Emily Steele and John Waupsh Live from Finovate Fall

Hello out there in fintech land, and hello live from Finovate.

This is Sam Kilmer, managing director of Cornerstone Advisors, leader of the fintech advisory practice, and I’m joined here in the Marriott Marquis on Times Square.

We’ve got Back to the Future the musical going on back here in the distance, but we have two rock stars up front.

We have Emily Steele, who is the president and COO of Savana, joining us today from Finovate.

We also have John Waupsh, who’s the CEO and co-founder of Nerve.

I’m always honored to be in the company of people I’ve known in the business for a long time, people Ron Shevlin, Mary Wisniewski, Al Dominick and I have had the honor to hang out with, and these guys are among them.

In true Fintech Hustle fashion, we’re going to try to keep it fast and loose today around what these guys are seeing in the industry and what they’re seeing and hearing in the sessions at Finovate.

I’m really going to need their help today because, unfortunately, last night my flight was canceled.

So I had to fly in this morning.

I’ve literally been to like two demos and half of a panel session.

I’m probably just going to be basically working on fumes and buzzwords at this stage, John.

No buzzwords.

No buzzwords.

There’ll be no buzzwords.

But yeah, let’s just start off with telling me a little bit about a day in your life.

What’s a day in the life of Emily Steele look like in fintech land?

Give me your best shot.

A day in the life of fintech for me is, look, I’ve spent my career focused on two things.

Most of the time it is customer experience.

But I’ve switched that a little bit now, and now I’m focused on banker experience because I feel as though the two go hand in hand.

So often, we only talk about one side of that coin, and it’s really the customer experience.

I think if we focus a bit more on the banker experience, it actually will improve the customer experience.

Right now, a day in the life for me is talking to bankers just to find out what the problems are that they’re having and hopefully find a way Savana might be able to help them.

Good stuff.

And this is not your first hayride, right?

This has been Accelerant, Temenos, Sanchez, FIS.

In terms of age?

No, no, no.

This has all happened in a nine-month period.

Yeah.

I hear what you’re saying.

What about you, John?

What’s a day in the life of John looking like these days?

Day in the life, let’s see.

Primarily, we do embedded banking in the creator space.

So primarily my world is trying to figure out who are those platforms that work with creators, how do they work with creators, and how can we help solve their needs?

It’s more about platform experience maybe than banker experience.

But nevertheless, the point is the same.

There’s absolutely the attention that you need to pay to your consumer, your creator, whoever that end user is.

But oftentimes there are other users in between, whether it’s a banker, bankers and also, in our experience, the platform partner and how they distribute our product and how they embed the product.

Very interesting.

It seems appropriate that Nerve started out initially, correct me if I’m wrong, focused on entertainment, musicians?

Musicians.

So we’re standing here outside the Al Jolson room.

I believe that’s probably the John Barrymore, not the Drew Barrymore room.

Probably not the Drew Barrymore room.

We’re over the top here at the Broadway Lounge.

This should feel like home.

I know you’re Austin, but this is New York.

This is kind of where it’s at in terms of entertainment.

I guess one thing I would ask you guys, since you’ve been here thus far longer than I have at Finovate, what have you been seeing and hearing in the halls?

What’s the sidebar chatter been?

Or maybe what’s the stage chatter that’s been resonating with you best?

John, want to start with you?

Sure, I’ll go with that.

Basically, what I’ve been seeing, I don’t really know what people are saying.

Let’s be honest, I don’t listen to what people say.

You’re focused on your...

I’m barely listening to you, Sam.

That’s probably just as well.

The stuff that I keep seeing is the level of depth that I believe a lot of fintech is at now.

We were so long kind of on that topical level, and now when you see a demo, the products are solving, many times, banker problems.

For instance, I saw a great one today where the card is both for payments but also security as well.

It’s kind of solving an MFA issue through NFC.

That was an incredible solution.

We’ve seen a lot of card products innovate over the last decade and a half, but that really felt like something that wasn’t a solution looking for a problem and required several layers of innovation over the last number of years for that to actually come to fruition.

I believe that was CompoSecure doing that product.

Anyway, the things that I’m seeing tend to be layers deep, real solutions, as opposed to maybe where we were a decade ago, where a lot of times it seemed kind of pipe-dreamish.

Pretty much getting beyond the buzzword level.

I like the fact that you had a session where it was multiple acronyms, and yet it was still legit.

When I did sit in on three sessions, it seemed like everybody was either dealing in AI or API.

So A and I are the favorite letters of the acronym right now.

What about you, Emily?

