Featuring: Deva Annamalai, Head of Payment Solutions Consulting, Fiserv will share how innovative new players from different industries are using faster payments to differeniate their offerings from their competition and creating new business opportunities to drive loyalty and help their customers. Seth Ross, Senior Vice President Business Development, Green Dot will answer the questions: What is banking-as-a-platform? What does it take for a bank to offer banking-as-a-platform? [toggle title="TRANSCRIPT"] <div class="transcript-scroll-box"> 00:00And we're really pleased that both Dave and Molly and and Seth Ross are here with us first step will be Dave, who is a good an old friend. We've had the pleasure of working with Dave at in our high end FinTech accelerator, and he's got great passion for it. He's now head of five search payment strategies and solutions Consulting Group, which is called new markets and is coming to us with the unique view and vision on real time payments. He's been with five surf since 2015 after working at Zions Bank core, and it's really great that he's here with us and please all give him a warm warm welcome, David. 01:00 everyone hear me? Okay. 01:02 We got 20 minutes, and we got a lot of material to cover. So let's jump straight forward. JJ did a wonderful introduction, so I'm not gonna talk too much. I'm gonna do. So let's go ahead and start talking about faster payments. How many of you here really think that faster payments or even the payments and he was broke? The good number of people don't really care if money moves faster or slower. Anyways, so the whole idea behind here as we think that when you look at the rest of the world, US payment systems have some ways to catch up, right? I mean, we don't have a truly universal faster payments mechanism in the US. There are many payment mechanisms in the US right like to receive payments and payments, p2p and whatnot. And there is no uniform way of transacting in a real fast fashion. So I'm going to show this one example. What do you guys think about this picture? anymore? Do happy mom with a baby. Right? A happy mom who basically ordered diapers, diapers and she doesn't have the time to load the baby in the minivan and drive the car. Okay, so she just use Amazon or some other service and next thing you know, diapers delivered to her house less than two hours. Awesome. Faster payment, faster services, right? What do you think about this person? 02:29 sleep deprived, frustrated kid screaming in the background, realizes that she's led a mortgage payment because it was a long weekend. I just realized that Oh my God, if I pay today, I'm gonna finish the bank for four days from now. This has happened to us before right? All the time. Like sometimes we can really operate at the speed of our payment systems actually deliver what is supposed to do. And customers are not liking that. I know they don't want to actually wait For some of these artificial boundaries, we live on this 24 by seven world. So why should your payments actually work only nine to five, Monday through Friday, excluding all the federal holidays, but that concept does not stick anymore and doesn't pass muster. So the customer wants payments anytime, anywhere on any channel. They want to be able to happen a lot of people a lot of stuff sitting you know, in their bathrooms using their phones 10 years ago that was never possible. Right? So in this type of situation, digital payments actually play a huge role. I mean, if you want to be able to do all of your payments as well as send us both receive payments in a faster fashion. And fi so we did a survey some time ago and a lot of people one of the biggest areas where they thought faster payments would make a difference was in the area of rent or mortgage, being able to digitally recurring expenses, you know, paying your babysitter a lot more guy you know, being able to pay them fast, and sometimes even services you provide you want to get paid fast And yes, you actually use Venmo, square cash, PayPal, you know all those services when you get paid, but do you truly get paid fast? Right? I mean, you get a thing saying that, yes, the money is gone. But to take the money out to you, you got to go one extra step, right? That's what I'm talking about that one additional added friction later. And anything under gone, right? Some states are awesome. The State of Utah actually gave me a refund. And one day, I moved to Georgia, Europe and Africa took me 90 days to get my state. I have no idea why. So really fast payments are changing how you experience digital services. I think this is something which customers are starting dates. And businesses are not there yet. Some of the business are starting to identify this gap and starting to do something to fix that problem. So why faster payments? Why do you need faster payments? Obviously, it drives loyalty. Right? If you ever actually were in a situation where you got paid instantly, for some some related use case, right where You know, you're expected to get paid two, three days later, and the money showed up immediately on your bank account, that actually changes how you experience the results. Once that happens, you're never going to actually make for the fact that that payment is gonna come two days later, right? And when you sell your stocks and bonds later, why should it be three days? Why can't right now? Right? That's your money, right? It shouldn't take three days to serve in your accounts. And