Track 1: Predicting Emerging Trends

Transcription:

Guru Sahajpal (00:08):

Speakers are going to be doing a little bit of crystal ball gazing. Their topic is predicting emerging trends. I'd like to welcome our panel, Jonah Crane from the Klaros Group, Jana Manley from Suncoast Credit Union, and Margaret Ryan from American Express. Welcome. The floor is yours.

Jonah Crane (00:33):

Alright, well thank you to American Banker for having us and thank you to you all for joining us in this track here. I believe we have the last panel between you and drinks. So as is customary, it was our job to get you out of here on time and hopefully awake. So let's have a little chat. We're supposed to do some crystal ball gazing, we were just told and the title of our panel is Predicting Emerging Trends and I'm tempted as moderator to just say, discuss, leave it there. But that's not of course fair. And please, I can't see much with the lights in my face, but if you have a question as we go, put your hand up and I know we have folks who will help you with a mic to ask the question. So let's start at kind of a high level and dig in a little bit to how you guys think about your jobs. I think you both deal with strategy and innovation in your day-to-day roles and those can be sort of fuzzy words that many people take to mean different things. So how do you guys think about an innovation strategy as it were in your roles? What's your North star in setting those strategies? And why don't we go first?

Jana Manley (01:41):

Okay. Testing. Alright, I think everybody can hear me. My North Star is still a little fuzzy, but it's very aspirational. So I would say that it is complete freedom of money management and money movement for our members and that means being where they are when they're there and with a solution that lets them get to their outcome. What is it that they're trying to do and how do they do that? But the true part of that North Star that I think makes it unique in the way specifically with credit unions that we do look at it is north star wise. We also want to be able to tell you what the impact to your financial wellbeing might be if you choose to take this action payment or whatever to get to the outcome that you need. So that would be my true North Star Now getting there is something else.

Jonah Crane (02:25):

Yeah, well we'll come back to that.

Margaret Ryan (02:27):

Yeah, very similarly. So at American Express we're focused on how can we enhance the lives of our customers and so thinking about what we can bring to bear for that. And so for us, our north start is the customer. So how can we create personalized, trusted experiences that are meeting our customers where they are, where they're going, just like you just said. And one of the key things there is embedding customer research throughout the entire product cycle. And so anything that we're bringing to market is really underpinned with a true appreciation and understanding of what's the customer need and what do they expect. And so we're starting from the very beginning of when we just have an idea of conducting some research, seeing how it resonates with our customers, and then once we get to a working prototype, we're taking it through usability testing to see is it easy to go through the flow? Is this intuitive? And then once the product's live, it doesn't stop there. We're gathering that feedback from our customers of like, is this resonating? Is it working? Some of that is formulas via surveys, some is just looking at Reddit threads and X and what are people saying and what do they not like? And that helps drive how we think about what to iterate and how to continue to keep growing the product.

Jonah Crane (03:45):

Jana, I'm curious if you have any parallel experiences that talk about in terms of how you talked about meeting customers where they are, how do you have you discovered where they are and what they want in that moment?

Jana Manley (03:56):

We do a lot of journey mapping. We look at, I'm a big fan of the funnel. I want to know where they are within the funnel, how long did they stay, where they were in the funnel and how does that work? And so that is one way that we take a look at that. But the other way that we take a look at that I think is looking at outside of our industry specifically in payments. I think as an industry we tend to always look at what each other are doing well. There's other people that are really coming. We'll talk about that later I know. But we actually do look at outside of our industry particularly, we want to look at where our members are in the e-commerce space. Where are they in the retail space, where are they making these payment decisions and what does that look like and how can we particularly be able to be in those moments, if you will, with our members? And what would that look like if you take it back in terms of a product service or just executing some sort of transaction and making sure that we're there again where they need us.

Jonah Crane (04:53):

The prior panel talked a lot about how risk and compliance comes into play when you're trying to innovate. I'm curious if you guys have thoughts on that, how it constraints your ability to make decisions or not. Just talk about the role that that plays in your ability to innovate.

