Georgia Fintech Academy

S2 - Episode 2: Capital Markets Explained with Scott Marean, CTO, FIS Global Capital Markets and John Butler of University of North Georgia

January 28, 2021 Georgia Fintech Academy Season 2 Episode 2
Georgia Fintech Academy
S2 - Episode 2: Capital Markets Explained with Scott Marean, CTO, FIS Global Capital Markets and John Butler of University of North Georgia
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Georgia Fintech Academy
S2 - Episode 2: Capital Markets Explained with Scott Marean, CTO, FIS Global Capital Markets and John Butler of University of North Georgia
Jan 28, 2021 Season 2 Episode 2
Georgia Fintech Academy

Scott Marean is the Chief Technology Officer for the Risk, Lending, and Credit capabilities for FIS Global. He joins John Butler, a recent graduate of the University of North Georgia's Mike Cottrell College of Business. 

They take on the important topic of capital markets and explain its key components.

Show Notes Transcript

Scott Marean is the Chief Technology Officer for the Risk, Lending, and Credit capabilities for FIS Global. He joins John Butler, a recent graduate of the University of North Georgia's Mike Cottrell College of Business. 

They take on the important topic of capital markets and explain its key components.

Speaker 1:

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 in textbooks .

Speaker 2:

So the executive director of the Georgia FinTech Academy, and welcome to episode two of season two for our Georgia FinTech Academy podcast. Today, we have Scott Marion and John Butler joining for a conversation on capital markets. Welcome to you both.

Speaker 3:

All right , thank you. Thank you,

Speaker 2:

Scott. Um, if it's okay. Let's um, I want to give you some time to provide an introduction and I was hoping you could give us a real kind of overview of your career journey and how you've gotten involved with FinTech.

Speaker 3:

Oh, sure. Absolutely. All right. So, well , first of all, it's a pleasure to join you, pleasure to be on the podcast. Uh , thanks for having me. Um, Tommy , it's been great to get to know you over the past couple of months and start getting involved in the Georgia FinTech Academy. Um, I'm actually new to Atlanta. I just moved here from Chicago at the end of 2019. I really like it, especially like in January, we're recording this. The winters are quite nice compared to Chicago where they're suffering under snow right now. So at any rate , uh, I'm a chief technology officer or a CTO at FIS. Um, see , I , you know, I, I love finding the ans technology working with college students and recent grads just starting out in their careers. So , uh, you know, this whole thing is really interesting to me getting involved in the tech Academy, but , uh, as far as the career story goes, I started out , uh, in computer science at the university of Illinois engineering school. So like I said, I'm from Chicago. So when I went to school up there , uh, it was computer science and the engineering department, but with an emphasis in business. So I guess I could've gone a couple of different ways with computer science. Like I could've gone into like detailed engineering type things, but I definitely had a bent towards solving business problems and helping businesses with technology. So when I graduated, actually, when I went into consulting, I started out at Accenture, which at the time was called Anderson consulting. Um,

Speaker 2:

I worked on for awhile while he did

Speaker 3:

Excellent. Yeah. Great place to start. I highly recommend them. Um , they're still around of course. Uh, and then I was programming at that time in the early nineties , uh, with , uh , C and Unix, which was cutting edge at the time. Right. Um, and then from there, I went to this small boutique company in the Chicago area with about 15 people. Um, and it was also a consulting started out around 15 people when I joined, we grew it to about 80 and then we got this bright idea that we were going to get into software products versus just consulting and we tanked the company. So that was fun. Uh , I love startups. Don't always work out like you expect, but , uh, but you know, it was funny cause I actually, there is where I started to go from being like a pure technical guy to being more interested in management. Um, you know, cause it's like you get to see that as you're leading your team or as you're delivering on a project that you can really have a positive impact on your team members and also have a positive impact on the company and, you know, kind of like a successful based on the products that you're delivering. So that was kind of where I got my , uh , management bug, if you will , uh, went from there to a , more of a mid-sized consulting company and I loved it, but um, ultimately left consulting firm , it might seem like a strange reason was that I was on all these projects and you can switch projects probably every three to six months. And there was this one project where I felt like I was , I was leaving it. Um, like I really wanted to stay. Like I wanted to see this thing play out. Like I could totally tell that we just set this business up for successful than it was for the years to come. And there's so many ways that you could take what we did and , and make it successful. And , and there's like, one of the client people got to do that and I had to leave, right, because I'm a consultant. So I was like, you know, I really want to get into the corporate world and see things build up over years . Right. And be able to really make a long-term impact. So I ended up switching into what I would call corporate jobs. Right. So kind of , uh, you know, and I did an insurance company for a little while and then a commodity, a commodities trading company, and then finally a trading software company. And what I noticed there was, you know, all companies will say, you know, technology is key to our business and all, but when you actually go to a software company, when you actually are, your business is to sell software and we work for a software vendor to me as a technologist, that makes a big difference to me because at that point, the leaders in the company really understand technology. They understand the importance of the software. That is the primary reason you're in business. So I discovered that's kind of like really where my passion is and by niches these days. So , um, so I did that for a little while and then finally ended up joining FIS , uh , as a CTO eight years ago. So , um, so back in 2012, at the end of 2012, I've worked in three different business units there , uh, asset management, insurance, and now most recently risk credit and lending. And , uh, there's been a great time, so kind of a winding road to get here, but , uh, yeah, I think it's always interesting to hear how people got to where they are. So anyway, that's the basics.

