How Banks Can Become Their Customers' Biggest Allies

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John Rosenfeld and Julie Guntrip discuss why many banks are faced with a consumer trust problem and how insights from their research on consumers' financial stress could help banks rebuild that trust.

What you'll Learn:
  1. Understanding the Trust Gap in Banking: Explore how past events and regulations may have compounded consumer's trust issues with their bank and highlight how banks could close that confidence gap.
  2. Uncovering Key Sources of Financial Stress: Identify major sources of financial stress for consumers and how these stressors impact their daily lives and major life decisions.
  3. Building Trust to Realign Bank & Customer Success: Examine how banks could help consumers address their sources of financial stress and pursue richer lives—and in the process, become their biggest allies.
Transcription:

John Rosenfeld (00:09):
Thank you all for joining us today for our lunch, and I hope you enjoy it. We're very excited to be here to talk to you about an exciting topic, how digital banks can become our customer's greatest allies. I'm John Rosenfeld, I'm the President of Jenius Bank, which is a new bank we just launched a year and a week ago, and things are going well. So we're very excited about the progress we've made. We've, in fact, we just recently broke a billion dollars in deposits and nearly that in personal loans as well. So we're off the blocks, if you will, and we really have a whole new focus. I'm joined here by one of my colleagues and somebody I've known for 25 years. Years, yeah, lots of years. Julie Gun Tripp, who is our head of financial wellness, I thought her name might be on the slide. And we're going to share with you some great research and talk to you about a few of our ideas and we'd love to have a dialogue at the end if we have time. And so let's rock on.

Julie Guntrip (01:15):
Alright, here we go.

John Rosenfeld (01:16):
So in our discovery phase at Jenius Bank, we identified a problem that we became really passionate about. And by solving this problem, we do think we can become our customer's greatest allies, but the problem is really bigger than just us and just our customers. It's impacting all of us and our entire industry.

(01:40):
The problem is the erosion of consumer trust in the banking system. Now, this isn't a recent development. You've all been around a while. You've probably seen it yourself, but like erosion, it happens over years and slowly eats away at something until ultimately there's a landslide. I'm sure you'll remember some of these headlines. And these are just a subset of what have happened in many of our careers. Don't forget things like banks manipulating interest rates or insider trading scandals or unauthorized account opening. All of those things clearly have impacted consumer perspectives. Not all of them were retail bank events. In some cases we were guilty by association with our investment bank or commercial bank partners. So what happened next? A wave of new regulations, things like Dodd-Frank Durban Amendment, reg E, UDAP, the CFPB, all of those things came and they were really intended to help protect customers, but they also took a huge cut into bank revenues.

(02:53):
The Durban Amendment alone impacted debit revenue or bank revenue by about 6.8 to 8 billion a year. I won't even talk about how much e impacted us. So in response to these financial impacts, banks had to preserve their financial performance, what the analysts expected. So what happened as a result? Rewards went down, service levels went down, fees went up, balance requirements went up. All of those things impacted how consumers felt about their bank and what was really important. And obviously they felt like the bank's profits had become the top priority. So how do you think those things impacted consumer trust?

(03:43):
So now I think we have, going forward, I think we have a systemic flaw in our industry. The value exchange is out of balance. Banks now make a material amount of their total revenue from customer's mistakes or when customers fail to take actions in a timely manner, things like overdraft fees. Whoops, I screwed up late payment fees. I had a friend the other day who had a CD and he went to get the money out and he had missed the renewal window by two days and the bank charged him 1% early withdrawal fee. He's like, it's my money. I am two days late. And sorry, it's an early withdrawal fee. It renewed two days ago. I mean, how does that make you feel as a consumer? So I kind of take it back. We're not really just misaligned. I would say our value positions are actually diametrically opposed. I think we need to catch up, Julie, there we go. I always need to catch.

(04:55):
In fact, let's go forward with another one and one more. There we go. We believe that convenience and trust will be two of the most significant differentiators in our industry in the future. According to a Forbes study, I looked up trusted companies outperform their peers by 400%. Does anyone know what some of the most trusted brands in America are? I looked it up. Kleenex, Lysol, Amazon, UPS and Bandaid. Not a single bank, not even a single financial services company. So there's clearly opportunity to differentiate in the world of trust. And at Jenius Bank, we became passionate about building trust to new levels with consumers. So we spent an enormous amount of time talking to customers about how they trusted their bank, about how they felt about their bank and about what their needs were. What did we learn? They didn't care why banks do what we do. They didn't care about. In fact, they never heard of Durbin or Dodd-Frank. They didn't know what Reggie meant. And they really didn't care about any of those things. They cared about their own challenges and their own outcomes. They care about their own lives and they care about where the money they have or how that money would impact their lives. So we go ahead Julie. We made a hypothesis that money and life goals and happiness are inherently linked.