obviously, the new economy is more complicated. All the new services which are being launched these days are actually finding that very important factor. And obviously, you need to know where to start today. Actually, I bought a house last week, which was awesome. And I sent the wire to the closing attorney. And it was no response from anyone I don't like guys didn't really receive the payment. And they don't respond. And I send the wire on Friday afternoon. I had no idea where the money went. Why does all of the services affirmation for anyone? It does seem like yes, we got the money. So that's actually the state of affairs when it comes to faster payments, right? So millennials, obviously not just millennials, Gen Z, Gen Y, all of them are very excited in terms of being here, but they don't have enough patience to wait for a few days. And then obviously, the businesses need to catch up on these things. So obviously, the need for faster payments is very universal. You got traditional mass payouts, where you know, you got to, like claim payouts, tax refunds, these are all things we are more programmed to receive those payments or a period of time and we don't really complain too much from that point of time, right? But even those payments, insurance payout, it can be life or death, right. I mean, there was a huge flood of use from a few years ago. I mean, you know, payouts like that needs to happen instantaneously. You can't really wait for a few days to mail a check. When a bacterium is drowned or the branches close even, that's not gonna do any favors to you. You know, you need money to spend it right away when you have an extra class. Then you got the newer economist, Uber driver or alone under the So says I don't want to wait till Friday to get paid for the book. Today, I want the payout right now, I don't know wait. So obviously, some of these digital services are actually promising you a lot of instant abilities to consume these services. But the problem though, is that money human infrastructure, which they all are based upon us to traditional, which means that they still settle two to three years from now, you know, in a retail setting, a merchant actually gets you know, he offers you a product you 07:30 don't see the money for three days. That's a big pain point, even even though it seems like a credit card actually works right. But for merchants in the back, they have to wait three days to get settled, and they don't like that. So obviously, evolution of faster payments. This is actually an interesting thing, because some of the How many of you in the room actually love crypto by Bitcoin or wearable some kind of cryptocurrencies, a few of you. The first thing I hide out and assault and the one Which really, which really actually surprised me and threw me off balance when I started doing this was the fact that you would actually look at, remember, December of last year was a bit of time was like 19,800 hours. It was a fun ride, you know, instead of checking Facebook, everybody was looking at Coinbase account. All right. So you didn't realize that you go to the bed in the night and you wake up in the morning and suddenly your portfolio went down like $3,000 for one of the reasons because it doesn't stop 24 by seven right crypto trades all around the world. And that's actually a good introduction to an economy are a payment system which never sleeps. It just works all day long. You know, you don't do that when you're trying to trade stocks or bonds. Right. You know, they only operate at a certain time during the week. TD Ameritrade recently launched extended trading hours Saturday trading and whatnot but still, you know, new payment system which is able to receive on a set of payments works 24 by seven and in order to support a 24 by seven infrastructure, you need to have the right type of support. You need to have API's, which actually do that file based interfaces don't work at all. You need the right level of security and risk management. And then obviously, you know, in order to do real time payment, it's actually as good as government money moves so walkable. So what do you do if you actually screw up something? You know, one of the biggest problems you see when it comes to sell bags, it's like they have a huge page explaining, do not send money to people who you don't know you do not have the bag we can reverse the money back to you. So please be sure don't buy the Matthews bad ticket from some unknown person and Zelda the money that's supposed to be right. So you have all of these use cases where you have explained to a consumer educate them that real time payments, once they know they're done, you know, reverting back is actually not always. So obviously, if you're a business, you want to be able to actually like receive payments and incentive payments. First of all, you have any left in the middle, right, depending on which kind of use case you're actually talking about is this, you know, B to C, C to B, you know, Bill Pay transfers dispersements, you know, you got to talk to a bank, you need to talk to a partner network, you have a whole connected set of bills, which is a completely different problems, right? You're trying to pay your phone bill, yeah, you can get the money to them, but their systems need to give you the credit. That is one reason why most times people actually want to pay some bills they call they use the direct to directly call them to get the credit right away. You know, some of the bank