Margaret Ryan (05:09):

Yeah, I really liked what I heard earlier of compliance and innovation is all about trying to do what's right for the customer and how they can be complimentary in that way of if we're doing something right, then it's meeting our compliance obligations, but also trying to drive our innovation goals. And so the way that we're set up, so I sit within a group called Amex Digital Labs, which is our in-house innovation unit. And so we actually are set up where we have a product team, a business development team, and then a product enablement team. And that team is responsible for working closely with all of our risk partners, identifying what the risks are with bringing this new product to market, making sure we have all the right controls in place to make sure that we're doing things in the right way.

Jonah Crane (05:56):

I love the way you put that Claris. We spend a lot of time working with our clients on risk management and compliance and often clients who are trying to do things a little novel and new and at the edge. And it's always helpful to remind them that a lot of this is really common sense at the end of the day and figuring out how it's done and done well can be helpful in your business. We can stipulate that, I don't know, maybe there's an 80 20 rule here, something like 20% of compliance is a little compliance theater and you just got to do it and there are boxes that have to be checked, but the more you can get in that risk mindset and what's good common sense, the more it can be an enabler. I think I like that. I like that framing.

Jana Manley (06:31):

I would add to that if you will. We actually have a really interesting dynamic that I think is working well for us in that respect. We have partnered very closely with our risk area and what we try to focus on is, for example, if you're talking about fraud, you always want to make the objective to reduce fraud. But if you make the objective different, if you look at it differently, it's not to reduce fraud, that should be an outcome of what you do. But the dream that we're trying to get to and going back to my complete freedom of money management and money movement means in order to get there, we have to have this other. So we try to frame it, we bring the teams into our project teams and make sure that we're framing it with that, the different end goal, end goal in mind of how is it going to benefit the member. And then by inherently doing that, then we're able to protect, protect the member as well as the organization.

Jonah Crane (07:26):

I want to come back for a second. You mentioned before looking out at what other players in the market are doing. I was asked a little while ago when my friend Brian Tate, can't see if he's in here, he asked, what do you think of the payment space right now? My basic answer was it's it's incredible how much it feels like on a daily basis change there is, I try to pay an awful lot of attention and I feel like I'm often sort of drowning in new announcements. How do you keep up? How do you compete If you're trying to meet the customer where they are, there's probably 10 other people trying to meet them where they are too. How do you compete in this world? It's getting hectic.

Margaret Ryan (08:04):

Yeah, I agree. So I think we're various ways. So whether it's through partnerships and staying close to what are the big tech partners doing, whether it's working with startups and understanding what is kind of the emerging trends or the new technology that's coming around, it's a lot of reading. I got a lot of newsletters and things that I'm reading on a regular basis. And it's again, taking that outside in view of what are people doing in different industries and what's kind of the new thing that's rising to the top and thinking how is that applicable to our business? And if our customers are using it, then we need to be thinking about it and how we can play a role there.

Jana Manley (08:42):

I would agree with that. I mean there's research upon research upon research every day you can look at that and have to stay abreast of what's going on. But the other thing is really taking that inward look of deep diving into the data, the payments data, transactional data. And I probably signed a broken record. If you've seen any of the other times where I've spoke, I'll tell you that it's the goldmine that is the most powerful data on the planet and knowing what's happening with your members, what's happening with your customers, because the transaction data can give you more insight than you could probably ever execute on. And so one of the things that we're really focused on is tightly working with our data analytics team and in partnership with some others to see how can we better ingest that data, not in just we have the data great, but how can we use the data model the data, learn from the data, and then let the data tell us what it is that our members are seeking because they're transacting and if they're transacting through the digital wallet. So if they're transacting through Amazon wallets or all the different places they can transact, then we're able to see that. Then it's really how do you shape your strategies? How do you shape your tactics, how do you communicate with your members then to make sure that you are heading in the direction and providing the services and the rails that they want to be able to use and make it as easy as possible.

