just five last year. So significant improvements in stability across the board in all our platforms, including payments. And of course our partners are a big huge part of that. We've implemented, I saw ServiceNow, one of the sponsors, we brought that in straight away five years ago when I first joined. It's been a big part of our journey to improve availability, improving our problem management, our change management, our asset inventory discovery. So we're really excited about that and some of the things that they're doing in the AI space to really help us predict problems before they happen. We have big use of Datadog. So observability monitoring is something that is really, really critical and we move from AppDynamics to Datadog, it's cloud solution.
(16:08):
It's been very, very successful. But more to do in that space. From an observability perspective, I think I've talked a lot about this, but obviously moving to the cloud has been fundamental to the journey that we're on. We really think that that is going to not only reduce our costs, but it's improving our speed to market. We're able to do things much, much faster. We've reduced by using DevSecOps Pipeline, we've reduced delivery time of our code from one day to 15 minutes. Infrastructure we've reduced from several months to seven days, and I want to get that down to one day. So significant speed in terms of and controls that we're embedding. So now when I release code, I'm automatically looking at that for vulnerabilities, scanning that for vulnerabilities before I had to stop, give it to the security team, the security team would come back to me. Now it's all done automatically through a pipeline. 90% of our testing is automated. Automated regression testing, we've reduced our testing team by about 30%, 40% by moving towards automated testing. At the same time we've reduced our defects by 17%. So a lot of focus on resiliency, making sure that we shift left. If I can find problems earlier in the process, it's a huge win for us.
(17:53):
Wow, I went through that quicker than I thought, but that was what questions do you have? Yes, please.
Audience Member 1 (18:15):
So I understand that you have on the how taking care of the regulatory and the security s on the cloud. So I understand that. I understand that applications landscape. So how are you taking care of the security regulations correct, because that was the initial concern from the CSO that and banks where cloud, how you taking of that security?
Michael Ruttledge (18:53):
Yeah, it's 70%, not 90%, but thank you. So we're not quite there yet. We will be there. We'll be a hundred percent by the end of this year. So we're at 73 right now actually technically, but yes, no, it's actually one big reason cyber reports to me. So no, seriously, it's been fundamental to our journey. We've built insecurity controls from the very beginning. So all of our cloud build, we use Terraform and we're using that Terraform to build the security controls to embed them. As we're building out a lot of this infrastructure. We've brought in people like Wiz who are just a native cloud provider, who are fundamentally changing the way that we do security in the cloud. We're shifting left, we're giving more, we're keeping it centralized, but at the same time we're democratizing it out to our engineers so they can now go in, look at Wiz and see the vulnerabilities in their code.
(20:00):
So it's a mindset change for us. We're very focused on technology talent. We've launched 50 badges, some of them security badges, data badges. About 2000 of our people have done those badges, about 2000 certifications. And we've launched academies in security, in data, in software engineer in architecture, and all of our colleagues have gone through those academies. So it's been a big upskilling. We do a secure coding badge as well, which all of our engineers have to do. So security's top of mind for us. Obviously we're a regulated industry, so it's very, very important to us. So everything we've done has been, with that vein in mind, security has been partners with us throughout. So as we've moved to the virtual private cloud, one of the things that regulators pushed us on was not having all our eggs in one basket. So we've got a hybrid cloud strategy where we're primarily on AWS, all of our database, all of our data lake is AWS.
(21:13):
A lot of the in-house written applications are on AWS. So the mobile app that I mentioned earlier, completely cloud native built from the ground up is all on AWS. But we've also, we're doing a lot of lift and shift into Azure. So to get out of the data centers, I wasn't able to modernize all 1700 applications that we have. So a portion of them have been lifted and shifted. I might be uplifting the operating system, the database, but I'm not uplifting the underlying code. So that's another way that we're thinking about it from a regulatory and risk lens is making sure we have two, not quite as sophisticated as NAB Bank are, where they're actually, they've got the leg in both simultaneously, which is amazing. Congratulations to them. But certainly that's something I'm thinking about for the future. Great question. Hi.
Audience Member 2 (22:10):
Hi. You mentioned payment. What do you think are some of the big use cases for that consumer, corporate demand will come from services they want to access?
