Rethinking Innovation During Unparalleled Change

Jim Marous (00:11):

Want to first, before we even start, thank everybody for being here. It's kind of interesting for us because even though this is our sixth one, it's always unique to be in front of a live audience for a taped podcast.

Jim Marous (00:29):

We have found in the last five of them that the dynamics of the interaction is different, the dynamics of the audience is different. It makes it for a more alive podcast, so to speak. We always set up as more of a fireside chat.

Jim Marous (00:47):

If you don't know me, Jim Marous. I'm the co-publisher of the Financial Brand, and I'm the owner and CEO of the Digital Banking Report and the host of the Banking Transformed Podcast.

Jim Marous (00:58):

A little history, real quick history, my podcast started in 2019 as an experiment, another way to learn from what's going on in the industry because that's my whole purpose right now in life and career, is to every day learn something new I didn't know before.

Jim Marous (01:15):

And the podcast has just been, I would say the biggest surprise because I knew it'd be a good learning platform, but every person is so different. You get different shades of different colors, and it's been a blast.

Jim Marous (01:30):

In the process of 2019, once we got to 2020 with the shutdown of everything, podcast business got to get really good. In fact, a lot of vendors that you see downstairs hired me to interview their executives because there were no sales calls and there were no events.

Jim Marous (01:48):

In addition, we started to get our feet wet on understanding more about the kind of companies we're interviewing. We got to know the fact that as a group, small finance institutions were moving at a much greater pace of change than their bigger brethren. Certainly, the middle market firms.

Jim Marous (02:07):

Yes, the biggest of the big have money to spend. And they spent it accordingly. But as we looked at the way the organizations transformed, we got to know a little bit more about the marketplace than we had before.

Jim Marous (02:19):

One thing that we've continually fallen back on, myself, is inviting U.S. Bank to the table. U.S. Bank, I will tell you that from my perspective, it's from the standpoint of pound for pound, the most innovative bank in the industry right now in the United States.

Jim Marous (02:38):

I say that because there's some bigger poundage than U.S. Bank. So, Chase Bank can move very quickly. Bank of America can do a lot of neat things. But it's interesting because it's the unknown innovation culture of U.S. Bank.

Jim Marous (02:50):

We've had Dom Venturo, actually, his boss on the show before. And he has continually been a very interesting guest because he has a unique personality, but nothing's a challenge for him, he just has fun doing every single thing at work.

Jim Marous (03:08):

Our guest today is Don Relyea from U.S. Bank, chief innovation officer. I'm going to have him explain because we have a pre-visit a little bit about his career. It's not the most normal career path to get to banking. And actually, it wasn't the most ... it was a very innovative career path from the college level up. So, why don't you explain a little bit about what got you here today and the journey.

Don Relyea (03:32):

Sure. Thank you, Jim. Thanks for the kind words about U.S. Bank as well.

Jim Marous (03:39):

Nobody paid me. And it's interesting, because you get a good view of what's out there, and it's a surprise because some people don't have U.S. Bank in their marketplace. They may not be familiar, but the whole organization is structured in such a way that makes innovation fun.

Don Relyea (03:54):

Absolutely. Yeah. If you'd have asked me 15 years ago whether I'd be in banking, it would've been, "Nah, no way." So, my journey actually is we did talk about that. It's very unique. I started off, I went to college for drawing for art. And I had a full scholarship.

Don Relyea (04:15):

And basically, I got a management of information systems, which is the computer science degree back then. I think, they taught us COBOL, which was actually super useful during Y2K.

Don Relyea (04:28):

But from there, I graduated from SMU and at that time, the goal was to get a job in one of the big five consulting companies. And I was able to do that. And I was all excited about that in my future. But I was still doing art. And this company had their holiday party at a place where I had my art all up. And they contacted me.

Don Relyea (04:55):

And I went to go meet with them. And I didn't know what to expect. But they were doing, Philips Compact Disc-Interactive and Interactive TV and kiosk development back in 1992. It was a super small shop of young folks down in Deep Ellum.

Don Relyea (05:16):

And I saw that, and I was like, "This is the future." So, I called up my consulting company. I said, "I'm sorry, I'm not going to join." And I went and I joined that company for $7 an hour, and I had to bartend to pay my bills. So, I did that, but it was the future.

Don Relyea (05:37):

And about three years later the internet became a big deal. We got the Coca-Cola website and the Friends TV show website. And then all of us who had made those sacrifices for those years, because we believed in digital as the future, it was a boon for us in our careers.

Don Relyea (05:56):

And from there, I went on to advertising. I worked at DDB for a while and led their technology. I did game development. I did a startup and we got killed in the bust. We were relying on a lot of server side image generation technology, which SGI chips in the cloud. And Cisco switches were really expensive back then. And so, we couldn't get the second round of investment on that.