(06:47):
So next slide.

Julie Guntrip (06:51):
We did a survey.

John Rosenfeld (06:54):
So we did a survey and Julie's going to share with you some of those results of that survey. And

Julie Guntrip (06:59):
Since I was slow, I don't know if I trust him to click this, he might mess me up.

John Rosenfeld (07:03):
No, no. I'll do my best.

Julie Guntrip (07:05):
Okay, thank you. Alright. Okay. So we did a survey and that's hopefully why a lot of you are here today to hear about this survey. So we're really excited to share the results. We interviewed, we talked to 4,000 American consumers, aged 25 to 55, earning over a hundred thousand dollars a year in household income. And our objectives, similar to what John already referred to, we were really interested in learning about the connection between people's financial health and their mental health, how they feel about their money and how their money makes them feel. And so we learned a lot of different things and so we're excited to share at least some of that with you. And then at the end, we'll let you know how you can see the whole report if you're interested. So go ahead. So it was just starting right out of the gates.

(08:01):
50% of the people said that they were stressed about their finances. So that went across income levels. So you might think, oh, well that's just the people who are in the a hundred thousand to 124,000 income group. But that was also true for people who are making over $300,000 a year in household income again. But it was interesting too because that higher earner group, they were really split and hit the extremes. And so when we asked a question on a 10 point scale, how affected are you by your finances in terms of stress? The high earners were the one out of 10. I'm not affected at all. And they were the highest group, but they were also the highest group, 10 out of 10, the most affected and the most stressed out. So we were like, this is really interesting. And I mean, I don't know if this surprises any of you, but suffice to say, if you're a banker in the room, half of your customers are stressed about their money. Lemme go ahead. So we wanted to ask, go back a second. I'm going to ask this group, how many of you in the last 24 hours have thought about your financial situation? The brave souls raising their hands? Thank you. So we know there's more of you. You're just not admitting it.

John Rosenfeld (09:24):
That was at least 50%. And you guys are in Boca?

Julie Guntrip (09:29):
Yeah. Okay. And then any of you lose sleep about your finances? Maybe. Maybe not. Maybe you're not going to admit to that either.

John Rosenfeld (09:40):
They are in Boca.

Julie Guntrip (09:41):
They are in Boca. Okay. All right. We get it. But when you talk to our respondents now, we can go ahead. We can, there we go. So 53% of people thought about their financial situation every day. And if you do the math, we were doing the math earlier, right? Three out of

(10:01):
Three out of every four. Yeah. Thank you for that. That's why he's the big boss. He can do the math. So that's a lot of people thinking about their finances at least two to three times a week and not just thinking about their, about their financial situation. That kind of meant everything that's going on. So go ahead. And unfortunately, what we also learned was that financial stress had physical manifestations. So people are losing sleep, 50% of people are losing sleep. So that was not representative in this room necessarily, but of our respondents and a third of people have headaches because of their financial stress. It's like that's a lot. That's impactful. And then also too, 40% of people in this particular number was related to someone's life partner in their partnerships, the finances are having an impact. I didn't, John and I were talking,

John Rosenfeld (10:59):
I've never had a fight about money with my wife. I dunno why.

Julie Guntrip (11:02):
Yeah, maybe that feels relatable. Maybe it doesn't. But I mean it's significant for individuals. So go ahead and go to the next slide also too. And we took sliced and dice the data by millennials for this particular question because millennials are in the thick of it. They're making a lot of financial and life decisions. But I'm from California, so it didn't surprise me that 38% of people would consider moving because of their finances or have their finances impact a decision to move because people are seeking a lower cost of living. But the next number, a third of people, their finances impacted their decisions to have children.

(11:48):
And then one of five people, their finances impacted their decisions or would impact their decisions to get married. Now, when we broke down that number, you'll see if you decide to download the report when we broke that number by people who are not currently married, that was 55%. So people really, their finances and their life goals or their life decisions are intertwined. And that's important for us to know. Go ahead. So what are the sources of financial stress and anxiety? So saving enough for retirement, far and away the largest category, and then feeling behind our age group, mounting debt, making the wrong decision and income, not covering expenses. One of the things we immediately noticed is there are three categories. They're concrete items, retirement, debt, income.

