In-House Incubator Creates Innovation Within Legacy Provider

Jim Marous:
Hello, and welcome to Banking Transformed. I'm your host, Jim Marous, owner and CEO of the Digital Bank Report and co-publisher of the financial brand. Digital payment adoption and the use of digital payments has surged across the world. As a result, prioritizing payments innovation is a critical area of focus for banks, credit unions, merchants, and those organizations that provide services and courses from support. Consumers want to choose how they transact, making it critical for financial institutions of all sizes to provide payment options that are fast, secure, and easy to use. But how does security bank stay ahead of the curve?

Jim Marous:
On today's show we have Ashley DePopas, co-founder and general manager of GoKart part of the FIS's Impact Labs. She will discuss the innovation process at FIS and the impact payment innovation has had on the success of both clients and the marketplace. Payments innovation is transforming banking as we know it and it will impact nearly every other industry in the next five years. There is significant value to be unlocked by organizations that take a holistic coordinating and strategic approach to modernizing their payments architecture. But no finance institution is taking this challenge alone. So how does a bank, credit union, Fintech provider, or big tech organization stay ahead of this payment industry evolution?

Jim Marous:
As I mentioned, I have Ashley DePopas, co-founder and general manager of GoKart, FIS's Impact Labs first fund adventure on the show today. Welcome to the show Ashley. Before we start, could you provide a little bit of background about your career, as well as the foundation of FIS's Impact Labs?

Ashleigh DePopas:
Yeah, sure Jim. Start with background. So one, thanks again for having me on the show. I have been in payments for about four years now, was brought in within FIS through the World Pay Acquisition, primarily launching products of the payment space into S&B software providers.

Ashleigh DePopas:
Before payments, I was a strategy consultant at Deloitte. Worked with fortune 100 companies on their customer strategy, financial technology, transformation, supply chain operations, a lot of different things. It's a great way to start your career. One of the last things I did there was actually help them launch their product innovation arm and help them figure out how to commercialize products that they were building for clients and scale them to be able to be sold to other clients of theirs.

Ashleigh DePopas:
I have a degree in chemical and biomolecular engineering, which has nothing to do with Fintech work.

Jim Marous:
Wow.

Ashleigh DePopas:
But my journey to this space has been an interesting one and a fun one. Now being the general manager of GoKart for the last year and a half, it's been exciting times for us just with all that's going on in payments.

Jim Marous:
So can you tell us a little bit about FIS Impact Labs? I think it's a fairly new component of FSI. How did it come about and what role does this entity play in the relationship with your multidimensional clients?

Ashleigh DePopas:
So FSI Impact Labs is essentially a corporate venture builder for FIS. What that means is that FSI has essentially isolated a team that can focus on very specific problems to solve within the Fintech space. The Impact Labs team's mission and vision is to create a frictionless economy. So these teams and pods are set up to solve a specific point of friction in Fintech, come up with solutions that may or may not solve that problem, test them in an iterative way, build out a business case, and then ultimately incubate them. The way that team comes up with problems to solve for and chooses investments in different ventures and startups to build is whether or not there is a unique advantage, or unfair advantage, that FIS brings to the table to disproportionately scale a venture.

Ashleigh DePopas:
So what that means for GoKart is we tested a hypothesis of is there still friction in checkout. This was at the time where the pandemic was just happening, everybody was moving to make payments digital, restaurants, healthcare, retailers that were in store, all forced to move online, and we had to set out and understand friction still exist in checkout, or is that already solved for.

Ashleigh DePopas:
The unfair advantage that GoKart had in building this organization within FIS is that we over a million merchants across the globe. We have payment technology that already exists that we can bring together today to make check out much faster and more consistent for consumers across industries. Those two things along with the partnerships from the bank relationships and all the card holders that we issue cards to on behalf of banks, brought this beautiful ecosystem together to make it really easy for consumers to check out. So that's what GoKart solves for. Impact Labs does this on a repeatable process over and over and over again.

Jim Marous:
So you obviously, as you mentioned, serve multiple constituencies, including financial institutions, merchants, Fintech provider, as well as internal business units within FIS. So how do you get the input from these multiple constituencies to build a solution, be it, as you mentioned, the GoKart solution or any solution that FIS touches, how do you get the input from these multiple constituencies?

