Episode 12: Core Banking Technology and Open Banking - Don Free, Gartner and Kai Currie, Georgia State Robinson

Don Free, VP Research at Gartner joins Kai Currie, a Computer Information System honors graduate from Georgia State Robinson School of Business for a discussion on core banking technology and open banking trends. Tommy Marshall, Executive Director of the Georgia Fintech Academy moderates the conversation on his birthday!

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Speaker 1 0:06

Welcome to the Georgia FinTech Academy podcast. The Georgia Vintech Academy is a collaboration between Georgia's FinTech industry and the university system of Georgia. This talent development initiative addresses a massive demand for FinTech professionals and give learners the specialized education experiences needed to enter the FinTech sector.

Speaker 2 0:28

This is Tommy Marshall , the executive director of the Georgia FinTech Academy. And welcome to episode 12 of our podcasts . I am really excited today to have , uh , two phenomenal guests, Don Fri uh , research VP from Gartner and Ty Curry of the , uh, recent graduate or fairly recent graduate. We'll get into that , uh, from , uh , the Robinson school at Georgia state. Um, and I have another important announcement related to today's episode. Um, this is the birthday episode. Uh, today is my birthday. It's May 28th. And so , uh, you can't see me, but I have my birthday button on and , uh, I'm , I'm excited to be sharing that time with both you Don and I day . Welcome. Thank you for having us , uh, we want to get in and kick off with , uh , intros and Don. Um, it's just great to have you , um, everybody I've been , um, I've, I've known Dunn on , I think it's been over 20 years. Um, we want to , a project I did early in my career was to , uh, implement a , uh, online bank or American express. And we , um, implemented a , uh, a system from a company called Pfizer that , uh , and , and Don was really the representative from Pfizer that was managing that entire , uh, effort. And so , um, I, I tried to be helpful in putting that in. I basically had no idea what I was doing, but , uh, uh, I think I, I, sir, I know I learned 10 times more from Don and I think , uh, got out of me in that , in that engagement, but , uh, Don, thanks for being here. Tell us about you.

Speaker 3 2:27

Yeah, so , uh, yeah, thanks for having me today. Um , real pleasure. And , uh, um , I guess I, I really got started after probably just a four year stint with the Marine Corps. Um, got out, went to George Mason university, a major in computer science. Then I got in the banking software business pretty quickly thereafter. I basically started , um, by migrating banks from their old systems to the new core banking platforms, which is a type of software that basically post debits and credits , um, to a large degree and plus many other things. But I , I I've basically done that for probably more than 40 projects when I was working on the vendor side. Um, probably a little known fact that , uh, you would to regulatory requirements. That's probably reached back to the depression of 1928, not the last one we just had, but , um, banks can't believe be closed for more than four days in a row. So , so moving from one software system to another has to be done over a weekend, typically the us market. Um, this is basically where I learned how to stay awake for about 72 hours in a row. Um, so, so fun fact there , um, I guess, you know , for me, I really did enjoy developing code. I mean, that's kind of my left brain part of me, but as I saw offshoring starting to become a little bit more common relative to a development source, I moved on to management , um, led development, professional service teams with finally , um, as you referenced Tommy , I kind of moved into kind of larger scale program management type roles. So that was all a good time. But , um, after about 18 years of that, I got a , uh, an invitation to join , uh, the company I'm with right now , uh, with Gardner I'm an analyst with that company on the banking team. And actually I'll be there. Uh , I think this just , uh , 20 years in November, so really like this place was great. I published research basically on core banking, architecture, digital business platforms. Uh, but I also speak at conference events. Uh , I meet directly and indirectly with roughly about 300 bank CEOs a year. Um, I guess most of my work does take me internationally. I've been to about 88 countries. I think it is so far. So , um, that's, that's my story