(12:48):
Those are things that we would typically think of as being financial stress, but feeling behind your age group. So at Jenius Bank, I run social media. So immediately my brain goes to social media and the impact that has on people and how we have this comparison culture in our society. And so this makes sense, but this also a commentary on modern society. The feeling behind your age group is causing stress in your life. The other is making the wrong decision and you can go ahead and forward because it circle subs perfect, making the wrong decision. And so we were like, wow, people are having a lot of stress. This is one of their major sources of stress for them. And that really indicated to us that there's this feeling like a lack of preparedness in life. And that really struck us as well. Go ahead.

(13:44):
Thank you. So what we did is we took two of those categories, one concrete and one intangible, and we broke it down because we find it really interesting. We look at these high income groups, we keep wanting to myth bust. It's not just the people making less money that are feeling this. It's across all these income groups. So income won't cover expenses, interestingly. So total respondents isn't green and the higher earners are in white. So yeah, they are behind the total group, but it's not by a lot. So you have one in four 25% of these individuals who are making 300,000 or more feeling like their income won't cover their expenses. So what were we saying earlier? More money, more problem. When you make more money, you just spend more money. Yeah, exactly. I mean it does, again, another commentary on our society, but that tends to happen. Go ahead. And then the other was we looked at this feeling behind age group, and that was actually much closer to the total. So we were like, wow, it must be the company you keep, you're comparing yourselves to the people you surround yourself. So potentially you are earning more money, you're surrounded by other people who are earning more money and you're competing to keep up. But, yeah.

John Rosenfeld (15:00):
Keeping up with the Joneses, right?

Julie Guntrip (15:01):
Exactly. Exactly. So here's this dude, he looks like he's doing pretty well, right? But

John Rosenfeld (15:10):
I still think that's a member's only jacket.

Julie Guntrip (15:13):
Actually looks like my former neighbor, I have to say. But chances are we may think, oh, he looks rich, chances are he doesn't feel rich. So let's look at this phenomenon here. So 32% of the people that we interviewed said that they think that other people think they're rich. It's a little bit of a tongue twister there, but only 20% of those same people would say that they think that they are rich. So let's break that down. So 80% of people don't think they're rich. And this is, we're interviewing people who make over a hundred thousand dollars, even though they would say that others around them think they're rich. So it's like what is that? Is that we only know our own financial situations and no matter what kind of persona that we put out into the world, we all know the truth. So maybe that, I don't know.

(16:08):
I mean maybe if we have these, I used to kind of think fancy cars and big houses, people that are rich, but let's look, go ahead in advance, according to our respondents factor in, when we ask them what does it mean to be rich, what they said, what it means to be rich, and we gave them a lot of options to choose from. Some things even less concrete, not having financial debt retiring early without concern and establishing generational wealth. So we'll let that sink in. Dunno if that surprises people or not, but we found that incredibly interesting. Go ahead John. So really what consumers, customers, however you want to put it, our seeking is security and confidence. And that was our takeaway from this. And go ahead.

John Rosenfeld (17:10):
It's not moving.

Julie Guntrip (17:11):
It's not moving. There we go. So we're asking where are people going for their guidance? So we asked in the survey, where do you go for help? Where do you get your financial guidance? And as the social media leader, I was kind of excited. I'm also the blog leader. People are going online like that. Job security for me, they're going to their friends and family, they're going to professionals. But go ahead.

John Rosenfeld (17:37):
But look at how small the bank number is. 9%. Do you think that has something to do with the trust concept we talked about a minute ago? I do,

Julie Guntrip (17:47):
Yeah. But look at this. 20% don't have any source of financial guidance.

John Rosenfeld (17:56):
So if we can provide that guidance and we can be there. Thank you. The

Julie Guntrip (18:02):
Microphone. I'll take the clicker too.

John Rosenfeld (18:04):
There you go. If we can be there when our customers need us most or want that help, think about it. What if we could predict when the customers are going to encounter some kind of financial issue, avoid an overdraft, a late fee, remind them about that CD that's renewing. If we could do that, I think we could build the trust never before we could become the Kleenex or bandaid of banking. I never thought I'd say that.

