Using Data to Deliver a Next-Generation TechFin Platform

Jim Marous (00:00):

Hello, and welcome to Banking Transformed, the top podcast in retail banking. I'm your host, Jim Marous, Owner and CEO of the Digital Banking Report and co-publisher of The Financial Brand.

Jim Marous (00:21):

More than ever, financial institutions are expected to know what account owners need and want, even before they do, using relationship history, transaction data, and even insights from outside the bank. Consumers want you to know them, understand them, and reward them.

Jim Marous (00:42):

Combining historical account ownership history with real-time transaction data can provide a great predictor of what account holders want to do next. The key is to keep the account holder data safe, while providing a value-add with every single engagement.

Jim Marous (01:02):

We have Deep Varma, Chief Technology Officer from Alkami on the Banking Transformed Podcast. Deep shares how modern technology can enable a next-generation sales and service platform that increases revenues and lower costs for financial institutions.

Jim Marous (01:18):

More and more account holders prefer to use digital banking to do their daily transactions, as well as to shop and buy new services and products. But the competition from non-traditional providers, it's very stiff. Using internal and external data, modern technology and a challenger mindset, regional community financial institutions can be the convenient choice consumers want, and the confident choice consumers need.

Jim Marous (01:51):

So, Deep, it's been a while since we met each other at your event in Dallas, but welcome to the show. Could you introduce yourself and give our people on the podcast today a quick overview of Alkami?

Deep Varma (02:05):

Sure. Good to meet you, Jim, again, and it was exciting to meet you last time in Dallas. So, a little bit about Alkami, but before that, a little bit about me.

Deep Varma (02:14):

I'm Deep Varma, Chief Technology Officer here at Alkami. I'm a Silicon Valley veteran based here in San Francisco with over 25 years of experience and bring a lot of experience from the banking side, consumer side, and really excited to be part of Alkami.

Deep Varma (02:31):

What is Alkami? So, when we think about Alkami, is a TechFin company, which is building this world-class digital sales and service platform. And when you think about this sales and service platform, it has two pieces, and the one piece is onboard and grow, and the second piece is engage and guard.

Deep Varma (02:54):

So, this platform enables these financial institutions to modernize their infrastructure, to partner up with Alkami so that we can help them increase their revenue and decrease their cost of operations.

Jim Marous (03:09):

You know, it's interesting, you have a very long career in technology within the banking industry. Can you share how you've seen technology really expand what banking can do and what it really can be for the consumer?

Deep Varma (03:23):

Yeah, and it is interesting because Jim, when I look into this banking industry, there are three stakeholders in this industry. So, one is the consumers or the members; the second one, financial institutions; and the third one are the regulators.

Deep Varma (03:40):

It is so interesting in last, I will say, 10 years, how the technology is struggling, plus how the technology is making inroads into all the three areas. Number one, when we see from the consumer's point of view, technology has really made it very easy and simple to use the banking apps.

Deep Varma (04:05):

Like now, I can sit at my couch and I can do my transfers. I can look into the data and insights and to see where I'm spending money. So, for the consumers, more data, more insights, easy-to-use, and the product offerings. They have more on the table with the technology, they can go to bank A or they can go to bank B.

Deep Varma (04:30):

So, I think this is to me, is when consumers are on the driving seat, we can see that change happening. And that is the reason why many years back, the FinTech started coming up because there was a gap in the industry. Now, when you go to financial institutions — so we just talked about the front office, which is what the members or the consumers see.

Deep Varma (04:55):

In last many years, the middle office and the back office, that is also where technology started making inroads. Now, banks are saying how I'm going to effectively run my business, how I'm going to integrate with so many systems, how I'm going to bring this data, which is distributed in different places.

Deep Varma (05:15):

So, I think that's the second level where I believe how the financial institutions operate more effectively using the technology and the automation with robotic process automation. All this is popping into the mid-office and the back office.

Deep Varma (05:34):

And the third one is regulators. Now, with the technology, they can really see what's happening in the financial institutions because the accessibility of the data, now you look into the Fed now, which is the real-time payments, the speed of the innovation is also increasing to bring the more value.

Deep Varma (05:56):

So, I believe all the three stakeholders (consumers, financial institutions, as well as the regulators) are getting advantage of this technology.

Jim Marous (06:07):

You know, it's interesting Deep, that we talk about technology, but technology is only the starting point. And in fact, technology by itself, really doesn't move a financial institution forward if other things don't change. What are the challenges that you've seen as financial institutions, traditional banks try to modernize their core system, their services and their product offerings.

Deep Varma (06:33):

I think the challenges is, if you go back, the way the systems have been built, they have never been built from the technology-first mindset. It has been built and over the period of time, the financial institutions start building their own heterogeneous systems or one data here, one data here.