may slow based on data may not actually work as fast and efficiently. And that's one of the huge pain points. So you got the spaghetti of relationships and connections, which needs to be enabled in order to come up with a uniform, faster payments ecosystem. So what do you do you need to have intermediaries which is our bread and butter, right? We do this extremely well. So, you know, we need to be there on a medical provider is not us, right? I mean, I'd be lying if I say that, you know, other providers out there. Also do this Same, they provide these type of gateway services where they take away the complexity between talking to all of these different entities. So obviously, you know, in order to support faster payments that are these four major players in industry now you got early warning and natural, you know whose primary use case here is p2p network is actually run by early on, then you go to the clearing house was really trying to enable faster movement of money, you know, between individuals and customers for primary use cases b2b business business, then you got to guardrails which are starting to get into the business of enabling through real time payments. Now, this is actually as close as it gets to near ubiquitous real time payments in the US, you know, put together a car because it works for most banks in the US, which is your debit or credit card, debit card, MasterCard, or visa logo. And then obviously, you've got an archer, which you actually use to receive your payroll and all kinds of payments which actually don't really use, you know, faster payments again, 12:01 So once again, we have a bit of debt should be shared, I believe so, you know, don't worry about me moving a little too fast and you don't have to worry about taking pictures later, you will get a copy of this. And then obviously, many of these applications use different vendors, right. So in order for you, as a merchant to be successful, and be able to provide a true faster payment experience, you need to be able to support a variety of mechanisms, you need to be able to push, you need to have an ability to push to a bank account directly, or some form of social token like zurb whenever you know phone numbers and emails on file, and you always have checked as an option because some folks will never change they still want to check. So the real fear truly wanting to implement a real time payment system, what are the questions you got to ask yourself, you know, what is the most important use case and find the fault for not all use cases are similar, right? You know, we'll actually talk through some of the use cases some of the use cases truly want payments than another And then the day, but you know, maybe your accident claim check from the insurance company, you're okay with waiting for a day together. So trying to identify which use case you're trying to solve is very important. And which networks are you going to be using? Are you going to be using the guardrails? Are you going to use cch or matcha? What kind of infrastructure do you need? I mean, you're not at the payments business, right? And a payments business is complicated. Moving money from one state to the other requires money transmission licenses. And as a business, do you really want to focus on what your core sense are? Or do you want to understand how money transmission laws work across state lines? That's not what you need to be spending your time on? And how can you leverage what you already got? You may already have a department where you may be printing checks in America and supporting them and whatnot. What do you do? Do you want to continue keeping them or do you want to get rid of them? So those are some of the questions you have to ask yourself. Then obviously, here's a list of all but real life, faster payment options you see in the US in a Walmart actually is opening here. Baxter's on wages to employees. In Walmart. Many of the Walmart workers live paycheck to paycheck. And for them, any emergency from one paycheck to the other really puts them in a really bad spot where they need to go to payday lenders, the company realized that this is a big problem. And they actually partnered with some gig economy and wage worker access companies, you know, even and pay active to provide services to their employees. So now the employee can actually get access to their pay wage a lot faster than waiting for the paycheck to come two weeks from that. So all of these use cases have some form of ability to actually move the payment to you in a much faster fashion than waiting at a trade reality. This is actually a great example database, one of our customers, they actually work on the N word elevator industry where they allow employees to actually get access to pay and it's it's actually no more crazy. They're onboarding new companies. So this is becoming one of those new employer benefits which an employer offers. Right I mean, like you have on wages Sitting in the employer, what can you do to tap into the payroll? You know, you've worked for like 10 days already, right? Instead of waiting for 14 days to get paid, what can I do to get an access to that so I don't have to actually go to a paid. Now this is another example which pretend you promise How many of you here know what you promises? Awesome. So basically what they do was they actually allow you to build loyalty rewards by either using their debit cards, or even their loyalty program on any money you actually say. They actually