March 17, 2022 • 53 mins
Listen to the top minds in B2B payments as they share and provide insight, perspective, and knowledge in a virtual roundtable setting. Featuring c-suite executives from the worlds of fintech, banking and investment.
Moderator: Ernest Rolfson, CEO & Founder, Finexio
Panelist: Ronnie Selinger, CEO & President, Nordis Technologies
Panelist: Jared Wolffe, CEO & President, Banc of California
Panelist: Joe Proto, Finexio Chairman & Former EVP, Mastercard
Topics of discussion include: The Evolving Relationship Between Fintech and Banks, The Role of Embedded Finance in Payables, Pandemic-Driven Urgency To Innovate, Investment Differentiators....and more.
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Transcript
Episode Transcript
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Ernest Rolfson (00:00):
Thanks, everyone for joining. thanks to Joe and
(00:02):
Ronnie and Jared for coming on.
We're gonna have a really fundiscussion on a number of topics
today, collaboration betweencorporate banks and fintech,
embedded finance solutions,digital adoption of payments,
benefits to end users, all theinvestment excitement that's
been going on in b2b and fintechin general, and hopefully a
little glimpse of the future andwants to come as well. So just
(00:23):
by way of intro, Ernest Robson,founder and CEO for Nexio were
an accounts payable payments asa service company embedding
payments and cash flow toolsdirectly within large AP
procurement and financialinstitutions services to help
end customers manage theirbusiness payments. So with that,
I'd like to just go around andlet the other esteemed
(00:46):
colleagues and friends hereintroduce themselves and let the
listeners learn a little bitabout each of them their company
and role. So I'll just go aroundmy screen the way I see it,
maybe we can start off withRonnie and hear a little bit
from you.
Ronnie Selinger (00:59):
Thanks, Ernest.
Ronnie Selinger, president andCEO of Nordis Technologies.
Nordis is a communicationmanagement company that has
gotten into payments as well.
And we manage communications andthe print, the digital as well
as payments for our clientsthroughout the country.
Ernest Rolfson (01:17):
Thanks so much, Jared, how about you?
Jared Wolff (01:19):
Thank you, Ernest, for having me here today. I'm
certainly thrilled toparticipate with all of you. I'm
Jared Wolff, President and CEOof Banc of California. We're a
nine and a half billion dollarcommercial bank headquartered in
Southern California. One of thelarger banks headquartered here,
we specialize in deliveringrelationship focused solutions
to our clients in lendingdeposits and treasury management
(01:39):
and payments, and helping ourclients grow their businesses
and improve their cash flow andoperational efficiency.
Ernest Rolfson (01:45):
Thanks so much, Joe. Great to see you.
Joe Proto (01:47):
Hi, everybody, Joe Proto here, particularly honored
to be here with Ronnie andJared. Now we have a big
audience. And I know we've got alot to cover. I'm a serial
entrepreneur in the paymentsindustry for 40 years, built and
sold my first company toCorestates bank in 1992, which
is, of course, now part of WellsFargo, sold my next company to
(02:10):
FirstData and now part of FiServback in 2000. And sold my third
payments company to MasterCardin 2019. Retired, semi-retired,
from MasterCard in November. AndI am chairman of Finexio, and
honored to be serving aschairman at Finexio.
Ernest Rolfson (02:31):
Thanks for being here. The intros I think we're
gonna have a really funconversation. Just to start the
discussion, I think, you know,Jared, and Ronnie your CEOs of
companies in and around andserving customers with FinTech
and payment related products tomeet various Treasury needs, I
guess, be great to talk abouthow your organization's have
(02:52):
evolved, or are evolving to meetthe expectations of your
business customers today, andjust how you think about that
continued evolution andinvestment you're both doing.
Ronnie Selinger (03:03):
So a big part of the way I run my business is
listening to our customers andleveraging technology to solve
their problems. And so we'vebeen a communications company
and so we manage billing andcommunication for our customers.
Part of what we've needed to doover the years is build a second
facility so that we could havedisaster recovery is when our
(03:27):
customers were concerned aboutwhether or not their stuff was
going to get out. We're here inFlorida. And in Florida, we all
know there are hurricanes. Andso as we've evolved, our print
and mail business, we've evolvedit by expanding and having
multiple locations. The otherthing that on our side is
(03:48):
expanding communicationsdigitally. So email, text
messaging, deliveringcommunications right to the
someone's Android or Applewallet, that's been another
another area of growth for us,as everybody knows
communications today are omnichannel. And we've got to be
able to deliver thosecommunications for our customers
the way the consumer wants toreceive them.
Jared Wolff (04:11):
Similar to Ronnie, was well said, I mean, we are a
business bank in a wide varietyserving a wide variety of
businesses in sectors rangingfrom professional services and
real estate to healthcare,software, manufacturing, and
media and entertainment. Andwith the disruption that's
occurring in payments,businesses want more digital
integration between theirbanking and their operations. So
(04:32):
it's easier to move money andeasier to get things done. This
is probably one of the mostexciting times in my career in
terms of the the amount ofinnovation that's occurring in
such a short period of time. Butwhether it's a digital loan
application that automateautomatically uploads last
year's financials and taxreturns for loan renewal, high
volume Mobile deposit oroptimizing cash flow. From my
(04:54):
perspective, clients really wanta tech forward solution that's
efficient and not paper based.
And so The expectations ofclients today and particularly
businesses has just, I think hasaccelerated certainly through
the pandemic. And in terms ofwanting to find solutions that
are digitally focused and thingsthat can make them more
efficient.
Ernest Rolfson (05:14):
That's fantastic. I want to shift into
I think a natural extension ofthat coming off of Jareds
comments is around thatcollaboration between banks and
fintech. I think most banks, ifnot every bank in the country is
thinking about this. I know allof us on the call have been
working with and serving eitherworking at banks or providing
(05:35):
products and services with andthrough banks. So I think this
is very topical. We have somereal thought leaders on this
call here. Maybe Joe can leadthe comment here is how have you
seen in your career, I thinkespecially with Transactis how
payments software has helpedbanks deliver a better customer
experience.
Joe Proto (05:52):
Yes. And now for decades in the payments
industry. And the reason I'vebeen so engaged and never, ever
thought of moving on is becausepayments are so dynamic. And
they change every five to 10years. I mean, think about our
own lives, and how we interactwith our friends, our colleagues
(06:12):
and other businesses, thatdynamic changes are just so
exciting. So it continues toevolve. What's different is the
pace of change is faster thanever, the FinTech bank dynamics,
for those on the FinTech side,who all the way over at one end
of the spectrum, who think banksare being left behind, I would
(06:36):
caution them to be aware thatbanks are extremely healthy and
progressive. To quote JamieDimon CEO of JPMorgan Chase.
He's investing heavily intechnology, and believes in
building buying and partneringwith fintech. So we really have
a whole new generation ofyounger bank CEOs like Jared who
(07:01):
are not only embracingtechnology, but helping lead
banks forward in where we'regoing. On the other side, for
banks that are not moving fastenough, then I think that there
are challenges and risks tothem, where they won't be able
to keep up and serve theircustomers adequately. So the
(07:24):
pace of change is one in which Idon't believe we've ever seen
before. COVID is a supercatalyst for this change,
especially in b2b digitaltransformation. Working from
home has changed. Everythingthat we expected to be able to
do in the past, versus where weare today. Mark Cuban, the the
(07:48):
entrepreneur and famous SharkTank investor said software is
going to write software. He saidthat five years ago, yes, we
will have you know, self drivingcars someday, but not anytime
soon. Nor will we have softwarewrite itself. So the coming
together of banks and fintechsworking in unison, I think is
still the magic formula forsuccess in the future.
Jared Wolff (08:12):
Joe, I couldn't agree with you more. I mean,
fintechs, if anything, areaccelerants for the marketplace.
And they've been able to helpintroduce to banks streamline
ways to do things, there's a youknow, there's a lot of dating
and and marrying going on rightnow between banks and fintechs
in terms of trying to find theright partnerships.
(08:33):
Fundamentally, what I see fromfrom the banking side is, you
know, fintechs have reallyintroduced a novel and more
streamlined ways for buyers andsellers to engage with each
other. When you look at theecosystem today, there are
really two things going on. Fromour perspective. You have
innovation occurring on thelegacy and dominant payment
rails. And you have innovationthat's occurring on to introduce
(08:54):
new payment rails, viablockchain and stable coin, and
probably some others as well.
And while both are exciting,from our perspective, we're
focused on delivering to ourclients more efficiently on
existing payment rails, whetherit's via fed or MasterCard and
Visa with innovative solutions,because I think there's a lot of
room for improvement. And itrequires a lot less adoption,
and can have a higher impactimmediately. We're closely
(09:17):
watching innovation, you know,using a theorem and provenance,
but it kind of feels to me likewe're in the very early first
inning. And it's like a bet, youknow, are we going to choose VHS
or Betamax, and then LaserDiscis probably going to come along,
and then blu ray and then somenovel disruption, like digital
streaming equivalent. So for us,these are all competing
(09:39):
platforms with no crosstalk yougot multiple challenges of
collective action, selectiveadoption, and there's still
intermediary tokenisation thatneeds to make this stuff work,
which might even be lessefficient than fed down. So we
think that there's a lot thatfintechs can share with us to
help deliver solutions to ourclients more efficiently today,
using the existing pay rails andtry to reduce the friction and
(10:01):
optimize how things are done.
And I think there's just tons ofroom there.
Ernest Rolfson (10:07):
If you can comment, I mean, what do you
feel like the difference mightbe just for listener like, say
if I'm a business, right? Oreven if Im consumer, like the
experience or difference oflike, say, maybe interacting on
payments with my bank versus aFinTech today? And is it more
like the customer demand that'sdriving some of these
(10:28):
differences? Or the banks arethe ones that are driving? It
feels like based on Jared'scomments, certainly Jared is
thinking about how do we pushthe bank forward to meet some of
these needs? But I'm justcurious about what is there a
difference in feeling or is italso just to cater some
capability gaps that don't existin the market, and all of you
are, but you're working withbanks are serving banks, or
you've developed FinTechcapability. So very topical.
Jared Wolff (10:52):
I think that there's a difference on the
consumer side. And on that onthe business side. So I would
say on the consumer side,innovation occurred much more
quickly, with startups that thatcreated new front ends to allow
consumers to get services moreefficiently more quickly,
whether it was through chime orsquare, or the equivalents, I
would say on the business side,banks have played a leading role
in helping deliver solutions toclients to help them see what
(11:15):
they could do better, it's muchmore disaggregated, in terms of
businesses, finding solutions,and banks can really be the
innovators and delivery systemsto their clients. That's how we
see it.