Jonah Crane (10:00):

So let's take the next step in that journey. We've talked about customer research, we've talked about researching emerging trends and who's doing what. How do you then make decisions about what do we actually prioritize? What are we actually going to focus on? What are we actually going to build? Because you probably are looking at a menu of dozens of things at any one time and presumably one can't do them all at the same time. Maybe Amex digital labs can, I don't know.

Jana Manley (10:25):

 True.

Margaret Ryan (10:27):

I wish.

Jonah Crane (10:28):

I'd imagine that's a challenge. There's a prioritization that has to come into play do, and I'm sure part of the answer is data, but help us understand the next step in that journey.

Margaret Ryan (10:38):

For us, we revisit what are our focus areas each year. To your point, we can't do everything. There's always going to be constraint on resources, whether those are technical resources, product resources, design resources, et cetera. And so we revisit what are those focus areas each year and then that's how we narrow in and decide what we're prioritizing. I think we're a little unique in the sense that we're meant to be looking at the short to medium term. So we're not purely driven by revenue. Revenue is important, engagement is important, those are things that we're trying to drive for the business. But recognizing that something that we think has the potential to drive significant revenue five years from now may be very small in the short term and still making a bet on that language term potential to be able to move forward.

(11:28):

I think that's awesome. And as a credit union, we're the same. We don't look at revenue first. It's what is the benefit to the member. But I think one of the things that helps us in focusing on those areas is really taking a look at what is the need. And if you just take a look at the need from the most simplistic manner, right? It's looking at, I'm stealing this from someone else too. Are you brilliant at the basics, right? The very basics things that you as an organization or we as an organization are there to serve the members with. Are we brilliant at it? If not, how do we get brilliant at that? Because those underlying components are the pieces that allow you to build on. And so the trick is not getting too sidetracked with shiny objects because there's a lot of shiny objects out there and you have to make sure you know what they are. You have to make sure they're not going to be the disruptors, but you really got to take a look at that underlying core infrastructure and how can you be absolutely spot on and brilliant with that And that sets you up for being able to then go chase the shiny objects.

Jonah Crane (12:26):

Got it. So let's start to tiptoe at least towards the crystal ball. I love that. Brilliant at the basics. Another phrase I hear often in sort of product and design discussions is, what's the job to be done here at the end of the day? What's the core underlying thing that your customer, for example, is trying to do? And so in payments innovation, is there any sense in which the innovation we're seeing in payments is changing the job to be done or morphing it in some respect? I guess another way to ask the question is, is there anything new under the sun or are we really just talking mostly about moving analog to digital and sort of faster, faster, faster? Where do you think we are in the evolution of payments in terms of creating wholly new capabilities in the payments landscape?

Margaret Ryan (13:16):

Yeah, I mean I think there's a ton to keep evolving and iterating on. So when you talked about what's changing I think a little bit is customer's expectations are changing as it's becoming an increasingly more digital world. When I think about shopping online, the job to be done there is I want to be able to easily and securely check out so I can get on with the rest of my day. 10, 15 years ago, easy probably meant something very different than what it means today to our customers. And so what used to be sufficient of just being able to type in your credit card details and complete the checkout. Now customers are looking for, they don't want to be digging around in their wallet, pulling out their card, having to go find them in the other room. They want something that's going to allow them to complete that checkout seamlessly.

(14:00):

And so you see there was the ion of checkout buttons, there's the wallets that are now live. We recently launched something in partnership with Google on Chrome autofill. So customers are using Chrome to check out on a regular basis. So it goes back to meeting customers where they are. And today they can save their card details, they get pre-populated. The next time they're checking out, well now they can also enroll in a virtual card number. And so they're able to then when they're making that payment, a real time call is being made to amex and they're returning a token. And so the physical card number is not then being shared with the merchant to complete that transaction. So it's adding that extra layer of security while still providing that ease of not needing to manually type in all your details. So continuing to iterate on what's already in place I think is the key opportunity.

Jonah Crane (14:55):

Revolution by evolution.

Margaret Ryan (14:56):

Yeah, a hundred percent.