get emotional rewards, this money can actually be used to save for your child's college education. Now, you promised that it was a big challenge because it's all under 45 plants in the US, and not all of these 500 plants had an ability to actually accept payments you know, you have like figured out a way to actually collect the payment from you promise and once the money comes to you, you have a little tentative right Am I do I really want to send it the college education I have a solid years. So you're also looking for a way to build bridges to all these hundred and 40 different College slides are more money medically so that when the rewards are being on, you put some money directly to those college plans. And, you know, we actually help them do that. So this is another example where the ability to have faster payments or being able to bridge to these new forms of businesses is very crucial. Now, bayfair is another company where, you know, they're coming up with this revolutionary schema, if you're an Uber driver, you know, why would you want to wait till the end of the day, usually, the drivers get paid once every week. That's not uncommon for them, you know, because these drivers are, you know, really wanting to get asked for their wages right away. On the other hand, you know, they will give them an option to request the funds in a given day for a certain amount or fee. But ultimately, the goal for them is to be able to collect those funds right up to the end of the day. That's basically their aim. You finish the ride the money shows on the bank account. And that's what you know, paper is doing, you know, so to be able to pay a driver right off the rails. 17:00 So the value of going faster, obviously, you know, payments, drive engagement, you know, you really want to be able to, like, you know, provide a profound experience to your customers, once they experience being able to collect payments from you instantly. That changes how you see things. It's never the same. When amazon prime came first two days was awesome, it was never the same. But now two days is too late. I wanted to right now, too. So once you basically beat your own self and determine your own self, you love go back to the old ways. So what are you doing as a business to enable this faster payment mechanism so that you can actually pull higher engagement to the loyal customers? So obviously, you know, this has to be because right, I mean, you can build a siloed mechanism, you can just only work and that's one reason why Apple cash is actually a challenge because it works. ecosystem, right? What if you actually have a Samsung phone, I can send you money, so I gotta go to some other p2p mechanism to do that. So it has to be something that everyone can use to log on on their site. In a common user experience, being able to understand what it is you're needing a master's degree in figuring out how this payment system works. And then it has to be safe. Because that's very important. You can actually afford to lose your hard earned money on sort of a scheme, which doesn't work, right. So that's all I have. Thank you so much for your time. And I got 40 seconds for any questions you might have. 18:26 All right, thanks. 18:28 Good job. Thank you. Thank you. 18:32 Anyone have any questions for Dave? 18:35 You'll be around. Yes. All right. Thank you, David. Thank you again. Thank you. 18:42 Now it's my great pleasure to introduce Seth Ross, who is Vice President of Business development@green.in. His role he leads all enterprise business development at the company which is one of the leading providers of direct to consumer financial products. Some of the brands you may know of our green.go, bang, money back money pack account now rushcard and rapid pay, that's probably the lump sum Allah, whatever. The company has a market capitalization of $3 billion. And Seth joined, read that about a year and a half ago from American Express. And he's here to share his perspectives on banking as a service in this ignite ideas session. So please, please join me in welcoming 19:35 Thank you, JJ. Right. Awesome. Well, thanks so much for the kind, kind introduction. I will need this Yes. It's a It's a real pleasure to be here with you guys today, hoping to have a engaging interactive session and I dare say maybe even a little bit provocative. So let's see how we do today. Start off with. I'm going to ask a question to the audience. I want to see a show of hands. How many of you feel that the car you drive your choice of car? says something about who you are? Michelle hands? How many of you? Okay, most of you I drive a Volvo I affectionately call it the dad mobiel and you know, that definitely says something about you know, my priorities and and who I am. And different people make different choices, right. Some people choose to drive a Tesla. Some people choose to drive a Ford F 150. That says something about their identities. This is a coffee town. How many people feel like your choice of your preferred coffee vendor says something about who you are. See Show of hands. Okay, fewer. Okay. I like this example here because it actually says the association level in college What? What are we supposed to think about you when you're drinking that coffee? There's some psychic benefit that people get from drinking a certain brand of coffee. But what about your bank? Now, this is a room full of Baker's, it's not exactly a representative sample, but how many people in this room feel that their