Ashleigh DePopas:
Yeah, I'd have to say just starts with who's first the end user of the problem that you're solving for. Once you start there, then you expand out. So in the case of GoKart, we started with the consumer. Our ultimate goal is to solve for fast checkout for consumers, frictionless checkout for consumers. From there, we talk to the merchants. Merchants are the ones that sell products to these consumers. So often, we'll leverage relationships within the FIS business to access those merchants. Meanwhile, internally, we're setting up workshops, discussing with stakeholders and leaders within the FIS business who are ex experts in the industry, experts in payments, experts in e-commerce to help build out and inform some of the product strategy and some of our go to market strategy.

Jim Marous:
Innovation FIS, is it done totally right now within the FIS Impact Labs or is it distributed in some way across the entire FIS organization, which is huge to say the least?

Ashleigh DePopas:
It would be silly to say that innovation only lives within Impact Labs. Our entire organization is innovative in some regard, some respect. Impact Labs just has a very specific process that they follow, almost mechanical in a way, and very data driven in a way and how they inform and get research on what problems to solve for, how they market size those opportunities, and also when they build out the business case. So we follow a very strict step-by-step process to get to an investment decision.

Jim Marous:
FIS, as I mentioned, is huge organization and [inaudible 00:07:34] huge organizations, agility and flexibly is not necessarily a core competency. When you worked with GoKart, how did you see the process as it related to how big FIS is and how you can relate to smaller constituencies? Because I would imagine, you had to change a lot of legacy thinking, legacy process in order to put a new implementation in place. How did you do that with GoKart?

Ashleigh DePopas:
Yeah. Oh man, that's a really good question, and there's a lot to unpack there. So I'll start off by saying the way the corporate venture builder was designed was so that we could be nimble and that we could be agile as we're incubating a venture. So as a general manager of GoKart, I have an engineering team, a product team, a sales team, and an ops team that all report to me. So essentially, it's like a startup, we just are funded and live within a corporate entity.

Ashleigh DePopas:
When the Impact Labs team was funded and founded, I have to say the appetite across the FIS organization was welcoming to that idea to be able to break down barriers, challenge the way processes are done to accelerate the growth of this venture and future ones to come. So in a way, we've figured out how to use the best of both worlds. There is great things that large organizations bring to the table when it comes to process and structure that might make them seem like they're moving slower. But you've got to remember, FIS is backing almost 95% of the largest banks in the world, so their process is there for a reason. When it comes to innovation, it's understanding how do you leverage that to your advantage, those rules and those structures, and build nimbly enough to be able to provide value to merchants and to banks as quickly as possible.

Jim Marous:
I would take this to another level and say it on the innovation side one of the challenges that organizations sometimes have is we work with them, and I worked with all the major core providers, is how does the organization support the smaller finance institutions, the smaller merchants that you work with? So when you're building a new product, such as GoKart, how do you make sure that the small organizations are served as well as the big organizations?

Ashleigh DePopas:
Yeah, it's a core principle of ours and our product strategy. We don't build just for one large enterprise client or one large bank. The value of GoKart, of being able to check out quickly in as many places as possible is that we have scale, and scale requires that we build for problems that everyone could need solutions for. So what that means is it's very easy to integrate to GoKart. Our use cases are applicable across a number of different scenarios when a consumer's checking out, whether that's ordering food online, or whether that's ordering a pair of jeans online, or whether that's paying for your healthcare bill. We've made it so that the primitive checkout process can work within those different industries and can easily integrate either into your own tech stack or the software provider that you use for your e-commerce platform.

Jim Marous:
I realize that we've been talking about an innovation, but really haven't talked what the innovation does. So can you discuss a little bit about GoKart-

Ashleigh DePopas:
Yeah.

Jim Marous:
... the payments innovation that you recently introduced in and what it brings to the marketplace that's different then what's out there today?

Ashleigh DePopas:
Yeah, sure. So we talked to a lot of consumers right at the beginning of the pandemic around checkout and what they don't like about payments today. I was actually surprised, myself, with how much friction still exists when it came to checkout. So in its core, GoKart is a consumer checkout product. It allows consumers to save their payments information. It automatically recognizes consumers on merchants websites, or via text, email so that consumers can pay for a good or a service as quickly and as conveniently as possible.