Jana Manley (14:57):

Well I think one of the previous tracks or the previous sessions we had, one of the things that I do see that seems like if you think about it really like a thing which is the race to the super app because it is the faster I want more, I need it faster, I need it now. And so how do you have that all in one place? Because we know that people, the idea of a PFI is loose at best from what it used to be. We know everyone tends to have more than one financial institution, more than one payment vehicle. How do you just make sure that you're one of the top three maybe in the mix and I'm making up three, but something like that, you want to be up there. So I think that the idea of a super app is something that may be something, but that to me is more of changing a way that things are delivered more so than changing the thing itself.

(15:48):

Now, one thing I do think is very interesting, a possibility for changes is the impact of this move to now faster. Everything has to happen is what does that do to people's financial wellbeing? It's like what is it the impulse buy when you're in the checkout lane, it's so fast you don't really need it, but I can do it. And you think about the buy now pay later, there was a comment made earlier as well, that's easy, it helps people. But man, could it possibly have an impact on someone getting themselves in trouble because there's no super app. That's why the concept of that super app kind of intrigues me is there's nothing really to help them manage the 40 buy now pay later things that they could have out there. So how do you help people manage through the new products and services they're offered through the payment channels?

Margaret Ryan (16:37):

And I think you see in some other countries like the UK where open banking has been in place and so they're trying to pull in some of that information for customers. I think it'll be interesting to see how the regulation evolves in the US it is coming and what are the new opportunities there. And then the environment's just changing. I mean Apple is opening up their NFC in Europe that's potentially going to have new entrants into the wallet space or maybe not. I will see what happens, but I think things are definitely evolving on a daily basis

Jonah Crane (17:08):

And Apple's getting sued here for keeping its wallet closed. So US and Europe seem to be taking somewhat similar approaches to thinking about antitrust and interoperability and openness on platforms. So it'll be interesting to watch that. And as you say, this is all happening as, I mean open banking sort of exists here, but we don't have regulations that mandated and those regulations are in process. We can perhaps come back to that, but I mean Elon's going to solve all of our problems with the perfect super app. So I think next year we know what we'll be here to talk about. The super app will be sucking us all into its vortex. I think a lot of what you guys have been talking about for the last several minutes in terms of the new experiences meeting customers, really where they are strikes me as, I think the phrase that's used to describe that a lot is sort of embedded financial services.

(18:07):

How do you embed the financial part of an experience or a user journey within that broader experience, whether it's digital or even online in some cases. And that embedded finance has become a hot topic and it kind of means a lot of things. But I think there's really something to that in the sense that as pain has become more digital, it's just much easier to make them super seamless for the customer. And the expectations are now ratcheting up where every time something becomes a little bit easier and more seamless, nobody really wants to go back to the old way of doing things. I just had to pull out my credit card last night, I was checking into a flight and had to pay some extra. I didn't have my card loaded in. I was like, when was the last time I even type? I used to know all my credit card numbers by heart. Not anymore. In any event, can you talk a little bit about that sort of embedding of the financial aspect of a journey into the broader customer journey? None of us wake up in the morning and want to make payments. We want to buy our coffee or do whatever it is we're going to do next. And how that's impacting how you guys are thinking about your jobs meeting your customers and competing as we were just talking about in the very competitive marketplace.

Margaret Ryan (19:16):

So we're thinking about what's complimentary to the payment. The actual payment should be pretty simple, but what's happening before the payment? What's happening after the payment? Where can we add value throughout that journey? So one of the things we've been tested into over the last year is around redefining our membership and loyalty programs to make them more digital. So we launched a program called Member Collectibles last year, which allows customers to collect NFTs or ops proof of attendance protocol while attending different events where we're partnering. And so we did this at Austin City Limits, we did this at the US Open Tennis tournament in New York. And what we did is we partnered with local artists to design the actual NFTs when customers attended the event, they could then go and collect these by linking their Web3 wallet. And it really brings to life this digital collectible I think of when I grew up at Yankees fan.