choice of bank says something about them, but it really speaks to their identity? Anyone want to? Okay, so basically, in an industry that does so much to support people's lives, it's so integrated into their financial lives. There's more emotional resonance with a cup of coffee than with the bank where you're holding your funds. I think we can do better. And so that's really what we're trying to get. We spend some time working with collaborating with Our partners at payments calm. And we put together a survey to try to unpack this question a little bit more to really deeply understand how are people thinking about their banks, how people are how their banks are resonating with him in their daily lives and want to share a little bit of this is a hot off the press sneak preview for you guys on some of the insights that will be coming out a little bit later this month. A little bit on the survey, just housekeeping so you know we 22:38 we, hello. 22:42 Okay, so just so you can see. So we, we surveyed enough people to get a good representative sample. And we wanted to better understand people's attitudes and feelings about their banks. And here's what we found. First of all, most people when you ask them, they say yeah, my bag fits. into my daily life. I consider that a fairly low bar. About 90% of people say, Yeah, my bag fits. Okay, well, what does that really mean? When you raise that bar a little bit to say, Well, are you satisfied with your bag? 63% say they're satisfied with their bag. And the majority of people have been with their bank more than five years. So it's kind of an interesting, this kind of leveling of the playing field. What's interesting, though, is when you ask them how many people say that their bank actually says something about who they are? Only 44% say yes. So what's interesting is for consumers for whom their primary bank account is actually an online bank account. That number goes to 57%. for consumers for their with a primary bank account, that's with a regional bank. That number is 36%. pointing us to a direction of where the industry is going. If we need to really appeal to these consumers at a more visceral emotional level, we've got to be better on this metric. Well, who is positioned to be better at this metric? So we asked consumers, where else might you be willing to receive financial services? And we saw is actually majority 56% of consumers say they'd be open or somewhat open to receiving financial services from a range of other alternative providers. online retailers topped the list as being in Seattle, you could guess who might be but other providers farewell to brick and mortar retailers, other financial service providers. There are a lot of other brands out there that have the emotional permission from consumers to offer banking services. So with Interesting as you asked the broader population, what are the most important attributes of your bank? unsurprisingly, the most important attribute is trust. because fundamentally beighton is about trust, who do I trust with my money? And then under the broad population, the next answer was convenient locations. This all changes when we look at a different group called Bridgeville, anneals. And this is a age segment that the payments, comm people kind of introduced us to, I think it makes a lot of sense. It's essentially older millennial millennials, age 30. You know, Millennials with money. So their decisions actually have an impact, and you can see them in the financial system. So what's interesting is what a bridge millennials say when you ask them what's important. Trust still important, but then what's that next level down? 25:54 online and mobile banking. And I think this speaks to something really exciting. 26:01 About a shift that's going on in our industry. 26:06 There's a shift in the paradigm of how you build trust. 26:12 The currency of trust is changed. This used to be how you build trust, you'd walk into a cathedral of modern capitalism. You'd have the neoclassical arches or columns and leather wrapped furniture. And that was how you knew you were someplace solid. That's how you knew that was where I want to put my money. That's not the currency of trust anymore. today. User Experience is the currency of trust. And the companies that are going to earn that trust are the companies that are creating unique customer experiences that fit their customers lives. That's why people love when they receive those diapers. Two hours after they ordered them, and they get it consistently, and that drives trust. There, the consumers are looking for experiences that seem to get them. That's the bar for all of us in delivering banking services. Really interesting outcome from the survey, two thirds of younger generation say they were open to try financial services from, from alternative providers. So that compares to the 56%. So now, you know, significantly more users in the millennial and below age segment are interested in some of these alternative providers and these brands, and we're showing here were some of the ones that bubbled to the top in our survey. But I think the question really is, which are the brands in the future that are developing that trust with consumers, where they'll have permission to engage with it in their financial life? That's the next step. And that's really where green dots banking as a service solution comes in. So many of you will know green.is, kind of the originator of the reloadable debit card solution. But we've