Don Relyea (06:29):

But from there, I went into Verizon, and I leveraged the game development skills to build a prototype of their next generation TV system there. And that landed me in the great position of running a small innovation lab for Verizon.

Don Relyea (06:47):

There were three labs, so I only had one of them. And we were the smallest. But over that time, we filed I think over 400 patents. And I was on a few of those. So, that was great.

Don Relyea (07:01):

And then, many of the executives at Verizon decided to take their digital transformation playbook into banking. And so, I was like, "I'm not going into banking."

Don Relyea (07:14):

But eventually, somebody called me and made me a deal I couldn't refuse. So, I ended up going to Barclays and cutting my teeth in banking and digital transformation there where we did a lot of design thinking. And then, rolling out agile development teams because we'd already been through all that.

Don Relyea (07:33):

And the banks, European banks were just beginning down that journey a little over 10 years ago. And from there I ended up at BBVA, I actually met Derek White, who is the-

Jim Marous (07:49):

Any of any of you who were at yesterday's session with Derek, most have come up to me and said they will never forget that session, in just the way he delivers his passion, it's pretty insane. But no, it's interesting because that combination becomes very instrumental.

Don Relyea (08:06):

And so, when Derek went to BBVA to do their digital transformation, I went with him over there. And you were asking me this morning how I ended up at U.S. Bank, Derek introduced me to Dominic. And I had the opportunity to build out our intellectual property program at U.S. Bank. And I'd actually done that at Barclays and at BBVA prior.

Don Relyea (08:34):

And then, Derek ended up leaving U.S. Bank and Dominic had the opportunity to take over as chief digital officer. And then Dominic was selling me on the innovation role. And he's like, "Don, this is probably the most fun job in banking and the coolest job in banking."

Don Relyea (08:50):

And he was absolutely not wrong on that. And that's probably a good segue into my role at U.S. Bank as well, if you want to just roll right on in there.

Jim Marous (09:04):

I do want to get in that, because it ... not just your role, but how U.S. Bank truly internally fosters an innovation culture.

Don Relyea (09:14):

Yeah. Let me kind of lay the foundation though, with the role real quick. And then we'll go into the culture bit, because it's really kind of, there's a foundation. And then there's what we've built on top of that foundation.

Jim Marous (09:32):

So, when I look back, when I took that role from Dominic, he had already been doing that for 12 years. So, we have one of the longest running innovation teams, I think in financial services. And maybe the longest. And that's pretty long for innovation teams, just in general. Most of them are dead after about three years.

Jim Marous (09:56):

Burn out or dead. Yeah, exactly.

Jim Marous (09:59):

So, but what we've done there is we've actually got a really solid framework which we built on. So, basically our team structure's we've got three teams focused on the processes of innovation. So, we've got a team, and this is a new thing that I built at the bank. We have an applied foresights team. So, they are actually-

Jim Marous (10:19):

What does that mean?

Don Relyea (10:20):

So, applied foresights, they are looking out into the future to understand future scenarios that are around technology convergence or specific technologies. And then we're thinking about, "Well, how is this going to impact our customer's behavior in the future?"

Don Relyea (10:37):

So, let's just say, hypothetically, if we believe that our customers are going to have personalized and very powerful AI agents working on their behalf, what does that mean for the bank in order for us to be able to serve those customers now?

Don Relyea (10:58):

And there's all kinds of implications once you begin to think about how that customer behavior's going to change over time. And things that we need to do as a bank to be prepared for those things. And a lot of that work sort of guides our long-term strategy. It's sort of like thinking about if you're going to go fishing, where are the ponds, where the big fish are going to be? That's the sort of analogy we have. I do a lot of fishing in my personal time.

Don Relyea (11:30):

And then we also have a team that's focused on the processes of innovation around emerging products and how we incubate those, how we test and learn with features, all those types of things.

Don Relyea (11:46):

And then we have one that does research and facilitation. And she also has the intellectual property practice that we built up. And that research and facilitation includes things like customer co-creation, as well as co-creation with the lines of business.

Don Relyea (12:02):

So, design thinking, things like that where we really are working with the lines of business, in some cases, directly with customers to understand deeply what their pain points are and where their problems are. Because all the technology we have, should be harnessed to solve those needs as opposed to just going down technology rabbit holes because we think it's cool.

Jim Marous (12:26):

So, it's interesting. You have a whole mindset that says, "We're going to be set up for the free future. We're going to be resilient by doing different testing methodology." I mean, I know in the room, I know the size of organization, we're talking about probably the most advanced innovation thinking process that you'll find in banking.