(18:37):
What if banks were open 24 7? Have any of you been up sleepless night worrying about your money and you try to call your bank at 3:00 AM and see if they answer? Most banks don't answer at 3:00 AM but some do. So I think that's one just demonstration of a real commitment to their customers. What if they had humans answer the phone instead of having to go through those automated menus or they actually did help customers avoid mistakes, but also what if they could build customer confidence in their financial decisions and prioritize the long-term relationships over short-term profits? What if we did become the first place customers go for help? We can get there if we can demonstrate that their success is more important than our own. So a new breed of banks is emerging with an innovative and compelling value proposition. We intend to be part of that revolution, but we know we're not alone and we hope you will join us. We truly believe that this tide will raise all ships we'll all be favorable by association instead of guilty. So we are realigning the bank's success with our customer success, and we're confident that this will build unprecedented loyalty with our customers and lifetime relationships.

(20:13):
If you want to learn more about our mind Money connection, you can grab this QR code or soon you'll be able to find it on our Jenius bank.com website. It's a much more detailed report with a lot of the details that Julie shared with you a moment ago and we're excited to share it with everyone. So thank you very much. I know we ended a little early and we'd love to open it up for questions and challenges. Throw a tough one at us. Yes.

Audience Member 1 (20:43):
Just so, oh, here,

John Rosenfeld (20:44):
Hand on the mic.

Audience Member 1 (20:50):
So something I would wonder is what exactly would Jenius Bank do to sort of help foster that trust that other banks might not be doing? I guess a specific example.

John Rosenfeld (20:59):
So a lot of the things we looked at, what are the things that frustrate customers? What are the things that upset them? So obviously the mind money connection work that Julie did was much more about the psychological aspects. We got into the weeds about aspects of banking that really just tick people off. I'll give you an example. Forms no one likes to fill out forms. Opening an account should be easy, less than five minutes, not holding your money for excessive periods of time. So holds is another big or detractor multiple ways to get your money in and out of the bank. So we looked at all these things and we tried to focus on those parts of the customer journey to simplify the experience, we did open our call centers twenty four seven, which costs more money. I didn't mention this before. One of the unique aspects of Jenius Bank is we started this during covid. You guys remember that? That thing that the virus, and we all started working from home. We stayed there. So I have 350 employees that all work from their house and that's it. So it's kind of exciting. It brings in this whole new element of banking. Now, COVID also accelerated the idea of digital banking. So fewer and fewer people feel the need to go to a building to do their banking now. And so that's helped become an impetus for further growth. I hope that answers your question. That's perfect. Yeah. Thank you. Other questions over here?

Audience Member 2 (22:36):
We've done similar serving North border and one of the things we were looking at was crossing products on retail exploitation. What we found is that customers want to address the concern that we don't necessarily up something our business model requires that the more product you have with them stick care of a customer. So

John Rosenfeld (23:03):
That was a softball. That was a great question. And when you say north of the border, you mean like Georgia? I live in Florida, but no, that's excellent. The idea, and I'm sorry, I just lost my train of thought, but the idea of Cross-sell actually ticks off customers. I mean, they feel like banks are always throwing things at them trying to get them to buy something else. I mean, how many of you get at least one credit card offer a week in your mailbox or seven? It's amazing, but I get it. I mean, traditionally banks have been built on the concept of having a broader relationship. But what's happened over the last 10 to 15, 20 years, and I've been doing banking for 25, is the industry has created the ability for customers to decentralize their own finances. So we've made money movement so easy that keeping your savings over here and you're checking over there is not a problem.

(24:03):
You can move the money almost instantaneously. In many cases. We also made it easy for you to have loans from multiple banks and credit cards and checking and savings mortgage. I mean, credit card was the first one to kind of go out of the banks. They were the first one that you saw credit card offers from non-banks or other banks that you would consider. And then mortgages. People started researching mortgages. The internet allowed customers to check rates from multiple banks, and then Rocket Mortgage came along, et cetera. Then ING kind of started this with savings before that, very few people would keep their savings at a different bank. So now I bet many of the folks in this room have multiple financial services products at multiple banks now. So back to your question, how can we win? Well, if you can create a network effect and as a little company that did this really, really well, apple, every Apple device works with the other Apple device seamlessly, right?

