Banking's Next Chapter: 5th Anniversary Special (Part 2)

Jim Marous (00:11):

Hello, and welcome to Banking Transformed, the top podcast in retail banking. I'm your host, Jim Marous, owner and CEO of the Digital Bank Report and co-publisher of The Financial Brand. This is the second part of a two-part episode in celebration of our fifth anniversary of the Banking Transformed Podcast.

Jim Marous (00:30):

As in the first episode, I'm honored to be interviewed by my senior producer, Leah Haslage, from Evergreen Podcast. In these episodes, we discuss the journey of the Banking Transformed Podcast, the evolution of the banking industry, and the insights into the future of financial services.

Jim Marous (00:49):

From our very first episode to our most recent discussions on artificial intelligence and digital innovation, we're going to explore how the podcast has chronicled the remarkable transformation of banking during one of the most disruptive periods in financial services history.

Jim Marous (01:06):

In both this episode and the one that preceded this, we'll be discussing the major trends that are shaping the industry, some memorable guest insights, and my prediction for the future. Both episodes offer a unique perspective on how digital disruption has transformed banking and provided valuable insights into the challenges and opportunities that lie ahead.

Leah Haslage (01:30):

You have consistently emphasized the importance of the customer experience. How has the customer expectations evolved since you started the podcast?

Jim Marous (01:42):

Oh, wow, that's pretty cool. As can be expected, the consumer today does not look at banking as competing with banking. When a consumer gets frustrated with their financial institution, it is usually because they're not using the data in the way that other organizations they work with do.

Jim Marous (02:03):

What's really interesting, the biggest change on experience is really outside the industry. I think what's interesting is consumers now don't compare banks to banks, they compare banks to all other experiences. They will think to themselves, "I give you so much data, I know you have access to so much data, why don't you use it for my benefit?"

Jim Marous (02:24):

We know that when I call the corner pizza shop, they'll pick up the phone, they'll go, "Hi, Jim, before you start, are you doing takeout again?" "Yes." "Would you like to order what you got last time, or do you want me to go over that again?" "Yeah, share with me what you have." They'll tell me what I got. I'll go, "You know what, save time. Let's go with that. That sounds good to me."

Jim Marous (02:43):

Or with Amazon, that takes all the data they have and behind the scenes, really knowing it. They're going to be providing you the list of what you may want to buy based on what you already have bought.

Jim Marous (02:57):

So, as I kid around, there are those people that realize that I'm not going to get something that's green or pink, I'll probably get something that's black or red. Okay, not a real big aha moment, unless you haven't met me before. But Amazon does this on a regular basis.

Jim Marous (03:12):

And I already brought the Uber example, but I think what's happened is a consumer gets frustrated when something happens to their account that the bank could have avoided and made it easier for me.

Jim Marous (03:27):

I look at the transformation, the GPS in your car, it used to be, they simply gave you the route from point A to point B that you put into the map, very much like a paper map, but on the digital platform.

Jim Marous (03:39):

But now, they have things such as, “By the way, you've been in the car for two hours, here's some Starbucks, where you're going to be going by. Here's some Marriott hotels you may want to stay at because it's getting kind of late and we know you're usually late on making your reservations for hotels.”

Jim Marous (03:53):

Or maybe as simple as saying, “You know what, you may want to get off this road and go one entire exit through side roads because it's going to save you an hour and a half,” and they're going to tell you how much time it's going to save you. And that's by actually using crowdsourcing. All the other people doing the same thing, and they know what's happening going forward.

Jim Marous (04:10):

So, the consumer really has a problem when they see that you know their account's going down, they may not know it, and the bank doesn't do anything to help you avoid that problem. Or when they do take care of your problem, they may not do it in a way that's on your behalf, but it's on their behalf.

Jim Marous (04:29):

So, the expectations are use the data you have to help me in my journey. Be it at the grocery store with what kind of fruits and vegetables I like and how ripe I want them – if it's at the pizza shop, what kind of pizzas I like and other aspects of that meal. Or is it just on an Uber journey.

Jim Marous (04:47):

I get really frustrated when I see that organizations have data available that they can access, such as when I'm doing a test drive of cars. When you do a test drive of cars, there's a soft hit on your credit bureau to say, should I give this person a car to go drive by themselves? That soft hit is you can buy it. That is why when you do one test drive, you're going to get bombarded by emails and digital ads for every dealer. Not only those that are selling things like what you test drove, but those in that category or a side category, luxury, non-luxury, new or used.

