Gonzo Goes to BAI Retail Delivery 2013: Innovate This!

by Eric Weikart & Sam Kilmer

BAI Retail Delivery 2013 is in the books. This year’s event took us to Denver where the theme was “Ideas to Action.” Action! Can I get a Gonzo “Hell Yeah!” From all reports and consistent with some other industry conferences, financial institution attendance was in line or slightly up from last year’s event, but it was pretty tough to judge in the seemingly massive Colorado Convention Center. That didn’t solve tight confines in some of the hallways and breakouts. There was, however, plenty of room left in the cups after the drink-ticket pours in The Expo.

This scotch-on-the-rocks was little more than a sip. Come on … where’s the love?

Attendees (we heard 1,600 from financial institutions) this year were the usual large and mid-size banks and several international banks. There seemed to be a LOT more credit unions this year, maybe even a third of the audience. And, it seemed like somewhat weaker attendance from community banks.

Innovation Showcase

BAI kicked off the event with its inaugural Innovation Showcase. We are big Finovate fans, so we loved the concept of eight minute dog-and-pony shows. Hey, if you can’t beat ’em, join ’em. There were 18 vendors across mobile, risk, analytics and lending. The vendors did not disappoint for the most part with special kudos to Narrative Science, Mitek, Fiserv and Microsoft. Of course, several vendors had us scratching our heads. Note: The program said DEMOS, so why did we see PowerPoints and concept screens? Cisco and Andera had interesting demos we saw afterward, but they had some telecom issues in the room during the session.

Our informal Gonzo estimate: 85% of vendors typically tout “cloud,” but an astonishing 0% tout cloud when Internet access is shaky.

Global Innovation Awards

Looking for ideas around the world, BAI brought examples. South Korea’s Hana Bank brought an interesting disruption: abandon the account number to just use the mobile number, expanding the bank’s “client” reach to anyone mobile. We liked that a couple of the innovations addressed lending process (one-click mortgage, paperless loans). Hey, if loan demand is weak, step up the service and win more share!

General Sessions

This was probably the best year we could remember for general session speakers at Retail Delivery. BAI saved the best for first with Frans Johansson’s passionate plea for break-out innovation through diverse team inputs, niche offerings difficult to duplicate, and executing through multiple low-cost experiments. And, right on to Frans’ point about the purpose of strategy being to convince you to act.
 

Malcolm Gladwell was the exception to the lineup in that we walked away without a single usable idea. The kickoff comparing banks to Fleetwood Mac had promise, but Gladwell pointed to the obvious difference between rock bands and banking being heavy regulation. Uh, yeah … exactly! So, how about an “Innovation During Heavy Regulation” session and maybe close with Lindsey & Stevie belting out “Go Your Own Way”? Just sayin’.

Former WalMart CEO Lee Scott offered provocative experiences on market strategy (the company’s initial focus on small towns) and improving process (its famed logistics). But the idea that the Amex Bluebird partnership is entirely for the unbanked that they will help evolve into traditional relationships at banks? Really? We think there is more to that story. Prepare your strategies accordingly!

Peter Sheahan’s presentation and interaction with YouTube co-founder Steve Chen and Kiip’s Brian Wong seemed to fill in more around Johansson’s approach to innovation. Sheahan re-emphasized controlled risk-taking experiments, relationship building using actual behavior information (vs. demographics), and brand that provides value (vs. sells). Chen pointed to innovation best arriving from engineer-led and team-based approaches and that customer communication should be fast turnaround and personalized. Wong pointed to dealing with commoditization and regulation by creating intimacy that will scale and avoiding being perceived as mechanized. Wong noted the average three -month development-to-launch life of a mobile app, which had some bankers salivating. To speed up an innovation culture, Chen joked that banks should just acquire some Silicon Valley firms. OK, GonzoBankers, get out your M&A wallets and say, “dilutive to earnings”!

The Breakout Sessions

We couldn’t attend them all. From what we saw and heard from others, the breakouts were a mixed bag and far less compelling than the general sessions. To BAI’s credit, the topics themselves were solid, though we might carve out some of the buzzwords. (Hint: Would your paradigm shift if given a robust omni-channel ecosystem?) Sometimes, the content felt too high level or the sleeves maybe just didn’t get rolled up enough. But, there were some gems in there to be found.