Jim Marous (12:50):

And there may be comparables, but the reality is, what they've really done is when you have interest rate changes, like we've seen that kind of came unexpectedly at the time it did. And where we hadn't for 10 years worried about ALCO, because basically when you have completely stable interest rates at a low level, there's no reason to keep weaning every week for ALCO.

Jim Marous (13:08):

And all of a sudden it changes, it changes how you make money, it changes how loan demand's going to go. It changes where people are going to place their savings. And that's to have a foot in that, but in foot in reality. And what do we change today from a practical business perspective. It's a neat dynamic. It creates an interesting environment, I would imagine.

Don Relyea (13:33):

Yeah. It does. Let me finish up on a few other things. We also have three teams that are focused on specific types of innovation. And one of those which touches on what you just talked about is our fintech team. So, their job is really to work with the lines of business, understand the client needs, and marry the lines of business with fintech capabilities.

Don Relyea (13:58):

And I've seen several companies here walking around that we're partnered with. So, that's super exciting. And a lot of that work is also right around, is that partnership — we have a great engineering team, and they love to build things. But would a partnership with a fintech greatly accelerate our speed to market? And the answer is generally yes.

Jim Marous (14:23):

With an exclamation point. Yeah.

Don Relyea (14:26):

So, those are the opportunities we're looking for. And when there's we go for it. Then we also have two teams focused on areas of technology that are fairly specific, but also, timely right now. So, we've got folks focused on AI applied R&D, and then we have people focused on blockchain technology because we believe that tokenization, fractionalized assets and atomic settlement are all going to be important use cases in the near future.

Jim Marous (15:00):

That's interesting. So, when you look at those of that group, all these groups tend to cross functionalize. They cross over to talk the other areas about how you can help facilitate what we're trying to bring to market.

Jim Marous (15:15):

Real quickly on the fintech partnerships, are you looking for specialties where you say, "You know what, this company, we have this problem, this company's going to solve that problem. Their lives depend on solving that problem. So, I've got a better partnership than I have, even with my own people that lives depend on more than just that enhancement." How do you pick your partners?

Don Relyea (15:38):

That's a great question. Our fintech team is also partnered with our M&A team. And we have a really strong sort of risk framework approach to it. So, and even when we talk to the regulators about these things, they're like, some fintechs don't get what it's like to work with a regulated entity.

Don Relyea (15:59):

We've got a pretty good vetting process where we can weed out the ones that don't understand how to work with regulated entities. And there's a pretty much a large portion of the fintech space, which is not looking to disrupt banks, but they're looking to partner with banks.

Don Relyea (16:18):

And those are the folks that we work with. And we do have some fintech investment where it makes sense, but our strategy around that is investing in our partners, just so we have a seat at the table and make sure that the value that they add to our customer chain is cared for.

Jim Marous (16:39):

So, let me take an example that I'm kind of familiar with at U.S. Bank, and I've talked about it at multiple session that I've had here. The new account opening experience. Now I'm going to reference this again to the crowd.

Jim Marous (16:51):

If you've been in my class, or if you've been in any of my podcasts, if you listen to anything, you know that I am pissed off as hell that we can't get new account opening right in digital. Because basically we're shutting off our doors, the front doors, the thing we do business for, which is getting new customers or enhancing relationship with the existing customers. And we make it hard as hell to do it.

Jim Marous (17:13):

And we even do research that says, "Our customers want to open accounts and branches, just look how many we've done." And I immediately go, "Have you thought about, maybe you haven't given them any choice but to come into the branch and open it." And it's got a lot of friction in it.

Jim Marous (17:27):

Let's go through the process because I think it's interesting in that to fix that, at U.S. Bank, you had legacy opening processes. It was long. It was not what you were very proud of.

Jim Marous (17:38):

But I know that you had to make that change. You had a commitment that we were going to move to a faster process. And I believe Dom said a year and a half ago, "We were going to take away anything that we could do so that the customer didn't have to do it."

Jim Marous (17:54):

So, if there was anything we could even partially help that the customer had to do, we take over that. Now, number one, who's in the room when you're doing that? Because it impacts a lot of people in the organization. And what's the timeframe on those kind of changes? A relatively big change in the banking world.

Don Relyea (18:10):

Yeah. So, that actually is great because there's a whole lot of things that I could talk about with that. I think, really the goal is to get everything to DIY with all the consumer stuff. If you can't do it online and a hundred percent online, then you're not there yet.

Don Relyea (18:31):

And we're actually really pretty close to a hundred percent, which is amazing. And our mobile app is highly rated. It's the best in banking right now. Which is amazing too. And really taking that care to understand, "Okay, are we going to throw up a legal thing right here, as a impediment to the click through to get onboarded?" And part of what we do is we get all the right people in the room to solve these problems.