Ronnie Selinger (11:26):
And on the delivery system side, which is,
you know, the side I deliver on,you know, consumers have
choices, I think it was easy, atthe very beginning, right,
because we printed mailedeverything. But today, there are
choices, and the consumer hasthe choices. And so in customers
have to be able to deliver thosecommunications and taking those
(11:47):
payments, how the consumer wantsto get them and how the wants to
receive them.
Joe Proto (11:53):
We're in a field here. And especially in the US
market, in particular, we addnew payment types, but we never
retire old ones. Look, you go toyou go to the convenience store,
and you get changed withpennies, or nickels that nobody
wants and leaves on the counter.
As a country, we're stillproducing pennies, although it
(12:14):
costs us more than a penny tocreate it. So we keep adding
this whole multi channelexperience for consumers as well
as businesses and I like aboutthis panel in particular is
we've got a communicationscompany and a bank. And when you
look at where we are and wherewe're going, it's about this
integration of data and dollars.
(12:37):
And customers, whether you're aconsumer or a business, wanted,
fast, wanted accurate, wantedfriction free, and wanted to do
the thinking for me, so that Idon't have to do that. And and
when you look at thisintegration of data and dollars,
the winners I think for thefuture will be the ones that
(12:59):
serve the marketplace in thisomni channel world that we live
in as much immediacy in realtime as possible, frictionless
and cost effective.
Ernest Rolfson (13:11):
Yeah, well said Well said, I thought for a
minute we were going to talkabout something that no one
talks about, which is a piggybank lobby, and how they may be
behind the scenes keep copies,these pennies and nickels that
we have to deal with. That's foranother day, though. Joe, your
last comments. I think the segueinto this next session around
embedded finance and all four ofus here are working together to
(13:34):
bring streamlined customerexperiences to the marketplace,
right notice would focus onreceivables, helping clients
receive payments help consumersreceive FInexio on the payable
side, Bank of California,certainly leading with Treasury
Management and lendingsolutions. We're seeing a lot of
innovation and a departure fromthe status quo in our sectors.
(13:58):
And so I think it'd beinteresting just to learn how
your companies are navigatingsome of these new approaches.
And as it relates to that, howhave you helped or thinking
about helping your customers seethe need for engaging with these
new solutions that we've beenbringing?
Ronnie Selinger (14:15):
We've seen a value in digital consumer
payments from our customers. Andwe're a big believer in b2b
payments, and this is somethingcustomers need and we're talking
with the same customer that ison the communication consumer
payments side as the business tobusiness side and the b2b
payments, it's you know,certainly in what Finexio is
(14:38):
doing, more efficient, moreproductive, better experience to
the consumer. And so we arereally excited about bringing
business to business payments toour customers because we'll look
at it and and we feel it's justan extension on what we
currently do for our customers.
Jared Wolff (14:57):
I would say that from our perspective in terms of
How are customers thinking aboutpayments, demand is growing. But
I think a lot of what we'redoing is making technology
available to help our clientssee the benefits. And I feel
that's part of our core missionto be a little bit ahead of what
our clients may need, and thenintroduce them to things that
can help them be more efficient.
There is a learning curve andsome teaching involved. I would
(15:19):
say that clients are respondingreally well. And certainly that
those have that have adoptedways to optimize payments are
seeing benefit, it's not foreveryone, but certainly with you
know, the way that that we seefor Nexio and the like, it's not
for everyone. But if yourminimum payments is 50 to 100
grand a month, you're going tostart seeing some benefits
today. And you know, that's whowe're focused on is helping
(15:41):
clients of that size reallystart to to see benefits. And I
think it's going to roll fromthere.
Joe Proto (15:47):
I think it helps to look at the history of accounts
payable and accounts receivablein particular, because that's
the lifeblood of every business,being able to get money in being
able to pay your suppliers andvendors. In a paper based world.
They are two rails of a traintrack, AP and AR. That never
(16:09):
meet, right? They're distinct.
And, you know, we've gothundreds of people on this
podcast who know AP, and ARreally well, in a paper based
world, manual handling, you'renot going to integrate those.
But as we move now to a digitalexperience, and this integrated
commerce, where AP and AR canmove in a multi channel way, we
(16:31):
have the potential to create amonorail so that an
organization's AP and ARdepartments are no longer siloed
they're actually come together.
And the ability for the outboundpayments and the inbound start
to look like a singularexperience at a corporation. And
(16:55):
that is to me the driving forceand the excitement around the
thesis of where we're taking APand AR. And as we start to knit
together, supplier suppliersnetworks, I am a buyer on one
hand, but I'm a supplier on theother, creating that kind of
integrated network, if you will,a directory of directories is
(17:20):
really I think, where we'regoing in the next three to five
years.
Ernest Rolfson (17:25):
So that's exactly right. If I were either
a software firm listening or apayments firm thinking about how
do I become one or the other,these are the kinds of companies
we specialize in serving atFinexio. We work with a lot of
software platforms that aremanaging billions and spend but
don't know how to introduce apayment solution and how to do
(17:46):
that efficiently and safely. Andso I think to some of you folks
can comment and this but I thinkRonnie you've actually made this
transformation yourself as acommunications company and
adding in FinTech solutions,which is different. So you bring
your own perspective, but you'vebeen successful bringing
integrated payment solutions. Isthere something you would
attribute to that success? Or ifyou were giving your peers
(18:09):
advice in the space what shouldthey be considering? And why is
that worked out so well for you?
Ronnie Selinger (18:14):
Well, the value is not reinventing the wheel.
We created this incredibletechnology that allows our
customers to manage theircommunications from their
desktop. And partnering withpayment companies and fintech
companies that havecomplementary technologies, were
able to bring these solutions tothe market much faster and much
(18:35):
more efficiently than if westarted from ground zero and
just started developing itourselves. So in my opinion,
fintechs really complete thecircle. We're very excited about
bringing b2b payments to ourcustomers as we continue to move
Joe Proto (18:50):
Payments are hard.
Many of us on this podcastdown this path.
remember really well, whenGoogle said they were going to
create Pony Express and become apayments leader. And a lot of us
spent 12 to 18 months of ourlives in and around that project
that, you know, never got out ofthe proverbial, you know,
(19:11):
corral, the pony did not, thepony did not make it. And and
that's Google, right who couldbring a tremendous amount of
capital, talent resources.
There's a reason why paymentscompanies exist. Now, when you
bring technology and bankingtogether, they what can be
(19:33):
created is really incredible andunique. And so I love where
Ronnie has, you know, continuedto reinvent notice over the past
30 years is never looking atwhere he is. He's always looking
at where the marketplace isgoing. And I think Jared has the
same position at Bank ofCalifornia. We have now an
opportunity to look at where thepuck is going to be. And to do
(19:56):
it with technology simply forremembering that payments are
really hard to get right.
Jared Wolff (20:05):
Joe, you're right.
I mean, there, there's a lot offriction and suboptimal decision
in the way businesses makepayments. This is a
transformative time to move awayfrom paper and have some AI and
some digital thinking, helpbusinesses optimize when they
pay and how they pay. You know,why? Why are you paying a vendor
that a bill that's due in 60,why are you paying them in 10,
(20:26):
and doing them in the mostcostly method via check? What
are you going to do to helpchange your decisioning to move
money more efficiently, andincrease your cash flow? And I
think that's what a lot of thistechnology like Finexio, has
really shown businesses, theycan do it differently and save a
lot of money in the process.
Ernest Rolfson (20:47):
We kind of naturally started talking about
some of these benefits of thesethemes we've been talking about.
And I think we're getting asense of why but maybe just for
the group, I mean, why shouldcompanies prioritize this
digital transformation in b2bpayments? What is the
imperative? What, if anything,are you hearing from your
customers, or specifically fromCFOs? I think that'd be
(21:10):
interesting for the group toknow about as you serve your
customers and the kinds ofproblems your customers have,
that you think some of thesepayment solutions are solving
and why you decided to spend abunch of time in this area?
Jared Wolff (21:21):
Happy to start and just say that I think businesses
are much slower to adopt newtechnologies than consumers. And
so we've we felt it was animperative for us to be looking
at how we can serve our clientsand be solution oriented. If
they don't find it from us,they're going to find it from
somebody else eventually. But ifwe can introduce something to
our clients, which we think istruly value add, and help us
(21:46):
become a hub of their financialservices ecosystem, as we
continue to deliver solutions onthe lending side, on the deposit
side and treasury managementthat we can help them on their
payments. It makes us a morecomplete bank. And so we've been
looking at this for a while. Theone thing I would say, just to
go back to something I saidearlier is it is a very
confusing landscape right now,you know, people that are
(22:08):
looking at this for the firsttime, or maybe people that have
looked at this for a while,understand that there are two
competing things going on rightnow, there are the existing
payment rails, which are thelegacy payment rails, which have
plenty of room for optimization,which is what everybody on this
podcast is using daily. And thenthere are the neo payment rails
which are being introduced,which are are still very, very
nascent. These are trulyhighways, and they're their own
(22:31):
toll roads. And you know,infrastructure has not yet been
built on some of them. And youdon't know what type of car you
need to drive smoothly on ityet, and what roads it may
connect to is still unclear. Sowe're focused on the traditional
payment rails, which is whateverybody's using, and how do we
help our clients be mostefficient and optimal on that.
And, you know, we will belooking carefully at at the new
(22:52):
rails, and what they might see.
But I think we are years awayfrom those talking efficiently
and being right for mostclients.
Joe Proto (23:01):
Customer loyalty. I don't mean to be harsh, but it
can be defined by what have youdone for me lately? Whether
you're a consumer or a business,nobody's waiting around. When
there's something better,everyone's ready to move on. And
we're seeing that with thiscomputer, in our pocket. As
(23:22):
individuals, we bring that samekind of thinking to work. And we
expect to have these kinds ofautomated tools at our
fingertips that just work. Andas younger generation now takes
over the financial positions,the senior most financial
positions at cooperationsdriving the market, driving
(23:46):
banks driving their technologypartners to move faster, to
provide better to offersomething that is different and
unique that will help theirbusiness or they move on. It's
no longer a game now wherecompanies will stay with
suppliers that are not keepingup. Everyone needs to move on
(24:08):
for the health and thecompetitive nature of their
business. And there are moreoptions and more choices for
consumers and businesses thanever.
Ernest Rolfson (24:19):
Well said. In terms of barriers here to
digital adoption with customers,and we've touched on I think
that group generally agreesthere's a big lack of awareness
of a lot of these solutions, andit's heavy in education. I'm
just curious what specificbarriers to digital adoption
have you seen? If anyone has anyanecdotes on how you've helped
(24:40):
overcome either your internal orhelping customers adopt digital
solutions and fintech? I thinkthat's very relevant. It's
something we are helping ourpartners with and doing
ourselves every day and evenit's interesting. Some clients
we find have digital payments inplace. They still struggle with
it. And there's even more to doand more service that they're
(25:00):
looking for. That's somethingI'm acutely focused on next
year. But I'm just curious.