Speaker 4 4:50

Kind of get into a little discussion on this core banking space , uh , that I'm looking forward to, but before we go to that , um , tell us about you. Yeah, absolutely. Uh , so right now I'm a senior , uh, be graduating in December this year , uh, with a degree in computer information systems and actually a minor in Arabic. Um, I'm actually about to start my fifth internship on Monday , um, during my college career. And it'll be for algorithms engineering with Aaptiv, which is actually in the autonomous vehicle industry. Um, but when it all started out for me , uh, getting into the FinTech field, I was 16 when I started college. So I was learning how to code through platforms like solo learn and you Udacity, I just was craving to learn how to code. I was always a very creative person. I always wanted to like, see, I guess, the artistic nature behind programming. So I started doing that in my free time while pursuing my degree. And when my second year rolled around, I interned a financial group, which was my first exposure or direct exposure to working on the financial information systems sector, which was really, really cool experience. And then I continued on to intern at Clover , uh, in the Bay area last summer when I was there, I did a software engineering position. Again, the more and more, you know, technical experience I get the more, I guess I love it because I don't know. I love seeing how systems work. I love understanding the why behind the code. I love understanding, you know, the lengths and the possibilities and the innovations that, you know, we can create and how more efficient we can make systems to be. And the coolest thing about, you know, FinTech for me is the fact of, you know, it gives people accessibility. The more innovative you are, the more available you can make a technology. It's, it's really , um, it's something exciting to be a part of. Uh, so I'm really excited to learn more from Don here today and from you always. So yeah,

Speaker 2 7:00

Clover , um, is, was acquired. I know Sarah , I know several years ago by first data, which is now been bought by Pfizer , uh, in the last year. And Clover is , I think about it is a, is a merchant , um, uh, point of sale platform, but it's got kind of it's, it's cutting edge in terms of its user design and interface , uh, as well as , um, very modern technology that's offered to the merchant that allows them, it , the app store that Clover has. It's just that the thing that I kind of think of most often , uh, do I have this right? Am I right ?

Speaker 4 7:38

Yeah, no, exactly. Actually, and while I was there , um, so what I did , uh , specifically with Clover was I was helping integrate a third party app onto their app store. That was kind of my whole , uh, focus on the primary focus of, you know , my role there. And yeah, I mean the , the technology they have going on there, it's very, very cool. And to think of that, the coolest thing about Clover is the fact that when you're there, it has the most like startup B vibe. Like, it's you feel like you're just in a , you know, Silicon Valley startup and you're getting to try out whatever, you know, thing that comes to your mind as an engineer. If you want to add this to the UX, if I want to , maybe even as an engine engineer adjust the interface, like you were given the freedom to do that, whereas you still had the pipeline of, you know, the big brother, basically like a Fiserv at that point. They actually, I was there during the merge. Um, so it was just kind of cool how you get to be innovative. And I think that that's why they've achieved such a, you know, really, really, really great technology for their POS systems.

Speaker 2 8:50

Yeah. Cool. And I wanted a question when I asked you, I know, I notice you were part of Panthers in the Valley program. Uh, this is a kind of cool program that , uh, the Robinson school at Georgia state does where they'll , um, they'll have students gonna go through a bit of a competitive process and get selected into this , uh , program that takes of Silicon Valley. Now, was it, was that, did you have a different experience with Panthers in the Valley or did the Clover opportunity kind of merge into that somehow were the two related at all?

Speaker 4 9:22

And , um, so what happened was I got into the program and we were going to the Bay area in October, but that December, or sorry that September , uh, I was actually at first data's headquarters , um, because I'm a part of an organization called women in technology , uh, yeah . Supported by Mack mannose and, you know , penny Collins is , um, the director and it's a great organization, but anyways, I was at a , uh, kind of little conferencey event there. And this is the first time I met Mike mannose and he had just finished talking and, you know, they're going on? I think it was guy Terello talking next, just sitting over in the kitchen. And I was 18 at the time. I was just like, Oh man, like, I dunno ,

Speaker 5 10:08

I was just kind of fearless. So I walked

Speaker 4 10:11

Over to him. I said, Hey, I don't know what we're supposed to talk about, but , uh, let's have a conversation. And he was just kinda like, okay, let's do it. So we started talking and I talked about, you know, where I wanted to go, my global aspirations, how I had, you know, I was more tech technically driven. And we, after just talking for a long time, he kind of just extended a , you know, an offer verbal offer in the sense of, he was like, yeah, let's get you on board with first data or Clover. I said, well, I'm actually going to Silicon Valley and a couple of weeks, is there anybody from, I know first data does have a location there, but is there anybody from Clover I could meet with? And he arranged a meeting for me to meet with Zan Aronowitz, who's the COO of Clover currently. And after spending two years at , or not two years, two hours at their campus during that Panthers in the Valley trip. Um, that's how I got connected with Clover D . Cool. What a great story.

Speaker 5 11:08

Yeah . Yeah. It was fun .

Speaker 2 11:11

Wow . Good. Some good , some good networking lessons in that too.