Don Relyea (19:04):

And that's actually super key even for innovation. I know some of the stuff that you had mentioned you were going to talk about is if you're starting up a new innovation team, what do you need to think about? Getting all the people that can say no in the room upfront and treating them like subject matter experts.

Don Relyea (19:26):

So, the same way you might bring in a marketing expert or an AI scientist or somebody who understands blockchain into the room to come up with a solution, you need to understand the risk and the regulatory impacts.

Don Relyea (19:40):

And if you can get them involved in the solutioning phase, it's so much better than when you get all the way to the end-

Jim Marous (19:47):

Much faster too.

Don Relyea (19:48):

It's way faster because you'll go to the end and then they're like, "Nope, you can't do that."

Jim Marous (19:52):

I'm going to sometimes break up and say, "Guys, listen to this, guys and gals," I was a marketer and I hated to bring legal. Back then there was no compliance people. This was a legal person. They basically were paid to find flaws in what we developed.

Jim Marous (20:10):

It would be like nails on the blackboard. You'd be up at night going, "I don't want to invite them. I'd invite finance before I invite legal." But the reality is, if you don't invite compliance and legal or whoever's going to be the possible no vote and involve them in the development and have them have part of the yes vote, you're going to slow down the process and may never get off the ground.

Jim Marous (20:30):

And I'll guarantee you it's going to have more friction than what you intended to have. Not because they intend to be a friction point, but they have to justify their existence just like we all do. And sometimes it's not the best word and it's painful-

Don Relyea (20:45):

Yeah. But shifting them from that mindset of my job is to say no to my subject matter expertise is important to getting this product, which is part is strategic for our line of business or the bank in general, across the finish line, it's a mindset change.

Jim Marous (21:08):

How long is your new account opening process right now?

Don Relyea (21:11):

I think it's about five minutes.

Jim Marous (21:13):

Which it's in that range. Three to five minutes. We know that people have patience for a digital process, it's five minutes. And it's important because you're not losing customers before you have them.

Jim Marous (21:25):

I know that there's a very, very large financial institution that still doesn't have that, but they fixed it in a way by making it, so they track every person that started the process and amps out and they immediately call them and involve a person. And you have a likelihood of not having to hang up on a person.

Jim Marous (21:42):

And since you just try to engage, you think, "Oh my gosh, I maybe put something at risk." And so, that customer care area, it's clunky, but we don't lose the potential customer.

Jim Marous (21:54):

How long did it take you for that? Just that one piece to get put in place from the point of saying, we got to fix this to it's prefixed.

Don Relyea (22:06):

I don't actually remember the specifics on that one.

Jim Marous (22:09):

Less than a year.

Don Relyea (22:10):

Less than a year. I knew it was less than a year, but-

Jim Marous (22:12):

I think it was close to that three-to-five-month period. And it's interesting because I bring that story up because we all face this daily, and U.S. Bank has more layers and more components that can slow up a process. So, the fact that they can implemented scale and speed is a big deal.

Jim Marous (22:29):

Within the organization because you had to make the decision to move to U.S. Bank. You were moving from BBVA if I remember the correct or structure of where you went from. And BBVA is ultra and innovative. That's their chops. That's what they really are good at. They've had great leadership that came from outside the banking industry. They have a legacy of leadership leading innovation.

Jim Marous (22:57):

What is it about U.S. Bank that makes digital transformation and innovation so key to the organization, but so seamless. It's, you don't have to go through a lot of layers and fight battles through the way. How does the leadership provide that impetus to get these things done?

Don Relyea (23:16):

That's a great question. We have senior level support all the way at Andy Cesare level. A great example of that is in our programs group, we do innovation week every year. That's generally in Q4, where we bring in speakers from technology groups and whatnot. Andy Keynoted that last year.

Don Relyea (23:39):

Dominic has also really set up in digital, like the digital transformation is actually done really, really, really well. It's object oriented. So, and what that means is we've actually thought about how to do everything right. We've taken the time to do it right, and we've done it right.

Don Relyea (23:59):

And this actually opens up lots of opportunities for innovation across the bank in terms of how we, um, how we can automate things faster. And as the new technology verticals move up, we're actually really well positioned for a lot of that.

Don Relyea (24:16):

Also, innovation it's a long game. And Dominic understands that. Andy understands that. So, we have the air support to experiment with some things as well. And we've kind of hit a scale at U.S. Bank where we actually can mix our portfolio.

Don Relyea (24:39):

So, we think about the portfolio of work over kind of Horizon one, which is near term stuff. Horizon two, which is a few years out. And Horizon three, which is kind of the applied foresights arena. And most of what we work on right now is that Horizon two space.