Again, we've talked a lot aboutthe benefits and the why and the
vision, but also, introducingsome of the reality of the
barriers or challenges that areyet to overcome, I think is good
to explore,
Ronnie Selinger (25:15):
I could talk on the communication side of the
barriers on digital adoption,when it comes to, you know,
electronic adoption has been areal challenge for customers,
because every consumer wants toreceive something differently.
And we work with our customerson developing communication
(25:36):
strategies, so that we can drivemore digital adoptions, because
in our world, you know, we wantto manage all the communications
and we want to deliver them howthe consumer wants them
delivered. But our customersdefinitely have been faced with
the challenge. If you're, ifyou're using multiple vendors,
if you're using the letter shop,and you're using an email
(25:56):
company in a text messagingcompany, and someone may be
delivered to the wallet, you'vegot data flying all over the
place. And so from a customerstandpoint, that's a real
challenge, because everyone,especially in today's world,
wants to protect their data. Sogetting the consumer to, or
(26:17):
allowing the consumer to receivethe communications, the way they
want to receive, it will makethe payment the way they want to
make it is every customer everycompany needs to look at. And so
you know, we're really, reallyexcited about being in this
space, and helping our customersto manage that process with
(26:38):
their customers. And it is it isa challenge and, you know, on
the business to businesspayments side, you know, being
able to make payments to yourvendors, different ways other
than just your traditional checkwriting, and saving money, and
in perhaps even making somemoney in some cases. That is the
(27:01):
way of the future. And that'swhy we're so excited about
getting into this space, becausewe want to help our customers
become successful with theircustomers.
Ernest Rolfson (27:10):
Yeah, I was just going to add, I mean, the
learnings we've applied atFinexio are the learnings you've
been applying for years in theconsumer, bill payments space,
right? It's, it's, you know,just having one option or one
digital method, when a clientsupplier, that supplier, by the
way, maybe Joe Smith, thecontractor who's a single
(27:32):
individual LLC, who looks andfeels just like a consumer.
Their payment receipt andcommunication preferences may be
very different than AcmeCorporation, the billion dollar
company. And they may want todecide different electronic
payment methods and or differentspeeds with different fees
(27:52):
attached to that based on theirown unique needs. So I've seen
this evolution come fromconsumer that has yet to be
broadly, I think, employed inthe business context. And Joe
made that comment earlier aboutright. It's like, we're all
using these magical smartphonesnow in our day to day life. Why
are we going into the office,and using technology from the
(28:15):
1800s in the office, it doesn'tmake sense. So this is where the
opportunity lies is taking thisinvestment, and innovation and
ease of use, frankly, andconsumer, and bringing that into
the business world now whereagain, a business is really made
up of consumers. And thoseexpectations are now really
coming in in a major way.
Joe Proto (28:35):
It's so funny, because when you look back to
2000, we clear checks, Americais addicted to checks. We clear
checks by sorting them,transporting them to clearing
houses where then they were puton planes. So that the New York
check went to California theCalifornia check went to New
York, even though we had theability to capture the
(29:00):
microline, and the image of thecheck, we still move checks on
airplanes. 9/11 hit and whathappened? We shut down the
ability to move anything forthat period of time. And we
said, well, we've got thistechnology that exists. Why are
we still transporting physicalchecks versus electronic images.
(29:24):
And that's what thattransformation it was a catalyst
9/11 was a catalyst that changedthat electronic check deposit
our experience and and I thinkthat we're seeing the same thing
happen, where it's a little tooclose yet to be aware of it, but
COVID,I think is we-- look wewere told two weeks on the
(29:47):
couch, flatten the curve andeverything is going to go back
to normal. I shut down theMasterCard, New York office on
Thursday, March 12, two yearsago, and now we're finally
starting to see people come backin to the office. So when we
look back, I think a couple ofyears from now we're going to
look at COVID as being this,this real motivation for the
(30:10):
acceptance of technologies thatexist, but are not prolific and
being used as much. And we'llwe'll look at COVID as being a
big reason why we made theshift. Shifted our entire
paradigm in the accountspayable, accounts receivable
space.
Jared Wolff (30:27):
Unquestionably, Joe, you see things ahead of
others. So I'm sure that that'sgoing to turn out to be true. In
terms of the barriers toadoption. Just to comment on
that quickly. Traditionalbarriers to adoption are what
you might find in in manythings, which is, you know,
inertia, right? It's, we'vealways done it this way,
somebody who's holding theticket has to learn to do
(30:48):
something else. And does thatperson really want to invest the
time and energy unless somebodypushes them to do so or they
realize it's going to reallymake their job better, and it's
going to improve the company,we're also finding that there
really isn't one solution,that's great for everybody. And
so we tried to be, you have tohave a basket of solutions that
you can use to help provide theright solution to clients. So
(31:10):
when we see, you know,entertainment companies that we
work with, might need virtualcards as payment methods,
because they can, online, youknow, target how they're used,
when they're used for whatamount and for exactly capture
the right type of understand.
Whereas others who have largerinvoices that are in healthcare,
for example, they might need topay a lot of ACH and move money,
not via cheque but in some othermore efficient way. Or maybe it
(31:34):
is virtual cards, sending themout, but they're doing it in
much larger numbers, and muchgreater volume. So having a
variety of solutions, I think,helps to overcome a lot of
barriers to adoption, and helppeople see that there are
different ways to do this thatare right for them.
Ernest Rolfson (31:53):
I think one of the most remarkable things and
this is kind of taking off ofJoe's story was like, COVID
hits. And now you couldn't go inthe office, but you still had
all these checks. So companiesadopted because there really are
not that many solutions outthere. And it's actually very
hard to even find the web forsolutions to help you. And or
(32:13):
meet every single requirementyou may have, instead of doing
that, but could be brain damagereally hard. It's a very opaque
market, right? It's very if youdon't who has the time to
research, by the way, when wehave to make payments the next
week, right? So folks are goingin to the office. And then, you
know, one day a week just toprint and mail checks. And on
(32:35):
the other side, just to checkthe mailbox to see if any checks
came in the mail, and come andgrab it. So very remarkable that
is actually still going on. Andwhat clients tell us routinely
as a blocker is they're notaware of solutions that are out
there. They need their bank,right, they need their bank of
California adviser to call themand educate them on what's
(32:57):
available, because they don'thave the time to do it
themselves. They don't they'rebusy, business is booming. And
they don't have the resourcesthat are available that are deep
payments experts like some of uson the all of us on the phone
here to know that even what todo with the solution. How could
you get off of paper? If that'sall you know, and that's all
(33:18):
you've ever known? And now youhave to figure it out? There are
no or very few YouTube videosexplaining how to do this. So it
is a challenge. So they'relooking for trust. They're
looking for brand recognition.
They're looking for advisement.
And I think that's why I thinkbanks is a very obvious path
(33:38):
here. Because if I bank with abank, I pretty much trust that
bank implicitly.
Jared Wolff (33:44):
You're right. I mean, that's why to the point, I
mean, there is a lot of teachingand learning going on. And you
know, we have to be looking forthings that are going to help
our clients for all the reasonsthat you mentioned, and then
find a solution that we canintroduce to be ahead of where
they need to be because if wedon't do it again, they're going
to find it from another bank. Sowe've tried to stay ahead of it.
Ernest Rolfson (34:04):
There's certainly some Landgraf dynamics
right now in the market that arethat are very exciting. So
you're all investors in thespace your investors in FinTech,
SEO and b2b payments, whatshould investors be looking for?
Or do you think are interestingto look for in around this b2b
sector? I'd love to just startthere in terms of how you think
(34:27):
investors are thinking about thespace Fintech is been a
phenomenon over the last severalyears, but there's, I think, a
laser focus now also on b2b. Sowe'd love to hear your thoughts.
Joe Proto (34:41):
I have a lot of experience in venture capital,
growth equity, private equity,and have been, you know, the
beneficiary of having mybusinesses supported not just by
traditional financial investors,but my last company had five of
the top 12 banks as investorswith me, Wells, PNC, the third,
(35:06):
TD and Capital One. And, andit's part of this whole thing
that we're talking about wherebanks are not going to be left
behind. Banks are actuallycoming together to pool their
resources and their capital tomake investments in financial
technology, not necessarilybecause of the return on
(35:28):
investment, although that's nota bad thing. But because they
want a seat at the table, tobring that technology into their
bank. To me, that is the mostadvantageous position for a
FinTech to be able to have notjust financial investors, but to
have strategic investors,investors who are driving the
(35:51):
use of capital, not just forreturn, but for creating
something that is going tosupport and improve the industry
and challenge the incumbents tobe able to change with where the
marketplace is going. And youknow, this is a conversation
that I am deeply passionateabout, since retiring from
(36:14):
MasterCard in November. My onlyobjective in this last chapter
of my career, is to help FinTechentrepreneurs, like Ernest, like
you become successful, and to doit in a way that is
collaborative with banks andother strategics. And so there's
a lot of change happening at themacro level, especially when you
(36:36):
look at the public markets,we're seeing some of the high
flyers really being brought downto earth. And I don't mean like
some of the new fintechs I mean,companies like PayPal, that have
been around for, you know, along time and are very, very
well established. The PayPalstock is down, you know, 60 to
(36:56):
70% right now. So we're seeingthis recalibration of the
FinTech investment space, fromventure capital all the way to
the public markets, I think it'sreally healthy. I think it
brings discipline, it bringsnormalization, it can't just be
a growth at any cost, it has tobe one in which you have to
(37:18):
bring value to the market, themarket has to be willing to pay
you for it. And with that, youneed to do it in a way that is
efficient, just like everybusiness, just like that, you
know, the hundreds of people onthis podcast run their
businesses, they run it with alot of efficiency, Jared cannot
go to his board and say, I'mgoing to spend more than I bring
(37:40):
in. That's been a way forfintechs now for a long time.
And I think we're starting tosee some additional maturity in
the investment space.
Ernest Rolfson (37:51):
As board chairman and investor here for
Finexio, what did you see thatwas the most compelling reason
to join, just given your purviewof the entire market, and you
could really spend your timework on any number of things.