been making a really big push on banking as a service of the last several years, signing up partners like apple, like Uber, and we can talk a little bit about those. But essentially, it's really taking our platform and turning it over to our partners to create unique financial services that meet their needs. You don't have to just take my word for it. I'm just going to share a short video from a great partner of our stash and actually today, they just announced an amazing new feature on the stash card. So stash is a an investment advisor app with about 3 million active users. They leveraged our banking API's to integrate domains solution right into their user experience. And today they announced that when you spend like your stash debit card, you can get stock back. So for every dollar you spend at certain retailers, if you spend $1 at Netflix on Netflix, for example, you can get 5% in Netflix stock back, put right into your stash accounts really innovative, really interesting solution but I'll let Brandon their CEO share a little bit about that. 29:36 Down Brandon Creek I'm the CEO and co founder of stash based here in New York City. So we decided to choose green dot and their service offering is lean one of the parts of it that was aligned to customer values, and it was our vision for what a back 29:57 when you're a tech company and you want to innovate One of the most important things is whether or not there's a bank behind the scenes that understands your needs and what it requires to move at the pace that you want to 30:08 precess we want to put the customer in the dead center of financial services, and build products and services that wrap their needs in a highly personalized way. 30:17 We brought in the product teams and developers understand what would an integration between two companies look like? And he came up with a really beautiful design that you now see 30:26 that today. You know, we think what sets green dot apart as an engineer as a service provider is really the number one attack we does have has made it really easy for us to integrate into their API's and quickly deliver the banking services to customers. 30:42 This is the homepage of stash. And here you can see my investment portfolio, high retirement portfolio, my debit account, all from a single screen. Some of the really cool features of the bill is this ability to auto stash with auto stash. Were able to pull money from your primary account. into stash to make sure that you're always investing in yourself before anything else. I can find ATMs and there's over 19,000 free ATMs. at places like Walgreens, Rite Aid and CVS. I can look up spending insights, I can pull statements, right from within the app interface, I can manage my entire family experience right from my smartphone. 31:21 When we look at our clients lives, Sasha has paid too much money in that new piece. They need more guidance, and ultimately, they need one place to live their financial life. And Sasha now read as part of that is a great way for our clients to to live better lives. 31:41 So this is a great example of just a really exciting product that is purpose built to fit into consumers lives and people love it. It really resonates particularly with the millennial generation. For, for what they need and what they want. just highlighting a couple of the other partners that we we have with Rena, we work with Walmart so we power the Walmart money card. We created the Uber driver debit card with great rewards features for drivers to cashback on gas, cashback on auto parts, mobile phone bills, etc. And we also do instant payout for the, for those Uber drivers as well. We're partnering with Apple and the Apple Pay cash peer to peer solution which also has the virtual account that lives in the Apple Pay ecosystem, which is a green dot bank account, we department with into it, so people can get their tax refunds onto green dot issued debit cards, and then stamps you've seen. So just some of the wide range of partners that we have for our banking as a service offering. There's really such a wide range of things that we can Do but the real core ethos is that we want to do things that really fit right into consumers lives with the goals that they have at that time. How do you speak to the thing that that user really wants to do at that moment. And then lastly, just highlighting some of the elements in green that we're very, very proud of, you know, we're pretty unique in that we started out as a tech company 20 years ago, and then we bought a bank. And so we're kind of this unique combination of tech company first plus bank and regulated bank holding company, which we think really sets us apart from from other providers in the space. We also operate the largest cash flow network in the country with over 110,000 retail locations. And we have unique disbursement capabilities, doing push debit, instant payouts, as well as cash pick up at retail locations as well. So some unique elements and I think perhaps the biggest factor as well is that we do this at scale. We have over 6 million of our own users on green dot products that use our products every day. And so we have a ton of credibility when we talk to partners about scaling up their programs. So that's it about green dawn, I'll close with just saying that expectations are raising, expectations are rising. And we're very proud to be powering some of the banking solutions that are rising to meet those expectations. Thank you. </div> [/toggle]
