FinTech CEO David Foss on what your customers want digitally now
The pandemic was many things at once: a health crisis, a reshuffle of the workforce, a scientific revolution. It was also a radical restructuring of the relationship between people, their personal technology and the companies that serve them through these devices.
No industry was more affected than banking. When most of the nation’s bank branches closed for operations in March 2020, the gradual, even glacial, shift from in-person banking to mobile banking exploded overnight—and it’s never going back.
David Foss, CEO of Jack Henry, was a big part of how all that transformation happened. Since 1976, Jack Henry, an S&P 500 company with annual revenues of approximately $2 billion, has been a provider of backstage technology solutions to small to medium-sized banks and credit unions around the country. These days, about 8,000 institutions rely on Foss and his team to keep them technologically on par with giants like Bank of America and Wells Fargo. No small task.
The experiences of the past three years have also given Foss a unique laboratory to study, in deep detail, how American consumer behavior on the high street has changed. But more, the transformations in banking also provide useful case studies in how to transform operations and business models in many industries.
In conversation with CEO, edited for length and clarity, Foss, who has run the company since 2014, shares some of what he’s learned that will benefit CEOs in any industry where customers interact with their technology. In other words: Every CEO in every industry.
You find yourself in an interesting place in the American economy, in that you basically deal with the technology for many banks and credit unions across the country. What have you seen customers do around technology adaptation in the last couple of years?
What people want, especially the younger demographic, they want a single experience. It doesn’t matter if I’m using my phone, tablet or PC, it should be a smooth experience. So we started down that path about eight years ago to really try to make sure we were positioned to deliver a consistent experience regardless of form factor.
The pandemic accelerated everything. We now operate digital lending where everything is done online, you submit all your forms online to the friendly loan officer, the loan officer and the loan committee can approve everything using automation. Artificial intelligence tools can do much of the approval process.
I could go on and on and on, all the different things that have changed here as far as doing remote banking during the pandemic. As the demographic shift continues to happen, millennials and Z’ers, they won’t come into your department, they won’t even call you on the phone. They want to be able to do everything with the help of technology. And then as a bank you have to think about “How are we going to enable everything?”
How are you going to create a digital experience that allows that customer to work with you digitally? When they are stuck, how will they interact with you and you deliver the same good service that they are used to getting when they are in your department, but now you will do it through a digital presentation layer?
What have you learned that can be useful to CEOs in all industries about consumer expectations? What do they expect when they do business with a company via a digital platform these days?
The basic, number one thing is: Don’t make me go through some crazy self-help phone call tree. When I’m in a real moment of need, don’t make me press 1 for this and press 2 for that. Give me a way to talk to a human being.
The other thing is in that experience, you should also give me a way to share with a human being what it is I’m dealing with. So, whether it’s banking or something else, let me share with a human what I’m stuck on, or what situation I’m in, or where I need help.
For example, in our digital banking applications – whether I’m using my phone, tablet or PC – if you’re in the call center, I can show you what it is that I’m stuck on. I can grab a little widget and I can send you a screenshot of exactly what I’m stuck on through this secure conversation.
And then number three, because now you’re able to do business digitally, how do you think about who your customers are? In banking, so many bankers think of their customer base in terms of geography. I serve customers in this city or this county, or even this state. Well, now that there is no need for someone to come in and physically be in front of you, what are the opportunities for you to have a national presence using digital technology that will grow your business?
You have this great example of a company that did that, they happened to be in the Midwest and did a lot of the credit for RV sales. It is a great case study in thinking differently about the customer and the business model, thanks to digital technology.
As opposed to geography, think of a niche you are very good at serving. We now have examples of lawyers and doctors and dentists and all sorts of different things. I have a whole bunch of examples.
But the one example you and I talked about is a bank in the Midwest. Their CEO realized that they had developed a lot of expertise in their bank in lending to customers who buy huge motorhomes. So, he said, “Okay, we’re very good at serving these high net worth clients. We know what they’re looking for, we know what the credit risk is, we understand how to handle clients like this. We can take this expertise that we have , and we can take this nationwide.”