Deep Varma (06:55):

And this team, I'm doing my own work, migration to cloud being challenged. There are more and more layers which have been keep building on top of their technology. And what they realize at the end, they're not catching up with the innovation because the speed of the innovation is much faster.

Deep Varma (07:16):

And I think their biggest challenge is cloud is much more mature at this moment of time, so they really need to start thinking about migrating into the cloud or maybe the hybrid cloud. The second is how to take advantage of the data, what they have in their favor.

Deep Varma (07:37):

And they're struggling because I can tell you with my own experience, they have huge data, but they don't know how to use this data altogether. And the third is, which I think you also mentioned last time when we met — they really need to understand their customers because once you understand your customers, you can serve them better.

Deep Varma (07:58):

And I think on top of it is a regulated industry, so you need to stay within the regulation. So, that puts more pressure on the system. And I think their challenges is the system has been built in a way that everyone is so paranoid about making a change because they think if I change this, this is not going to work because of all the systems living in their own silos and not talking to each other.

Deep Varma (08:27):

And institutions keep on building these bandaid solutions — well, let me do this, let me do this — which is not going to scale. And I think this is what the challenge is, what we are seeing in the industry at this time with the financial institutions.

Jim Marous (08:41):

Well, almost every financial institution says that the banking transformation process is really where they're focusing. They're trying to transform to more being a digital banking entity. But as they try to make customer experiences better, it's the technology that really makes a difference.

Jim Marous (09:00):

And as your event showed, the ability to bring together solution providers such as Alkami really makes it so that any institution, any size can move forward at speed and at scale. One thing you introduced at the conference was the whole concept of “TechFin” as opposed to FinTech. Could you talk a little bit about this concept and the way you're deploying it at Alkami?

Deep Varma (09:28):

Yeah, and I think it goes back few years, this is even before joining Varo, I was trying to understand the landscape. And I see with the E-trade was the first company we started moving into a FinTech direction. And I started thinking FinTech means you are always being thinking about finance domain first, which totally makes sense, and then the technology second.

Deep Varma (09:57):

But now, with the ecosystem has evolved so fast, the technologies have evolved so fast. With the consumers on the driving seat, you need to make a mind shift change and that mind shift change is a TechFin — that you are technology company first, which is building the financial solutions.

Deep Varma (10:20):

Now, when you think from that point of view, it changes how you operate, it changes how you execute, it even changes how you build the systems. And to me, for Alkami to build this world-class digital platform, which is serving both the sales and the service platform for our customers, we really need to be a TechFin company.

Deep Varma (10:47):

And what I mean by the TechFin company, are we reliable? Can members use us 24/7? Are we scalable? Can we scale based on the financial institutions because we want them to grow? Are we building this platform which is much more efficient? Are we building this platform which is quality-based and it is performing?

Deep Varma (11:11):

So, when you think about this from the TechFin point of view, in my organization, and as well as in Alkami, we start the conversation first talking about the technology because financial solutions are just the outcome of the technology, as you said earlier. That's what the members see.

Deep Varma (11:32):

And the other thing, Jim, which you and me also discuss in the Dallas event — consumers are on the driver's seat at this moment of time, and they're driving this change and technology is one of the most ... one of the things I have is the powerful weapon that we have in our arsenal to operate with the speed of the pace of the consumers, what they want.

Deep Varma (11:57):

And that is where the TechFin comes into a play to transform the organizations and as well as build the platforms which can scale and can operate 24/7.

Jim Marous (12:10):

So, with that in mind, we keep on talking about being more of a digital company, changing the way we're doing things, changing back office, changing front office. As you and I discussed in Dallas, change sucks. I mean, nobody goes out saying "Just see how we can change things" because it's really difficult to change what you've done for years, for decades in many cases.

Jim Marous (12:33):

How does your firm help organizations with that transition? Because you obviously have to bring more than just the technology to the table. You really have to bring things that make it easier for them to change the way they've done things in the past. How do you do that?

Deep Varma (12:52):

Yeah, and it's so interesting, Jim, when we talk about the change. Change is eminent, but the change is tough too. And especially, if you've been operating for many years under doing the things in the certain way, it is not possible because humans are the one which needs to change and the technology changes later. That's the way I look into it.

Deep Varma (13:17):

And I think what Alkami does is we help you with this because we are the edge on that, and we use the latest technology, we are innovating, we are looking forward, we are seeing what's going to happen in the technology, how we do.

Deep Varma (13:33):

What Alkami does, it provides the platform where you just don't need to go and boil the ocean in one go. You can come and say this is the one area of the business what we want to digitize. We want to change the consumer experience, and you just focus on that.

Deep Varma (13:50):

And what I call that, don't boil the ocean, just do something simple, prove the value. And the value at the end of the day is your members. And I think this is what Alkami is on the forefront, because we've been in inception since 2009.