What are you seeing and hearing here at Finovate?

It’s not dissimilar, but I would take it one level further.

The depth of the demos, and I agree, not the blah, blah, blah buzzwords.

But what I’m also hearing differently is a lot more around partnerships and really solutions coming together to solve problems, then taking it to the integration layer.

It’s one thing to roll out all of this new technology, but it’s being coupled with a conversation around how do you actually integrate it and make it work at a bank?

Not just, how do I buy it, put it on a shelf and hope and pray?

Instead, how do we actually integrate it with our entire ecosystem such that it really can be used for the long term, if you will?

I’m starting to hear a lot more on the integration layer.

The other thing that I found interesting is not quite as much of, “Let me buy everything in a full stack.”

A lot more of beginning to hear again, and this is cyclical, right?

It’s, “Let me buy everything from one vendor so it’s all sticky and sticks together.”

Then two years later we talk about, “Let me buy best of breed.”

I like a best-of-breed buy because I don’t believe in one-stop shopping entirely.

We’re hearing that a lot, or I’m hearing it a lot, from banks, credit unions and fintechs talking about, “What are you doing? How do we couple together? How do we integrate it and make it actually solve real problems for the bank?”

Interesting.

Yeah, I’m seeing smaller and smaller organizations, banks and credit unions, get into the integration game.

I think some of the smaller credit unions maybe had development teams over the years, but it was pretty rare for a small community bank to have three or four developers focused on integration.

It seems like it’s more, maybe not the norm, but heading that way.

They need to have those resources just to be competitive.

I completely agree.

Sam, one of the things from my point of view, and the reason I’m so focused on the banker, is part of the challenge that I see today is all of these systems that have been put into banks for the right reasons.

They’ve been adding software that is helping them in this digital game that everybody’s playing, but it’s created complexity inside of the bank because of the lack of integration between that software.

Because I’m so obsessed right now with the banker experience, I feel as though if we do talk about it from an integration perspective, we can make a real difference.

I’m talking to lots of community banks and credit unions of all sizes, not just the big banks that are able to create that experience, but bringing that down to a community bank level and a regional bank.

Without integration, I don’t think they can achieve the right customer experiences or those that are going to keep the stickiness of a loyal customer.

Yeah.

I think the other thing that jumped out at me is you mentioned partnerships.

In the same way that a lot of banks and credit unions have not historically had a lot of dev teams internally and just assumed that their primary provider, or maybe secondary or tertiary provider, would have those resources for them, I think the other thing I’m seeing more and more now is what partnership resources do I need?

Maybe I have strong commercial lenders and I’m very comfortable with commercial lending deals, but I really have no idea about how to broker a great fintech deal.

How many people do I need to have on my team, whether it’s compliance people or actual dealmaker-type people, to make some of these deals happen depending upon how much of that they’re doing?

I have a panel session tomorrow.

No plug, because I’m pretty sure this might be coming out after it anyway.

But with some bankers talking a little bit about that.

They’re bigger banks, and I’m starting to see it with even some smaller banks.

I don’t know about you, John.

There are so many banks today, and credit unions too, but banks in general seem to be hyperfocused the last couple of years on building a sort of connectivity that they could then use for partnering with other fintechs.

Almost, whether you want to call it a BaaS-style relationship, but it doesn’t necessarily need to be in the sponsor-bank vein.

What really has kind of surprised me is the level, to your point, of, “Let’s bring in these technologists, let’s bring in these people to write and figure out how we can build this connectivity to our core,” but the lack of project management that I’ve seen at those same banks.

Sometimes it has not necessarily created the fastest or best execution.

Sometimes the miss is not necessarily on the technology side.

It’s almost more on the project-management side.

But for those banks and credit unions that have stuck with it and figured out that couple-year journey, it’s amazing to see where they are today.

They’re positioned in this world where they’re maybe not necessarily thinking about, or maybe they had already thought about, third-party and fourth-party risk.

They’re now sort of taking that discussion away because they can pull that fintech and that fintech’s customer base a heck of a lot closer than maybe having a BaaS or some other company in between.

That’s a big part of what I’ve seen.

Not that dissimilar.

John and I had an opportunity, Sam, where we were connecting and doing a little bit of trading notes before the broadcast.

We were just chit-chatting.

No, we were just supposed to be wrestling.

It was just chit-chatting.

But if we take the partner concept to BaaS and embedded banking, one of the things we were talking about is the complexity of banks and credit unions trying to adopt something like fintech.

We’ve been talking about those.

They are buzzwords now.

People are kind of tired of hearing about them.