Joe Proto (38:06):
I just really have been very lucky my whole career
to be a little bit of where thepuck is going to be not where it
is. And my belief is that thenext three to five years, this
digital transformation of b2b isgoing to be so accelerated, so
dynamic, so exciting. It's goingto help propel a lot of people's
(38:28):
careers into areas where they'llbe successful that they that
they couldn't have even imaginedbefore, there is one footnote
that we're all experiencing,which is this talent war that we
are in, especially intechnology, there is the ability
for people to now switchcompanies switch jobs, switch
(38:52):
careers, and we're seeingsomething that we're at the
early stages of, where FinTechfolks are moving to financial
institutions. Financialinstitution folks are moving
into fintechs. That crosspollenization might be a little
bit painful at times. But Ithink it's fantastic to be able
to see. Ronnie is able toattract and retain talent in his
(39:16):
business that he might not havehad access to before. Because
people want to go to a businessthat's on the cutting edge, and
helping transform. People wantto go to a bank like Banc of
California, because they getopportunities that they might
not have in a tech business ornot in a larger bank. So we're
seeing this, this combination ofthis dynamic change, coupled
(39:41):
with a talent war, where I thinkthe next three to five years,
the winners will emerge. Noteveryone is going to be a
winner, but we can expect peoplein their career moves to really
put amazing things on theirresumes in the next couple of
years.
Ronnie Selinger (40:00):
Just to jump on with Joe saying, I mean, from
the Nordis perspective, youknow, we love the managed hosted
service model. I mean, that'swhat we're all about that is
Expresso. So that is what we'vedeveloped for the communication
and payment space. And, youknow, we've talked a little bit
about COVID, and what its done.
And it's it's been a little bitof a disrupter, and also a
(40:23):
catalyst, right, because changeshave happened so, so quickly.
And I think the, you know,Finexio, and what you're doing
there and what we're doing hereat Nordis, and being able to
have our customers access ourplatforms from wherever they are
in the world, having our teamsworking on their deliverables. I
mean, all those things onoutsourcing, your
(40:47):
communications, your payments,whether your payments are on the
receivable side or other payableside, it's where everything was
moving now, because I think whenwhen COVID hit, you know,
everybody, most companies werestuck. They were stuck either on
the communication side, if youhad a whole team of people.
Well, let's take it a step back.
(41:10):
If you had the communicationsbeing done in house, and you
were shutting down in house, andhow now do you get your bills
out? We've developed expressobecause it was really important
for us to put this in the cloudso that no matter what was going
on at Nordis, our customers wereable to access and manage their
(41:33):
communications. Well, I thinkthe same thing goes on the
Finexio side. You know, Iremember sending a check out for
a bill and I was paying and youknow, I got a call three months
later, that they didn't receiveit. And it was literally sitting
in the lobby, because nobodywent back to the office. And so
this is a disrupter. And this iswhere we're all going. And we're
(41:57):
really excited about beingthere.
Ernest Rolfson (42:00):
In what ways has this group seen the emerging
tech influence the roadmap forfinancial services? And what
does that trend? I don't know ifover the next 10 years, I think
we can speak maybe more crisplyto the next five. But how is
this emerging technologyexplosion here really pushing on
(42:22):
financial services broadly,Jared already made a lot of
interesting comments aroundcrypto and some merging rails.
But I know for me, being able tooffer payments just from the
web. Now anywhere or embeddingpayments solutions via web based
other third party apps has beenincredible for our business. I
wasn't even aware of thattechnology a few years ago, and
(42:43):
now we're using it with ourpartners. I'm curious to see
what other technologies orthings you're really excited
about that will impact yourbusinesses or this industry as a
whole.
Jared Wolff (42:53):
We're really excited about a minute finance
and the ability for our clientsto more efficiently move money
or to tack on a borrowingsolution, for example, to
something which you know, inreal time. So you know, the
ability to process an invoice,click a button and say, hey, I
want to finance that invoicewithout doing a whole lot of
(43:14):
paperwork, is something which Ithink will be a big behavior
change for clients goingforward. I think also the way
that we move money, theexpectation will be that if I
got paid by somebody yesterday,why do I have to wait for
settlement? See that money, youknow, in two days? Why shouldn't
I be able to see it inrelatively real time? Even if
(43:38):
it's provisional credit, whycan't it show up yesterday in my
account? And so I think thatthose two things, being able to
access borrowing solutionsreally quickly. And then to be a
receptor of money reallyquickly, are two things which
are changing and are prettyexciting.
Ronnie Selinger (43:57):
And on the Nordis side, I think the big
word is API's I think that API'stoday have really given us all I
mean, when you have technologypartners, major systems are
talking to create one solutionfor our customers and through
you know, things have moved froma batch processing to it's going
(44:19):
to go out to real time and youknow everything in real time
whether it's communicationspayments on the receivable side
or on the payable side, it'sbeen a big game changer and I
think that the advancement of ofAPI's in our world is just going
to continue to get better andbetter. I mean, you know, it's
changed the world or booking anairline ticket, right? You know,
(44:40):
your airline ticket and thenyou'd wait a long time or you
know, hours if not days to getyour information back and now
it's instant you book a car,it's instant. And I think you
know, payments andcommunications are going the
same way.
Jared Wolff (44:56):
Ronnie, one of the implications of that for us is
the ability to bolt on multiplesolutions for our clients to
access them in a single spot. Sothey're going to be able to come
to us as a financial serviceshub. And we're going to have an
ecosystem where they can tapinto all these solutions, which
we might have connected to viaAPI, if it's core to what we do,
(45:16):
it might be something we investin. But it doesn't have to be
for us to provide it as asolution for our clients don't
have to go to 50 places to finda whole bunch of different
solutions. So I fully agree withyou.
Joe Proto (45:28):
Above are talking about blockchain and digital
currencies. And theadministration just came out
with a, you know, a watershedreport on where we're moving
with, you know, our digitalcurrencies. The whole idea of
embedded finance is alreadyhappened in the consumer space,
whether it's buying my Pelotonor buying a $50 pair of jeans, I
(45:53):
can buy now pay later, we'vejust embedded financial
experience for the consumer thatexisted before maybe with your
card, but now exists outside ofthat card experience. You could
say, it happened so fast, thatwe don't yet know what the
downstream effects may be. Iwould not be surprised if we see
(46:14):
some of that go from what it isto buy now pay, maybe, or even
buy now pay never? Are we kindof laying the seeds for the
next, you know, financial crisisat the consumer level? But when
you look at it for the business,to the business to business
experience, the large enterprisedoesn't necessarily need to
(46:38):
finance their receivables, buttheir suppliers would be willing
to pay for that payment. And sowe're seeing this AP AR
experience merge in a way thatis really, I think healthy. So
the large corporation can say,hey, small business, I'm going
(46:59):
to pay you in 60 days. But Iknow you need that cash flow
faster. I'm willing toaccelerate my payment for a
small discount. And now we'vegot embedded finance happening,
right in the experience betweenbuyer and seller, like we're
seeing between sellers andconsumers in buy now pay later.
Ernest Rolfson (47:22):
I think what's happening here is in b2b,
there's just more steps that arerequired. And that's where the
barriers will come down rightnow. So like I'm working with
Jared on working on, sayembedded finance, but then
Finexio, is then working withsomebody like a Jaggaer, where
we then have to integrate intoprocurement. So then the buyers
(47:44):
have a seamless end to endexperience. The bank knows about
it, has the information, butyou're removing that friction.
So it's multiple steps ofembeddedness, to create that
ultimate experience. And that'swhat's really cool and
transformative. And that may allget triggered because there's an
email delivered by Nordis thatthe supplier might see what
(48:05):
those options that they thenchoose. And maybe eventually
it's a text, maybe it's anemail, maybe, you know, probably
not carrier pigeon, we knowthat. So it's just it's this
dynamicism of the connectionpoints that several of us on the
phone can clearly see. And we'reactively building these bridges.
That's what's really excitingabout the future for me, and
(48:27):
it's completely untapped.
Joe Proto (48:29):
In the meantime, one of the questions that was
written in was, how can I get mycustomers to stop sending their
payment to an old PO box that,you know, my company pretty much
discontinued using years ago.
And so while we're, while we areleaning into this great digital
future, we still have legacysystems out there that have a PO
(48:49):
box on that check that just gotcut, and is being sent to where,
you know, there may be the oddpiece of mail and you can't, you
just can't shut it down.
Ernest Rolfson (49:00):
And the good news is there are solutions out
there in the AR side, and we'relooking to connect to as many of
those as we can. So just a fewminutes left here, and that was
great. We've been talking aboutthe future. I think I'll pause
for a minute and open it up tothe audience. We didn't just
address one audience comment ifthere are any other audience
(49:20):
questions, themes, we didn'ttouch on something you'd like to
revisit or press us on, by allmeans. There's over 100 people
here that we'd be happy toengage with this point. So feel
free to submit through the app.
If there are any questions orcomments, someone sent us some
love. And this is from an actualcustomer that partnering with
the next sale has transformedour AP team. Thank you. So
(49:42):
that's fantastic. Thanks forthat feedback. That is a real
customer of ours and not aplanted question. So thank you,
Daniel. We appreciate you, man.
This was from Jeff. So aquestion here regarding the
strengthening of securitymeasures. and thoughts on on
fraud elimination. I'll make aquick comment on that. I think
(50:05):
one of the ways that companiescan avoid this issue is by
partnering with FinTechsolutions to help manage and
apply technologies to validateand authenticate bank accounts,
identities and store thatcritical information off of the
corporate systems themselves.
That's something we've investedin heavily at Finexio. In moving
(50:25):
money, as Joe will tell you,having those systems in place is
table stakes for doing this. Ithink that is a benefit of
actually adopting some of thesolutions and approaches we've
been talking about is so that isa corporate end user. Why should
you have to really figure thatout or know that yourself,
especially if the technology iscommercially available?
Jared Wolff (50:46):
Ernest, if I can address that for a minute, I
mean, we obviously as a bank areon the frontlines of seeing
this. And fraud most oftenoccurs through actually the
workplace where fraudsters knowthat they can't penetrate a bank
network. But they can likely getinto a less secure network of a
smaller, medium sized business.
And often it's getting access tothe email system, monitoring
email for transactions andwires, and then sending an
(51:07):
instruction, you know,masquerading as something. So I
would encourage everybody tomake sure that they have the
right verification procedures,that they have dual controls in
place, and that they partnerwith first their bank to make
sure that their controls areright. I mean, you really need
to do a review, if you haven'tdone one and make sure that
you're doing it right to protectyourself. But there are
tremendous FinTech solutions.
(51:29):
And that's one of the hugebenefits of fintechs is that
you're going to really bypassthe traditional methods, that
fraud has occurred on andprotect yourself even more.
Ernest Rolfson (51:39):
One last quick thing before we go another
question was around Joe'scomment of never eliminating
payment rails and was just, youknow, how does the industry
promote interoperability? And Iwould say, I think by continuing
to invest in the maintenance andintegrating and keeping these
things alive and active, so thatcustomers continue to have the
(51:59):
choice. I think that's how a lotof our companies have grown. I
don't think they're sunsettinganything to Joe's point, it's
more about how do we make it beeasy to continue to use
alongside everything else?