Speaker 2:

The, and were , I remember that , um, FIS, there was an organization, huge organization called SunGard . Um, were you part of SunGard? And then I know SunGard was acquired by FIS in 2013, 14, something like that. Um, or, or not.

Speaker 3:

Yeah. Yeah. I actually started out at SunGard . Yeah. It's and it's funny because if you talk about SunGard out in the industry, people immediately think the data center people. So SunGard actually had two divisions that were about equal sizes and one was data centers and one was financial software and they split right before I joined. I'm not exactly sure what year it was, but that, so I joined them in 2012. So it must've been more like 2010 ish or something, but , um , it was the software side, which is what FIS acquired. So FIS was previously just banking, I suppose, if you want to call it that. And then after they took us on, then they became sort of banking and capital markets. Yeah . Yeah.

Speaker 2:

It's um, it's a great story. And uh, I just find I'm , you know, fascinated by the whole history of FIS and how it's grown to be such a huge, you know, 12 billion plus kind of revenue, annual annual your company and just how it's really become so diversified and engaged in so many parts of financial services , um, through , um, through organic growth, of course, but also through these really remarkable acquisitions that have occurred, like SunGard being an example. And I guess most recently the , um, the acquisition of Worldpay, which really brings our big kind of e-commerce merchant acquiring capability into the company. We'll get we'll , let's come back to capital markets in a second, but John , uh, I wanted to give you a chance to introduce yourself as our student guest .

Speaker 4:

Yeah. Uh, so I recently graduated from the university of North Georgia. Uh, I would say

Speaker 2:

Like a month ago. Yeah.

Speaker 4:

So yeah, coming out middle of winter , um , kind of the middle of COVID recent grad , uh, exciting time, but also I think it's exciting in a way that companies are really rethinking how they bring people on and talent they want to acquire. So I think if we were in a non COVID world, I would essentially be looking for jobs that are within my area or within my reach. Uh , the beautiful thing right now is with COVID and with everyone changing the fundamental understanding of how they conduct business, it's kind of a huge potential, like I could work with a team based in New York if I wanted to and I could live in Seattle or I could work with a team in Atlanta. Yeah. Endless possibilities. Um, or at least that's what I tell myself to kind of get over the fear because there is, yeah. The huge fear of like, no one knows what the face of business is going to look like and what the, you know, economic resilience is going to be. So I think it's , uh , a blessing and a , a huge challenge at the same time.

Speaker 2:

It's been great to have engagement from you and other students from the university of North Georgia. This , um , is an institution is since I've been here for the last little bit over a year has been, I just seen the increasing levels of engagement from UNG students, largely from the Cottrell college of business, which I think you were also part of. Um, and it's really , it's been great to , um , to have , um, these kind of increasing engagement from U and G and U and G for those of you don't know, is, is kind of, I guess in my mind, sort of just outside of Atlanta, Metro in a town called [inaudible] , which is sort of up kind of getting into, obviously North Georgia club a little bit closer to the, the Hills, but a gorgeous campus. I , uh, I had a chance to stop by , um, the campus recently and , um, kind of walk around and explore. Um, and so it's , um, I hope you had a great experience there and , uh, and we're excited that you're interested in this industry space of a FinTech.

