Tearsheet Podcast: Exploring Financial Services Together

As the financial world evolves, open banking and digital transformation are opening up new opportunities. This comes with several challenges for banks and fintechs. In today's episode, I sit down with Alessandro Hatami. He is a managing partner of Pacemakers, a consulting firm that offers a systematic approach that allows its clients to find the partner that is right for them. Today we discuss some of these seismic shifts in the fintech industry. Hatami has a unique background in financial services, spanning both upstart tech companies like PayPal and traditional institutions like Lloyds Bank. His background offers a compelling perspective on the future of financial services. "Financial services is the ideal digital product," Hatami asserts. "because there isn't a real tangible exchange," he says. Yet, despite this potential, many institutions are struggling to embrace digital transformation. I’ve been saying for years on this podcast that the ability for both larger and smaller institutions to partner – to partner well, at scale, quickly, and deeply – can be a differentiated, defensible model moving forward. Hatami explains, "They have gone through an evolution. But they haven't gone through a transformation." The challenge facing the industry today lies in balancing adaptation with true transformation. from legacy systems to cultural barriers. Through Pacemakers, Hatami aims to bridge this gap. He wants to improve partnerships between established financial institutions and agile fintech innovators. Here’s my conversation with Pacemakers’ Alessandro Hatami.

SMBs need more from their FIs, and data echoes this demand. 62% of SMB owners have reported feeling like their business banking options don't go any further than the services already available in their personal accounts.  So banks have to find a way to not only differentiate their business banking products from fintech and platform competitors but their own personal banking products as well. One bank that is leading the way is Citizens, which has a three-pronged strategy for SMBs, according to its President & Head of Business Banking, Mark Valentino. Valentino talks about how Citizens is getting closer to the needs and wants of SMB owners by focusing on gathering feedback through surveys and its bankers.

Today, we're diving into the ever-green landscape of startups and startup banking. While the startup scene is always buzzing, recent years have been particularly challenging due to a tough market, limited investment opportunities, and waning investor confidence. However, with a rebound in VC funding this year and recent rate cuts by the Fed, there’s a glimmer of hope for improvement and new opportunities. Joining me to discuss startup banking and share related insights from recent J.P. Morgan research is Ashraf Hebela, Head of Startup Banking at J.P. Morgan. In our conversation, Ashraf dives into how J.P. Morgan is sharpening its focus on startup banking, what approaches can better serve underrepresented founders, and the critical support that banking startups require from their financial institutions to thrive.

The days when SMBs were tethered to their home markets are long behind us. Today, SMBs are eagerly embracing global opportunities, expanding into new regions, and viewing cross-border sales as a key growth driver. Yet, with this expansion comes a major challenge: navigating the complexities of international payments. 49% of SMBs cite the ease of managing cross-border payments as a top concern. Many have faced friction with traditional banks, which has created a fertile ground for non-bank alternatives to step in. This shift is reflected in the growing trend of SMBs switching providers. While pricing and fees were once the main reasons for switching, today, the search for “better and more convenient” digital solutions is becoming a powerful motivator alongside these operational needs. So, how can FIs respond to this shift? Chris Ward, Head of Enterprise Payments at Truist Financial Corporation, addresses this question and its potential solutions at Tearsheet's The Big Bank Theory Conference, recently held in New York.

How can FIs step in with solutions that alleviate these pain points, allowing SMBs to concentrate on growing their businesses while relegating banking to the background? “I think there are a few elements of that, but since SMB customers are willing to adopt technology, that's a start,” said Scott Beyer, U.S. Bank’s Head of Business Banking Digital Experiences during Tearsheet’s The Big Bank Theory Conference, held recently in New York. Beyers noted that a generational change is underway in the SMB landscape, with 77% of small business owners now adopting or planning to adopt technology to enhance their operational efficiency. This trend presents a valuable opportunity for FIs to enter the scene and create engaging digital experiences that resonate with the evolving needs of these businesses. He identified three key steps banks can employ to seize the opportunity and address existing gaps:  1. Ensure the availability of products and services 2. Build integrations 3. Focus on data reconciliation and harmonization

Generative AI and open banking are beginning to change how banks engage with customers. Today we will look at this process with Olly Downs. He is a Chief Technology and AI Officer at Curinos. With a career spanning three waves of AI, Downs brings a wealth of experience to the table. He published his first academic paper on what we now call generative AI, back in 1999. "I've almost been waiting for the current wave of AI to join us," Downs reflects. He highlights the long-anticipated arrival of today's AI capabilities. AI-driven personalization will change digital banking. Banks are beginning to use it to recreate the personalized touch of traditional banking. Downs explains, "Traditional banking founded itself on personalized, high-engagement relationships. That followed families and businesses throughout their entire life cycle." Personalizing the online experience is challenging due to the growth of digital channels. Curinos' technology tackles this by analyzing customer journeys. It identifies the best times and ways to engage customers. This ensures that personalization continues in the digital space. The result is a more effective and tailored customer experience. Generative AI is not just boosting personalization. It addresses the entire marketing cycle for banks. This shift is redefining how banks approach customer engagement. It's enabling and testing tailored interactions with numerous ready-to-use marketing creatives. The impact is both profound and widespread. The blend of personalization with open banking is shaping the future of banking.