(25:05):
Do you think at most banks, every product works seamlessly? Probably not. Do you get multiple statements from the bank? Do you have to call and change your address more than once? We've gotten better, but I was in a bank when you literally had to change your address for each product through a different call center. So I think we've made progress, but our antiquated technology that's still resonant in a lot of the larger banks has kind of kept us from getting to Nirvana or to Apple level of network effect. So that's what I think is going to be key to success in the future because you can't tell a customer you really need to get your savings here and your credit card here and your mortgage here, unless it's a really distinct and compelling reason to do so.

Julie Guntrip (25:51):
I would also add, we do a lot of research, and when we did this research, I mean part of it we alluded to, we said, oh, well you were joking about, we talked to consumers about regulations, but consumers want to talk about their own issues. So we think what we're trying to do is really get and meet consumers where they are, understand their problems, which is why we did this research and talk to them about how we can help them. And if you focus on that, then the product, I'm going to say it sells itself. I came from branch banking, I did that for, that's not easy, but you're selling the benefit as opposed to the product. And you have focus on how am I helping? So that's why we're trying to dig into these problems that are facing consumers, what their stress points are, what their pain points are, so that we're selling into that and we're not selling like you just need X, Y, Z product. I'm sure you're doing that too.

John Rosenfeld (26:53):
I also think

Julie Guntrip (26:54):
Customers we're all trained, right?

John Rosenfeld (26:55):
Customers generally want to feel like they're making good choices. They want reaffirmation of that. So if I tell a customer, Hey, you have your majority of your savings somewhere where you're earning two and a half percent, and if you moved it over here, you'd be earning five and a quarter. They'd probably say, well, why didn't I do that? Right? Would you like us to move that money for you? Are there any catches? Instantly they feel like there's a catch. And that goes back to the whole trust issue. So one of the parts of the vision we have at Jenius Bank is we will be introducing aggregation. So we're going to allow you to link all your accounts at other banks and see them all in one place, not earth shattering. Other banks are doing this today, but what are they using the data for? Are they giving customers insights that, Hey, you should move your money from here to there. Oh, by the way, you're about to overdraft that other bank. Do you want us to move money from bank three to bank two so that you don't overdraft? I mean, has any bank ever done that? I don't think so. So those are some of the concepts about creating that network effect that I think can win loyalty and kind of drive a customer to say, at least consider that bank first.

Julie Guntrip (28:09):
That's a great question. We got a mileage out of that question.

John Rosenfeld (28:11):
Other questions? Can't see the back of the room.

Julie Guntrip (28:17):
It's very bright.

John Rosenfeld (28:19):
Oh, there's one back there. The lights right in front of you. Oh, really?

Audience Member 3 (28:22):
I got a bright shirt on.

John Rosenfeld (28:25):
You're blending in. Yeah.

Audience Member 4 (28:28):
More of a comment slash question,

John Rosenfeld (28:30):
Please.

Audience Member 4 (28:32):
When I think about my own financial literacy, I think that it is lacking pretty significantly, and I think it would be very helpful for my financial institution to maybe have a relationship with me when I'm younger, 18, 19, 20 years old, to sort of teach me the ropes of financial literacy. And maybe that would help me get that confidence that I have. You know what? I'm making the right decisions because a lot of people go nowhere because they don't know where to go.

John Rosenfeld (29:09):
Absolutely. And it gets worse as your financial life gets more complex. So let's say you get an inheritance and you have a mortgage and you have credit card debt, and you have an auto loan, which one are you going to pay off? Or are you going to put it in savings? Young people would've no idea. Even most people in their forties and maybe fifties don't really have high confidence that I should do X, then Y, then Z. And here's the exact reason why those make sense in that sequence. And I think that's what we need to be able to do. And just, I know a lot of this conference, there's been a lot of talk about ai. So imagine if we had the power of all the customer's financial data in one place, and then we could scour that data and look for opportunities to give the customer an insight that might steer them in a better direction. That's where we're headed. I think a lot of the banks are doing aggregation today. They're primarily using it to go back to what our colleagues said over here, to find the next opportunity to sell 'em something.