Speaker 4:

Yeah. I definitely enjoyed my time at the , at UNG . Um, I kind of had experienced it all three campuses. So when I started at UNG, I was coming off of a cycling scholarship at Morris Hill university. Um, the team was kind of folding down and support was waning there. So I was like, all right, well, I need to kind of make a plan for myself to be able to pay for college. So that meant moving back to Georgia for me , uh , at that point I've worked full time and attended the Watkinsville campus, which is really originally, I think in like the business sense of UNG. They acquired that from Gainesville state in order to get students that want it to live in Athens, but then it had the grades to get into UGA, but we're planning to transfer. So yeah, my dad was kind of a , you know , commuter campus, very like credit card swipe, right. People were coming in for classes and they were leaving there. Wasn't a lot of campus engagement there at the time. And then also at a time at the Gainesville campus, which is another like beautiful campus, amazing facilities, great staff. So I did two years there and then I did two years of it , a lot of good campus, my final two. So yeah,

Speaker 2:

I'm glad you mentioned your , uh, your passion and, and, and , uh , athleticism , um , with regards to cycling the , uh, the, I wanted to turn this whole podcast into a pro cycling , uh , podcast has been hard for me to resist that because , uh, as some of you may know, I have , uh, recently jumped head first into the Peloton , uh, experience. And , um, and as an aside on that, Allie love just got engaged. If you follow alley downtown, bro , know what I'm talking about, but it was, it was a little tough for me. It was tough for me to hear that news last night.

Speaker 3:

You might've had a chance there you think. Well ,

Speaker 2:

I mean, I've been married for 25

Speaker 3:

Years, so probably not.

Speaker 2:

Uh , but , uh, I'm a big fan. I'm a big fan of alleys . I'm kind of wishing her a lot of , uh , happiness of course. Yeah. Okay .

Speaker 3:

A new bike recently too, but I have a feeling that , uh, neither one of us or anything compared to John,

Speaker 2:

John would probably say , I don't want to talk wattage and output.

Speaker 3:

I don't either. It's pretty low. Um , I've been doing a lot of mountain biking lately, which is it's great for the sun. All right . Good stuff.

Speaker 2:

All right . Let's talk about capital markets.

Speaker 3:

Um, if we must,

Speaker 2:

Yeah. It's , uh , it's a kind of key critical part of financial services. Um, and one that , uh, I guess I'm personally very interested in and I, I think I just have an expectation that it's a , it's a part of financial services that , um, we could always all use a bit more understanding around and , and what are the components of it and how it works. So Scott, maybe start us off there and kind of break down this , uh, capital market space for us , um, and how to think about it.

Speaker 3:

Yeah, sure. So it's kind of funny, like I wanted to , uh, you know, to kind of look into this and come up with a good definition for you . Cause I knew we were going to talk about this, but so at its most basic level, it's a market, right. Just kind of , as the name implies , uh , for buying and selling things and what you're basically buying and selling, is that an equity, right? So that in the form of bond equities in the form of stocks and it's usually with a longterm growth, like investment outlook. Right. But then it gets a lot more complicated after that, but that's kind of the basics of it. And so then surrounding that, you've got other things that are closely related like money markets, right. And that's typically where people think about things like shorter term loans or smaller amounts , um, or there's also other related financial markets for things like insurance commodities or currency, like, and then on kind of on top of all that you throw in like regulations and reporting requirements to govern the whole thing. And you've got quite a diverse industry. It covers so much. Yeah.

Speaker 2:

The , um, that makes a lot of sense to me. I know when I've been learning about the space in my career history, you know, one place I keep, you know , the market thing is of course I gravitated to me, it was like, okay, it's just, it's a market. People are buying and selling things. They're exchanging value in , uh , in these markets and where, where is that happening? What, and I mean, one thing I locked into early and trying to understand the space more deeply was like these famous , uh, exchanges, like the , uh , the New York stock exchange being obviously, you know, one of the critical ones to the United States where equity and debt, you know, are sold , being sold right now at this very moment. Um, and then , uh, and then I, and then kind of, I started to explore a bit the history of the New York stock exchange. And, and you , you think about technology and what a massive , um, kind of , uh, impact that's had on the evolution of these markets, going back to like late 18 hundreds when the ticker Tate was created to kind of have this ability to , um, uh, communicate , um, prices of individual stocks , uh , through a Telegraph. Um, I mean, I , I was giving a talk , um, earlier this week actually, and I was suggesting that the, the birth of the ticker tape was the first moment of FinTech history that that's where FinTech history began. Okay. Yeah . You can argue that, tell me if that's right or wrong, but , um, that , uh, that then you come up to today where , um, I've had a chance to go to the New York stock exchange a few times and walk around on the floor and kind of walk through the building. And, you know, there was a , a time , uh, you know, not too long ago where all the majority of all that exchange trading that was taking place was in ball paper. Uh, it involved in you, you remember the store , these moments from , uh, when I was younger, you'd see news stories of the New York stock exchange. And they would just be paper littered everywhere. It's like falling from the sky , um, particularly on big days, but you go, you see these pictures today. Like we turned on CNBC right now, you know, they'll probably do a mid day shot of the New York stock exchange. And there's not really that many people there. I mean, despite, I mean, even when it's non pandemic , um, and it's all massive video screens. Right , right. And it's, this there's been a really huge , uh, electronification of that whole , um, medium of the market .