In the latest episode of Tearsheet's newest podcast, "Compound Influence," hosts Zack Miller and Josh Liggett dive deep into the fascinating world of Wall Street Bets (WSB) and its impact on the financial landscape. This eye-opening discussion explores the intersection of social media, retail investing, and the power of online communities. The Rise of Wall Street Bets The hosts trace the origins of WSB, from its humble beginnings in 2012 with just 1,700 followers to its explosive growth to over 17 million members by 2024. This growth trajectory wasn't linear – it saw a massive spike during the GameStop saga in early 2021, catapulting the community into the mainstream spotlight. The Robinhood Connection A significant portion of the podcast focuses on the symbiotic relationship between WSB and the trading app Robinhood. The hosts discuss how Robinhood's commission-free trading model and gamified user experience aligned perfectly with WSB's high-risk, high-reward trading philosophy. This partnership inadvertently led to debugging Robinhood's platform and exposing potential exploits. Impact on the Financial Industry The discussion highlights how WSB and the GameStop event forced traditional financial institutions to take notice of retail investors' collective power. It led to the emergence of new platforms like Public.com and prompted established players to adapt their strategies. The WSB Ethos One of the most intriguing aspects of WSB, as pointed out in the podcast, is its unique culture. Unlike traditional finance forums, WSB embraces transparency about losses, often with self-deprecating humor. This openness creates a sense of community and shared experience among members. Challenges and Concerns The hosts don't shy away from addressing the potential dangers of WSB's influence. They discuss how the influx of inexperienced investors armed with partial knowledge can lead to risky behavior and significant financial losses. Lessons for Financial Institutions The episode concludes with insights on how established financial institutions might engage with communities like WSB. The hosts emphasize the importance of authentic interaction and warn against attempts to control or manipulate these organic communities.

Welcome to the Tearsheet Podcast, where we explore financial services together with an eye on technology, innovation, emerging models, and changing expectations. I’m Tearsheet’s editor in chief, Zack Miller. Today, we’re joined by Bill Borden, Corporate Vice President, Worldwide Financial Services, at Microsoft, and Suzanne Dann, CEO for the Americas at Wipro. Together, they discuss their collaboration on leveraging Azure OpenAI to enhance generative AI in finance. This partnership focuses on improving customer experiences, streamlining processes, and ensuring responsible AI practices in the financial industry. As Suzanne puts it, “My role is to help clients digitally transform by bringing together the right industry expertise, technology, and integration experience.” Bill adds, “Our goal at Microsoft is to build products and services that truly meet the unique needs of financial institutions.” We’ll explore how cognitive assistants, powered by generative AI, are reshaping customer interactions, loan origination, and even the broker experience, all while maintaining a focus on security, reliability, and expanding AI access across the sector.

Gaurav Mittal, Executive Vice President of Ethoca, a Mastercard company, shows that the post-purchase space represents an opportunity for our industry. It's where customers want convenience, autonomy, and trust but many of the players today have not been able to meet their demands. Mittal brings a unique insight into how tools like digital receipts and subscription management delivered within the banking app can improve customer experience. What’s more, this mission to ease post-purchase tasks like cancellations brings with it cost reductions and operational efficiencies for merchants and banks as well — and our guest today tells us how to build for the hard to achieve but ideal solution: a partnership landscape where everybody wins.  To learn more about how merchants and banks can leverage subscription management tools and digital receipts to better serve customers as well as positively impact their bottoms lines download this whitepaper: https://www.library.tearsheet.co/ethocawp

Welcome to the second episode of our de novo community banking series. I’m Sara Khairi, your host and reporter at Teasheet. If you tuned in a couple of weeks ago, you know we kicked things off with a deep dive into Craft Bank's journey in Atlanta, from CEO Ross Mynatt's debut leadership role to its choice of core tech partner and the strategies it used to grow $250 million in assets. This episode builds on that theme, exploring the origin, growth, and technology paths of two other community banks: RockPoint Bank in Tennessee and Moultrie Bank in Georgia. Both banks are relatively young, having been founded during the pandemic, and while they share some commonalities like limited budgets and staffing, they each have unique markets and growth strategies. The variety of perspectives on the same challenges is what makes their story interesting. Joining us are Hamp Johnston, President and CEO of RockPoint Bank, and Donna Lott, President and CEO of Moultrie Bank & Trust. We discuss the origins and development of their banks, the hurdles they’ve overcome, and why they decided on Jack Henry as the right tech partner for them.