Jim Marous (05:25):

That same data is available to financial institutions. Why aren't financial institutions saying, “If you're in the market for a car, simply take a picture of the VIN number and we're going to tell you how much you're pre-approved for.” Or, “Have you been doing test drives? We can pre-approve the amount up to this amount.”

Jim Marous (05:44):

This data is there, and I think the biggest change in the way experiences are wanted is that consumers more than ever are expecting you to do as well or better than everyone else in the industry and outside the industry.

Leah Haslage (06:01):

It's funny, you saying this and you kind of touched upon it earlier when you brought up the Uber and Amazon comparison. As a consumer, I currently use Monarch to keep all my stuff in one place. I've used other things in the past.

Leah Haslage (06:11):

One of the things I like with Monarch is I can click on, on the app, and it has reoccurring, and I can look at the calendar popping up and say, “Okay, I can allot my money like this because I know this is coming up.” If I open up my individual banking apps, not one says, "Hey, based off of your history, FYI, this is coming up."

Leah Haslage (06:31):

And it kind of surprises me because it's like how can a individual bank not have this available for me, but this website that has all of my banking, every single banking – it has my home loan, I get what the value is every day if I want (you name it), my Edward Jones accounts, everything's looped in. And they have all this knowledge that this one institution can't do it. Like it boggles my mind.

Jim Marous (07:01):

You gave them that information. When you changed your bank account, you input the fact that you've changed your bank account. What's interesting, the reason why you put time and effort into keeping that dialogue going is because they provide value in return.

Jim Marous (07:17):

I look at my business banking account, and I've said this so many times in the podcast – but my business bank is simply a warehouse of funds from my business. It does not have any information of what I do, all the transactions that go in and out there are through PayPal. Even today, I bought something on Amazon, that went through PayPal, so the bank does not know at all what I bought. They simply know I had a transaction.

Jim Marous (07:43):

On the other hand, PayPal itself has all that information. They know what I'm buying, they know what I'm doing, they know who I pay, who I get money from. And that's why they give me a pre-approved line of credit if I want to push a button because they understand who I am without me having to participate.

Jim Marous (08:01):

I talk about in my personal bank, which is a top five bank that I know knows everything about me but takes no action on that behalf. For every month since I've had my business, twice a month, I write a check from my business account to my personal account and take a picture of it. Why is that? Because the two organizations don't talk well together, so I write a check.

Jim Marous (08:23):

Now, maybe they talk better together now, but both organizations, neither one has said, “By the way, you do the same transaction twice a month, every month for the last five years. How about if we automate this for you, so it's automatic and all you have to do is say, go forward do it?”

Jim Marous (08:37):

My bills I pay to you. I simply have to fill in one piece of information, click a button and it’s done, but my financial institutions don't talk too well together. In addition, my personal financial institution knows that about 15, 20 times a month, there's an acorn transaction. If you have an automated savings plan, why are you not offering me that?

Jim Marous (09:00):

And if there's some people that say, I don't want to sign up for anything else, I don't want to give my bank any more information – I'm the opposite. I'm going, if you're working on my behalf, I trust you. I know you have this information anyway.

Jim Marous (09:12):

And at the end of the day, if you can save me time, if you can save me money, if you can make my life easier, which is not that hard to do, then you're going to provide value to me that will mean I will engage with … I talk about the fact that why do people spend 130, whatever it is right now, a year on Amazon Prime?

Jim Marous (09:30):

You can't tell me it's because of the movies. You cannot tell me it's because you want same day delivery. You can get that without Amazon Prime. However, you are afraid to get rid of that relationship that started with free delivery.

Jim Marous (09:44):

But you're afraid to get rid of that relationship, because something else is tied in there. And you have great experience with Amazon almost all the time. And I'm going, “Geez, if I get rid of Amazon Prime, is my wife not going to be able to return the thousands of things that she returns on a regular basis?”

Leah Haslage (09:59):

Well, their customer service is great, and customer service is tied to everything. Like including banking. Like customer service-

Jim Marous (10:05):

And you don't know what's tied with what. So, I'm going for $130 a year to not have problems, I'm going with that.

Leah Haslage (10:13):

So, we're going to touch upon the whole future in a second. But specifically, I'm curious on your take of the future of organizations like a PayPal, Venmo, Cash App, that section of things. Where do you see that evolving now?