Ashleigh DePopas:
What we found in this space at the time is that while retail checkout solutions have created this best in class experience, that's fast, that's quick, that's easy, the concept of a one click button, that doesn't exist everywhere. So that's what we set to build out, a checkout solution for consumers that exists across industries that's truly ubiquitous.

Ashleigh DePopas:
The other thing that we set out to accomplish is providing flexibility for consumers. One thing we learned in the research that myself and the team conducted was that there are so many solutions out there today when it comes to different types of payment methods that they love the flexibility, but they want it in one place. When you talk to merchants, they're managing multiple vendors just to give consumers the flexibility of payment options on their website. You can imagine the NASCAR effect on e-commerce.

Ashleigh DePopas:
The other thing when we've talked to merchants is they're starting to engage consumers in new ways. They're launching personal shopper experiences where they're sending cute clothes items, but then you have to call and pick up the phone to get the credit card information. With the pandemic and restaurants moving online, and delivery apps taking over, restaurants are struggling to create seamless checkout experiences that don't impact their margins. So all of these things made me realize that while checkout's great in retail and there are solutions out there, it's not consistent across new channels that exist today and those payment methods aren't consistent and tied to one identity for a consumer.

Jim Marous:
So really, GoKart allows the consumer the ability to have multiple payment methods behind GoKart and make it so that, as you said, more ubiquitous across merchants that may not already associate with other large payment providers, correct?

Ashleigh DePopas:
Yeah, exactly. I would just say that the one thing that's uniquely different about GoKart compared to a traditional wallet today is the way we recognize users. So typically, a user would recognize a wallet and click a button. We have listeners that are integrated either into a guest checkout page, text message, email, where we just recognize the GoKart user's email and we check whether or not, let's say Jim, you're a GoKart user,[email protected] is a GoKart user and we just pop. No need to see our brand, or remember to use us, we truly just find you and usher you in to all your payment methods as seamlessly as possible.

Jim Marous:
So this is really an embedded, in the way we talk about embedded experiences, and as opposed to me getting to an Amazon site and seeing my options of payment, this is really even earlier in the purchase process, and, as you mentioned, and continue to mention, at the merchant level. Yeah, the big players are going to have their ways of paying and people set it up that way, but we buy things in so many different ways and more and more is being done through social. There's more embedding in Instagram and Facebook and LinkedIn, and other channels that, as you said, having your email address or having another way to identify you becomes pretty important.

Ashleigh DePopas:
Oh, totally. Yeah. You're hitting the nail in the head with where we're headed. Just in general, retail marketing spend is forecasted to go up 30% this year, and that's primarily in social channels. Something like GoKart where you can make sure you maximize that media spend to actually convert to a sale is really critical for us, send an email on a promotion, check out within that email with GoKart, put an ad up on social media, check out within that ad on GoKart. Those are the things that we're looking to move in, which is an industry term called headless checkout.

Jim Marous:
Okay. So I don't think it's in the process right now, and it's one of these things I've been used and social purchasing more than I'd like to, one challenge I see is that when you buy something, there's no way for it to tie back to the merchant to take that off your platform. I'd love to see a way so I don't keep on seeing the same ads for something I bought already. Today, there's no connection and that's just one of those things you start looking at things have come so far there's still distance to be made.

Ashleigh DePopas:
Yeah, I love to say that any new technology there's always new friction and something new to solve for, that's the fun part about technology is that problems never go away or they go away and then new ones pop up.

Jim Marous:
Oh gosh, yeah. And we don't realize how good it's gotten. It's like airline travel, I keep on referring to the fact we didn't know how good it we had it until we didn't have it that way anymore. So clearly, this venture wasn't lost without a ton of research. I hear you that you are super into numbers. What are some of the statistics that you and your team discovered about the checkout experience that was broken?

Ashleigh DePopas:
Yes, you are right. We've done a lot of research. We recently did some research ahead of Money 20/20 with a report called "What Do Consumers Hate About Payments" and it was totally centered around, it was a very aggressive title, I loved it. But it was entered around what friction still exists. Some of the most surprising and maybe appalling stats that I found in the research was 50% of consumers are not likely to purchase or are extremely frustrated by account login or password creation during checkout, which is really interesting, because when you go to buy something you have two options, guest checkout or sign in to pay. That sign in to pay, while really important and drives a lot of loyalty and a lot of engagement for retailers or for restaurants, consumers don't necessarily like that process.