Speaker 3:

Yeah , absolutely. Yeah. One of the, just quickly on that one, and it reminds me when I worked at that on the commodity trading company, one of the things that was our specialty there technology-wise , and this wasn't that long ago, but it was unique in the market at the time, was that all that floor trading that you do with the paper, especially in the commodities market, they were one of the last markets to go electronic. So I really had to get the best prices you really had to have a good floor trader. And so what we had is we had a system where you had a desktop trading app on your PC where you could buy something that was typically floor traded. And what it would literally do is go , come to our company. We would print on our printers. One of our runners would run it into the pit and then they would run it back and fill it and whatever. And so you could get what they call a floor, fill on your trade, you know, within minutes with them pressing a button on your screen, right? Like, so it was like this, you could also then buy , you know, the electronic trading equivalent to those, if you want to. But the fact that you could have a desktop application that could interface with the floor essentially was, was pretty unique. And we, you know, one of the best at that. So that was, and then they were talking about the New York stock exchange with the guy who sold the paper. There's a , I went one time and it was the funniest thing. And he's in the middle of these pits where you got all these guys yelling and screaming with the pieces of paper. Um, there was another floor beneath them, like, you know, kind of like if they're on the main floor, maybe you think this is in the basement, if you will. Um, that was collecting all the pieces of paper. And they were going down through a hole in the middle of this big pit in order to get processed down below and get matched up. And there were two guys in the middle that were like, it was like, it was like a big net. And they had like a belt around them in the middle of the net. And their whole job was just to sweep paper across the net and to a hall. So it could go down the hall into the floor below or someone else to process it . And I'm like, what are you going to do with your life after this? Like , I'm really good at , uh, I don't know, what do I do? I put pieces of paper into a hole in the middle of the floor anyway. So ,

Speaker 2:

Um, I've seen, I've never been inside the, any of the, either of the Chicago exchanges as commodities changes. I've seen the pictures of the , the open outcry , um, uh , kind of bullpens where like people are, these traders are just like, it seems like total chaos and it's like , they're screaming at each other. I'm like, how is this working? Um, and I guess my question is, if, you know, it's like to what extent does the open outcry kind of medium still take place?

Speaker 3:

Every all it's hard that doesn't even happen anymore. Like, it's kinda , it's kind of sad. When I lived in Chicago at the Chicago mercantile exchange, they had, they had just put in essentially what would be state-of-the-art for trading rooms and these rooms, if you're ever on the Chicago river, you can look across in these buildings. You can tell that the room itself is like five stories, tall, practically. It's just like this huge open gym in the middle of a , you know, what would be like a gym in the middle of the office building. And it had like, it was a combination of floor trading and electronic trading. So it had all these electronic tickers going across the walls that were huge. And it was all just perfectly set up. It was going to be the ideal. And then it was like, everything went electronic. So, you know, it was basically hardly ever used. And then eventually they just had to like slice it up and they actually put in like horizontal dividers into it to turn it into regular floors for the office. It was just, it was kind of sad. It was like, you know, coming out with the best covered wagon right before the car was invented.