Jim Marous (10:28):

Interesting. Digital payments is the biggest changing and most advanced area of the banking world. And when I talk about digital payments, it's even the digital transfer of funds, buy now, pay later, embedded banking. We don't look at it this way often, but I'm not just talking about banks to retail establishments, but retail establishments by themselves are building banks within their organizations.

Jim Marous (10:55):

There's organizations that have the ability to take information from their little scanner and provide you additional services. Some organizations have savings accounts for small businesses from their app. It is not unknown by anybody anymore, but you have the whole Starbucks experience where they're, I believe in the top 10 of financial institutions by deposits.

Jim Marous (11:19):

Now, you're saying, “What do you mean by deposits?” Well, when you store money on your Starbucks app, that's a savings account with no interest. They're managing money to the tune of what’s in fact one of the top 10 banks in the country, because the amount of money they have at their disposal because of your app every day.

Leah Haslage (11:40):

That's fascinating.

Jim Marous (11:41):

So, it's interesting when you look at different ways that embedded banking is taking place, how payments are changing, the ability to defer payments. I mean, when I get something from PayPal, I'm given the option, do you want this extended over three payments? And not just PayPal, but it's other payment apps. So, digital payments is really the most evolving area.

Jim Marous (12:00):

I think digital savings is going to be the next thing and pretty much what I'm going to call the elimination of what we'll call the traditional checking account. You'll still have the ability to do transactions, but it's going to be through this.

Jim Marous (12:14):

I don't need a check to do that. There's ways to make anything happen without checks. I mean you know my story, I don't carry my wallet anywhere. I figure I'm going to go to places that allow for digital transactions because I know this is safer than anything I can do with a card or with cash.

Jim Marous (12:32):

In fact, Apple Pay, I was at a restaurant that said, they take your card at the beginning, and at the end, you pay it off. Well, they couldn't take an Apple Pay at the front end because they said it is going to be a different account when you check out. I go, "What do you mean?"

Jim Marous (12:50):

They say, "Your Apple Pay changes your numbers so that nobody can do fraud on your account. And since when you come in, you put the card down, that card's going to have a different set of numbers than it is when you check out." And I should have known that, but that's something that was new to me. But it makes sense that they're revolving the numbers to make it so that nobody can use your Apple Pay without you knowing it.

Jim Marous (13:16):

So, I think the way companies engage can be really different. I think payments are very advanced. I think there's eventually going to be the elimination of what we'll call the checking account more in the United States than any place else.

Jim Marous (13:28):

And I believe we're going to see much more as far as financial wellness and the ability to engage me in savings, and actually making my overall financial wellness better. Not just my credit bureau, but make it so I'm working better to build higher savings, lower credit transfer of funds seamlessly without any action on my part.

Leah Haslage (13:50):

So, as we're entering 2025, what do you think is the biggest challenge traditional banks have, and how does it differ from when we started five years ago?

Jim Marous (14:01):

Well, that's a good one. When I look back five years ago, digital transformation, as we were talking about it, was a lot around technology. The ability to really make technology happen, to build technology, to buy technology, to invest in innovation, all those elements, hard wiring things.

Jim Marous (14:22):

What we have found over the last five years is number one, digital transformation is a back-office process before it's a front-facing process. In other words, to make my banking experience better on my phone, to make my new account opening experience better on my phone, what you need to do is fix your back office so you can do it in three minutes.

Jim Marous (14:43):

And we talk about it, I've used it many times. We got to have bankers get out of their own way, because what happens is they'll hire somebody to make a three-minute opening experience, and then say, “By the way, we still need to use the driver's license the first step,” at which point, as you know my head blows up, because I realize you're already at eight minutes. You can't do a physical piece of plastic to know your customer aspect when you can do it digitally.

Jim Marous (15:09):

So, the back-office aspect five years ago versus today, where we know back-office drives front office. It's not about the technology you buy, it's about the experiences you deploy. What I mean by that is, I mentioned a little bit earlier where the chairman of Lemonade said, "The biggest hurdle to digital banking transformation is legacy leadership."

Jim Marous (15:34):

And what he meant by that is, as much as you can buy technology, the ability to deploy it for the benefit of the customer really relies on leadership vision, and the ability for leadership to say, “We need to move forward at speed and scale, and we won't get in the way.”