Speaker 5 11:17

Well, let's get into this core banking , uh , zone. Um, I, it , any, any, have you had any exposure to this world of , uh , core banking or when you, when you hear that, what do you think? Honestly, I'm , there are no wrong answers here. All right . Bear with me here, but I'm pretty sure,

Speaker 4 11:40

Kind of like the pipelines behind what holds the banking system together. Right. Like it's kind of, that's how I think,

Speaker 5 11:49

But I don't know. Maybe I'll just offer a little

Speaker 3 11:54

Bit , um, um, maybe add on to what you were just talking about. So it's , yes , it is a bunch of pipes. Um, but I think I would look at it more generally as the way that systems are servicing existing accounts. So this would be like a consumer loan or a commercial loan, a mortgage loan , um, a CD, an IRA, a savings account, a and deposit account, all those things, you know, kind of think of demand, deposit accounts, checking accounts, but those are all things that require, you know, different handling , um, after a day's worth of transactions . So , uh , they accrue interest , uh, they transfer money from one to the other. Uh, there could be cash management type of functions could be some type of , um , you know, it's scheduled transactions that are being posted or being transferred to other systems. So in essence, basically it handles all the work. Um, that's a result of the prior day , um , and transact that into , uh, you know , updated balances and , um , uh , effective ways to reach the bank in case you need to. So I think those are all probably what I kind of think of as a core of help .

Speaker 2 13:08

Yeah. Yeah. Okay. And Don, as, as you, I mean, you've seen so much history as in this space over your career , um, you know , what, what's your impression of say like the last five years in this space and I don't know , big, big highlights.

Speaker 3 13:34

I would tell you that just when you think, you know, things are getting dull , um, you know, watch out because that's exactly what's happened here. You're talking about an industry banking that has been fairly sheltered from all the kinds of innovations that have been happening in other industries like retail. For example, now they're being forced to get a done or become irrelevant, and that's starting to push banks and doing things they've never done before. They've always had this kind of , uh , pre dispossessed, you know, belief that they needed to own everything. And so they, they own all the software that does everything and they, they customize all that software. Um, and they've really built over time, this big archeological dig, that's really starting to weigh on them and making them enable to unable, to really focus on servicing the customer. So all this stuff , um, is pushing banks to change the way they do their business. And to do that, you really have to get at the root of the problem, which is all the technology support.

Speaker 2 14:43

I think too, about the industry, maybe now, what was this upset , I guess not as much the last five years, maybe the last 10 years where , um, you know, often the , the banking industries, banks have grown through consolidation through mergers or , um, and I guess we saw the most rapid , uh, last wave of these mergers were forced upon us by the financial crisis in 2008. So, you know, Wells Fargo and Wacovia, and for example , um, but many others. And , um, there's, you know, when I think about the kind of core banking landscape, there was a lot that just got driven over time of, you know, we're gonna , these two banks merge , we're going to pick a target. We're going to go to that target. There's a whole lot of investment that just has to occur to make that happen with the, having as little to no impact on the customer as possible. Um, and so as a result of that focus, there's less, there's a little bit, but not maybe as much as there might've been otherwise of investment of innovation and how to drive , um, NGS further forward in types of , um, uh, uh, capability enhancement. Do you think that's fair? Um, is that, or do you, do you agree, that's kind of what had driven a lot of , um, the kind of focus on technology until say the last decade?

Speaker 3 16:13

Yeah, I think it depends on the segment of banking that you're talking about, but a lot of it , um , was a vendor dependency. If, if my main vendor provided it , then I could, I could do something. Um, and at the other side of this, especially toward the larger bank segmentation, they've got, you know, all this complexity, thousands of applications that they've basically have application to application integration with. And so it's pretty much turned into a straight jacket where then they can't really move effectively. So probably the biggest force that's been behind, a lot of the transformation and banking is really decomposing. What's there into smaller parts, the demand for , uh, the business mandate to move faster and at a more sustainable cost has forced banks to think rethink their ownership of things. As a matter of fact, I, I would say this has really pushed more of a decentralized and distributed type of technology based on banks that they have to take advantage of to be able to do that. It means they need to be able to effectively join no partnerships, align with fintechs , uh, be able to associate with , um, capabilities and be able to change that next week without a lot of costs . You can't do that with existing tech.