Speaker 4:

That's pretty, both pretty interesting stories because growing up as a kid, I'm always seeing, you know, pictures of wall street, everyone yelling at each other and, you know, climbing over each other to kind of with a ticket in the air. And you don't know anything about it. I mean, I'm just a kid, so it's cool to actually hear the, the interaction between technology and people and analog, because now, like I understand the situation better and I understand that like, that's a , that's an era that's kind of like gone to the wayside. So yeah , the most exciting thing I can imagine doing in finance, you know, it's cool. It seems like in the picture, so it's like

Speaker 2:

Scott, the next thing I wanted to get your perspective on are these two terms that, that often come up in conversations around capital markets , um, sell side by side. Um , when we say like, make that simple for us, like when, when, when you sit, when we're saying sell side, like what are we talking about? And then maybe like, what are the big tech, no , co-located technology get real high level capabilities that support that piece by side kind of same thing.

Speaker 3:

Yeah. So I think in the, in the grand scheme of things like the South side is certainly like you're selling in this market of, you know, bonds and stocks and whatnot. So there's, there's there's ways in which an individual company can be both a buyer and a seller. Right. And so to be on buy-side or South side is sometimes kind of tricky. Um, typically you would think of a normal bank that's loaning money as being on the sell side, right. Because you're, you're loaning out the capital. You are essentially selling it if you will. And then the folks that are looking to take on those loans or to invest in the stocks would be on the buy side . So you could have something like a , it's not a good example of a buy-side technology. Like, you know, someone who's like a fund manager is buying equities and they're , you know, essentially making money on the, the buying of those types of offerings. Right. But then within that, you're, they're also coordinating buying and selling of those things. Right. So it's , it's, it gets really nuanced. And I think that it's difficult to, I , and to me it doesn't really feel like a helpful , uh, differentiation at times. I just think about it more as the function that they're doing versus them as buying or selling. I dunno . It's hard to, I lose track of it along the way, honestly. Yeah.

Speaker 2:

Well , that's, I guess that I'm encouraged to hear you say that. I know for me , um, and you know, you mentioned consulting, that's how I spent most of my entire professional career was doing consulting and I would get into, you know, doing consulting projects in this capital market space with par you know, big players that were kind of operating sell side or buy side. But then at times I could be just with like a sell side group and I would often be getting confused in zones cause I'd be like, okay, he keeps saying sell side, but man, this certainly sounds like it's got these buy-side things. What am I missing? You know ? And I'm trying to be constantly in a position where I'm have a client believing, you know, feeling like we're getting value and they're like , you know, I'm supporting them. So I , I need to feel like I've really, I need to understand fully , uh , and it created a lot of anxiety for me. I'd be like, wait a minute, I've totally got my head around it .

Speaker 3:

I'm sure there's a YouTube video that explains it in about 30 seconds and I've done a terrible job with it. So maybe we can , uh , ask our listeners to go follow up on that one on their own. I think to me , the differentiation that actually comes up more in my work and just in general is the idea between front office and back office within a financial institution and even middle office. And I know those are also terms that people are like, you know , what does that even mean? Uh, so that's probably something we could talk about too, if you want to touch on that.

Speaker 2:

Yeah , definitely. No, I'm glad you brought that up because you're absolutely right. Um, those are terms, I kind of have a decent sense of like , okay, what are we talking about? But they're at yeah, absolutely. I mean, those are terms that come up very frequently.

Speaker 3:

Yeah. So I think the way I think about it is that front office is kind of where you transact with your customers, right? So , um , in a trading company, that's where you're actually making the trades, or, you know, in a , in a bank is doing loans. That's where you're doing the loan origination or insurance. That's where you're doing the underwriting. Like it's the beginning of the process. That's where you go through whatever process or interaction that you need to, to actually sell the, sell what you're selling. Um, and like I said, interact with your customer to bring new customers on board. And that's typically , um , what, what most companies want to invest the most into looking good if you will, and to make sure that that's like a seamless digital experience, right? So they want you as a, as a customer to feel like, Oh, these guys are high tech . They know what they're doing like this, I really love this, you know, user interface to, you know, to join this company as a customer. Um, and that's, and that's front office. And that's typically also what companies really want to spend the most time on differentiating themselves from other companies then . Right. And then on the back office, does that make sense?

Speaker 4:

It's the thing that you see the most is the customer it's okay .