Julie Guntrip (30:13):
I love that question because, or comment or whatever. Because I run content for Jenius Bank. And so my team writes the blog articles and we do the social media content as well, and we're really focused on the financial education. We agree. I mean, sometimes we ask ourselves, we have this acronym of the week on social media because I mean, does anyone really know what EFT stands for? We do. But does the average consumer, do they know the difference between an APY and an APR? I guess maybe in the context, but if someone just asked them, define that, the average consumer. So we're really passionate about providing that type of education or a blog. So if you got a shameless plug, if you go read some of our blogs, you'll see. I mean, they're really needy topics because we talk about being a Jenius with your money that's on brand for us, and we want to help you be a Jenius with your money. It starts with the education, it starts with the knowledge. And so I'm very personally very passionate about that, and I think our organization is very passionate about the education. So thank you for bringing that up. Yeah.

John Rosenfeld (31:24):
You have a question back?

Audience Member 5 (31:26):
Speaking of the insights, would you ever imagine and the trust where it's not favorable to your way the insight provided, but you still give it.

John Rosenfeld (31:39):
I think that's kind of getting to that nirvana, right? I think you have to be willing to kind of take short-term sacrifice for long-term gain. And so I have every intention of doing that, obviously to a certain level or to a certain degree, we have to be safety and safe and sound. But I think that's a great question and not a lot of banks are willing to do that. So wouldn't that be a differentiator? And I also do love the education piece, like Julie was saying. I mean, think about CDs. How many people know what a CD ladder is or the idea of actually opening if you have a hundred thousand dollars opening five, $20,000 CDs. So if you ever do have to get some money out, you don't have to pay the fee on all of it. You only pay the fee on a fraction of it. I mean, these are just tips that bankers know. The average consumer has no idea. So if we can help them based on their current situation, where they're in life and what their needs are, see the best potential arrangement, I think we'll win that loyalty game. Let me ask a question of the audience. Are we missing something? Are there other ways that we could build trust with consumers that we haven't potentially touched on here?

Audience Member 6 (32:53):
Start early.

John Rosenfeld (32:54):
Start early. Yep. I like

Audience Member 6 (32:55):
That. Products out to teens, and I see a lot of that happening now where kids have, there's an Uber teen now I think that's a really untapped market.

John Rosenfeld (33:10):
I agree.

Audience Member 6 (33:11):
Not that you could market that directly, but via the relationship that you've already got with your customers and starting that financial literacy early so that they don't fall into credit card traps at 25 when they're first year in college and Oh, I've got money now. Yeah, no, that's not real. I have no idea what you're talking about either.

John Rosenfeld (33:38):

So I have six children and three of them are in their, well almost 30, 29, 29 and 27. And actually all six of them have accounts at the bank. I opened for them and well, I'll go ahead and shameless plug for USAA. I served in the military, so you're welcome. But I opened those accounts. They all still have them. So I think to your point there is just kind of like this was given to me. I'm not giving it away type of thing. Yeah.

Audience Member 7 (34:08):
Oh, sorry. That you need to target or maintain in order to offer services or maybe back to the question was asked earlier, and I'm not saying that this is the case at all, but if you're a smaller bank compet price offered by much larger organization, if you can't be the lowest cost per provider, you can't offer the highest interest rate. And the best advice is to tell your customers, well, you really shouldn't be using these other poor institutions. Yes, you've generated loyalty and you've provided a service.

John Rosenfeld (34:54):
Is it profitable? Right, for

Audience Member 7 (34:57):
Right. So how do you think about it?

John Rosenfeld (35:01):
Great question. So at Jenius Bank, we have a bit of a luxury. So we are funded by SNBC. It's I think the 13th largest bank in the world out of Japan. They have obviously a pretty large presence in the us, almost all commercial banking. And so Jenius Bank is our first foray into US consumer banking. They're a big consumer bank in Japan, but not in America. So we have very solid financial backing with a lot more patience than a lot of angel investors or private equity funded startups. So I think that the patients there will allow us to take more risk in the short term and hopefully prove out a lot more longer term benefit. So we have that luxury than not everyone has. But I want to go back to something you said, which you nailed, which is we'll never be able to get to do any of this stuff unless we are one of the lowest cost base in the industry. And that's one of the reasons we're remote. We're paperless. We built the entire bank in the cloud, so we don't have a single server in the bank. Everything is in the cloud. So we've been able to take advantage of the latest technology, which has allowed us to be much more efficient. And it also gives us a bit of a competitive advantage over banks that have more aging infrastructure.