But we were talking about that it’s starting to come to fruition now because banks, one, bring them revenue, two, bring them additional products to improve the customer experience and make them more hip, right?

But more importantly, the banks now are getting technology through the right partners to support the fintechs in bringing embedded banking to life.

Not just talk about it, but bringing it to life.

So I think partnerships come in so many different forms.

It’s about how do you partner to get the right project management so projects don’t die on the vine, but you actually get them successful early and often?

But what about partnerships for vendor management?

Because if you’re a community bank or a credit union, there’s so much to manage now.

You need the right partners to help you in some of that because they don’t have unlimited resources like the big banks that you might be talking about.

I love the partnership topic too because it’s so many different forms.

When you get to vendor management or even contract negotiation, all of that other fun stuff.

It is fun.

Is that sarcasm?

I mean, it’s so important, though.

I don’t know where that normally sits at the bank.

Is that a CFO?

That’s what I’m speaking of, by the way, because the contracts, I don’t negotiate contracts normally.

At Cornerstone we do, but I did as a banker.

I’d bring in third parties or whatever, and sometimes I would do some of the things myself.

I think you asked the right question, which is, who’s overseeing it?

Ideally, the CFO, or there’s somebody internally that’s brokering all the handoffs.

The issue historically is that, whether it’s partnerships for fintech or partnerships for vendor management, it’s decentralized.

One of the challenges of the financial services industry, I wouldn’t say fintech as much as banks and credit unions, is that many functions are decentralized.

Revenue generally is decentralized.

You’ve got lenders, you’ve got payments, maybe over in retail or whatever.

I think you all have seen where you’ll go into a bank and you’re trying to figure out who’s in charge of revenue or who the VP of sales is, and there isn’t one.

You’re like, “Okay, that’s a little squishy.”

Sometimes, even on the cost side, the CFO doesn’t have as much oversight as you might think.

That’s one of the first things we start looking into.

I think one of the promising things, one of the positives of these conversations around partnerships, is that people can start thinking about a deliberate cycle of review and getting visibility and transparency into all that because it does matter so much.

That’s the good side of it.

I do think it’s getting better, but it’s been piecemeal and decentralized for a long time.

We’ve been positive here long enough.

Let’s go negative for a minute before we’re done here.

We’ve talked a little bit about things you guys think maybe you’re seeing here that seem to be working a lot better.

What’s something you see in fintech or banking right now that you think is just not working well, not cutting it?

I’m not trying to put you on the spot as much as have a real-time discussion around things that could be way better than they are now.

Is there something you see that’s kind of broken in banking or fintech or that you think could be way better than it is right now?

Emily, I don’t know if you’ve got anything.

I do.

I feel like we keep talking about what modernization and transformation are exactly the same.

I’ve been in this space, you mentioned a few companies there that might have said it’s been a long time I’ve been in this space.

Nine months.

Nine months.

But when everybody associates modernization with core transformation or, “Go replace something on digital,” I would challenge that.

Just because cores are 10 years, 20 years, 30 years, 40 years, 50 years old, we need to ask the question, are they serving their purpose?

Not everything in a bank that’s a problem has to be a core conversion.

Core banking was intended to be specifically about transactions, ledgers and product manufacturing, but we’re expecting the core to do everything.

If a core is over 10 years, it’s like, “I’ve got to go get a new modern core.”

I think that’s a problem.

We can’t keep looking at modernization as just saying core transformation.

We have to look at the actual bank’s problems and identify where those are coming from.

Over the last two days, I’ve had the pleasure of talking to lots of credit unions and banks that are saying, “Okay, then let me share with you some of the things that I’m seeing.”

It’s about disconnected processes.

It’s about not being able to gain the right efficiencies.

It’s not being able to figure out where data is.

I would challenge us, let’s not just replace the core because it’s the easy fall guy.

Cores take a lot of heat that we’ve got to replace them.

The reality is, let’s solve the real problem.

I think it’s not always the back end or the front end.

Sometimes it’s inside of the bank.

I don’t think that we’re replacing software and modernizing and helping the banker to solve those problems.

So for me, not a negative, but an opportunity.

Sure.

John, what do you think?

I’ve got nothing.

I think fintech is absolutely perfect.

Everything in this building is working.

There it is.

Everything is awesome.

No.

I think there’s always this pendulum that swings, right?

Everyone loves to talk about AI, or did at least a year ago.

Maybe now it’s still sounding buzzy.

It started to feel like, goodness, is the only real use case, at least right off the jump, customer service?

Which is a nice one, I guess.

Then do people really just want to talk to chatbots all the time?