Michael Ruttledge (22:23):
Anywhere that small businesses are using. So healthcare is one that we're partnering with companies on e-gaming, believe it or not, is growing really, really fast. That's another area payroll. So payroll companies we're just partnering with Gusto to launch in their payroll ecosystem. So those are some of the ones where we've been focused on some of those verticals.
Audience Member 3 (22:57):
Hi Michael. Great. Great overview there. Very helpful and good transparency in terms of what you guys are doing and over the next year. A couple of questions. One was you talked about 28 different systems that you have. Are those all going to the cloud? Are those internal? Are they external? Are they all client facing and how are you prioritizing which ones go when?
Michael Ruttledge (23:20):
That's a great question. So the short answer is yes, if they're in our data sensor, they're moving. So some of them could be COTS applications, but they just happen to run in our data sensors. We're moving them. Some of them are in-house grown applications, we're moving them. If it's a SaaS application that's already in the cloud, I'm leaving that where it is. And then some of the companies we partner with, like Finastra Loan iq, they said, we're getting out of the SaaS business, you have to move it to your data center. So we moved that to the cloud because the goal is really to be out of these 25 data sensors by the end of the year because that it is got huge cost savings for me and simplification at the same time. So everything will be out of our data sensor. Now, not everything will be in AWS or Azure. Some might be in a cloud FIS or Fiserv, some of the big partners that we use. But it will be all out of our data center. That's the goal by the end of this year, even our mainframe is, which we're dependent on in this ecosystem is actually in Z Cloud. So it's now at REL in Dallas and we're all out. We moved that last August, we moved our mainframe out to the cloud.
Audience Member 2 (24:47):
Yeah, my follow on was you mentioned NAB a few times. I've worked with them in the past.
Michael Ruttledge (24:53):
Yeah,
Audience Member 2 (24:53):
They always seem to be sort of on the bleeding edge of what they're doing in terms of payments and banking in Australia. How did you make that connection? How did you hook up with NAB? And it sounds like you had a really good sort of brainstorming exercise just in terms of what best practices are.
Michael Ruttledge (25:11):
Infosys introduced me to be honest. So one of the guys that's sitting down here, they have a specialist sort of think tank group, strategic group, and they obviously partner with many different banks across the world. So they introduced me to them and we did a follow-up. We spoke to their chief architect. She was absolutely amazing and she walked me through the whole end-to-end ecosystem for payments that they've built. And yeah, that's how we got to know them.
Audience Member 4 (25:53):
Hey, great session. You touched upon the open banking and APIs. I think as we move towards building more agentic systems, especially with LLMs and ai, what are your thoughts about model context protocols and if banks would be open to doing that so that some of the other software players can build on top of that and build genial systems and not just legacy API networks?
Michael Ruttledge (26:20):
No, everybody's asking about agen AI and where we're going with that and where the company's going with that. I think I'm very bullish on it. I think I do think that the engineers are going to have to change what they do on a day-to-day basis. You have to hire more architects, more very senior level software engineers who can really understand the code that's being generated. Because in reality is it's going to be less code developed by software programmers. It's going to be developed by Agen ai. I really do believe that's where we're going now. It's still early days, right? I think it's probably two or three years away, but we're investing in it and playing with it right now. We've got about a dozen different AI, gen AI solutions right now at the bank, mostly focused on human in the loop where I'm giving product information as an example to a customer service rep who is then relaying that to a customer.
(27:28):
But they're able to do it much, much faster because now they can ask a question, it gives them, uses rag technology and gives them the answer. So those are the early things we've played with Certainly we're using Microsoft GitHub copilot. A thousand of my engineers are using that right now. So I do think in the banking and payments ecosystem that you talk about, I do think that will be an area we will go to. Certainly if you think right now we use robotics a lot in our commercial business to help with things like commercial onboarding, underwriting, we use Blue Prism UI path. I think that will all be ripped out and we'll be replaced by Agen AI in the future. And our friends, people like ServiceNow I think have to watch out and Salesforce because I think Agen AI is coming for them as well. So they're going to have to pivot and think about what they do from a business model perspective. That's just my personal viewpoint by the way.