(36:28):
This, yes, sir. I just got

Audience Member 8 (36:31):
A question piggyback on talking about as far as starting early, say for instance here in the state of Florida, they passed legislation now that work for the kids in high school, they have to pass some type of financial literacy course in order to obtain. Have you guys thought about partnering with states that are doing like that initiative? Again, to point ahead of it, I'm an inspector and my kids know it because I taught them because it wasn't,

John Rosenfeld (36:57):
Yeah, I think it's a great idea. I mean, I think it should be mandated nationally as some type of minimum education requirement. I mean, but that will get them on the right path. But again, CD ladders or which debt to pay off first and variable versus fixed rate loans. I mean, think about all the complexity and the products we have. The complexity is there for a reason. Different products meet different needs, but most average consumers don't understand that well. And so I think it's something that we need to get a good start out on starting early, but we also have to make the information very easily digested. And I think that what we believe, one of the ways to do that is to make sure when we present it, it's very pertinent to the customer's current situation. Then they want to learn. It's like when your car won't start, you really want to learn how to use jumper cables if you'd ever used them before. So what is it? Emergency or necessity breeds solutions or innovation, something. I know. Something like that.

Audience Member 8 (38:04):
Exactly.

John Rosenfeld (38:05):
Yeah.

Audience Member 8 (38:06):
Invention,

John Rosenfeld (38:08):
Mother invention. Mother invention, mother invention. Thank you. Yes, sir. Yeah,

Audience Member 9 (38:12):
Good question. So you've spoken a lot about pour into customers, financial health, long term benefit. How do you quantify that long term benefit provide this is online, on the commercial side or directly difficult to get the right sentiment from the C-suite to

John Rosenfeld (38:42):
Totally. I mean, that's one of the challenges in the US banking is, and most of us work for public banks or for banks that have owners that have high expectations of ongoing stable and growing returns. So the idea of investing in something that doesn't have a clear ROI is painful. It's hard to swallow that. So I think, but we have to, right? It's just like AI in some respects. It's so many unknowns about where that's going to go. But if we all kind of heard over the last two days, we have to invest in it. We have to learn, we have to grow with it. Or if we're not on the train, we're on the tracks. Right.

Audience Member 10 (39:27):
Is that just because you said you mentioned patent, is that why you, is that realistic for say, a publicly traded US bank?

John Rosenfeld (39:37):
I think so. I mean, I think it's all about prioritizing. I think the majority people or the majority banks are prioritizing their investment into things that have solid returns and or things like advancing technology. But I think they also, they have to partition some of that investment and put it into improving the customer experience and creating better trust amongst their consumers. And by the way, they're already putting a bunch of money into compliance and risk management, which is kind of answering, hopefully will reduce a number of those headlines that we've had over the last couple of decades.

Audience Member 11 (40:16):
I think also success breeds success. So once there's a successful model that the bank industry can use as its model to move forward, you take a company like Facebook, when it first started its services were free. Well, now it's meta, right? One of the most important companies in the US economy right now. So there may not be a financial return today, but there's certainly a financial return, I think later advancing that CX experience and UX experience.

John Rosenfeld (40:51):
I think you're absolutely right.

Audience Member 11 (40:53):
And we were listening to, we were commenting on, and I'm not remembering her name, but she's fabulous. And she was from a credit union, a CIO, from a credit union yesterday, and she was saying, well, we model our customer service based on, what was it, the high-end hotels? Ritz. Yeah, the Ritz and all that. And so it's like if we're modeling how we should behave as a banking industry based on other banks, then we're going to just keep perpetuating the same. But if we're modeling outside, when I used to teach in college, we cut the Nordstrom effect for customer service back then, but it's like you have to kind of look outside your own industry because the consumers have a broad range of experiences they have in their lives, and they're going to start holding banks accountable for the same level of whatever they get somewhere else. So I think you're not on the train, you're on the track. So yeah, go ahead.

Audience Member 12 (41:56):
I didn't want to mention that. I think it's important for customer experience to see who your target is, which generation that is. So for me, a Gen Xer, having a phone number to access is very important. But I go to a website and it says, contact us. Have to go through five minutes to get to

Julie Guntrip (42:15):
A chat bot, go to our website. It's on the homepage,

Audience Member 12 (42:21):
It's important, but if it's a Gen Z, they perform. So I

John Rosenfeld (42:26):
Think they may want to chat. Right? Check.

Audience Member 12 (42:29):
I couldn't keeping that in mind as far as they're talking about,

John Rosenfeld (42:33):
I think we actually see on our website, we put our phone number in huge print on our website. We saw it as a differentiator because a lot of the digital banks today, it's hard to find their phone number, right? Because they don't want to take on that cost. So while we're a digital bank, we kind of want to maintain that human element as well.