Deep Varma (14:08):

We have 15 million consumers on our platform. We have 200 financial institutions, so we just don't have a product and technology, but we have a leadership, we have experience, we have a people, so our sales service support team, we all come together to help financial institutions to take them to the level where we want to take them. And this is sometimes I call, we are also coaches here to help financial institutions.

Jim Marous (14:43):

So, when you sit down with a financial institution — you've been on the FinTech side where you were a startup, and as you said, you were built as a digital organization. But as you started to reach out and meet with these financial institutions, the traditional financial institutions, what has been the biggest challenge that you've seen as you've tried to support their journeys?

Jim Marous (15:06):

Is there any theme to what you see in saying, "Geez, you know what, this gets in the way?" And I've talked about it before, I talked about it at your conference, that one of the things that I see is financial institutions tend to get in their own way on things they want to change.

Jim Marous (15:22):

They say they want to change something and then they put something legacy in the way. But what have you seen out in the field with regard to what organizations, the challenges that they're facing in trying to do things differently?

Deep Varma (15:35):

And you nailed it down Jim, I think the one consistent pattern of we don't know how we are going to make that change happen because we've been doing this for the last 20 years. That's the common theme.

Deep Varma (15:49):

The second thing is the internal hurdles, what they have to pass through with the different, different organization because people are living in their own silos and everyone gets nervous how this is going to impact them. That's the second.

Deep Varma (16:05):

And then they don't understand how the technology fits into the spectrum to help them: "Oh, I have my on-prem code which I'm running and I don't know how this is going to happen."

Deep Varma (16:20):

So, to me, they don't know how to go from here to here. There's a big gap. And the gap is, what I'm seeing is the gap is not just the technology or the product, it's an organization, it's the thought process.

Deep Varma (16:36):

And I feel the best way for financial institutions to really bring the change — because Jim, you and me talked about this and I really believe change is eminent. No one can stop the change at this moment of time.

Deep Varma (16:51):

The genie is already out of the bottle. Whether you love it or you hate it, that's going to happen. The best thing what financial institutions can do, and there are times I go to the financial institution, I'm going to form my own digital organization to do this, but you just cannot do this in silo. You have to bring everyone together.

Deep Varma (17:12):

And I think my recommendation to them always being, try to partner up with innovative companies like Alkami who can help you understand what are the steps you need to take to digitize, and what can we do to help you rather than you stuck in your own spiral and don't know how to come out of it.

Jim Marous (17:37):

Yeah, I mean, that is so key. And I think this is what's so exciting about this time. We have solution providers out in the marketplace now that can, I'll say, hold the hand, but I don't mean that in the derogatory sense — but can really help an organization transform themselves digitally very quickly and at scale in a way that's never been possible before.

Jim Marous (17:59):

You can take pieces, parts. And a lot of the excuses that we use as bankers ranging from regulatory to compliance to, geez, “We've never done it this way, to our data is not formatted correctly” — organizations such as Alkami have really worked to bridge those challenges, to make it so that those are no longer the biggest challenges.

Jim Marous (18:21):

And as you mentioned, you work with so many different organizations and so many consumers, there's really not very much you haven't seen already. So, for an organization to partner with Alkami or another organization, they can see the fact that we don't have to learn by trial and error, we can learn through experiences that you've had.

Jim Marous (18:43):

So, what's interesting also as we enter this time, nothing works in a vacuum. So, the reality is we're in a time of economic uncertainty, to say the least. I mean, there's a lot of things going on right now that challenge organizations that want to invest.

Jim Marous (19:01):

However, what really amazed me at your event in Dallas was of all the people that were at the event, all of them were saying, “We aren't going to stop. We're going to continue to move forward. We're going to continue to invest and do things differently. We may not scale them as big right now, but we're going to do something.”

Jim Marous (19:21):

So, if you were a financial institution, a beginning financial institution; a community bank, a credit union, where would you start as you try to change your technology stack, given the economic uncertainty today, and knowing that investment may be limited, you may have to bring a return on investment quicker than ever.

Deep Varma (19:43):

Yeah, and I think I always, Jim, go back to what is the goal you are trying to achieve? At the end of the day, the financial institutions, you are serving someone. Who you are serving — are you serving your members or you're serving your business accounts?

Deep Varma (19:59):

So, what they need to understand is what are the pain points, and then understanding those pain points and the business goals. And especially, I think we know what's been happening in last one year, as you said, there is an ROI model. Every CIO, CTO sitting on the table have to convince their CFOs, why should I invest in this because it's a tough market to be.

Deep Varma (20:25):

And I think to me, start with the purpose and the goal. Who you are serving? What are the gaps you have? Are your members staying with you? Are they just coming and maintaining this transitional relationship? Or you want to transform this transactional relationship to the emotional relationship.