Jim Marous (15:53):

This is why, as we find in all the research we do, the organizations that are most digitally mature are the largest and the smallest, not the middle. The middle gets in their own way. They have a lot of legacy leadership. They have a lot of people that don't want to get rid of their jobs. They don't want to change their jobs. They don't want to sit around a room and find new ways to do things that may completely eliminate their job.

Jim Marous (16:14):

On the other hand, the smallest and some of largest say, “We have no choice. We have to change. We will train our people to do new jobs that put them at a higher value to us. We will pay them more to do things that are not transactional but are thought-based.”

Jim Marous (16:31):

So, the biggest change probably in the last five years, and we talk about it often now, is that we know honestly in the podcast, within the first four questions, if these people get it or not.

Jim Marous (16:45):

We're sometimes full. We sometimes have an interview with somebody and we go like, “Boy, they aren't there.” On the other hand, there's others, we get within three questions, we're going, oh my God, this would be a ... as Leah will say, "This podcast's going to take 55 minutes because there's no way Jim's going to be able to shut up." kind of like ours right now.

Leah Haslage (17:03):

I was just thinking that, I'm like but even as a producer, I can't keep it to 20, 30.

Jim Marous (17:07):

Yeah. But the real aspect is that we find now it's the soft things. It's leadership, it's the ability to distribute insights across the entire organization rather than having be in the IT department where you have to ask for them.

Jim Marous (17:23):

That's what's really changed banking. I think it's no longer about how much you invest in technology, it's how much you partner and understand how you have to deliver different experiences.

Jim Marous (17:33):

And my example that I gave recently on a podcast, a small organization that I went, and I was supposed to do a whole day training session on what they should do to become more digitally advanced. And within 20 minutes before the session even started, I realized they were doing all my go-tos.

Jim Marous (17:51):

So, I had to figure out, geez, what do I talk about when they have a three-minute new account opening experience, they have a four or five-minute new account loan experience. They have really good customer interaction capabilities online and offline. They have great bots, chat bots available. But I realized that their biggest challenge was they were doing all these things and they weren't talking about it to their customer base.

Jim Marous (18:13):

This is Silicon Valley bank, and I found out that they weren't deploying it well, they didn't get it out, so the customers understood it. So, they were the best in class in my mind at that time, and yet nobody knew it.

Jim Marous (18:26):

So, it's just like anything. If what you're achieving is a secret, yeah – and at the end of the day, I think the biggest change is what's going on internally and actually, having the vision and the leadership to transform at scale.

Leah Haslage (18:45):

Jim, all the different industry leaders you have met throughout the years of events and that we've had obviously on the podcast, what advice do you give them moving forward right now?

Jim Marous (18:55):

Well, that's interesting, Leah, that you mentioned that because I recently did a podcast with another organization, the question came up that a lot of people seem to be in transition right now. A lot of times, not at their own avail, that they were let go of their position where they were. And the conversation came up: how do people avoid that? How do people prepare for a future that is completely still unknown?

Jim Marous (19:22):

And what it gets down to, and it's something that as you know, I live this, I try to live this every day. And my wife and my son also try to live this. The most important thing is to continually learn. We have never in our entire history of existence had more ability to learn on an ongoing basis and be prepared for the future rather than the future outplace us in some way, mentally or actually physically.

Jim Marous (19:48):

With the new implementation and use of gen AI since November 22, you can ask an AI tool anything in this world: tell me what you know about X. Now, you have to process it with a mindset that says, “I want to make sure I'm getting rid of any hallucinations or anything that may be wrong.” But the bottom line is you're going to learn every time you ask an AI tool a question.

Jim Marous (20:14):

You may say, “I currently I’m at this organization, I do this role. This is what I do daily. This is what I'm involved in, what I'm trying to achieve in my position. What should I be doing to get better?”

Jim Marous (20:27):

Or, “This is what I'm writing about right now. This is my take on it, I'm going to give you my actual dissertation on what I'm saying. What am I missing?” It may be something about, “I just heard about this on the news. Can you fact check this and let me know if this is really happening, and this financial institution is doing this. Give me everything you know about this.”

Jim Marous (20:52):

It is so much easier than Google, because it can actually be built in a conversational way. In addition (and it's very rudimentary), don't forget to continually update your LinkedIn profile and use that as a learning tool.