Speaker 2 17:43

Yeah, that, that was an area in my time at Accenture when I was the head of FinTech for North America. I mean , that was a lot of the kind of strategy I was trying to help our clients enable was this, how do we , um, identify appropriately appropriate kind of later, early stage kind of mid stage FinTech companies that could bring forward a, a capability to, to the bank. Uh, and then of course, a big part of those projects and conversations would be , uh, around how , um, difficult or to what extent is it even possible to introduce a , a new partner capability, FinTech provider, et cetera, into the complexity. And as we would have more of those discussions, the, you know, it was clear that you could see the CIO and even the business owner's minds churning around, how do we be more , uh , capable of getting into these types of relationships with , uh, with new innovative partners in an easier way and how to make that occur?

Speaker 3 18:57

Yeah. And what you're referencing is, is how probably Gardner terms that as ecosystems, you know , these are, again, as you referenced, there is , there are a lot of the organizations out there that are trying to vet a lot of these , um, smaller fintechs, such that they can provide a role , um , as an intermediate mediary and the value proposition to the banks. Not all banks can afford to do this yeah. Bank of America. They could probably buy a lot of these and they have in the past, but those banks that are probably in the mid tier and below don't have that kind of budget and can't move like the larger tier banks can. So as a result, they have to go to a place, a trusted location where they can that have this vetted for them , um , to be able to provide that more ease of integration.

Speaker 2 19:45

Yeah. Yeah. It's interesting. I, and most of my career has been spent with the very largest financial institutions, but more recently over the last two years, I've begun to spend time with the community bank and the credit union space. And it's been, I've really learned a lot. And I've heard often in those conversations with their leaders that say community bank frustration, that, you know, they, they, we they're like, we've got to be able to keep up with the Wells Fargo, the BFA, and not only keep up, but we want to be able to offer more and we've got some great ideas, but we feel , um, like it's been difficult to kind of deliver what they want. And then there's, I've seen , um, there's a , there's a platform called this is more credit union focused , but constellation is what they call it . A group of , um, it's a credit union service organization that was formed and they just decided to create kind of their own mobile banking platform that had a lot of , uh, I guess, openness , um, and visibility capabilities to it. Um, to try to address that business challenge of , um, of doing as good or better than , uh , some of those banks that were threatening to steal their cars .

Speaker 3 21:07

No, I think you make a really important point because I would tell you over the last three years , um, there's been a growing anxiety. Um, if I'm going to target the size of these banks are probably anywhere between one and 100 billion in assets , um, that have typically used vendors in the past, like Pfizer, like FIS , um, that have gone down a path of a , what I'll call a cross sell hell. Um, it's basically a straight jacket where the bank is forced into these leveraged positions, where they have to buy everything from a single vendor , um, as a result , um, they, they can't grow properly. They can't extend or be innovative. Uh, and this is very much as opposed to the way that the open banking market is starting to unfold.

Speaker 2 21:56

Talk about that. Talk about , um, open banking, you know, how you, how you think about that term and what that means, and , um, what sort of trends we're beginning to see really take hold , uh, from an open banking standpoint.

Speaker 3 22:15

Yeah, I think that if you kind of break this down to a simple simplest parts, it's really talking about how do I get outside of the bank to reduce the cost of innovation. Um, and how do I do that in an effective way , um, center of gravity for most banks, I'd say globally , um, certainly in the U S market as well has been API APIs, application programming interfaces. Those are basically extensions and really exposing capabilities of a bank or the capacity to actually accept those inside the bank . But so think of this as kind of a connection point and integration , um, but at a higher order level that makes it much more seamless. So there's, that's the promise of open banking that I can extend out to some, you know, banking industry affinity group that provides , um , a series of API APIs. Um, you know, you were, I think even talking about prior to the , uh, the discussions they bought plaid plaid, you know, is another kind of player in this role where basically we're starting to get aggregators of APIs. Um, and this kind of reflects that ecosystem construct that I was talking about before. So it's all about how do I expose functionality that I can use to collaborate with third parties? How can I create innovative products , um, on the fly and not have to do everything myself and leverage others that are perhaps, you know, a tip of the spear of the market?