Okay, great. Well, well,fantastic event, engaging
conversation. This was ourpayments executive roundtable we
heard from Jared Wolff, the CEOof Banc of California, Ronnie
(52:22):
Selinger, the CEO of Nordis, JoeProto the Chairman of Finexio,
and myself, Ernest Robson, CEOat Finexio. Thanks all for being
here.
Thanks, everyone for joining. thanks to Joe and
(00:02):
Ronnie and Jared for coming on.
We're gonna have a really fundiscussion on a number of topics
today, collaboration betweencorporate banks and fintech,
embedded finance solutions,digital adoption of payments,
benefits to end users, all theinvestment excitement that's
been going on in b2b and fintechin general, and hopefully a
little glimpse of the future andwants to come as well. So just
(00:23):
by way of intro, Ernest Robson,founder and CEO for Nexio were
an accounts payable payments asa service company embedding
payments and cash flow toolsdirectly within large AP
procurement and financialinstitutions services to help
end customers manage theirbusiness payments. So with that,
I'd like to just go around andlet the other esteemed
(00:46):
colleagues and friends hereintroduce themselves and let the
listeners learn a little bitabout each of them their company
and role. So I'll just go aroundmy screen the way I see it,
maybe we can start off withRonnie and hear a little bit
from you.
Ronnie Selinger (00:59):
Thanks, Ernest.
Ronnie Selinger, president andCEO of Nordis Technologies.
Nordis is a communicationmanagement company that has
gotten into payments as well.
And we manage communications andthe print, the digital as well
as payments for our clientsthroughout the country.
Ernest Rolfson (01:17):
Thanks so much, Jared, how about you?
Jared Wolff (01:19):
Thank you, Ernest, for having me here today. I'm
certainly thrilled toparticipate with all of you. I'm
Jared Wolff, President and CEOof Banc of California. We're a
nine and a half billion dollarcommercial bank headquartered in
Southern California. One of thelarger banks headquartered here,
we specialize in deliveringrelationship focused solutions
to our clients in lendingdeposits and treasury management
(01:39):
and payments, and helping ourclients grow their businesses
and improve their cash flow andoperational efficiency.
Ernest Rolfson (01:45):
Thanks so much, Joe. Great to see you.
Joe Proto (01:47):
Hi, everybody, Joe Proto here, particularly honored
to be here with Ronnie andJared. Now we have a big
audience. And I know we've got alot to cover. I'm a serial
entrepreneur in the paymentsindustry for 40 years, built and
sold my first company toCorestates bank in 1992, which
is, of course, now part of WellsFargo, sold my next company to
(02:10):
FirstData and now part of FiServback in 2000. And sold my third
payments company to MasterCardin 2019. Retired, semi-retired,
from MasterCard in November. AndI am chairman of Finexio, and
honored to be serving aschairman at Finexio.
Ernest Rolfson (02:31):
Thanks for being here. The intros I think we're
gonna have a really funconversation. Just to start the
discussion, I think, you know,Jared, and Ronnie your CEOs of
companies in and around andserving customers with FinTech
and payment related products tomeet various Treasury needs, I
guess, be great to talk abouthow your organization's have
(02:52):
evolved, or are evolving to meetthe expectations of your
business customers today, andjust how you think about that
continued evolution andinvestment you're both doing.
Ronnie Selinger (03:03):
So a big part of the way I run my business is
listening to our customers andleveraging technology to solve
their problems. And so we'vebeen a communications company
and so we manage billing andcommunication for our customers.
Part of what we've needed to doover the years is build a second
facility so that we could havedisaster recovery is when our
(03:27):
customers were concerned aboutwhether or not their stuff was
going to get out. We're here inFlorida. And in Florida, we all
know there are hurricanes. Andso as we've evolved, our print
and mail business, we've evolvedit by expanding and having
multiple locations. The otherthing that on our side is
(03:48):
expanding communicationsdigitally. So email, text
messaging, deliveringcommunications right to the
someone's Android or Applewallet, that's been another
another area of growth for us,as everybody knows
communications today are omnichannel. And we've got to be
able to deliver thosecommunications for our customers
the way the consumer wants toreceive them.
Jared Wolff (04:11):
Similar to Ronnie, was well said, I mean, we are a
business bank in a wide varietyserving a wide variety of
businesses in sectors rangingfrom professional services and
real estate to healthcare,software, manufacturing, and
media and entertainment. Andwith the disruption that's
occurring in payments,businesses want more digital
integration between theirbanking and their operations. So
(04:32):
it's easier to move money andeasier to get things done. This
is probably one of the mostexciting times in my career in
terms of the the amount ofinnovation that's occurring in
such a short period of time. Butwhether it's a digital loan
application that automateautomatically uploads last
year's financials and taxreturns for loan renewal, high
volume Mobile deposit oroptimizing cash flow. From my
(04:54):
perspective, clients really wanta tech forward solution that's
efficient and not paper based.
And so The expectations ofclients today and particularly
businesses has just, I think hasaccelerated certainly through
the pandemic. And in terms ofwanting to find solutions that
are digitally focused and thingsthat can make them more
efficient.
Ernest Rolfson (05:14):
That's fantastic. I want to shift into
I think a natural extension ofthat coming off of Jareds
comments is around thatcollaboration between banks and
fintech. I think most banks, ifnot every bank in the country is
thinking about this. I know allof us on the call have been
working with and serving eitherworking at banks or providing
(05:35):
products and services with andthrough banks. So I think this
is very topical. We have somereal thought leaders on this
call here. Maybe Joe can leadthe comment here is how have you
seen in your career, I thinkespecially with Transactis how
payments software has helpedbanks deliver a better customer
experience.
Joe Proto (05:52):
Yes. And now for decades in the payments
industry. And the reason I'vebeen so engaged and never, ever
thought of moving on is becausepayments are so dynamic. And
they change every five to 10years. I mean, think about our
own lives, and how we interactwith our friends, our colleagues
(06:12):
and other businesses, thatdynamic changes are just so
exciting. So it continues toevolve. What's different is the
pace of change is faster thanever, the FinTech bank dynamics,
for those on the FinTech side,who all the way over at one end
of the spectrum, who think banksare being left behind, I would
(06:36):
caution them to be aware thatbanks are extremely healthy and
progressive. To quote JamieDimon CEO of JPMorgan Chase.
He's investing heavily intechnology, and believes in
building buying and partneringwith fintech. So we really have
a whole new generation ofyounger bank CEOs like Jared who
(07:01):
are not only embracingtechnology, but helping lead
banks forward in where we'regoing. On the other side, for
banks that are not moving fastenough, then I think that there
are challenges and risks tothem, where they won't be able
to keep up and serve theircustomers adequately. So the
(07:24):
pace of change is one in which Idon't believe we've ever seen
before. COVID is a supercatalyst for this change,
especially in b2b digitaltransformation. Working from
home has changed. Everythingthat we expected to be able to
do in the past, versus where weare today. Mark Cuban, the the
(07:48):
entrepreneur and famous SharkTank investor said software is
going to write software. He saidthat five years ago, yes, we
will have you know, self drivingcars someday, but not anytime
soon. Nor will we have softwarewrite itself. So the coming
together of banks and fintechsworking in unison, I think is
still the magic formula forsuccess in the future.
Jared Wolff (08:12):
Joe, I couldn't agree with you more. I mean,
fintechs, if anything, areaccelerants for the marketplace.
And they've been able to helpintroduce to banks streamline
ways to do things, there's a youknow, there's a lot of dating
and and marrying going on rightnow between banks and fintechs
in terms of trying to find theright partnerships.
(08:33):
Fundamentally, what I see fromfrom the banking side is, you
know, fintechs have reallyintroduced a novel and more
streamlined ways for buyers andsellers to engage with each
other. When you look at theecosystem today, there are
really two things going on. Fromour perspective. You have
innovation occurring on thelegacy and dominant payment
rails. And you have innovationthat's occurring on to introduce
(08:54):
new payment rails, viablockchain and stable coin, and
probably some others as well.
And while both are exciting,from our perspective, we're
focused on delivering to ourclients more efficiently on
existing payment rails, whetherit's via fed or MasterCard and
Visa with innovative solutions,because I think there's a lot of
room for improvement. And itrequires a lot less adoption,
and can have a higher impactimmediately. We're closely
(09:17):
watching innovation, you know,using a theorem and provenance,
but it kind of feels to me likewe're in the very early first
inning. And it's like a bet, youknow, are we going to choose VHS
or Betamax, and then LaserDiscis probably going to come along,
and then blu ray and then somenovel disruption, like digital
streaming equivalent. So for us,these are all competing
(09:39):
platforms with no crosstalk yougot multiple challenges of
collective action, selectiveadoption, and there's still
intermediary tokenisation thatneeds to make this stuff work,
which might even be lessefficient than fed down. So we
think that there's a lot thatfintechs can share with us to
help deliver solutions to ourclients more efficiently today,
using the existing pay rails andtry to reduce the friction and
(10:01):
optimize how things are done.
And I think there's just tons ofroom there.
Ernest Rolfson (10:07):
If you can comment, I mean, what do you
feel like the difference mightbe just for listener like, say
if I'm a business, right? Oreven if Im consumer, like the
experience or difference oflike, say, maybe interacting on
payments with my bank versus aFinTech today? And is it more
like the customer demand that'sdriving some of these
(10:28):
differences? Or the banks arethe ones that are driving? It
feels like based on Jared'scomments, certainly Jared is
thinking about how do we pushthe bank forward to meet some of
these needs? But I'm justcurious about what is there a
difference in feeling or is italso just to cater some
capability gaps that don't existin the market, and all of you
are, but you're working withbanks are serving banks, or
you've developed FinTechcapability. So very topical.
Jared Wolff (10:52):
I think that there's a difference on the
consumer side. And on that onthe business side. So I would
say on the consumer side,innovation occurred much more
quickly, with startups that thatcreated new front ends to allow
consumers to get services moreefficiently more quickly,
whether it was through chime orsquare, or the equivalents, I
would say on the business side,banks have played a leading role
in helping deliver solutions toclients to help them see what
(11:15):
they could do better, it's muchmore disaggregated, in terms of
businesses, finding solutions,and banks can really be the
innovators and delivery systemsto their clients. That's how we
see it.
Ronnie Selinger (11:26):
And on the delivery system side, which is,
you know, the side I deliver on,you know, consumers have
choices, I think it was easy, atthe very beginning, right,
because we printed mailedeverything. But today, there are
choices, and the consumer hasthe choices. And so in customers
have to be able to deliver thosecommunications and taking those
(11:47):
payments, how the consumer wantsto get them and how the wants to
receive them.