Don Relyea (24:57):

And our job to pull it into the Horizon one, where the lines of business and the agile teams can take it and execute it and scale it and put it into market. We also think about innovation as it's almost like a culture. So, the programs group that we have at U.S. Bank, I think is really world class.

Don Relyea (25:25):

I haven't been at every bank, but I've been at a few banks, and I haven't seen anything like it. So, at U.S. Bank, we really want everyone to be an innovator, all 70,000 of us. So, but how do you do that? We want them, we want what's focused engagement on innovation across the bank.

Don Relyea (25:47):

So, we don't want them inventing stuff that's not related. We want them to leverage their own subject matter expertise, where they sit to improve what they're doing on a day-to-day basis. We want them to have that safe space, that comfort to say, "How can I do this better? Is this process a pain for me as an employee? Or is it a pain for our customers? How can we fix that?"

Don Relyea (26:11):

So, we've set up a variety of programs that actually are open to every U.S. Bank employee. So, we have an idea place where people can submit ideas. We have idea challenges. And these are super cool, and it's very unique as far as I can tell.

Don Relyea (26:32):

And these are tailored around the lines of business. Line of business leaders can initiate an idea challenge with their entire organization, and we can tie it to whatever is important to them. Usually it's some combination of their organization or the bank's strategic objectives combined with inspiration from new technology like AI or blockchain or other types of things.

Don Relyea (27:01):

And then we crowdsource the ideas across their entire organization. They all come into idea place. And from there, we work with their leadership team to filter the ideas into winning ones. And we'll typically get hundreds of ideas.

Don Relyea (27:16):

And then we'll filter them down to 5 or 10, whatever the appetite of the leadership in the line of business is willing to put the time in to manage. And they vote on them. It's kind of like a shark tank.

Don Relyea (27:30):

And then, the winning ideas, we'll usually combine similar ones into teams. And then we do bootcamps with them where we actually train them in the same frameworks that the enterprise innovation team uses on big projects.

Don Relyea (27:48):

And it's a learn, share, do model where we teach them how to do things like market analysis, TAM SAM SOM, business model canvases. We teach them how to kind of pitch to executive level folks. So, that means crafting your message as to how does this tie into the organization's goals?

Don Relyea (28:09):

How is this solving client pain, these kind of things. So, and then those folks, they stay in their jobs. They keep working there, and a lot of them often move up. We also do innovation training and applied foresight with our high impact development program.

Don Relyea (28:30)

And that's actually going on right now in Minneapolis, where the emerging leaders, the folks that are moving up in the organization and succession plans are being trained in how to use applied foresights to look at how are these emerging customer behaviors going to impact my products and my portfolio.

Don Relyea (28:57):

Is a change in customer behavior likely to impact my P&L? What do I need to do to get prepared? What are the market signals I need to look for if this particular customer behavior or future becomes more prevalent?

Jim Marous (29:15):

Do you really become like a service organization for the overall bank, where a lot of the innovation is a bottom up. So, if somebody finds a problem, they have an access to putting that out there to say, can we fix this?

Jim Marous (29:27):

And I think, I talked to you about some banking problems I had recently where little things like a double NSF on a deposit I transferred, which as we all know, that's caused by the fact that we're running withdrawals before deposits.

Jim Marous (29:43):

But there's ways to fix that, if you have a current customer, that would be something you go to it. Where I had an airline example where I had a ticket change from one class of the ticket to another class, and yet they had me board where they were putting me, I mean, irritants.

Jim Marous (29:57):

But since it's instilled across the whole organization, if I'm a teller in my third day of work and I see something that I go, “God, I can't believe they do this, this would really tick me off.” They have an access to get that changed.

Don Relyea (30:12):

Yeah, absolutely. They do. And that's actually, there's a bottoms up approach where we crowdsource, there's also a top down approach. So, we're an agile organization. We moved to the product model. So, all the lines of business now have chief product owners.

Don Relyea (30:33):

So, when you think about, I think some of the big challenges we've seen is from the innovation team, it's like, we want to do this whole bank product where there's a card component to it and a wealth component to it and a consumer component to it. And that's been a little bit challenging because of the organizational structure.

Don Relyea (30:55):

But now with the chief product officer model, there's a small number of people that's easy to get into the room to talk to about that. So, we're super excited about that. And that's been a development over the past two years, that's going to make it better.

Jim Marous (31:11):

So, you have the ability to actually change in a certain way, the organizational structure to function in a more efficient way to drive innovation. So, you've mentioned so many things in your conversation around the organization really, really, really wants to make it so innovation becomes the centerpiece within the customer side of it. From the standpoint of making it so it becomes part of your daily job, it's second nature as opposed to, “Jeez, I wonder if there's a way to do this type thing.”