Jim Marous:
In some cases, it creates shopping cart abandonment. I just go, you know what, I'm not going there.

Ashleigh DePopas:
That's exactly what it does. It's one of the primary reasons of shopping cart abandonment. So what's interesting about that is we saw that as an opportunity. Well, let's make guests check out as quick as possible so that consumer can buy the item, create a connection with that merchant, and then come back for loyalty or sign up after the purchase, so things like that.

Ashleigh DePopas:
The other one that I don't think is surprising, but just validates some of the stuff that we're working on is 20% of consumers get distracted or lose interest when making a purchase and that leads to cart abandonment. We're living in a day where a text message could distract you and all of a sudden you're no longer ordering on the checkout page, let's say a new ad pops up, and now you're looking at a new product and you didn't make checkout quick enough to actually convert that sale. There's times where I've tried to order food online in between meetings and couldn't pay fast enough, so I just ate my leftovers in my fridge. That's a lost sale for a restaurant. So losing interest in the distraction that we have on our phone and just in our digital lives today can really impact cart conversion.

Jim Marous:
We forget about some of the things that happen because we do so much on our mobile device that you have notification, you have other things that, as you said, distract you, things that never would have happened in an office or a laptop situation, for instance.

Ashleigh DePopas:
Exactly. Exactly. Yeah, and the last one I'll say, and I was surprised by this one, but it's an exciting metric, was 70% of consumers want one identity attached to their payment methods and they want loyalty surrounding that. I found that really interesting given that there are existing solutions today. That's really what drove a lot of the thinking around GoKart is there seems to still be a gap in what consumers want. So you're right, research numbers are super important to us. We talk to consumers every day, whether it's ethnographic research, whether it's user feedback, whether it's usability testing. All those things are super for us to stay ahead on how we design checkout for consumers.

Jim Marous:
Well it's interesting, one thing about payments is it never sleeps, it's always going on and it's evolutionary in the amount of change. We've seen by now, pay later, we see cryptocurrency, we see blockchain, we see NFTs, all these things that are impacting what we're going to consider, in a broad sense, the payment process. So obviously your work has just begun with regard to, yes, you've introduced a new product, but this has got to evolve in the marketplace or else you fall behind again.

Ashleigh DePopas:
Yeah.

Jim Marous:
So what's being done to be prepared for the changes that are going on in payments as relates to alternative payment solutions, as well as different ways of people ... I'm not too sure if I consider buy now, pay later a payment solution or a lending solution, but it does get involved in the process of checkout. So how did all this relate to, as you're looking at GoKart, going forward?

Ashleigh DePopas:
Yeah. As we structure the new payment methods that we want to provide consumers and enable on merchant sites, we look at a number of things. Right now, buy now, pay later is almost becoming table stakes. It's been really interesting how quickly that specific technology and offering has grown in the US. We were just at the National Retail Federation Conference in New York. Was it last week? Yeah, it was last week. That was the hot topic. So it's really interesting because we've seen a lot of growths there. There's still lot of merchants who are assessing that as something that they want to provide their consumers and we know for a fact consumers want it. So near term, that's what we're looking to embed within GoKart. Beyond that, it's going to depend on consumer behavior. We hear merchants say that they would love real-time payments embedded within GoKart because it's a lower cost payment solution. In some markets, pay by bank has been adopted really quickly, like in China or in another developing countries in South America. I don't have a crystal ball, but we'll see how that goes in the US with consumers paying by bank.

Ashleigh DePopas:
The other one is crypto. Crypto, while still very volatile, I do think it's going to move there eventually, maybe not in retail or restaurant to start, but gaming, in VR. I think there's a cohort or a demographic of especially younger or more tech savvy consumers out there that are starting to move that way, and you've seen merchants already start to step and dip their toes. So you're looking at the first movers right now test the waters. Again, what we focus on is what's going to solve a problem for a broad set of consumers. So we're going to wait and see, but it's definitely on our roadmap to enable.

Jim Marous:
So it's interesting, and it's more of a personal question, you've gone from an area within FIS that's I would say typical, to being the owner of a Fintech organization within FIS. How has this changed your daily life, what you do day to day, and the way you're thinking?