Deep Varma (20:47):

I think once you define that, don't go and try to do it by yourself because it is a complicated technology. It is not easy to do it. And what's going to happen, this is actual money, so you cannot make mistakes. That's another thing.

Deep Varma (21:04):

So, I will say this is where, go back to the basics, look into the core challenges, understand the ROI model, and I will again, go back and say, just pick one area, solve that area, show the ROI, and then keep investing because at the end, you're going to figure it out — you will save more money by digitizing now rather than what you're spending today. I think that's the part with sometimes institutions.

Jim Marous (21:36):

That's a great piece of advice. You know, it's interesting, when we met each other at the event in Dallas, I did not know exactly that I was going to be meeting you, number one. We're big fans of the podcast of Varo and Colin Walsh and everything that they've done and that you did there.

Jim Marous (21:52):

However, in moving to a new firm, you had to see something in Alkami that said, "Boy, this is the right time." And in your presentation in front of all the users that were out in the audience, you talked about your vision, about what you see as the future of Alkami, what you see as the future of banking, and how these are going to work together.

Jim Marous (22:16):

And to be honest with you, I saw it as almost you saying, “This is why I came here.” So, with that in mind, what do you see as what Alkami's going to be doing in the future? How they're going to be positioned and how they're going to make an impact in the industry that you're going to be part of?

Deep Varma (22:35):

Yeah, and I think Jim, you said it right, there was a massive opportunity I saw in Alkami and I said this is my going to be the next home because I want to go there because the home is the place where you live and then you shine in your home.

Deep Varma (22:53):

I think Alkami is on the cusp of becoming one of the best technology company, which is producing these financial solutions. The reason being, I continue to believe because we have people, those who bring the experience, and we have been in the business since 2009.

Deep Varma (23:14):

We have a massive scale of 15 million consumers, we have launched our product to 200 financial institutions. Now, taking our platform to the next level, the level which is what I call is a sales and a service platform, allow financial institutions to increase their revenue, decrease the cost of operations.

Deep Varma (23:41):

At the same time, we really want to be in the business where I want financial institutions to embrace and extend our platform. What I mean by that is our platform allows you to build on top of it based on your unique needs. And you know, you can take it, you can plug it.

Deep Varma (24:01):

But also, at the same time, CIOs and the CTOs, those who run our platform on the financial institutions, they can be a hundred percent confident that our platform is operational 24/7. It is scalable, you go from a hundred thousand customers to 500,000 customers. We grow with you.

Deep Varma (24:22):

We are stable, reliable, and we provide you this data insights to do the hyper-personalization. And that's also Jim, I got fan of yours when you gave the example, I believe, on some loan you were trying to apply to see financial institutions going to come to you, and no one did.

Deep Varma (24:44):

And how do we take this data and give it to the financial institutions for them to compete with the mega banks and the FinTechs to grow and retain their customers. So, I think that's where Alkami is heading, and this is where we will be as we move into this TechFin era.

Jim Marous (25:06):

You know, what's really interesting Deep, is that what Alkami is doing right now is really, really important for those community and regional finance institutions. I'm fortunate enough to be a host of a podcast that Alkami Sponsors, which is Visionaries Podcast, where we interview small and mid-size finance institutions around how they're hitting above their weight, as we would say, or certainly, doing massive big things being a smaller organization.

Jim Marous (25:36):

And it is a great opportunity to be part of that podcast because it really shows on a daily, on a weekly, and a monthly basis, what is going on in the industry and how modest side organizations can really do amazing things. And so, that's a plug for the other podcast that Alkami sponsors called Visionaries.

[Music Playing]

Jim Marous (25:57):

And it really provides a go-to, a roadmap as will around what organizations are doing around what you've talked about here, Deep.

Jim Marous (26:10):

Deep, thank you so much for being on the podcast today. I really appreciate it and look forward to working with you and talking to you again.

Deep Varma (26:19):

Thank you, Jim. Thanks for having me.

Jim Marous (26:21):

Thanks for listening to Banking Transformed, the winner of three international awards for podcast excellence. We appreciate the support we've received to make this an endeavor of success.

Jim Marous (26:32):

If you enjoy what we're doing, please take some time to show some love in the form of a review. Finally, be sure to catch my recent articles on The Financial Brand and the research we're doing for the Digital Banking Report.

Jim Marous (26:43):

This has been a production of Evergreen Podcasts. A special thank you to our senior producer, Leah Haslage; audio engineer, Sean Rule-Hoffman, and video producer, Will Pritts. I'm your host, Jim Marous.

Jim Marous (26:56):

Remember, consumers don't want a digital bank — they want their banking to be digitized.