PNC pointed to its contact center direction using flexible staffing, sales results and scorecards. It sees the Amazon.com mobile assistant model coming to banking soon. Moven and GoBank talked up their attempted differentiation from banks. Moven claims to have eliminated the batch budgeting that everybody reportedly hates and moved to more real-time mobile money management discipline as you spend. The details matter, and we’ll see if America perceives that tech as helpful friend or merciless nag. Bank of the West talked about its increasingly team-based approach to innovations and speeding up the timeframe to launch an in-house mobile app by involving risk and compliance earlier in the process. University FCU arrived with a deep and gritty analysis on self-service kiosks and advisory branches, particularly the staffing and comp plan implications. Whether you agreed or not with the approach and experiences with kiosks vs. video, you had to appreciate the level of thought and sharing. Well done!

And, at so many conferences, we have all suffered through ballroom panel sessions with death-by-PowerPoint and zilcho interaction. Here’s a Gonzo shout out to the moderators and panelists we saw who kept some of it very lively.

The Expo

Sam with a thermal printer

With over 225 vendors this year, the Expo did not disappoint. In addition to the typical behemoths (FIS, Fiserv, InfoSys and IBM), D+H and Q2 stepped up their game with a noticeably larger presence this year. Jack Henry went its usual understated route and used the occasion, as did D+H, to talk up a mid-size bank core system signing. And, TCS was understandably talking up its core signing of Zions. Not to be left out were the usual peripheral vendors and cash dispenser/recycler vendors doing their thing. There was decent energy around NCR and Diebold with their self-service in-branch kiosks and video personal teller machines.

Free buffet with toner order

Best giveaway: Dead heat tie between Flux and National Financial. Why take home an iPad when you can pack a dozen Flux-branded eggs of silly putty or pause reflectively at National’s bag-your-own-leftover-Halloween-candy kiosk. Which was your favorite?

Best attention grabber goes to Software AG with its facial recognition software. We’re not exactly sure how it applies to banking right now, but it’s pretty cool stuff. We spent more time than we should have at the booth because of it.

Sam’s age calculation was highly suspect

 Other Cool Stuff

TSYS presented a self-service credit card management tool that would allow customers the ability to manage their limits/approvals based upon geolocation. For banks, this means fewer calls and less fraud … we were very excited about this one. And, get this: six-minute demo. Bam! Value!

Mitek – No surprise that the Mitek booth was hopping for most of the event. Winners of the Finovate conference, the “take a picture of your license and open an account with your mobile device” idea was a hit here as well. Also, kudos to Mitek for its mobile capture product that has broken the vendor barrier. It’s great to see the big guys like FIS, Fiserv and Jack Henry relying on a relatively small provider for mobile innovation.

Sam Kilmer and our friend John Gallo from TDECU being wowed by Mitek’s new app

Access Softek got our attention with its Location Based Security … same idea we saw with TSYS in the Innovation Showcase.

We spent some time with Lexmark learning about its Perceptive Software. The company now offers an ECM product including archive and workflow. It works in a lot of different industries, so we’ll be listening for more bank successes. We are always excited to learn about emerging players in the market.

Eric gets an instant issue debit card from Kristi Lawton at EFT Source. Next stop: StubHub for some Broncos tickets.

Bancography’s Steve Reider and Laura Levie offering up their theory on why branches won’t go away…EVER.

Eric in the Expo with Faheem Masood and Joe Buscaglia of ESL FCU

One key theme we took away from the event was the need for developing increasingly simple processes and apps for mobile. Another key theme was taking advantage of mobile device sensory capabilities like video, camera and geo-location capabilities to improve experience. And, lastly,analytics seemed to be a third of the vendor Expo booths this year. Fraud, credit, marketing, employees, staffing, payments, you name it … it’s increasingly being analyzed. And, that’s good for this industry.

The Fintech CEO Panel featured comfy seating, ambient lighting, and surprisingly convenient rest room access.

During the Fintech CEO panel, incoming Digital Insight CEO John O’Malley told bankers to get beyond demographics and analyze payment transaction data to understand customer behaviors, where money is flowing, and how to help. That sounded pretty good to us.

We’ll be looking to hear more about payments analysis and innovations put into action in our own client strategy sessions, roundtables, and other conferences including BAI Payments Connect in the Spring.

Onward, GonzoBankers!