Speaker 2 23:46

Yeah, I think, yeah , I guess sticking with plaid for a minute, it was like , um, you know, there's been a lot of discussion that I've been in the middle of over the last , um, two months as the , uh , paycheck protection program began to roll out across the banking industry. And there was this, you know , really kind of mad scramble to , um , make sure that that money , um, got appropriately or those loans got appropriately deployed to the companies that needed them. So it just really , um, and you were seeing kind of new mobile apps getting rolled out by the big institutions, but within a matter of hours , um, new capabilities, new function , um, and this was to get the origination done. Um, and now I know, so now the resonations largely done, but now these ones gotta be serviced. It's the, Oh my gosh, what are we going to do now? And the , um, the folks at plaid , um, you know, kind of , they, I know they'd stepped in quickly. I was on a call with , uh , one of their leaders and they are looking to kind of quickly do an integration with ADP because ADP has a lot of payroll information. And we know that the loan that's been given to PP loan has been given, could be forgiven if you're maintaining the certain level payroll. So it's like, I can imagine, okay, quarterly, I need to take a snapshot of the company's payroll. Is it staying constant? You know, I'm , I'm , uh , I'm just guessing these are kind of questions and how to do the servicing. And so I could see all my gosh , I could just turn the plaid and they could give me this data that I need through an integration that they would take care of with ADP then as the bank, I don't have, I got that thing less to worry about. Um, and I got a better chance of getting a higher quality on a solution in place.

Speaker 3 25:38

No, yeah, that's it entirely. And I think that if you can kind of look at this as, you know, early days when each one of the banks built their own API APIs , um, and I think to many, it was kind of a reference to, you know, if we build it, they will come, but they never did. Um , so now we are trying to move into this next evolution of API APIs, where we have different kinds of providers. It's not just the bank providing , um , it's , it's also these third parties that provide access to a series of systems that are not , uh, you know, I would say innovative in and of themselves. They , they attached to a SAP or Oracle, you know , uh , uh, general ledger systems. Um, they, they connect to, what's a Slack, they connect to a number of different platforms. Why would a bank want to spend all the time creating all these API APIs ? They already exists right off the shelf. So that's some of the value proposition. That's inclusive of organizations like plat . Yeah . I have a question. Just make sure I'm following

Speaker 4 26:44

This. Right. So, so you've talked a lot about like the advantages of decentralization , such as, you know, having strategic API pathways, you know, that'll help these banking parties, you know, do things more efficiently, more, give them the chance to complete things, more like timely and all of that, but I'm curious. So what about the relation? So even though, you know, that advantage of be of operating more efficient, once you are decentralized, what, how would you compare the cost to getting a bank, to be ready for that? Right. The cost to be ready to become decentralized versus the extra cost of continuing to operate at, you know, a certain level of deficient. And at what point do you think, you know, at what point does a company like decide to make that jump?

Speaker 3 27:41

Yeah. So I'm going to , I'm going to give you the classic analyst response to that, and this all depends on your segment size. It depends on, I would say , um, your , um, relationship with vendors, your , uh , it maturity. A lot of that goes into the mix of this. So if I just to answer your question more directly, if I'm a smaller bank, let's say sub 1 billion in assets, then I'm going to be very vendor dependent. And, you know, again, we're talking again, you know, the , the major four Finastra , um , Jack Henry FIS five serve and the U S market anyway. So , so those organizations are pretty much tied to the hip of these , uh, financial technology providers. And , and you have to realize that there's , there are some issues at hand here with these vendors where if they went to this completely open banking, you know , construct , um, they feel threatened. Um , they basically feel they're losing their intellectual property when they do that, or their value proposition. It used to be used to call it the, you know, the whole Oracle red stack approach, which means that if you buy from Oracle, we'll make sure that all the stuff is efficient top to bottom, but that's directly an opposition again, to this more open banking concept. So how does a smaller bank start leveraging that? How do they get there? In many cases, they're going to have to wait for their vendors to make that work. I would tell you that probably credit unions that are the same size as a bank are not equal. So a bank that has 1 billion in assets at a credit union that is 1 billion in assets are different animals. Those credit lines are much more progressive. They already have architecture staff. They already have , um, it , um , development , uh , organizations within the credit union that actually cater to these kinds of more open banking concepts. So a lot of this has do with your size, the segment and the, and the dimension , um , that's available in the market. So, you know , what about the plaids ? What about, you know , some of these kind of third-party equals how available are they, if, if they don't get the keys to the castle from the vendors to make this open, then their road is going to be much slower to accommodate, but I would tell you, there is some changes afoot. What we're seeing is a new breed of vendor coming onto the market. Uh , one that's actually designed from the ground up to actually reference this kind of granularity. That's very easy to expose thinking about kind of microservices , API based core platforms. FIS doesn't have that , uh , you know, fly serve doesn't have that these other organizations don't have that, but with this kind of nice shiny capability , um, also comes, you know, the weight of maturity and, you know, low reference base . That's a little bit scary to the smaller bags . There's definitely choices to be made and there ways to get there. Um, it depends on how aggressive that financial institution is and how , uh , directly relative , relative to their revenue, projections , uh , digital business that depended on