Joe Proto (11:53):
We're in a field here. And especially in the US
market, in particular, we addnew payment types, but we never
retire old ones. Look, you go toyou go to the convenience store,
and you get changed withpennies, or nickels that nobody
wants and leaves on the counter.
As a country, we're stillproducing pennies, although it
(12:14):
costs us more than a penny tocreate it. So we keep adding
this whole multi channelexperience for consumers as well
as businesses and I like aboutthis panel in particular is
we've got a communicationscompany and a bank. And when you
look at where we are and wherewe're going, it's about this
integration of data and dollars.
(12:37):
And customers, whether you're aconsumer or a business, wanted,
fast, wanted accurate, wantedfriction free, and wanted to do
the thinking for me, so that Idon't have to do that. And and
when you look at thisintegration of data and dollars,
the winners I think for thefuture will be the ones that
(12:59):
serve the marketplace in thisomni channel world that we live
in as much immediacy in realtime as possible, frictionless
and cost effective.
Ernest Rolfson (13:11):
Yeah, well said Well said, I thought for a
minute we were going to talkabout something that no one
talks about, which is a piggybank lobby, and how they may be
behind the scenes keep copies,these pennies and nickels that
we have to deal with. That's foranother day, though. Joe, your
last comments. I think the segueinto this next session around
embedded finance and all four ofus here are working together to
(13:34):
bring streamlined customerexperiences to the marketplace,
right notice would focus onreceivables, helping clients
receive payments help consumersreceive FInexio on the payable
side, Bank of California,certainly leading with Treasury
Management and lendingsolutions. We're seeing a lot of
innovation and a departure fromthe status quo in our sectors.
(13:58):
And so I think it'd beinteresting just to learn how
your companies are navigatingsome of these new approaches.
And as it relates to that, howhave you helped or thinking
about helping your customers seethe need for engaging with these
new solutions that we've beenbringing?
Ronnie Selinger (14:15):
We've seen a value in digital consumer
payments from our customers. Andwe're a big believer in b2b
payments, and this is somethingcustomers need and we're talking
with the same customer that ison the communication consumer
payments side as the business tobusiness side and the b2b
payments, it's you know,certainly in what Finexio is
(14:38):
doing, more efficient, moreproductive, better experience to
the consumer. And so we arereally excited about bringing
business to business payments toour customers because we'll look
at it and and we feel it's justan extension on what we
currently do for our customers.
Jared Wolff (14:57):
I would say that from our perspective in terms of
How are customers thinking aboutpayments, demand is growing. But
I think a lot of what we'redoing is making technology
available to help our clientssee the benefits. And I feel
that's part of our core missionto be a little bit ahead of what
our clients may need, and thenintroduce them to things that
can help them be more efficient.
There is a learning curve andsome teaching involved. I would
(15:19):
say that clients are respondingreally well. And certainly that
those have that have adoptedways to optimize payments are
seeing benefit, it's not foreveryone, but certainly with you
know, the way that that we seefor Nexio and the like, it's not
for everyone. But if yourminimum payments is 50 to 100
grand a month, you're going tostart seeing some benefits
today. And you know, that's whowe're focused on is helping
(15:41):
clients of that size reallystart to to see benefits. And I
think it's going to roll fromthere.
Joe Proto (15:47):
I think it helps to look at the history of accounts
payable and accounts receivablein particular, because that's
the lifeblood of every business,being able to get money in being
able to pay your suppliers andvendors. In a paper based world.
They are two rails of a traintrack, AP and AR. That never
(16:09):
meet, right? They're distinct.
And, you know, we've gothundreds of people on this
podcast who know AP, and ARreally well, in a paper based
world, manual handling, you'renot going to integrate those.
But as we move now to a digitalexperience, and this integrated
commerce, where AP and AR canmove in a multi channel way, we
(16:31):
have the potential to create amonorail so that an
organization's AP and ARdepartments are no longer siloed
they're actually come together.
And the ability for the outboundpayments and the inbound start
to look like a singularexperience at a corporation. And
(16:55):
that is to me the driving forceand the excitement around the
thesis of where we're taking APand AR. And as we start to knit
together, supplier suppliersnetworks, I am a buyer on one
hand, but I'm a supplier on theother, creating that kind of
integrated network, if you will,a directory of directories is
(17:20):
really I think, where we'regoing in the next three to five
years.
Ernest Rolfson (17:25):
So that's exactly right. If I were either
a software firm listening or apayments firm thinking about how
do I become one or the other,these are the kinds of companies
we specialize in serving atFinexio. We work with a lot of
software platforms that aremanaging billions and spend but
don't know how to introduce apayment solution and how to do
(17:46):
that efficiently and safely. Andso I think to some of you folks
can comment and this but I thinkRonnie you've actually made this
transformation yourself as acommunications company and
adding in FinTech solutions,which is different. So you bring
your own perspective, but you'vebeen successful bringing
integrated payment solutions. Isthere something you would
attribute to that success? Or ifyou were giving your peers
(18:09):
advice in the space what shouldthey be considering? And why is
that worked out so well for you?
Ronnie Selinger (18:14):
Well, the value is not reinventing the wheel.
We created this incredibletechnology that allows our
customers to manage theircommunications from their
desktop. And partnering withpayment companies and fintech
companies that havecomplementary technologies, were
able to bring these solutions tothe market much faster and much
(18:35):
more efficiently than if westarted from ground zero and
just started developing itourselves. So in my opinion,
fintechs really complete thecircle. We're very excited about
bringing b2b payments to ourcustomers as we continue to move
Joe Proto (18:50):
Payments are hard.
Many of us on this podcastdown this path.
remember really well, whenGoogle said they were going to
create Pony Express and become apayments leader. And a lot of us
spent 12 to 18 months of ourlives in and around that project
that, you know, never got out ofthe proverbial, you know,
(19:11):
corral, the pony did not, thepony did not make it. And and
that's Google, right who couldbring a tremendous amount of
capital, talent resources.
There's a reason why paymentscompanies exist. Now, when you
bring technology and bankingtogether, they what can be
(19:33):
created is really incredible andunique. And so I love where
Ronnie has, you know, continuedto reinvent notice over the past
30 years is never looking atwhere he is. He's always looking
at where the marketplace isgoing. And I think Jared has the
same position at Bank ofCalifornia. We have now an
opportunity to look at where thepuck is going to be. And to do
(19:56):
it with technology simply forremembering that payments are
really hard to get right.
Jared Wolff (20:05):
Joe, you're right.
I mean, there, there's a lot offriction and suboptimal decision
in the way businesses makepayments. This is a
transformative time to move awayfrom paper and have some AI and
some digital thinking, helpbusinesses optimize when they
pay and how they pay. You know,why? Why are you paying a vendor
that a bill that's due in 60,why are you paying them in 10,
(20:26):
and doing them in the mostcostly method via check? What
are you going to do to helpchange your decisioning to move
money more efficiently, andincrease your cash flow? And I
think that's what a lot of thistechnology like Finexio, has
really shown businesses, theycan do it differently and save a
lot of money in the process.
Ernest Rolfson (20:47):
We kind of naturally started talking about
some of these benefits of thesethemes we've been talking about.
And I think we're getting asense of why but maybe just for
the group, I mean, why shouldcompanies prioritize this
digital transformation in b2bpayments? What is the
imperative? What, if anything,are you hearing from your
customers, or specifically fromCFOs? I think that'd be
(21:10):
interesting for the group toknow about as you serve your
customers and the kinds ofproblems your customers have,
that you think some of thesepayment solutions are solving
and why you decided to spend abunch of time in this area?
Jared Wolff (21:21):
Happy to start and just say that I think businesses
are much slower to adopt newtechnologies than consumers. And
so we've we felt it was animperative for us to be looking
at how we can serve our clientsand be solution oriented. If
they don't find it from us,they're going to find it from
somebody else eventually. But ifwe can introduce something to
our clients, which we think istruly value add, and help us
(21:46):
become a hub of their financialservices ecosystem, as we
continue to deliver solutions onthe lending side, on the deposit
side and treasury managementthat we can help them on their
payments. It makes us a morecomplete bank. And so we've been
looking at this for a while. Theone thing I would say, just to
go back to something I saidearlier is it is a very
confusing landscape right now,you know, people that are
(22:08):
looking at this for the firsttime, or maybe people that have
looked at this for a while,understand that there are two
competing things going on rightnow, there are the existing
payment rails, which are thelegacy payment rails, which have
plenty of room for optimization,which is what everybody on this
podcast is using daily. And thenthere are the neo payment rails
which are being introduced,which are are still very, very
nascent. These are trulyhighways, and they're their own
(22:31):
toll roads. And you know,infrastructure has not yet been
built on some of them. And youdon't know what type of car you
need to drive smoothly on ityet, and what roads it may
connect to is still unclear. Sowe're focused on the traditional
payment rails, which is whateverybody's using, and how do we
help our clients be mostefficient and optimal on that.
And, you know, we will belooking carefully at at the new
(22:52):
rails, and what they might see.
But I think we are years awayfrom those talking efficiently
and being right for mostclients.
Joe Proto (23:01):
Customer loyalty. I don't mean to be harsh, but it
can be defined by what have youdone for me lately? Whether
you're a consumer or a business,nobody's waiting around. When
there's something better,everyone's ready to move on. And
we're seeing that with thiscomputer, in our pocket. As
(23:22):
individuals, we bring that samekind of thinking to work. And we
expect to have these kinds ofautomated tools at our
fingertips that just work. Andas younger generation now takes
over the financial positions,the senior most financial
positions at cooperationsdriving the market, driving
(23:46):
banks driving their technologypartners to move faster, to
provide better to offersomething that is different and
unique that will help theirbusiness or they move on. It's
no longer a game now wherecompanies will stay with
suppliers that are not keepingup. Everyone needs to move on
(24:08):
for the health and thecompetitive nature of their
business. And there are moreoptions and more choices for
consumers and businesses thanever.
Ernest Rolfson (24:19):
Well said. In terms of barriers here to
digital adoption with customers,and we've touched on I think
that group generally agreesthere's a big lack of awareness
of a lot of these solutions, andit's heavy in education. I'm
just curious what specificbarriers to digital adoption
have you seen? If anyone has anyanecdotes on how you've helped
(24:40):
overcome either your internal orhelping customers adopt digital
solutions and fintech? I thinkthat's very relevant. It's
something we are helping ourpartners with and doing
ourselves every day and evenit's interesting. Some clients
we find have digital payments inplace. They still struggle with
it. And there's even more to doand more service that they're
(25:00):
looking for. That's somethingI'm acutely focused on next
year. But I'm just curious.
Again, we've talked a lot aboutthe benefits and the why and the
vision, but also, introducingsome of the reality of the
barriers or challenges that areyet to overcome, I think is good
to explore,
Ronnie Selinger (25:15):
I could talk on the communication side of the
barriers on digital adoption,when it comes to, you know,
electronic adoption has been areal challenge for customers,
because every consumer wants toreceive something differently.