Speaker 3:

Right. Yep . And so in the back office, let's jump to the back then we'll come back to the middle. The back office is really where you kind of just run the business at QL . So , um, you know, like, so that's maybe on insurance policy, that's just kind of where you're processing the premiums that are coming in , um, or on a loan servicing the loan, you know, calculate an interest, that sort of thing. Um, and trading, you know, you're just kind of doing the accounting and the taxes and all that. Um, typically less sexy, right? There's still , um, good money to be made on selling software to people that need to do that. So if I asked us a lot of that, but , uh, but that's typically then place where you typically are not necessarily differentiated. And , uh, the big emphasis there is trying to do it efficiently and because it is looked at as a cost center. Exactly. And so, you know, FIS in particular, we'd helped try to automate as much as you can in those back office functions or even lifted out for you if you don't want to do it yourself. Right. So we'll take on in certain cases, you know , certain servicing aspects of some of these back office functions that like I said, are typically not your differentiator. And you're like, I might as well just outsource that to another company because you know that someone else can take care of it. And then if we do that for enough companies as an outsourcer, then we start to get more and more efficient at it and we can start doing more and more automation and , uh, you know, kind of everybody wins. Yeah.

Speaker 4:

And is that most of the time consumption happens in terms of, so in a more simplified version, I'm a customer coming to get X amount of dollars on whatever security it may be is the , the five day waiting period or whatever the waiting period is for crediting. The funds is that normally due to the back office , just being able to service whatever the loan may be.

Speaker 3:

Now , the back office would do things like process your payments after you're up and running. So that the first part, the origination part would be more front office. And then, you know, we'll keep track and make sure that you're paying us. And if you're not, you know, we'll send out the notice to say that, you know, you're late and calculate late fees, all that good stuff, that's all back office.

Speaker 4:

So what is middle office is middle office, the result of those two offices, either being out the back office, being out stores or yeah.

Speaker 3:

Kind of different, totally different. So it's so typically in the middle office, you're doing things like analyzing risk. That's usually what we're a lot of that comes in. So, so risk management, where if you're a bank, you know, one of the big things these days, especially after, you know , some of the recent financial crisis is, you know, it could , can our banks, can our bank survive the next big , uh , crisis, right? Like what would a shock to the system look like and do to us? Like, do we have enough liquidity and everything, right. So that's calculated kind of in the middle office, if you will , um, or an insurance company, you know, trying to calculate, well, how low could we make our premiums and still make money? Right. What has changed in the market recently? Like, I dunno if you're doing life insurance, like, are people living longer and will , you know, by the time this policy matures, you know, could I offer an even lower price today? Right. So trying to analyze the risk of your insurance portfolio or, or loans, like we were just talking about, you know, someone defaulting on a loan, what are the chances of someone defaulting or not? Right. So we're in the risk management. People have been very busy during COVID, right? Like businesses and consumers, you know, defaulting on all sorts of stuff that is , uh, unfortunately, you know, a reality of the situation. And therefore, you know, it was really a hot topic these days, as far as, you know, what businesses are paying attention to.

Speaker 2:

So, and then Scott , I guess, pulling that a little bit more when, so the, the area that you're kind of focused on day to day as the CTO for risk lending and , um, that zone credit , um, I is a lot of that technology supporting that middle office zone primarily. Or are you kind of touching all, all three front, middle?

Speaker 3:

Oh yeah, we do them all right. Yeah. So I mean, FIS, I think I'm not sure if you mentioned it earlier, but yeah. We've got, you know , over 55,000 employees over 10 billion in revenue, you know, it's a massive company, I think we're around number 300 on the fortune 500. And it's always funny if I mentioned that to somebody they're like, and what company has it , it's like the biggest company you've never heard of. Right. So we are quietly in the , uh, operating in the background , uh, you know, between all these different financial transactions in the , in the industry here. But , uh, yeah, we , so we have everything from, you know, like we were talking about the front office doing, you know, trading or insurance underwriting or loan origination. We have applications for all those things or the back office where you're doing whatever accounting or loan servicing fund management, you know, insurance policy, admin applications for all those. And then all the risk management stuff where you're doing liquidity or stress testing or whatever it might be. Um, the , I think in all those technically I dunno, like it's kind of, it's a toss up between, what's more, more interesting technically like if you're a computer science major and you're trying to figure out like, which one do I want to get into? Technically probably it's more fun . And middle is probably where the more exciting technology is, however, on the back office stuff with the accounting and everything, there actually is a huge push now to really modernize those systems. And by modernizing them , you know, we can scale them out a lot bigger than they ever used to. We can host a more , uh, economically. So there's still a lot of interesting work to be done there. It's just that, you know, probably like one of the trading companies I worked at , we did high-frequency trading, where are you doing? You know, kind of lightening fast things that you're timing in microseconds trying to play the market, which I think, you know , may have questionable economic value, but that's still fun technically to play with. So , uh, you know, those are some good topics there.