(20:21):

And so I'd go to the games and I would save the paper tickets and I'd put them in a little box on my bookshelf and I look back at it and I bring to life this day that I spent with my family watching the Yankees and eating cracker jacks and all of that, and it brought these fond memories back. And so we're trying to do that in a similar way of driving this emotional relevance with our customers, particularly our millennial and Gen Z customers, by allowing them to leverage these digital collectibles to be able to remember the onsite experiences that they're having. So thinking of new ways that we can bring things like that to life.

Jana Manley (20:57):

Yeah, I would agree. Actually re-imagining how we're looking at rewards and rewards, not just for historically you've looked at rewards that are transaction based, right? But we're also looking at how do you bring loyalty and rewards into the holistic spaces, rewards for more things than just that and how do you link the digital and the physical.

(21:16):

I think there's some great learnings that we can have outside of the financial industry on linking physical experience and digital experiences because there was the big thought for the longest time that as we go digital and finance, that there'll be no need for branches and everybody was convinced there'll be no need for branches. Well, that's not what's really coming into play. We're actually seeing at least in our space a little bit differently and we're having to reimagine how we're linking the two. And so I think it's part of just, again, really looking at all of the different touch points that a person or a member may have with the organization and with the channels and services that we can offer. And how do you make sure that it's kind of a constant state of mind, if you will, for when they're getting ready for the job to be done.

Jonah Crane (22:01):

Well, some people have gone further than asserting we won't need bank branches. They have asserted we won't need banks.

(22:08):

That's perhaps a slightly different debate, but not altogether detached from the conversation we're having to the extent that the financial aspect of a transaction or an experience gets fully embedded within the other experience, what's the bank's claim to participating in that journey? And I think it's really interesting to hear how you guys are thinking outside of the bank product for how do I become relevant to that customer journey and not just sort of allow the customer journey to swallow me as it were. And so that's really interesting observation, sort of flipping the embedded finance competitive threat on its head almost. I do want to turn to open banking since you raised it and since it's a relatively hot topic and since I discussed it yesterday on a panel. And it strikes me that,

(23:00):

I mean like I said, I'm a believer that we've had open banking in the US for over 20 years, even though we haven't had a regulatory regime around it, it's been largely beneficial. I think that it's been market led and we've developed lots of interesting use cases and lots of learnings that I think hopefully will be applied when the regulation is put in place. But so there is this practical reality, and I think you mentioned it already, that people have multiple financial relationships. The era of monogamous financial relationships is long gone. We are now firmly in a space where people have, I think on average over 15 financial apps of some financial accounts, of some sort banks. And I guess to some extent credit unions have tended to think of open banking as a bit of a threat historically. And I'm curious whether you guys still feel that way or maybe you don't agree with that general observation or maybe you see some opportunities. I'm curious how you're thinking about that landscape as the rule approaches

Margaret Ryan (23:59):

Go for it.

Jana Manley (23:59):

Well, I would say that I think that the longest time the industry as a whole, banks and credit unions, just financial services industry have sort of thought it's somewhat of a protected space and we offer a service that no one else can offer. And so that's a little bit, if you look back on that, you might want to go, we were very wrong in that because we have seen the entrance of competitors that we never saw coming and specifically payments has been the place where that has come in. And so I think the idea is the horses out of the barn that is happening. And so we have to look at it in terms of then how do you really leverage that? How do you look at it and say, how am I going to play in this space? And it's going to force us to look at things very differently and how do we play not just with each other in this space, but we're going to have to learn to play with the competitors. I think on our pre-discussion, one of the things that was just eyeopening to me was when I was looking at digital wallets and if I were to ask anyone here, what is the number one digital wallet out there? You're all going to tell me the same thing, right?

(25:04):

Apple Pay, thank you. Yes, but this is my favorite thing. It was so eyeopening to me that the number two wallet, anybody know Starbucks, okay, a coffee company is the number two digital app. I'm like, okay, this is very interesting. How do you dig further in this? And I started researching into Starbucks digital strategy. These are players that are coming in and if you think about how much money is now moving through spaces that are not traditionally financial services, so how do you play in that and Betty yet, how do you learn from them? How do you learn for what they're doing? And that we can do that and have that kind of loyalty with our members. So I'm of the opinion that like it or not, it's here and we have to learn to look at it in a way and see where can we now learn from it and become relevant and still stay on top of it. And even my true North star would be to compete with being non-financial services, digital apps.