Jim Marous (21:09):

I have over a hundred recommendations from my very first job to the job I'm doing currently on every aspect of what I do, why? Number one, it may build loyalty. Number two, it lets me know what I'm doing wrong because they may not mention something I thought was pretty important that they didn't mention as being something I do really well.

Jim Marous (21:29):

Thirdly, I have a living resume that if I'm ever outplaced, if I'm ever told, “We don't need you anymore,” I have recommendations I don't have to ask for in urgency because they're there. But when you're having those interactions, ask those people: "Hey, you've known me for a long time, can you do this for me?"

Jim Marous (21:48):

And by the way, I doubt if anybody ever turns down a person who's asking for a reference or recommendation. And is it up to date? Does it reflect who you were 12 years ago as opposed to today?

Jim Marous (21:59):

But most importantly, continuously learn. Instead of taking the dog walk and meeting neighbors and trying to remember the names of dogs (my own problem), are you truly listening to podcasts? Are you listening to things or asking an audio tool to inform you about something you don't know about?

Jim Marous (22:17):

Don't have downtime when it can be education time. Yes, let your mind wander, take off time. On the other hand, realize that what's going on in a social political way today has a lot to do with people that have been outplaced, either in reality, or in mental states, and have no way of thinking they can catch up. You can catch up, you've got to continually be ahead of what's going on in the marketplace and educate yourself to the next phase of where you want to go.

[Music playing]

Leah Haslage (22:53):

So, I love this message and I truly, truly believe knowledge is power. And I am so glad that you put this emphasis on people wanting to constantly learn and to keep yourself educated. Because things are always changing in the industry.

Leah Haslage (23:08):

But with that said, our financial literacy rate in this country is not good. And those are your consumers. So, how can bankers and people in financial institutions do a better job educating the public that don't have a good basis of finances?

Jim Marous (23:27):

Boy, great question that ties exactly into what I just said. Financial institutions should build modules that allow a consumer to interact through a conversational tool that asks them questions and provides them answers.

Jim Marous (23:43):

If I call my financial institution and I can get even with a bot and say, “I have a challenge with my credit card. I've seen 12 transactions that don't seem normal to me, and this is what they look like. Do I have to worry about this?”

Jim Marous (23:59):

Or more pertinent, not in my case right now, but for a lot of people: “I am hitting the highest level on my credit usage right now. How do I bring that level down” and have the chat bot ask questions. “What do you currently spend on this? How do you currently do this?” Get to know more and more about you. And in that interaction, help the consumer help themselves.

Jim Marous (24:27):

There are so many tools out there today that we just interviewed people from Debbie. And what that was, they give rewards. They have an award process for bringing your amount of credit down, for helping you understand how to manage your credit usage. But they're also now giving rewards for how you're saving.

Leah Haslage (24:48):

People want incentives.

Jim Marous (24:50):

Exactly. But what they're doing is they're saying, “Tell us more about you, we're going to help you make that journey possible.” And oh, by the way, in the AI world, every answer you have is going to make it so you can serve that customer better in the future.

Jim Marous (25:04):

Seven years ago, Erica was introduced by Bank of America – did not think that all those verbal communication interactions aren't going to fuel an amazing AI tool for consumers that want the bank to help them manage their finances better. Those conversations were not just thrown out, they were used as a database. That database is better than anybody in the industry today at knowing how consumers are currently banking.

Jim Marous (25:33):

We use the example a lot of times when COVID checks came out and when people were able to take a monthly pass on their loan, be it a mortgage loan or a car loan. The financial institution did not know why did you need a buy on your mortgage, or on your car loan. Was it because you wanted to start building up savings with that money? Or was it because you couldn't put food on the table? Those are vastly different financial journeys.

Leah Haslage (26:02):

Vastly different.

Jim Marous (26:04):

And if you don't ask about that, if you don't understand from an educational standpoint, flow of funds, and if a financial institution doesn't keep track of each consumer's flow of funds, where do those funds go? You're having silent attrition because you aren't understanding the customer journey. Again, it gets down to continuous education.

Leah Haslage (26:23):

So, I have a random pop culture question for you, but it ties in with banking, and maybe, it's because of holiday season's coming up here in the United States. And no matter when you're listening to this, but it's a wonderful life as a classic.