Speaker 4:

Do you think that it seems correct me if I'm wrong, that FIS is trying to make , um, investment banking and investment style firms more and more like retail banking in terms of speed and convenience and efficiency, efficiency. Um, I've seen a lot of like FIS products that look to just reduce the amount of time that it takes to do these typical commercial functions. Yeah . I think where like the gains are to be had.

Speaker 3:

Sure. Well, I think with , um, in any business you could potentially just hire your own development team and write all your own software, right? Like, why not? Like it's, you know, it's, it's , uh, you know, software developers can do anything right. At the same time, you know, as soon as you started doing that, the very first thing you would say is like, why am I writing my own accounting software? Right? Like, like that's like, that is really hard to keep up with all these changes in tax laws every year. Like let's just buy an accounting package. It's like, all right. So our developers are gonna throw out this custom accounting package. They made them briskly use one off the shell and you kind of started pulling your business apart like that. We were thinking, Oh , and then also, why would I, why would I write this ? Why would I write that? So a lot of times what ends up happening is, you know, any big business gets to the point where they start questioning, why do I have my own software development team? That's creating the software when, you know, I could buy it from another company they're going to maintain it and probably do a better job of it. There , their focus is, you know, doing this function for a lot of other companies. So they can probably figure out stuff that I would've never even thought of in that space. And then also, you know, given today's technologies, it's really easy for them to, you know, kind of white label our stuff and make it look like their own or even what they might do in a lot of companies do this is they'll create their own customer facing portal where, you know, like I said, they want to invest in the front office stuff right. To make themselves differentiated. So they might create some really cool portal that works well, both on your PC, on your mobile app. And all it does is just call API is at FIS. Right. So it doesn't actually do any of the business logic. Like all the data has started FIS and it's all being, you know , going through our business rules and everything. But whenever you capture data, all you do is call a function of if I asked to make it happen. Right .

Speaker 2:

Yeah. Wow . That is , um, that's a great area view. And thanks for kind of , um , unpacking this , uh , term capital market, or this is a critical piece of our financial services industry. I want to pivot over to kind of news. That's caught our attention in the , uh, in the past week FinTech news. This is the FinTech news segment of the podcast. Um, so , uh, Scott, I'm going to start with you , uh, any, any either , uh , kind of news story or a other topic you want to mention in , in the news segment?

Speaker 3:

Oh gosh. I feel like I'm on a game show. Shoot one, go ahead. Let's we'll just, it'll be a commentary on the news . How about that? Okay. That's all right .

Speaker 2:

Um , all right . Commentary. Well, John , you and I had talked about something earlier. What, what did , what did you want to bring up ?

Speaker 4:

Yeah, I, I definitely, so I'm a part of wall street bets . It's like my, my nightly reading of trying to decide, did he like, yeah, just looking at what people are saying, right. And so, and gain , obviously GameStop is the biggest hottest topic related to what

Speaker 2:

Of GameStop. I mean, even came up in the Jerome Powell fed reserve briefing yesterday,

Speaker 4:

Which I can say the fact that we've reached a point of justice

Speaker 2:

Came up. I was like, wait a minute. Is everybody talking about this old strip mall, video store? Why are talking about this?

Speaker 3:

It's kind of like the blockbuster , a video games. Yeah.

Speaker 2:

Yeah. So what , so what am I missing? Uh, John. Yeah .

Speaker 4:

So without getting into like, too much of the technical details, because that's one thing I definitely want to steer clear of, because I'm sure there's someone out there listening who is followed along much closer than I have, but pretty much game's up failing. Like we said, blockbuster failing company. So everyone and capital markets starts to take a position that is congruent with the failure. Right. They're gonna CA they're going to capitalize on the fall of GameStop . So a lot of people on this Reddit form , so Reddit yeah. Has wall street bets , which has an insane amount of users. I think it's upwards of like 2 million. And it's a lot of people just going on there and finding securities or assets to short for the most part. Yeah. And so I'm not sure how it started, but people found that all these hedge and institutional investors, these market makers had hedged on the failure of GameStop . Well, they decided, okay, this is a highly leveraged company. We don't want that to happen. So we're going to take the opposite. And so there were enough people taking the opposite point that I guess it started to drive the position up because now all the hedge funds have to take the P had to take the opposite position of what they initially had in order to not lose, you know, lose a ton of money on it. So it's crazy to me because it's, for the most part, people that don't have traditional finance educations , uh , there was a lot of jokes out there that, you know, some of them are like in high school or in their parents' basement, but it's crazy to me from a , um , sociological perspective, because it is a collective action of people and it's a democratization of things we see like hostile takeovers, right? What's the difference between what this collective people are doing, enforcing on the market. I think that's worth noting is the fact that you don't always need a finance education or a masters and anything in order to kind of drive change in a market. So I think that's, what's really interesting is the fact that people have come together and decided we want this outcome, whether this outcome is financially viable for us to take a position on right. GameStop , like it's a debt burdened failing business. And why would people want to be involved with that? Like as soon as, as soon as you have any sort of actual financial interests in it, you kind of realize like, Oh, it's just a , it's a bubble. Like I don't want to touch it. Um, but I think it's really interesting cause it, it proves that people are willing to put money into things that aren't economically viable. And I think the bigger question is, you know, how powerful can we act for things that we do want, right. So better ESG data, better reporting on that more , um, more action on climate change, more action on diversity in business. And that's the bigger question. And the bigger takeaway is like, this is just a point in case we all know how it's going to end, but what does this mean in terms of thought and how people think of markets? So I know that's a really long drawn out answer and if y'all have any,

Speaker 2:

No, I think you're hitting on some key points here that I think start to explain why this topic has gotten so much attention in the recent news cycle, because it's kind of, it's hit into this kind of broader conversation around the retail investor versus in the institutional investor. And what's the relationship between the retail. And when I say retail investor , I mean, people like me and you who , uh, you know, invest in our brokerage accounts in any sort of way. And then institutional investors of course are large institutions, these large banks and others that are , um, that are participating in the market. And , uh, there's a , I don't want to get, we could talk for a whole nother couple of hours on this dynamic, but , uh, it certainly kind of opened, or maybe reopened some kind of fundamental questions about the , uh , access to information, the access to kind of power, power of remarketing , mean these kinds of interesting topics. Um, and I think will continue to be discussed. And , uh, there's a whole lot of, you know, I think interesting hypothesis as to, you know, what's why has this game stop thing kind of run some so , uh, in the way it has over the last week or so. Um, but no great. Thanks for bringing that up. Um, the only other thing , yeah ,

Speaker 3:

I would say the only thing there is like the whole thing just kind of feels artificial to me. Right. So it's , um, you know, all that is usually something to avoid in general. So it's fun to watch as an outsider, but like very difficult to make a real money on that. And there's probably some like high-frequency trading before. There's probably some electronic traders that are just raking it in on this because they love volatility. But , uh, but your average person like me and you are just, we'll just get soaked if we do this well , you will just lose all our money.

Speaker 2:

This is not a trade Warren buffet is gonna get on , uh , or you know, a seasoned Vanguard investment manager.

Speaker 3:

Yeah . Yeah. My , my personal take is, even though I understand how all this stuff works, I , uh, only did mutual funds. Like, you know, my kids always say is , it's very boring. Dad, come on , you should, you know, what stocks should I buy? Like you should buy the S and P 500, you know, like that's

Speaker 4:

Yeah. Time and markets matters more than timing and market market . Yeah .

Speaker 2:

Well, we have run to the end of our time. Uh, Scott, John, thank you so much for participating in this podcast. Also just a big, thanks to FIS FIS as a founding investor in the FinTech Academy. And we are very appreciative of the ongoing partnership and relationship and Scott, I , I look forward to us doing some , uh, some more things together here in the near future. Yeah . Right . Thank you. And then John, keep us posted on the job search we're here for ya .

Speaker 4:

Yeah. What to do, and thank you both for , uh , letting me be on here and kind of giving me the time of day. I really have enjoyed every opportunity. That's kind of come up through the Academy. Uh, it was something that wasn't offered at UNG COVID and it honestly was one of those things I couldn't get into my real estate class because they only had two sections and they were both full they're only taught in the fall. I was , Oh, no, I'm going to , I'm going to set myself back a year. But then I was able to sub in and kind of work around to get the Georgia FinTech Academy. And it's honestly been probably the, the has increased my chances of employment. Post-college more than any other single class has been. And I have FIS to definitely think for that. Um, being able to work with real companies , uh, meet real people in the industry is definitely been a , uh, enriching expense .

Speaker 1:

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