Speaker 2 30:57

Don. What about regulatory? And I'm thinking much more from a European context where we've seen payment services directive to PSD to come forward in the last few years. And Kai , this was a mandate from the regulatory leadership in the European union saying to banks, you have to be opened and allow , uh , uh, an easy path of integration. So that con consumers , uh , can have greater control over who has access to their information. This will, this will never happen in the United States because of the way our regulatory system is set up in a very, very different way. Um, but you know , Don, I'm curious to hear the extent you've been seeing change , uh, kind of accelerate from this open banking standpoint from the EU. And then how are you seeing that begin to influence the, the United States to any extent?

Speaker 3 32:05

Yeah, I think that, you know , let's kind of make that reference to PST too . Um, and also I would say more pointedly even to the UK market and the kinds of regulatory , um, issues they've raised there relative to open banking , um, GST to great idea, but the problem is the level of specificity for the standard is not to the level where it needs to be. So it's not a standard if anybody can make changes to it, or if you have some kind of ambiguous definition of what the contents, what the metadata is at the end of that standard, that's part of the problem with PSD two, the other issue relative to UK regulatory stuff, there is certain regulatory requirements they've made. And the reason why they certainly have been emphasizing open banking, this is not like a new thing. That is a fairly new thing for them. Three years ago, they wrote a missive off to all the banks. So , you know, Hey, did you hear about this public bank, public cloud stuff? Well, don't even think about it one year later, they're going, Hey, you hear about this public cloud thing. It's really cool. So even at a place that's dark and probably void of change. Um , so we're , I give us some hope , um, we're a trajectory that goes beyond where it is today. Um, there are obviously changes occurring in these markets. And so I think that , um , this it's had a limited effect so far. I wouldn't , I wouldn't say it's been wholesale, but what I see happening is there's probably less reliance on, I would say standards groups, although there are some that are probably indicative of this, like buy-in for example, the banking industry architecture network that are working on this kind of a problem, but these are volunteer organizations where the real teeth in this market is isn't the regulatory authority. They force things to happen. There's no choice. You have to do it. So where I'm starting to see this progress is that the market at large, and this is more globally. We see Singapore, we see Australia starting to take bits and bites and started piecing together things that already has been done with some of these other initiatives, some of these other standards on initiatives within the regulatory markets and starting to kind of pull together this more general framework. So I would guess that yes, there is hope for the West market. I believe that it won't be something that , um, is going to be based on probably regulatory in the near term. I think it would be based on more of a desire , uh, to , uh, provide demand in this , um , kind of open banking environment to provide much more effective, you know , uh, you know , go to market capabilities. I think apart from all this. And I think this is important to me that you were referencing before about the , the numbers of, of loans that were the government was starting to initiate. And yes, it did hit the origination front, but this is probably indicative of what we see in other markets. So for example, in India, where they've got, you know, the population density that far exceeds most countries in the world, we're starting to see some problems in the way that API APIs have been built. The API is the base going straight back to the core systems and the performance is suffering tremendously. As a result, they're starting to kind of rethink this and trying to think about how can I get high value transactions back to the core directly, but perhaps in a staging or more of a kind of repository based interim step, maybe my low value transactions come in here. Maybe my balance requests from APIs hit a layer that's above the core . So a lot of this has to do with performance too , and I don't think we're quite ready for this whole open banking environment with a kind of transaction them that they could persist. And we're talking probably , um , you know, a billion transactions a day. Wow,

Speaker 2 36:03

Fantastic. Um, I love this conversation. Um, I want to pivot , um, just cause we're gonna we're we need to begin to wrap up towards , um, just big FinTech news that has caught on better caught our attention over the last , um, last week. Um, I I'll let, I'll let you start any news that's um, caught your attention.