And we work with our customerson developing communication
(25:36):
strategies, so that we can drivemore digital adoptions, because
in our world, you know, we wantto manage all the communications
and we want to deliver them howthe consumer wants them
delivered. But our customersdefinitely have been faced with
the challenge. If you're, ifyou're using multiple vendors,
if you're using the letter shop,and you're using an email
(25:56):
company in a text messagingcompany, and someone may be
delivered to the wallet, you'vegot data flying all over the
place. And so from a customerstandpoint, that's a real
challenge, because everyone,especially in today's world,
wants to protect their data. Sogetting the consumer to, or
(26:17):
allowing the consumer to receivethe communications, the way they
want to receive, it will makethe payment the way they want to
make it is every customer everycompany needs to look at. And so
you know, we're really, reallyexcited about being in this
space, and helping our customersto manage that process with
(26:38):
their customers. And it is it isa challenge and, you know, on
the business to businesspayments side, you know, being
able to make payments to yourvendors, different ways other
than just your traditional checkwriting, and saving money, and
in perhaps even making somemoney in some cases. That is the
(27:01):
way of the future. And that'swhy we're so excited about
getting into this space, becausewe want to help our customers
become successful with theircustomers.
Ernest Rolfson (27:10):
Yeah, I was just going to add, I mean, the
learnings we've applied atFinexio are the learnings you've
been applying for years in theconsumer, bill payments space,
right? It's, it's, you know,just having one option or one
digital method, when a clientsupplier, that supplier, by the
way, maybe Joe Smith, thecontractor who's a single
(27:32):
individual LLC, who looks andfeels just like a consumer.
Their payment receipt andcommunication preferences may be
very different than AcmeCorporation, the billion dollar
company. And they may want todecide different electronic
payment methods and or differentspeeds with different fees
(27:52):
attached to that based on theirown unique needs. So I've seen
this evolution come fromconsumer that has yet to be
broadly, I think, employed inthe business context. And Joe
made that comment earlier aboutright. It's like, we're all
using these magical smartphonesnow in our day to day life. Why
are we going into the office,and using technology from the
(28:15):
1800s in the office, it doesn'tmake sense. So this is where the
opportunity lies is taking thisinvestment, and innovation and
ease of use, frankly, andconsumer, and bringing that into
the business world now whereagain, a business is really made
up of consumers. And thoseexpectations are now really
coming in in a major way.
Joe Proto (28:35):
It's so funny, because when you look back to
2000, we clear checks, Americais addicted to checks. We clear
checks by sorting them,transporting them to clearing
houses where then they were puton planes. So that the New York
check went to California theCalifornia check went to New
York, even though we had theability to capture the
(29:00):
microline, and the image of thecheck, we still move checks on
airplanes. 9/11 hit and whathappened? We shut down the
ability to move anything forthat period of time. And we
said, well, we've got thistechnology that exists. Why are
we still transporting physicalchecks versus electronic images.
(29:24):
And that's what thattransformation it was a catalyst
9/11 was a catalyst that changedthat electronic check deposit
our experience and and I thinkthat we're seeing the same thing
happen, where it's a little tooclose yet to be aware of it, but
COVID,I think is we-- look wewere told two weeks on the
(29:47):
couch, flatten the curve andeverything is going to go back
to normal. I shut down theMasterCard, New York office on
Thursday, March 12, two yearsago, and now we're finally
starting to see people come backin to the office. So when we
look back, I think a couple ofyears from now we're going to
look at COVID as being this,this real motivation for the
(30:10):
acceptance of technologies thatexist, but are not prolific and
being used as much. And we'llwe'll look at COVID as being a
big reason why we made theshift. Shifted our entire
paradigm in the accountspayable, accounts receivable
space.
Jared Wolff (30:27):
Unquestionably, Joe, you see things ahead of
others. So I'm sure that that'sgoing to turn out to be true. In
terms of the barriers toadoption. Just to comment on
that quickly. Traditionalbarriers to adoption are what
you might find in in manythings, which is, you know,
inertia, right? It's, we'vealways done it this way,
somebody who's holding theticket has to learn to do
(30:48):
something else. And does thatperson really want to invest the
time and energy unless somebodypushes them to do so or they
realize it's going to reallymake their job better, and it's
going to improve the company,we're also finding that there
really isn't one solution,that's great for everybody. And
so we tried to be, you have tohave a basket of solutions that
you can use to help provide theright solution to clients. So
(31:10):
when we see, you know,entertainment companies that we
work with, might need virtualcards as payment methods,
because they can, online, youknow, target how they're used,
when they're used for whatamount and for exactly capture
the right type of understand.
Whereas others who have largerinvoices that are in healthcare,
for example, they might need topay a lot of ACH and move money,
not via cheque but in some othermore efficient way. Or maybe it
(31:34):
is virtual cards, sending themout, but they're doing it in
much larger numbers, and muchgreater volume. So having a
variety of solutions, I think,helps to overcome a lot of
barriers to adoption, and helppeople see that there are
different ways to do this thatare right for them.
Ernest Rolfson (31:53):
I think one of the most remarkable things and
this is kind of taking off ofJoe's story was like, COVID
hits. And now you couldn't go inthe office, but you still had
all these checks. So companiesadopted because there really are
not that many solutions outthere. And it's actually very
hard to even find the web forsolutions to help you. And or
(32:13):
meet every single requirementyou may have, instead of doing
that, but could be brain damagereally hard. It's a very opaque
market, right? It's very if youdon't who has the time to
research, by the way, when wehave to make payments the next
week, right? So folks are goingin to the office. And then, you
know, one day a week just toprint and mail checks. And on
(32:35):
the other side, just to checkthe mailbox to see if any checks
came in the mail, and come andgrab it. So very remarkable that
is actually still going on. Andwhat clients tell us routinely
as a blocker is they're notaware of solutions that are out
there. They need their bank,right, they need their bank of
California adviser to call themand educate them on what's
(32:57):
available, because they don'thave the time to do it
themselves. They don't they'rebusy, business is booming. And
they don't have the resourcesthat are available that are deep
payments experts like some of uson the all of us on the phone
here to know that even what todo with the solution. How could
you get off of paper? If that'sall you know, and that's all
(33:18):
you've ever known? And now youhave to figure it out? There are
no or very few YouTube videosexplaining how to do this. So it
is a challenge. So they'relooking for trust. They're
looking for brand recognition.
They're looking for advisement.
And I think that's why I thinkbanks is a very obvious path
(33:38):
here. Because if I bank with abank, I pretty much trust that
bank implicitly.
Jared Wolff (33:44):
You're right. I mean, that's why to the point, I
mean, there is a lot of teachingand learning going on. And you
know, we have to be looking forthings that are going to help
our clients for all the reasonsthat you mentioned, and then
find a solution that we canintroduce to be ahead of where
they need to be because if wedon't do it again, they're going
to find it from another bank. Sowe've tried to stay ahead of it.
Ernest Rolfson (34:04):
There's certainly some Landgraf dynamics
right now in the market that arethat are very exciting. So
you're all investors in thespace your investors in FinTech,
SEO and b2b payments, whatshould investors be looking for?
Or do you think are interestingto look for in around this b2b
sector? I'd love to just startthere in terms of how you think
(34:27):
investors are thinking about thespace Fintech is been a
phenomenon over the last severalyears, but there's, I think, a
laser focus now also on b2b. Sowe'd love to hear your thoughts.
Joe Proto (34:41):
I have a lot of experience in venture capital,
growth equity, private equity,and have been, you know, the
beneficiary of having mybusinesses supported not just by
traditional financial investors,but my last company had five of
the top 12 banks as investorswith me, Wells, PNC, the third,
(35:06):
TD and Capital One. And, andit's part of this whole thing
that we're talking about wherebanks are not going to be left
behind. Banks are actuallycoming together to pool their
resources and their capital tomake investments in financial
technology, not necessarilybecause of the return on
(35:28):
investment, although that's nota bad thing. But because they
want a seat at the table, tobring that technology into their
bank. To me, that is the mostadvantageous position for a
FinTech to be able to have notjust financial investors, but to
have strategic investors,investors who are driving the
(35:51):
use of capital, not just forreturn, but for creating
something that is going tosupport and improve the industry
and challenge the incumbents tobe able to change with where the
marketplace is going. And youknow, this is a conversation
that I am deeply passionateabout, since retiring from
(36:14):
MasterCard in November. My onlyobjective in this last chapter
of my career, is to help FinTechentrepreneurs, like Ernest, like
you become successful, and to doit in a way that is
collaborative with banks andother strategics. And so there's
a lot of change happening at themacro level, especially when you
(36:36):
look at the public markets,we're seeing some of the high
flyers really being brought downto earth. And I don't mean like
some of the new fintechs I mean,companies like PayPal, that have
been around for, you know, along time and are very, very
well established. The PayPalstock is down, you know, 60 to
(36:56):
70% right now. So we're seeingthis recalibration of the
FinTech investment space, fromventure capital all the way to
the public markets, I think it'sreally healthy. I think it
brings discipline, it bringsnormalization, it can't just be
a growth at any cost, it has tobe one in which you have to
(37:18):
bring value to the market, themarket has to be willing to pay
you for it. And with that, youneed to do it in a way that is
efficient, just like everybusiness, just like that, you
know, the hundreds of people onthis podcast run their
businesses, they run it with alot of efficiency, Jared cannot
go to his board and say, I'mgoing to spend more than I bring
(37:40):
in. That's been a way forfintechs now for a long time.
And I think we're starting tosee some additional maturity in
the investment space.
Ernest Rolfson (37:51):
As board chairman and investor here for
Finexio, what did you see thatwas the most compelling reason
to join, just given your purviewof the entire market, and you
could really spend your timework on any number of things.
Joe Proto (38:06):
I just really have been very lucky my whole career
to be a little bit of where thepuck is going to be not where it
is. And my belief is that thenext three to five years, this
digital transformation of b2b isgoing to be so accelerated, so
dynamic, so exciting. It's goingto help propel a lot of people's
(38:28):
careers into areas where they'llbe successful that they that
they couldn't have even imaginedbefore, there is one footnote
that we're all experiencing,which is this talent war that we
are in, especially intechnology, there is the ability
for people to now switchcompanies switch jobs, switch
(38:52):
careers, and we're seeingsomething that we're at the
early stages of, where FinTechfolks are moving to financial
institutions. Financialinstitution folks are moving
into fintechs. That crosspollenization might be a little
bit painful at times. But Ithink it's fantastic to be able
to see. Ronnie is able toattract and retain talent in his
(39:16):
business that he might not havehad access to before. Because
people want to go to a businessthat's on the cutting edge, and
helping transform. People wantto go to a bank like Banc of
California, because they getopportunities that they might
not have in a tech business ornot in a larger bank. So we're
seeing this, this combination ofthis dynamic change, coupled
(39:41):
with a talent war, where I thinkthe next three to five years,
the winners will emerge. Noteveryone is going to be a
winner, but we can expect peoplein their career moves to really
put amazing things on theirresumes in the next couple of
years.