He began by expanding into the states around him. To facilitate that, he created his own online brand. He happened to call it IncredibleBank, and he set it up as a bank specializing in lending to customers who bought these great big RVs.
Everything about that online presence was focused on people who loved to RV. Tips and tricks and all that kind of stuff – and the types of accounts you’d have beyond just a loan, the types of accounts you’d have if you were a valuable customer interested in RVing.
He started expanding, and he went to these RV dealers and said, “We’re experts at this, so if you have a customer who’s interested in borrowing to finance their RV, we’re the people to talk to.” It took off.
Before you know it, he was marketing nationwide to these customers, and he established relationships with all these dealers around the country that sell these sizes of buses. He grew the bank tremendously through this one niche that he identified that they knew how to serve.
It’s a perfect example of thinking about the service I know how to offer better than anyone else. How can I take it bigger than my traditional service area and create a whole new industry for us to grow?
As labor costs have skyrocketed, automation is becoming a bigger deal. In clerical work, the banks were among the first digitally automated companies. We all used to go in and see tellers, then we had ATMs. Give the rest of the CEO community out there some tips if you could, to bring automation more successfully into the white collar world.
RPA makes people’s heads spin sometimes, so the term I use all the time is workflow: technology that automates workflow. Think of any process you do repeatedly in your business, whatever it may be. Let’s use the example of hiring a new employee, right? So, in the HR department, there’s a process that you go through when you onboard a new employee, and it involves paperwork, this step before this step, before that step.
That sort of thing is ripe for automation, but think of it as workflow. If you have technology that can take all of the process stuff and automate that process, now as the new employee you get an email, “Hey, you need to click this and fill out this form,” you fill out the form, which triggers a new step in this process automation flow. It doesn’t require a person to do anything, it just triggers the next step.
We have been in that business for quite some time. And there are a lot of companies out there that do that, but it’s an approach that ensures you never miss a step because the technology controls it.
So if you think about all the different things you do in your business, regardless of what the business is, that are done over and over and over and over again, there’s probably a workflow solution that can automate that for you and make it a lot more efficient process.
How do you use technology internally? Give us a tip from a technology company that really interfaces with the physical world on how to use technology more effectively internally.
We are a large employer, with employees in every state in the country. We do what we call a continuous listening survey.
What that means is instead of asking our employees once a year or once a quarter and saying, “How are we doing as a company?” we examine all employees on the anniversary of employment. What works for us is that we get answers to surveys every single day of the year. We mine this data all the time to see if there are changes in our employee base that we need to be aware of that could be problematic for us.
It has been a big transition for us to get better at running the company and understand more clearly what is happening among our employees because we constantly get a view of employees’ feelings. And of course it’s a very diverse group of answers because your anniversary date has nothing to do with what group you’re in or what role you’re giving or anything like that. It is a completely random thing when it comes to the answers to the survey. So, all that data comes in, we produce a whole bunch of different dashboard reports that I can use to make sure we’re running the business efficiently.
The kind of thing that is sometimes left to the HR department, you know – let HR do the best they can. Well, maybe not. Maybe you can use some different approaches and some different tools that really make it more meaningful information.
Any other final thoughts as we head into the next year?
It is interesting to work with bankers right now because most of them are more optimistic than pessimistic. The reason is that interest rates have risen. If you run a bank, that’s good news. And most banks, most financial institutions are not troubled.
The Great Recession, which was caused by the financial markets, saw many banks close. It was a really difficult time. But today the banks are actually very healthy, so most bankers are relatively optimistic about our ability to get through this and don’t see a big meltdown in terms of the overall economy.
It is clear that many people are struggling individually, people are suffering just because of what is happening with inflation. But the general feeling in our room is, regardless, we can overcome this, and it will take some time, but we’ll probably come out the other end in 2023, and we’ll be fine. So that’s how I live my life every day now. Yes, it’s challenging, but it’s nowhere near what we saw in the Great Recession, and I think we’ll be fine in the next 12 months or so.