Jonah Crane (26:04):

Alright, bring it says Jana, come on.

Margaret Ryan (26:08):

Yeah, and I think with Starbucks what they did is they found a way to really deliver value to their customers within their app because it's a lot to download another app and then open up that app specifically when you have Apple Pay on your iPhone and you can just easily tap to pay, but they've built in this pre-order functionality, you are able to earn points. They regularly have different, games is not the right word, but if you buy these three different things, you get extra points. And so they've done a really good job of finding a way to deliver value that makes it worth it to the customer. And so I think that's something we can really learn from how Starbucks has succeeded there. I agree. Open banking is here and I think customers have an expectation of being able to control their data and where they're sharing their data and being able to share their data to, if it's, let's say a budgeting app that they want to be able to use for their financial health, we need to be able to give them the control over that to make that decision for themselves.

Jana Manley (27:11):

Well to that end that you asked earlier of what's kind of the next thing? I think if you look, you're seeing even in the advertisements you probably see on television, on streaming, on your app, whatever, you're seeing the rise of a lot of the financial wellness plays. You're getting a lot of the budgeting tools that you're starting to see and that's what they're looking to do. They're trying to get all of that information and serve that to their customers in that way. But what they're doing is being able to access all of that powerful and rich data that is then in turn marketable. So it's a really interesting thing.

Margaret Ryan (27:48):

Yeah and I mean it's totally a disintermediation risk, but I think that's where we need to go back to the customer. What is the value that we're able to deliver to our customer? We have this data already, how can we leverage that to be able to drive or deliver new features and products for our customers that resonate with them, that keep them coming back while still allowing them to access all of these other different apps and features that are available to them.

(28:14):

One of the favorite things that I've heard along my 20 some odd years in the industry though is when we started talking about using data for a long time back, that's creepy. We don't want to be too creepy. And I'm like, get used to creepy. It's there and people have become very used to the fact that you say something out loud and all of a sudden and you're seeing an ad in Facebook or an ad in Twitter or X and so creepy has become the new thing.

(28:40):

Well, on the flip side, people actually get annoyed if you don't recognize them as the person that they are. We traditionally have been kind of siloed of like let's say you have multiple cards with American Express. We kind of look at you separate across those different card relationships, but you're one human that has multiple relationships with us, we should know that we should be treating you as such. And if we don't, customers are getting annoyed because they know that we have the data and they expect us to be using it.

Jana Manley (29:06):

That's a good question.

Jonah Crane (29:10):

Those a great, great multilayered answers. We are well past the two minute warning. Now we are actually winding down. Are there any questions in the audience? I see one near the back.

(29:26):

Thank you.

Audience Member (29:28):

Question for Jana, but Jonah and Margaret, feel free to jump in as well. In the credit union space, what payments use case are you most excited about?

Jana Manley (29:40):

I didn't quite hear the whole. Did you?

Jonah Crane (29:41):

In credit union space, what payments innovations basically are you most excited about?

Jana Manley (29:47):

I really think that right now the thing that I'm most excited about is being able to leverage the data. And I know that seems like the most boring thing maybe on the planet, but I think it's so powerful and one of the things that I'm so excited about is being able to look at that and be able to be predictive, more predictive with it. And not in terms of just selling another product really, but being able to be in front of something with a member and being able to almost create dialogues with them through the digital apps, through the digital space. However we can communicate with them and letting them know this is connecting the dots, right? It almost becomes marketing, but I don't even like to use that word. So my thing is not so much excitement about the rails because the rails are there. It's how we are engaging with our members to be able to let them know how to best get the job done. Sorry, hopefully that sort of answered your question.

Jonah Crane (30:45):

Any other questions? Alright, well we are at grave risk of violating our pledge to get you out of here on time. Thank you all staying with us and hope you enjoy the rest of the conference. Good evening.