Don Relyea (31:42):

Yeah, absolutely. And I think at the end of the day, if there's a dozen people you can get in a room and align them around goals, which our strategic goals everyone knows them. So, it's a lot easier to solve those problems. People want to solve those problems.

Jim Marous (32:01):

So, there's always more things to solve than there's time to solve them. I mean, I've met with individuals, one-on-one over the last three years. A lot of them, I mean, tens of thousands of people one-on-one, and I ask one question almost every time I meet somebody saying, what's your biggest challenge today?

Jim Marous (32:19):

And invariably, every single, I mean, 95% of them-time, I don't have time to do what's needed. So, it becomes a prioritization process. At U.S. Bank where there's all this momentum around innovation, you can't say yes to everything. How do you prioritize ideas and innovations and challenges and implementations? How do you prioritize them on a daily basis?

Don Relyea (32:42):

Yeah, that's a great question. And we have a pretty robust framework for doing that. All of our work is tied to either some kind of strategic impact for a line of business, a customer pain point or there's work around proof of technology, trying to learn about the technology and get it in front of business leaders so that they understand the impact it's going to have to their product and to their customers.

Don Relyea (33:14):

So, all of our work has TAM SAM SOM type stuff assigned to it, unless it's a technology proof of concept or pilots that are too early for that sort of thing. And once again, it's that sort of horizon. Is it a near term thing? Is this something that an agile team could be spun up if you have money.

Don Relyea (33:38):

Because they'll come to us in looking for staff org, but we say no to that. If there's a problem to solve, if there's a, a fintech partnership to explore though when they come to us, we'll definitely point them down that path, and that kind of thing.

Don Relyea (33:58):

So, we focus mostly in Horizon two efforts. Things that are a couple years out that we can drag to the line of business. And we test and learn on these. We have a scientific process, so we test with customers, we test with partners. And if things aren't ready for the market yet, we put them on pause.

Jim Marous (34:21):

So, you have the ability to turn on and turn off an innovation. It's not just a, it's got to be perfect before it goes out. There are times where you'll actually go back and retrofit to the previous-

Don Relyea (34:34):

Yeah. And our award-winning smart assistant is a great example of that. So, the team even-

Jim Marous (34:40):

So, you’re also marketers as well as anybody, you get to put these little plugs in for your smart assistant. That's good.

Don Relyea (34:47):

Yeah. But that was the team before I was even at the bank. Dominic and crew found voice tech about 10 years ago at CES, and they were like, “People are going to be banking on this.”

Don Relyea (35:03):

But we tested and learned, I think we did all kinds of customer support stuff with Alexa, and we learned Alexa was terrible at answering customer support questions at the time. The customer experience just wasn't there yet.

Don Relyea (35:16):

So, we kind of kept it on the back burner and continued doing some R&D efforts on it as the technology improved. And then in ‘22 we launched it. And it was a great platform, and we were actually able to also redo the whole thing in Spanish, also in about a year's time, which is a pretty big deal.

Jim Marous (35:41):

In many ways from a customer's perspective and everything else, when you look at what's going on, I mean, everything you've presented is a pretty rosy view of what can happen. And you have a team that's looking at the future. You have a team that's looking in the near term, got a team implemented, you have within your organization, you have different categories within your group that can work together to get things implemented. Not everything works according to plan.

Don Relyea (36:04):

Yeah. No, absolutely.

Jim Marous (36:06):

When you look at it on a broad sense, as opposed to one versus another implementation, what's the biggest challenge you face today within an organization that's committed to and proven some pretty good chops in the innovation side? What's the challenge today?

Don Relyea (36:22):

I would say the biggest one is we have air support to fail in innovation. But culturally outside of innovation we're still working on that. And the programs is what we use to kind of evangelize that test and learn. And that's even made it all the way to Andy who said, “I want people to test and learn, just not on their P&L.”

Jim Marous (36:48):

As long as it doesn’t cost anything you can test all you want. Yeah, exactly.

Don Relyea (36:51):

But trying partners and failing them quickly is important. 90% of the work we do either gets put on pause or it's canceled. There’s really somewhere between 5 and 10% actually makes it to commercialization.

Don Relyea (37:11):

So, when you look at that, it's just that culture of learning on a regular basis that is important. And once you get outside of the safe space, sometimes it's a challenge, really to get that because people … I would say the biggest barrier is that it's so easy to say no because you assume that that's the riskless decision.

Jim Marous (37:40):

And that's actually culturally, I think the biggest hurdle we have as an industry is that when you're hired, you're hired most likely as the organizations in a risk avoidance institution. As opposed to (and you've come a long way in this, but we've had some other interviews we've done that they've come longer, they've come shorter), a risk management process.