As a consumer, I don’t.

I don’t want to talk to a chatbot because, as a consumer, I don’t know that I feel that’s the right thing to focus on.

It’s not what I want.

Is that the experience that you’re thinking too?

I definitely agree that talking to a chatbot is never fulfilling.

But at the same time, I love it.

It’s terrible.

It’s usually a terrible experience.

But for instance, there have been demos here where the chatbot has evolved upon, right?

There’s essentially technology that’s being used in building movies today that’s being used now to create kind of a human on top of the chatbot.

You’re actually now talking to somebody who kind of looks and acts human.

That, at least from an evolution standpoint, makes a lot of sense, I think.

But it also finally brings the hype into a little bit more normalcy, where you’re going, “Okay, well, I can kind of see that being used now.”

Is it going to work in every application?

Of course not.

I’m on a phone or whatever and I just want to talk to a human.

Can you please stop assuming I said this thing when I said this, or whatever the case may be?

But to me, that’s like every Finovate event.

You start to see the hype become rationalized, where you’re like, “Okay, the thing that was a little bit blown out of proportion, but required investment and required a lot of that hype in order to get to where it is today, is at a place where it’s actually starting to be consumable at the bank level, at the credit union level and at the consumer level.”

I’ll add one, Sam.

I’m going to get you some fintech or Finovate.

Today I was at lunch, and I love what you said because I could not agree with you more, John.

I had someone I was sitting eating lunch with today say to me, “I’m looking at your sign, Savana.”

No pitch.

“And I don’t see AI anywhere.”

I’m like, “Why?”

No, “Savana.”

Right.

No, he said, “Why, no, Sam?”

That’s what he said.

He goes, “Why doesn’t it say Savana.ai?”

I said, “Look, I think AI is cool and all, but we’ve got to find a real problem to solve before we actually invest.”

I love that you said it.

We just said it about embedded banking.

Sometimes we talk about these things to where we end up so tired of hearing the buzzword, and finally the technology catches up with a real problem to solve.

But I thought it was funny.

He’s like, “Add AI to your name.”

Not yet.

One of the things I think of are companies that don’t have AI in their name that have been doing AI for the longest time.

They tend to be in the fraud-reduction area.

Exactly.

What I’m looking for is, when are the heavies that really do the heavy lifting in some of the proven cases in fraud reduction, when are their skills getting transferred into this natural-language stuff?

Because right now, you’re starting to see some of it on things like voice authentication and this type of stuff.

Okay, I see all those use cases.

They’re way less sexy.

Nobody really talks about them anymore because we’ve heard about voice authentication for 15 years or whatever.

It’s not necessarily been the best.

But you see, okay, well, what’s the intonation?

How is this customer reacting?

Then how does that feed through to how the person should respond if there’s an actual human on the other side?

You see a lot of that trickling into the conversation, I think, and into actual deployments.

I guess those are huge businesses, not to minimize them, but it also seems like there should be so much more that’s really changing our lives today.

We’re getting there, but we’re not there yet.

And not to diminish it too, and it’s not a plug for anybody in particular, but I’m actually watching all these deployments that are going in of Glia and Agent IQ and Posh and all these.

To me, that’s really promising stuff because you’ve got dedicated entrepreneurs with dedicated subject matter expertise, and they’re applying it right now.

A lot of times when bankers reach out to us and say, “Give us the playbook,” sometimes we have to say, “Look, if you’re asking us about commercial loan process improvement, there’s a playbook. If you’re asking us about generative AI, the playbook is still being written. We’re still making this up.”

It’s okay to say that.

Guys, I appreciate you taking the time to go both positive and negative with me and everything.

I wouldn’t be doing my job if I didn’t hold this for just a second.

If you would, John.

Trophies.

We get trophies.

You guys do get trophies.

Everybody gets a trophy.

Are you kidding me?

This is 2023.

This is a Fintech Hustle double-album coaster set.

Do not put your needle on this.

Put your buzzy drink on it.

You bet.

And also, because I know you guys are dying for headwear, we’ve got some nice...

These are not endorsed by LL Cool J or Run-DMC.

But nevertheless, I think that you’ll like them.

They are endorsed by me, not Ron Shevlin.

Unfortunately, Ron does not support the hats.

Ron’s, again...

No, he’s just not wearing the hat.

Same playlist on this?

There’s not, but I can send you one separately.

Thanks again for joining me on Fintech Hustle.

We’re in the hall live here at Finovate, Marriott Marquis, New York City.

Loving it.

Thank you so much.

Join us again on the next episode.