Leah Haslage (26:37):

And one of the central points in the movie, the character George Bailey has the banking in town, he has the bank. And it's kind of like a fight between him who's trying to help the people, and the other guy whose name is escaping me, but he is an old crotchety guy that wants all the money for himself. And so, what's your take on a movie like that and how it influences, inspires people when it comes to trusting their banks?

Jim Marous (27:06):

That's a really good question. I think looking not just at the movie, but on its version in the marketplace today. Research after research study show that the most important component of trust in banking, which is how you're really going to know if you want to work with somebody going forward, is are they working on my behalf or on their behalf?

Jim Marous (27:29):

The perception of working on my behalf versus your behalf as a consumer is different for every person. But if you're putting a fee on me for an overdraft, but don't allow me to waive that when I tell you what's going on, you're out for you, not for me.

Jim Marous (27:45):

When you're not looking after my money and you have downtime on the ATM or you have policies that don't make any sense, but you don't change them, that lowers the trust. I think the biggest factor of trust may not be, are you going to steal money out of my account? That's not going to happen. But are you truly looking out for me?

Jim Marous (28:06):

And what that means is, are you learning with each transaction who I am? Do you know me? Do you understand me? Will you look out for me going forward? Those are elements that are key, but when you look at that movie and the basis of the whole thing and the savings alone and being able to actually help people with their mortgages and realizing that it wasn't a loan that was there, but it was a home that was there.

Jim Marous (28:37):

I have an example, as I've mentioned a couple times on the podcast, where we decided to buy a small place in Florida, and we were going to bring up that mortgage with the current mortgage we still have on our current basis. And my financial institution that I was using in Cleveland had not notified me, even though I knew that the rate had dropped significantly since the time of our original mortgage. And they had not helped us get a loan at a lower price.

Jim Marous (29:04):

So, when we decided to refinance, one of the parts is you're going to have a notification, go to your current mortgage holder, it says, "We need to know the payoff balance." That was the only time that organization ever reached out to me and said, "Oh, we can help you." And I basically told them that, “I appreciate that, but you've never reached out to me before and it doesn't appear you really wanted my business.”

Jim Marous (29:30):

Well, this was a small financial institution, a credit union, a really good firm overall. Well, the president of the company called me and said, "What is the problem here? What have we done wrong?" I said, "Well, I've had this loan four years past the dropping of rates. It is now at a very low point. And during that period, you never reached out and said, you know what, we can save you money."

Jim Marous (29:52):

"And I'm sure overall you're thinking, well, the longer we can keep this higher rate, 6% mortgage on the books, the better off we're going to be. However, we are now buying another property, we're going to be adding to our mortgage at a lower rate than what you were offering before but the overall revenue to that financial institution is going to be higher than what you were getting at my higher rate with a single loan."

Jim Marous (30:18):

So, it really gets down to the winner in this whole game are going to be those financial institutions that look at long-term relationships as opposed to short-term transactions. And that's easier said than done.

Jim Marous (30:32):

We work with quarterly financials, but overall, people are becoming more and more aware because the digital world allows you access to information that was never there before. And when everybody else is pulling your direction to make your life easier. If your finance institution isn't, they may not close their account, but they're going to remove their relationship. We've talked about this many times that I'm not closing my two bank accounts-

Leah Haslage (30:56):

I'm a case point.

Jim Marous (30:57):

Oh yeah. I'm not closing my two bank accounts, it's too doggone hard, but all my transactions and all my revenue is going elsewhere.

Leah Haslage (31:05):

Alright, final question, Jim. Looking into 2025 and beyond, what excites you the most right now in banking and finances?

Jim Marous (31:15):

Wow. I know I asked this of a lot of our guests, I never-

Leah Haslage (31:19):

I feel like you right now: “Jim, what excites you-”

Jim Marous (31:21):

I never kick it back to myself. Be sorry what you asked for exactly. Without any doubt right now, and it sounds really like I’m mailing in, but AI really has got me really excited. But not just AI to make personalized experiences, but AI to think on my behalf to actually use the information that's available to go deeper than just a personalized name, address and next product you want to sell me – to really knowing in a second's notice that I need something.

Jim Marous (31:53):

And I give an example, and this was a while ago. But I was out of town, out of the country actually, and I found out there was a transaction being done on my account that were fraudulent. And I called my bank, and they said, "Okay, we have to give you a new debit card number. " Because it was played off my debit card.