Jim Marous (38:07):

And I give an example of mBank in Poland, it could have been eight years ago, 10 years ago even, where they were instructed by the top management, find a way to give a line of credit to every single person that has a mobile phone that has our accounts.

Jim Marous (38:20):

Now, initially you go, “That can't be done.” Well, start rethinking what you think is a line of credit. It doesn't have to be a thousand dollars. It can be $50; it can be a hundred dollars for the Polish example of that to make it so you can expand it first.

Jim Marous (38:33):

But you have to rethink your whole risk assessment role to say, “I'm not going to be afraid to have a loss, but I want to limit the size of that loss from an individual perspective.” So, really, as you've mentioned, risk is still a difficult process and as is fraud and losing of identity. So, you got innovation kind of worse against the fraud speed.

Don Relyea (38:58):

Yeah. Yeah. I mean, so without mentioning any names, the lady who onboarded me into innovation team, she used to run our design thinking team. And she is now in risk at a senior level. So, that's a game changer. And that's really what's really opening the door for us to get that risk SME experience into the solutioning part. We're on a journey.

Jim Marous (39:34):

It’s almost the way that the legal change from being a no you can't because this is against the law to, I'm going to tell you what the risk is. And you can determine if you want to take that risk or not. I mean, have a risk person in that mindset to say, I'm going to take the slings and arrows if I'm wrong on things because it's going to somehow fall on her.

Don Relyea (39:54):

We have a strong design thinker in risk now.

Jim Marous (40:00):

That's transformational. It makes your job more fun and easier just by the nature of that.

Don Relyea (40:05):

Yeah.

Jim Marous (40:06):

So, before we go to some questions, I do want to have some time for questions. What excites you about the future right now?

Don Relyea (40:14):

This is actually probably one of the best times to be in innovation or transformation of any kind. When I talk about my career path, I got to experience the internet revolution three years into my career and it was amazing.

Don Relyea (40:34):

And then I was at Verizon during the mobility transformation. And that was amazing. And we're on the precipice at the very beginning of the automation transformation. And it is probably the most exciting time so much is going to change from a technology standpoint.

Don Relyea (40:57):

But don't panic because as businesses we are still going to have customers, customers are still going to have pain points. And even if everything about your job changes due to automation, it's those relationships and the customers that you need to stay focused on. If you do that, you're going to be fine.

Jim Marous (41:18):

Yeah. You probably know Brian Roemmele. I interviewed him on the show and he's an AI savant. And he said, “My vision of what's going to happen in banking is not only is the consumer going to have their own digital agents, but we're going to have digital agents for each customer within the bank that will be able to talk to each other and bring the best possible solution,” based on question and answers in that the digital agents will be able to answer the questions ahead of time so that we can move the journey forward.

Jim Marous (41:47):

And that is not that far away. We know it isn't, but it's hard to embrace that. And it's exciting. It's a great time to be in bank. I think you're right. We need to get some questions from the audience because I'm sure there's got to be some — there we go. I'm glad that I didn't just say what's going on and nobody answers it. Yes, go ahead.

Female (42:03):

I manage our innovation department, we're still in our entity around two years. So, when you say three years, they fizzled, I get a little scared, for someone who is trying to get to your 12 years.

Don Relyea (42:18):

Yeah, absolutely. Once again, the most important thing you can focus on are those customer pain points.

Jim Marous (42:26):

That are real today.

Don Relyea (42:27):

That are real today. And as a new and emerging innovation team, you want to get some wins on the board, so don't go for the metaverse right now. It's not quite ready. Go for embedded services plays, fintech partnerships, tackle stuff that's just a little beyond where the digital maturity of your standard, uh, project teams are and find those things and pull them in and get a win.

Don Relyea (43:01):

What you'll do there, you'll build the credibility and the airspace to take more risk later. And like I said, I got the privilege of coming in-

Jim Marous (43:12):

After wins were already-

Don Relyea (43:13):

After Dominic already did all that. But I've had to do it in Verizon and other places by myself.

Jim Marous (43:21):

If you're involved in innovation at any level or want to be, U.S. Bank is not silent about how they do things and how they try to do things differently. It's very interesting because on one hand they're a big bank, we all know that.

Jim Marous (43:34):

But when he talks about partnering with fintechs, it's very much a small bank mentality saying, how can I get these incremental wins with partners that I can put in place immediately? Because I don't have to wear my crown of pride to say, “Oh, by the way, their team can do it better than my team.”