Audience Member 5 (28:43):
Hi Michael. A very, very insightful session that we've been listening to all things you mentioned. You mentioned a lot of focus on three Cs, which is of course customer experience is very, very important. And as you mentioned, payments is the leading edge of the crown jewel of the application that's going on. So hardening resiliency becomes the core success for what it happens. Amay, we've gone through several challenges we are overcoming and continue to overcome in this. If you can enlighten something on hardening resiliency, that'd be great from payments perspective.
Michael Ruttledge (29:11):
Yeah, it's a great question. I think it goes back actually to the question that was asked earlier, and probably in hindsight probably should have answered that a little better. But looking at that end-to-end ecosystem, those 28 systems, you have to prioritize which ones you are doing first. Which ones do you really need to harden? So for example, we looked at our fraud systems first one is fraud in the industry. Banking industry has really increased over the last two or three years post covid. So it was really important that we had always on fraud systems, not only for payments but for everything we do at the bank. So that was one that we really focused on first. And then next it was the core payments applications. So EPP, our core realtime payments platform because we're moving not only realtime payments, we're moving a CH moving wires to that platform. So we prioritize that. So it was the key ones I would say that we using, we we've prioritized the hardening and the resilience for, but it's really important you have the end-to-end view and then you start picking 'em off one at a time based on the available funding you have, et cetera, with all of the other competing needs.
Audience Member 6 (30:37):
Hey Mike, great session. I have a question around your web plus ACH migration. Congratulations. That's a huge big bold move. But I see core rail as foundation. I don't see that as a differentiator. So the question is what's really is pushing you to take a foundational change over differentiator where gen AI is coming, embedded banking is coming, so what kind of motive in terms of strategy that citizen is taking to sort of change plus, which I know a lot of banks wants to do, but nobody's able to do it?
Michael Ruttledge (31:18):
Yeah, it's a great question. Part of it frankly, is just our modernization journey. So Pep Plus is 25, 30 years old. Not many COBO programmers are coming out of college anymore. We're on a very similar journey with our core. We're on systematic, which is an FIS 30 plus year old core with COBOL and assembler programming. So we're moving that to Fi S'S modern banking platform. We've already moved our deposits business to that we're launching checking at the end of this year. So it's part of that journey, I would say, in terms of modernizing the overall ecosystem as is moving to the cloud. So that's the macro view. And then specifically for payments, we just see that we can just enable things so much faster if it's on a distributed platform, we think that real time payments is going to continue to grow. So that's an area that we want to be in. And then we've really doubled down on APIs. So now we've got a library of several hundred APIs in the environment. So whether it's the FDX APIs, open banking that I talked about earlier, or whether it's the other APIs that we have in the ecosystem. So I really think that's another area where build once reuse many, we're using it across, we are building enterprise APIs that are reused across multiple platforms. So it's really part of that journey to really modernize the bank's applications and really move to agile, move to cloud, et cetera.
(33:03):
I think we've got time for probably one more. Hi,
Audience Member 7 (33:11):
Yes. Modernizing the banks and how do they get a competitive advantage? Are the banks, have you mentioned the payments hub? Is it each bank having to have its own payment hub so that they can make the rails speak to one another? I mean, are we replicating that at each bank that has to do that and going forward? So how do you see the industry competing?
Michael Ruttledge (33:41):
Well, here in the US you have everyone's connecting to the clearinghouse, right? So that's standard set of infrastructure, everybody that's been built that everybody's connecting to. But within different banks, different banks are on different real-time payment systems, but they're all connecting to, at the end of the day, they're all connecting to the clearinghouse. But yeah, so there's a variety of different payment solutions. One where on is from Fiserv for Nasra have one a CI have one. So it depends on your preference for vendor, which one you end up choosing. But essentially they're all doing much, much the same thing. But different banks have gone with different providers and some of these providers leapfrog each other in terms of capabilities year over year. So it's your confidence in their roadmap and what their ability to deliver is. We've been in a multi-year journey. It hasn't been easy to move off the mainframe to our real-time payment system. I'll be honest, it's been a three year journey to get, in fact, this will be the fourth year by the time we've done it. So it takes a while to move all the processing onto these platforms.