Jim Marous (32:10):

And I said, "Oh God, I have so many transactions to play on that debit card. It's going to be so much of a hassle and I'm going to have to wait until people say, oh, by the way, your card didn't go through.” They said, “Well, really with a plastic card, we had to give you a new card.” I said, “Okay.”

Jim Marous (32:24):

Before the conversation ended, they said, "However, your new account is already stored in your Apple Pay account and you can use that for the rest of your trip." That's the difference between using the AI and the ability to make a digital transaction possible versus our old physical way of doing things that by its own nature is broken.

Jim Marous (32:46):

So, I think the future, and I can't even go beyond 2025 because it's asking for too much. But if I just look at the near-term future, I think we're going to see organizations doing some really, really cool things around financial wellness, around identification of people and building an overall ecosystem of financial relationships that they can manage and work on behalf of the consumer.

Jim Marous (33:11):

I think we're going to find a couple of very, very targeted organizations that are reaching out to specific segments. We're already seeing this, but I think what we also may see is we know that Chime and Varo and SoFi and Robinhood have relationships, but in many cases, they may be secondary to traditional relationships, and we're seeing this in Europe already.

Jim Marous (33:39):

I think we're going to start seeing consumers say, “You know what, I've been really happy with my chime and my Varo and my SoFi and my Robinhood account and PayPal over time, I'm moving my account. I'm going to put it all … because this company's not going to go out of business.”

Leah Haslage (33:55):

I did that, I put majority in SoFi. They have a better APR right now. Then the customer service is outstanding.

Jim Marous (34:03):

Your anxiety about a company that's not located in your neighborhood goes away. My son just had to open up a joint account. He opened up with Chase, why? Because he kind of knew as much as I hate to close the accounts I've had, I know I'm going to be able to be served by Chase anywhere, anytime. Digitally or-

Leah Haslage (34:23):

His credit cards are probably tied in within, so you can do all your banking with one.

Jim Marous (34:25):

That's what made him go that direction. He had the credit card with him as well. So, what's going to happen, is I think you're going to see … and Chase wasn't a good example because it's not a FinTech firm. But I think you’ll find consumers that in the past, used the FinTech firm as a secondary relationship with very low balance, but they used them regularly, maybe they only had a thousand dollars in the account or a hundred dollars in the account.

Jim Marous (34:48):

We're going to start to see what we've seen in the UK, consumers switching their entire relationship someplace else. And this is a warning to every financial institution executive that's listening. What used to be silent attrition where people spread out the relationships is going to become real attrition because the government and others can make it very easy for people to close accounts and close relationships as well as everything that goes on with them.

Jim Marous (35:12):

And so, the reason for people sticking with you goes away unless you've made an impact on them recently.

Leah Haslage (35:19):

Incentives and customer service. As a consumer, I'm going to tell you right now.

Jim Marous (35:23):

Exactly, warning to all; the last experience is the most memorable experience and this one you'll talk about. So, you still have a chance to keep that customer that you think is loyal and make them loyal again.

Leah Haslage (35:36):

Thanks, Jim. This was so much fun. And as always, I learned something from you.

[Music playing]

Jim Marous (35:41):

Thank you very much. Thank you for five years. I know we're getting together tomorrow to have some celebration, but I want to thank you and the entire team for making this all possible. Chris, really appreciate it. Will Pritts, I appreciate it. I appreciate Brigid and the entire team at Evergreen that have made this whole dream, this aspiration, this crazy, crazy idea come to life.

Jim Marous (36:05):

We did the first year, and about a year and a half on a shoestring without any revenue coming in, it’s something I funded myself, but it's all been worthwhile. It's been a great learning experience and when I talk about ongoing learning, I'm blessed by the ability to have a class at least one, maybe three times a week. So, thank you.

Jim Marous (36:24):

Thanks for listening to Banking Transformed, the winner of three international awards for podcast excellence. If you enjoy our work, please give us a positive review. Finally, check out my recent articles on The Financial Brand and the fantastic research we're doing for the Digital Bank Report.

Jim Marous (36:40):

As always, this has been a production of Evergreen Podcasts. A special thank you to our senior producer, Leah Haslage; audio engineer, Chris Fafalios, and video producer, Will Pritts.

Jim Marous (36:50):

I'm yours host Jim Marous. Until next time, remember, banking evolution can only be understood with continuous education from and by industry leaders. Use some of the downtime you have to expand your horizon into the podcasts, articles, research, and most importantly, one-on-one interactions you can have with your peers.