Jim Marous (43:51):

I think the most exciting part is the companies downstairs are going to own that. And if you find a partner that's going to do digital identity, they're always going to have to win the game of digital identity as opposed to a person that has five other assignments and may be fast follower.

Jim Marous (44:08):

You get those fintech partnerships because you want a leader as opposed to a fast follower and you've gone as far as a company to invest in that too. So, when fintechs had struggled a little bit with funding, you actually saved them in certain cases if they had a great solution, which is-

Don Relyea (44:23):

Absolutely.

Jim Marous (44:24):

Which is key. Yeah. Another question. Yes.

Male (44:27):

Hi. Great talk. Thank you. My question is, how do you handle the transition from like Horizon two into Horizon one? Is that where you handle the …

Don Relyea (44:36):

Yeah, absolutely. The question is how do we handle the transition from when we drag it out of Horizon two into Horizon one? There's a really clear handoff from the innovation team to the line of business where we're driving it as we're pulling it over to them.

Don Relyea (44:53):

And then when, when they're ready to commercialize, we step back, we hand it to their product owners, their agile teams take over, their engineering teams take over the integration piece, and we stay on as advisors until it's commercialized.

Jim Marous (45:10):

One more question. Yeah, go ahead.

Female (45:12):

How do you recommend a bank who we’re a banking as a service, how do you recommend shifting that culture of thinking to an innovative — to get your employees to think more innovative, especially with the changing technology? What's the plan or framework for changing the culture?

Don Relyea (45:33):

We actually really thought about that more when we designed our programs team as an, it's got a big employee engagement piece to it. So, we track engagement, we find that employees are actually really interested in this stuff. So, we have regular programming. There's regular programming on AI and developments in that space. We have a regular blockchain thing, and these happen like every other Friday or so-

Jim Marous (46:00):

These are educational programs?

Don Relyea (46:01):

Yeah. And they're hosted by our programs team. And we'll pull in external speakers. In some cases, we'll pull in internal SMEs. We cover internal use cases where we're having success. And a lot of that's just to educate the banks or the rest of the bank on what's happening in a particular line of business where we have a win.

Don Relyea (46:24):

Reuse is a big deal across the U.S. Bank. So, when we solve something with a new technology, we want to broadcast that across the rest of the bank and programs is a great way to do it, as well as our agile demo days. The innovation team is partnered with the agile team on demo days.

Don Relyea (46:44):

So, we coordinate the demos. There'll be product release demos of what we put into market, but they'll also be R&D demos of what's coming and what people need to begin thinking about.

Don Relyea (46:55):

So, thinking about how to push that culture of innovation out as an employee engagement piece is actually super cool. And I also have the employee segment digital. So, our programs is working very, very closely with that. And they work with HR and everything else. So, all of these learnings get tied into our learning center, our skills academy, our product academy that we have.

Jim Marous (47:20):

It's interesting one thing that made me aware of U.S. Bank a long time ago around innovation is they market internally what they've done in innovation, it becomes part of bragging right? Saying, we're doing this, we've done this. It's not silent innovation that I'm still amazed that banks don't continually do updates on your mobile app, like every other company does saying, “Hey, we're doing this and this is why we've done it as a marketing tool.”

Jim Marous (47:47):

But the reality is, the educational side of this, I was just in Dubai about almost two months ago now, Emirates NBD Bank has the most massive training team I've ever seen in my life. And most of their training is on generative AI, digital transformation, innovation, all these elements that we never thought would be part … well, I'd rather train on how do you avoid not counting money right in the branches or whatever it may be.

[Music Playing]

Jim Marous (48:15):

Yes, you have to do all your government regulated training, but to do training that helps so much on proving to people we're putting our money where our mouth is, and you guys have done it. Emirates NBD, you can do research on it. They have amazing — I spoke to a class, which is amazing by itself, in front of 275 people that were brought in to learn about what the future bank is going to look like.

Jim Marous (48:38):

The next month, the key outside speaker is going to be talking about innovation. The next person is going to be talking about the metaverse. Something that's not even going to be touched by the bank for quite some time.

Jim Marous (48:47):

But among all these, they have dozens upon dozens of other smaller group learning processes. That's how you get it to be part of the culture is you keep on talking about, that's the importance.

Jim Marous (48:59):

That's how we do everything. We're out of time on a legal perspective and already being asked. They're wanting to know where I am at the next thing.

Jim Marous (49:09):

Thank you.

Don Relyea (49:10):

Thank you, Jim.

Jim Marous (49:12):

I think we appreciate the passion. It's very key. Thank you and thank all of you. Really been fun to be doing these podcasts. It's good not to be in my little office with literally padded walls in a 12 by 12 room that is my desk and my podcast set up. But thank you for being here live.

Don Relyea (49:30):

Thank you.

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