Speaker 4 36:27

Yeah, absolutely. Uh, so I thought it was kind of interesting. I think PayPal acted quite fast, especially given these COVID circumstances right now. They actually came out , um , on their latest app version with a QR code , uh, as your form of payment. So the whole idea behind it is they're really pushing how, you know, when you enter spaces, whether be it restaurants, gas stations, whatever it might be , uh, you're able to have a contact list , um, experience in the sense that you're able just to only touch your own device, and you're not having to use a communal device, which has communal bacteria and risk. And so I think it's really cool that PayPal has already come out with , um, in the last , uh , couple of weeks, this new feature on their app,

Speaker 2 37:13

Definitely , um , kind of taken advantage of the circumstance right now to cause you know, PayPal has been trying to figure out how to get further penetrated into , uh , payment acceptance at the, in the store and the store, you know, they've done great with the , um, mobile, mobile and e-com . Um, and so this , um, you know, the, the fact that consumer behavior is changing so quickly around contactless is , um, just makes really good sense for them. Um, uh, how about you Don in a, in a news caught your attention?

Speaker 3 37:47

Yeah, actually I , um, I just got the presentation this morning for a vendor briefing. I'll have this afternoon with plaid. Um, they're basically coming out with a plat exchange. Um, this is a platform that's supposed to give banks, basically the tools to ensure they have data access, you know, for, I say the ever broadening use of , uh, you know, the digital financial services markets oath, it basically allows a connection to thousands of fintechs. Um, you know, I think they have like , I think over 2,600 at this point , um, and it allows the bank to start, you know, as we were kind of referencing before and what Kai was asking me about how to banks to kind of get out of this, this is one of those kinds of exchanges or ecosystems, if you will, that allow those underlying organizations to gain access to a lot of API capabilities that they normally have access to. This is hitting not just on a , um, uh , more of a kind of B to B level or business to business level, but also , um , at a consumer level to provide, you know , uh , the options to opt out , um, to look at data privacy options on a more holistic basis. But I think there's a lot more packed into this and we'll start to see more of this evolution of ecosystems as time goes on as the demand appears.

Speaker 2 39:02

I know we were talking , um, I mean, it's just, it's remarkable the, what , what plan's doing in the marketplace in, in general, and we were talking and one of the last shows about this new , um, partnership that , that planted announced with Microsoft, where in you in it's kind of integrated with the Microsoft Excel app where you can pull data in from your bank account, for , as us as individual consumers, we could create our own little kind of customer PFM . I mean, just really remarkable. And then of course, we're , I guess we're waiting still to , um, let a plat and visa consummate their , uh, transaction. Uh, I think they just have some delays as a result of the , uh , crisis, but , um, I'm sure everything will like go close, see her in the next month. Um, the only other piece of news I'd seen that, that , um, I wanted to mention was that Brex, I love this startup Brex out in California , um, which is a , uh, basically a corporate card for startups is , uh , their business. Um, they've continued to grow , um, aggressively and they just closed $150 million series C round , uh, kind of giving them some further capital to expand since.

Speaker 3 40:26

Yeah , I would say that kind of the , you know , actually I'm doing some research right now. We have within Gardener's something called cool vendors and cool vendors basically kind of highlight these kinds of fintechs. Um, I do it for the banking team, so we're just starting, I'm starting to get some , some entries in , but in the past we've seen organizations that have , um , completely shaken the market through either AI , um , and , and doing things differently and also , um, maybe even very traditional piece of the business done in a more innovative way. So for example , uh, think of, you know, like collections, it's not a very fun business to be in , um , and banks hate it. Uh , they always outsource that stuff, but there have been some companies basically starting up that actually have automated this and have actually come back with a higher response rate than you can with it through a data center, which is obviously, you know, where banks want to go

Speaker 2 41:19

Through a court. That's my favorite cool takes . I love them. Uh, well, I , uh, I D I really enjoy this conversation, Kai , Don , just thanks so much for being a of this. Um, Don , thanks for your engagement with the FinTech Academy. I hope we can have you back on to this podcast. Maybe we'd love to have get you in front of some of the classes that we're we're offering through the FinTech Academy. Uh, and then Kai , just best of luck in the active , uh, internship. I know you're getting started with , um, you're , you're just, I'm in awe of your educational and professional success , uh, that you are telling us about. And, and thank you so much for being part of our student advisory committee for the, for the FinTech Academy, your , your voice has been , um, it's really been great and important for me to have your voice on that , uh, at group. Uh , so you all take care and we'll look forward to having you back. Thank you so much. Happy birthday, happy birthday.

Speaker 1 42:25

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