Audience Member 12 (42:52):
And then I would also add to this point of financial literacy, which I think is extremely important and great idea. If you have a link to the Federal Reserve, there's so many resources there, financial literacy, literally have to just put in the link. You don't even need to have somebody on the phone talking about financial needs.

John Rosenfeld (43:12):
.Absolutely. Yeah, that's a great point.

Julie Guntrip (43:15):
Although we seem to think on my team that we do a really good job of breaking down things even better, maybe than they do. So we like to think so. But yeah, I know definitely there's a lot of,

John Rosenfeld (43:26):
 I mean, we provide links to the FDIC as well.

Julie Guntrip (43:28):
We do. We are very particular about our, I was just teasing, sorry. But we are very particular about our sources.

John Rosenfeld (43:36):
Any other questions? I know we're running out of time. Oh, is there one back there?

Julie Guntrip (43:40):
Yeah, we can't, sorry. We can't see.

Audience Member 13 (43:44):
Given your all cloud native as you described, how much are you thinking about almost designing the bank with ai? AI as how you architected it as opposed to basically going down traditional banking cloud?

John Rosenfeld (44:00):
I want to make sure I understand the question. Are you saying how much are we using AI to develop?

Audience Member 13 (44:06):
How much are you basically trying to, rather than almost build this banking platform out in a traditional way, we add more products, we get smarter versus you just go right at what if we had gen AI view, core element design, this?

John Rosenfeld (44:21):
Yeah. So we're starting with insights, and there's a couple companies out there offering insights. In fact, I saw Jody here today from Persons, persons or mx, a few others that are building insights that based on customer transactions that trigger particular insights. That's in my mind, more like automation than AI, right? It doesn't have a feedback loop that says that insight was particularly valuable or not. That's what I think is the next step. I don't think we're ready to jump to. Well, we have to get a platform out there that begins to provide insights. So we can start taking the feedback and we'll probably initially use that feedback with humans to modify the design. But I do see that the next logical step is to let AI do that for us. And so it steers which insights would be ideal for which customer, at which point in time.

(45:23):
And we are. So we build two products. We have a savings account and we have a personal loan, unsecured personal loan, the two most basic products in the banking industry. That's all we have today. We will build other products, but we wanted to get a base foundation with a solid deposits platform and a solid lending platform. And the next platform to launch, well, actually today, our mobile app is launching, but within the next few weeks, we're launching what we call the evolved experience. So core banking to me is move money, see your balance, get your statement, do all the basics that every bank has to do. Evolve banking to me is taking it to that next level of giving customers the insights to help them build their confidence, build trust.

Julie Guntrip (46:11):
I'm going to call out that we're just in case two minutes. We're two minutes over. No, it's too

John Rosenfeld (46:15):
Much answer or a question fast. No,

Audience Member 14 (46:18):
Just one last, I'm just curious. Your back office operations and for your security architecture, are you outsourcing? Must be outsourcing.

John Rosenfeld (46:30):
We outsource our call center. We manage our own fraud team, our own A-M-L-B-S-A-M-L team. So my parent organization is very conservative with regards to risk management and compliance. So we didn't feel comfortable outsourcing things like that. But for the call center and some of the second level support that's outsourced,

Audience Member 14 (46:59):
For example, you talked about possibly offering an aggregation. She's currently being done just by the largest organizations, requires security could potentially be compromising across all of their financial relationships.

John Rosenfeld (47:19):
Absolutely. So we are using a third party for aggregation. Absolutely. And all of the logging, or let's call it the access information, the identity access management system is like one time use. So it's like plaid, right? So we're not storing usernames and passwords so that those could potentially be compromised. We are utilizing transaction data, but we store it in an anonymized manner. So I mean, we do have a pretty thorough cybersecurity plan. I think I have 33 people of the three 50 that are cybersecurity InfoSec. So it's probably one of the most robust groups within my business.

Julie Guntrip (48:07):
We will be around here for a few minutes, I think if you, yeah, so come up and I want to make sure that we're respectful of everyone's time since the clock is now counting up instead of counting down. So we're like, okay, now we're eating into your personal time. But yeah, and

John Rosenfeld (48:22):
I hope you enjoyed lunch. We slaved over the stove for hours.

Julie Guntrip (48:27):
Thank you.