Ashleigh DePopas:
I'll start off with saying it was extremely humbling to go from a product manager within Impact Labs to a general manager, and to build a venture from the ground up. We started with a team of 1 and we are now at 40 people. So the way my daily life has changed is that I can go from the nittiest of grittiest of details to talking about the high level vision of where GoKart's going to be in 10 years in a matter of seconds. I think a lot about people now, a lot about the culture on the team. To me, that is the most important thing to build a successful and sustainable organization is how do you empower people? How do you motivate them? How do you just give them the right level expectations and goal settings so that they can come up with the best solution for the problems we're solving for at GoKart?

Ashleigh DePopas:
So I think a lot about our people and how to manage an organization that is scaling really rapidly. I'm doing a lot of just over-communicating of ideas of decisions that need to be made, context around pivots where we're switching. New information comes in every single day here and that's a lot to handle for a company to be so adaptable and agile, but also, building for scale. So that seems a little bit high level, but it comes down into how I run one-on-ones, I do a lot of one-on-ones. What are the principles of how we're going to decide our product strategy for the year or for the quarter, for sprint planning? When we talk about sales, it's always what's the customer's problem? What's the consumer's problem? And really just people back to the core reasons why we built GoKart is the role that I play in a lot of the meetings today.

Jim Marous:
What do you believe is the biggest opportunity, not just for GoKart and FIS, but in the payment's marketplace today?

Ashleigh DePopas:
The biggest opportunity, so I have a couple. I truly believe in 10 years that if you're not the most frictionless out there, you're dead in the water. A consumer's expectations are so high right now that while you could say that across industry or across technology, for payments specifically, if you are not the best in class when it comes to a consumer experience, you're dead. The second one, when it comes to actual technology, I really think, broader looking, that real-time payments and getting in on that early is going to be key, just given the trends that have happened in China and other markets with real-time payments and pay by bank, I think the US is ready for it.

Jim Marous:
Finally. and I'm going to throw another little curve ball here.

Ashleigh DePopas:
Love it.

Jim Marous:
We're a month away, or a little bit more than a month away, from International Women's Day. It is not at all invisible to me that you're a woman at a very large financial institution that's on a leadership role managing what is an effect, the first Fintech development from FIS Impact Labs. What is it like for you at FIS? It's a very diverse organization that has certainly given opportunities for women. But what's it like to be a leader and being able to be the leader of something that's so brand new at FIS, being a woman?

Ashleigh DePopas:
The most interesting part in the last year in developing as a leader, as a woman, is almost discovering my own strengths as the woman in this growth period, and honestly, at FIS, being empowered to do so, I feel that I've been given opportunities to fail. I've been given opportunities to grow in my leadership style, whether that's being more direct or in some ways, really lean into my authentic leadership style, which is honestly being very empathetic towards others and being very understanding and curious about others' perspectives or opinions.

Ashleigh DePopas:
It's been really cool to honestly see some of the attributes that a woman has become a super power for me, and I've loved. I've really loved the chance to grow at FIS and the support that I've received, and the team that's surrounded me is great. I honestly operate as a flat structure, and I love that. I think that we all have wonderful ideas that we bring to the table. We all come from diverse, either industry backgrounds, or careers, or cultures, and age as well, and all of those things are valuable when it comes to creating something new together. And I'm just one piece of the puzzle.

Jim Marous:
Thank you so much, Ashley, for being on the show today and sharing your insights, as well as a little bit of your personal side. I really appreciate the time.

Ashleigh DePopas:
Thanks Jim.

Jim Marous:
Thanks for listening to Banking Transform, rated as a top five banking podcast and winner of three international awards for podcast excellence. If you enjoy what we're doing, please take some time to show us some love in the form of a review. It really helps us in the rankings, but also finding more guests like todays. Finally, be sure to catch my recent articles on the financial brand and the research we're doing for the digital bank report.

Ashleigh DePopas:
This been a production of Evergreen Podcasts, a special thank you to our producer, Leah Longbrake, audio engineer Sean Rule Hoffman, and video producer Will Pritts.

Ashleigh DePopas:
I'm your host, Jim Marous. Until next time, remember, innovation requires the ability to collaborate and share ideas while understanding consumer needs.