Ronnie Selinger (40:00):
Just to jump on with Joe saying, I mean, from
the Nordis perspective, youknow, we love the managed hosted
service model. I mean, that'swhat we're all about that is
Expresso. So that is what we'vedeveloped for the communication
and payment space. And, youknow, we've talked a little bit
about COVID, and what its done.
And it's it's been a little bitof a disrupter, and also a
(40:23):
catalyst, right, because changeshave happened so, so quickly.
And I think the, you know,Finexio, and what you're doing
there and what we're doing hereat Nordis, and being able to
have our customers access ourplatforms from wherever they are
in the world, having our teamsworking on their deliverables. I
mean, all those things onoutsourcing, your
(40:47):
communications, your payments,whether your payments are on the
receivable side or other payableside, it's where everything was
moving now, because I think whenwhen COVID hit, you know,
everybody, most companies werestuck. They were stuck either on
the communication side, if youhad a whole team of people.
Well, let's take it a step back.
(41:10):
If you had the communicationsbeing done in house, and you
were shutting down in house, andhow now do you get your bills
out? We've developed expressobecause it was really important
for us to put this in the cloudso that no matter what was going
on at Nordis, our customers wereable to access and manage their
(41:33):
communications. Well, I thinkthe same thing goes on the
Finexio side. You know, Iremember sending a check out for
a bill and I was paying and youknow, I got a call three months
later, that they didn't receiveit. And it was literally sitting
in the lobby, because nobodywent back to the office. And so
this is a disrupter. And this iswhere we're all going. And we're
(41:57):
really excited about beingthere.
Ernest Rolfson (42:00):
In what ways has this group seen the emerging
tech influence the roadmap forfinancial services? And what
does that trend? I don't know ifover the next 10 years, I think
we can speak maybe more crisplyto the next five. But how is
this emerging technologyexplosion here really pushing on
(42:22):
financial services broadly,Jared already made a lot of
interesting comments aroundcrypto and some merging rails.
But I know for me, being able tooffer payments just from the
web. Now anywhere or embeddingpayments solutions via web based
other third party apps has beenincredible for our business. I
wasn't even aware of thattechnology a few years ago, and
(42:43):
now we're using it with ourpartners. I'm curious to see
what other technologies orthings you're really excited
about that will impact yourbusinesses or this industry as a
whole.
Jared Wolff (42:53):
We're really excited about a minute finance
and the ability for our clientsto more efficiently move money
or to tack on a borrowingsolution, for example, to
something which you know, inreal time. So you know, the
ability to process an invoice,click a button and say, hey, I
want to finance that invoicewithout doing a whole lot of
(43:14):
paperwork, is something which Ithink will be a big behavior
change for clients goingforward. I think also the way
that we move money, theexpectation will be that if I
got paid by somebody yesterday,why do I have to wait for
settlement? See that money, youknow, in two days? Why shouldn't
I be able to see it inrelatively real time? Even if
(43:38):
it's provisional credit, whycan't it show up yesterday in my
account? And so I think thatthose two things, being able to
access borrowing solutionsreally quickly. And then to be a
receptor of money reallyquickly, are two things which
are changing and are prettyexciting.
Ronnie Selinger (43:57):
And on the Nordis side, I think the big
word is API's I think that API'stoday have really given us all I
mean, when you have technologypartners, major systems are
talking to create one solutionfor our customers and through
you know, things have moved froma batch processing to it's going
(44:19):
to go out to real time and youknow everything in real time
whether it's communicationspayments on the receivable side
or on the payable side, it'sbeen a big game changer and I
think that the advancement of ofAPI's in our world is just going
to continue to get better andbetter. I mean, you know, it's
changed the world or booking anairline ticket, right? You know,
(44:40):
your airline ticket and thenyou'd wait a long time or you
know, hours if not days to getyour information back and now
it's instant you book a car,it's instant. And I think you
know, payments andcommunications are going the
same way.
Jared Wolff (44:56):
Ronnie, one of the implications of that for us is
the ability to bolt on multiplesolutions for our clients to
access them in a single spot. Sothey're going to be able to come
to us as a financial serviceshub. And we're going to have an
ecosystem where they can tapinto all these solutions, which
we might have connected to viaAPI, if it's core to what we do,
(45:16):
it might be something we investin. But it doesn't have to be
for us to provide it as asolution for our clients don't
have to go to 50 places to finda whole bunch of different
solutions. So I fully agree withyou.
Joe Proto (45:28):
Above are talking about blockchain and digital
currencies. And theadministration just came out
with a, you know, a watershedreport on where we're moving
with, you know, our digitalcurrencies. The whole idea of
embedded finance is alreadyhappened in the consumer space,
whether it's buying my Pelotonor buying a $50 pair of jeans, I
(45:53):
can buy now pay later, we'vejust embedded financial
experience for the consumer thatexisted before maybe with your
card, but now exists outside ofthat card experience. You could
say, it happened so fast, thatwe don't yet know what the
downstream effects may be. Iwould not be surprised if we see
(46:14):
some of that go from what it isto buy now pay, maybe, or even
buy now pay never? Are we kindof laying the seeds for the
next, you know, financial crisisat the consumer level? But when
you look at it for the business,to the business to business
experience, the large enterprisedoesn't necessarily need to
(46:38):
finance their receivables, buttheir suppliers would be willing
to pay for that payment. And sowe're seeing this AP AR
experience merge in a way thatis really, I think healthy. So
the large corporation can say,hey, small business, I'm going
(46:59):
to pay you in 60 days. But Iknow you need that cash flow
faster. I'm willing toaccelerate my payment for a
small discount. And now we'vegot embedded finance happening,
right in the experience betweenbuyer and seller, like we're
seeing between sellers andconsumers in buy now pay later.
Ernest Rolfson (47:22):
I think what's happening here is in b2b,
there's just more steps that arerequired. And that's where the
barriers will come down rightnow. So like I'm working with
Jared on working on, sayembedded finance, but then
Finexio, is then working withsomebody like a Jaggaer, where
we then have to integrate intoprocurement. So then the buyers
(47:44):
have a seamless end to endexperience. The bank knows about
it, has the information, butyou're removing that friction.
So it's multiple steps ofembeddedness, to create that
ultimate experience. And that'swhat's really cool and
transformative. And that may allget triggered because there's an
email delivered by Nordis thatthe supplier might see what
(48:05):
those options that they thenchoose. And maybe eventually
it's a text, maybe it's anemail, maybe, you know, probably
not carrier pigeon, we knowthat. So it's just it's this
dynamicism of the connectionpoints that several of us on the
phone can clearly see. And we'reactively building these bridges.
That's what's really excitingabout the future for me, and
(48:27):
it's completely untapped.
Joe Proto (48:29):
In the meantime, one of the questions that was
written in was, how can I get mycustomers to stop sending their
payment to an old PO box that,you know, my company pretty much
discontinued using years ago.
And so while we're, while we areleaning into this great digital
future, we still have legacysystems out there that have a PO
(48:49):
box on that check that just gotcut, and is being sent to where,
you know, there may be the oddpiece of mail and you can't, you
just can't shut it down.
Ernest Rolfson (49:00):
And the good news is there are solutions out
there in the AR side, and we'relooking to connect to as many of
those as we can. So just a fewminutes left here, and that was
great. We've been talking aboutthe future. I think I'll pause
for a minute and open it up tothe audience. We didn't just
address one audience comment ifthere are any other audience
(49:20):
questions, themes, we didn'ttouch on something you'd like to
revisit or press us on, by allmeans. There's over 100 people
here that we'd be happy toengage with this point. So feel
free to submit through the app.
If there are any questions orcomments, someone sent us some
love. And this is from an actualcustomer that partnering with
the next sale has transformedour AP team. Thank you. So
(49:42):
that's fantastic. Thanks forthat feedback. That is a real
customer of ours and not aplanted question. So thank you,
Daniel. We appreciate you, man.
This was from Jeff. So aquestion here regarding the
strengthening of securitymeasures. and thoughts on on
fraud elimination. I'll make aquick comment on that. I think
(50:05):
one of the ways that companiescan avoid this issue is by
partnering with FinTechsolutions to help manage and
apply technologies to validateand authenticate bank accounts,
identities and store thatcritical information off of the
corporate systems themselves.
That's something we've investedin heavily at Finexio. In moving
(50:25):
money, as Joe will tell you,having those systems in place is
table stakes for doing this. Ithink that is a benefit of
actually adopting some of thesolutions and approaches we've
been talking about is so that isa corporate end user. Why should
you have to really figure thatout or know that yourself,
especially if the technology iscommercially available?
Jared Wolff (50:46):
Ernest, if I can address that for a minute, I
mean, we obviously as a bank areon the frontlines of seeing
this. And fraud most oftenoccurs through actually the
workplace where fraudsters knowthat they can't penetrate a bank
network. But they can likely getinto a less secure network of a
smaller, medium sized business.
And often it's getting access tothe email system, monitoring
email for transactions andwires, and then sending an
(51:07):
instruction, you know,masquerading as something. So I
would encourage everybody tomake sure that they have the
right verification procedures,that they have dual controls in
place, and that they partnerwith first their bank to make
sure that their controls areright. I mean, you really need
to do a review, if you haven'tdone one and make sure that
you're doing it right to protectyourself. But there are
tremendous FinTech solutions.
(51:29):
And that's one of the hugebenefits of fintechs is that
you're going to really bypassthe traditional methods, that
fraud has occurred on andprotect yourself even more.
Ernest Rolfson (51:39):
One last quick thing before we go another
question was around Joe'scomment of never eliminating
payment rails and was just, youknow, how does the industry
promote interoperability? And Iwould say, I think by continuing
to invest in the maintenance andintegrating and keeping these
things alive and active, so thatcustomers continue to have the
(51:59):
choice. I think that's how a lotof our companies have grown. I
don't think they're sunsettinganything to Joe's point, it's
more about how do we make it beeasy to continue to use
alongside everything else?
Okay, great. Well, well,fantastic event, engaging
conversation. This was ourpayments executive roundtable we
heard from Jared Wolff, the CEOof Banc of California, Ronnie
(52:22):
Selinger, the CEO of Nordis, JoeProto the Chairman of Finexio,
and myself, Ernest Robson, CEOat Finexio. Thanks all for being
here.
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