00:00:01
I guess - AR JC do who is the chairman
00:00:04
and CEO of customers bank or customers
00:00:07
bank bank mobile and Bank mobile
00:00:10
technologies and also la lien Sidhu who
00:00:13
is the co-founder president and chief
00:00:15
strategy officer of bank Mobile J and
00:00:19
lovely and thank you so much for coming
00:00:20
today to speak with knowledge at Wharton
00:00:22
so happy to be here thank you thanks for
00:00:25
inviting us so you launched Bank Mobile
00:00:28
which you call a completely digital Bank
00:00:31
almost three years ago in January 2015 I
00:00:35
wonder if you could talk a little bit in
00:00:37
the beginning about how did you assess
00:00:40
the state of digital banking in the US
00:00:42
and what's the opportunity that you saw
00:00:44
for the launch of Bank mobile yeah
00:00:48
banking that's a very good question the
00:00:50
banking is all about attracting
00:00:53
customers making the customers feel very
00:00:56
good about their relationship with a
00:00:58
bank so they become customers for life
00:01:01
so traditionally banks have used these
00:01:05
are the built bank branches or the
00:01:07
acquired bank branches to acquire
00:01:09
customers and then we obviously noticed
00:01:12
that customers are coming to the bank
00:01:15
branches less and less and less and you
00:01:18
gotta find a way to attract the
00:01:20
customers so so we actually put created
00:01:25
a task force and said to the task force
00:01:28
imagine if you couldn't open a single
00:01:30
bank branch
00:01:31
how can you acquire customers how can
00:01:34
you be engaged with the customer so that
00:01:36
they say wow this is a great experience
00:01:38
and how can you make them customers for
00:01:40
life and Loveleen ended up heading that
00:01:43
task force and from that idea where we
00:01:47
said if we won't disrupt ourselves then
00:01:50
somebody else will and we don't like to
00:01:53
do that so that's where it all started
00:01:56
and maybe Levine can tell you how that
00:01:58
idea brew then into where we become
00:02:01
America's biggest and fastest growing
00:02:03
digital bank today
00:02:05
yeah and just expand upon what you said
00:02:08
with a few stats it's kind of astounding
00:02:10
but people on average are walking into a
00:02:12
bank branch one to two times a year
00:02:14
but they're interacting with their bank
00:02:16
on their mobile device 20 to 30 times a
00:02:18
month and then talking about from a
00:02:21
business model front for a bank bank
00:02:22
branches are only acquiring 52 net
00:02:26
checking accounts a year per branch okay
00:02:29
that is not an exponentially growing
00:02:30
customer acquisition vehicle so we were
00:02:34
thinking how can we create a sustainable
00:02:36
low-cost high-volume customer
00:02:38
acquisition strategy and that's how we
00:02:41
were able to really develop Bank mobile
00:02:44
and we can talk to you a lot more about
00:02:45
the strategy as we go on
00:02:46
absolutely well why don't we take a step
00:02:49
back and look at the banking move the
00:02:51
mobile banking market in the US as a
00:02:53
whole how do you think it compares to
00:02:56
other parts of the world because as far
00:02:58
as I can see a lot of the action
00:03:00
actually seems to be happening in places
00:03:01
like Africa and the US Africa and and
00:03:05
Asia how does the u.s. compare to those
00:03:08
markets yeah I think that it's been a
00:03:11
lot slower in the US and I think it's
00:03:14
partly because of the regulatory
00:03:16
environment so it's been very difficult
00:03:18
for FinTech players or non banks to
00:03:20
enter into the banking space I
00:03:22
definitely think that there's there's a
00:03:25
reason why that is the case to really
00:03:27
protect the consumer but it also creates
00:03:29
a lot of barriers to entry for
00:03:31
innovators in the space so if you look
00:03:32
at Africa and you look at MSA and and
00:03:35
these that are trying to create
00:03:37
opportunities for the masses to really
00:03:39
become banks you look at India now with
00:03:41
the $1 card and and these numbers and
00:03:44
being able to Bank them and then you
00:03:46
look at China that is creating digital
00:03:48
banks that's creating payment systems
00:03:50
through WeChat and Ali pay you're
00:03:52
absolutely right but there's also less
00:03:55
you know lower barriers to entry in
00:03:57
terms of an opportunity for these
00:03:58
players to innovate and I think I think
00:04:01
what's happened is US banking system is
00:04:05
built upon having giving access to the
00:04:10
vast country's population in a local way
00:04:13
and so there's a belief among the
00:04:16
regulators like Loveleen said that if
00:04:18
you permit digital banking it'll
00:04:20
principally be available in populated
00:04:23
centers
00:04:24
that the remote areas of United States
00:04:27
which is really the middle part of the
00:04:29
country will not have access I think
00:04:31
that's a total fallacy and I think
00:04:34
United States my prediction is within
00:04:36
five years we'll be a leader in digital
00:04:39
banking globally how will that
00:04:43
leadership be established
00:04:44
it'll be established because the
00:04:46
Innovation Center of the world is us
00:04:49
they are there's a lot of innovation
00:04:51
taking place in the FinTech area but
00:04:54
it's the bank charters and it's a
00:04:57
partnership is being debated and the
00:04:59
regulator's are preventing banks to have
00:05:02
a good solid engagement where the
00:05:04
FinTech companies for the benefit of the
00:05:06
consumers because they believe for
00:05:08
whatever reason that FinTech is not good
00:05:11
may not be good for the consumer I think
00:05:15
there is no question that you need good
00:05:18
regulation there's no question you need
00:05:20
good consumer protection but why should
00:05:24
one has to walk into a bank branch to
00:05:27
open an account why this and it's
00:05:29
already disrupted whereby for credit
00:05:32
cards you never have to go to a bank but
00:05:34
if you want to open a checking account
00:05:35
god forbid you need to go to the bank
00:05:37
how crazy that is
00:05:38
so Bank mobile today has really you know
00:05:44
change that whole process whereby Bank
00:05:47
mobile today is opening up almost as
00:05:49
many checking accounts as Bank of
00:05:51
America is opening with approximately
00:05:54
4,000 plus branches across the nation
00:05:57
and I think there'll be more Bank
00:06:00
Mobile's coming up and that's why it'll
00:06:02
become a very common way of doing
00:06:04
banking in the United States and the
00:06:06
regulators are just slow to adapt if you
00:06:09
look today that they've already started
00:06:10
working on the FinTech charters that's
00:06:12
not allowing these fintax to get FDIC
00:06:15
insured deposits but it is a start where
00:06:17
they don't have to go state-by-state and
00:06:19
register and can start you know serving
00:06:22
customers nationally you mentioned
00:06:24
earlier about you know customer
00:06:26
acquisition strategy and I think one of
00:06:29
the advantages that fintechs seem to
00:06:31
have over traditional banks is their
00:06:33
ability to come engage with Millennials
00:06:35
that I was wondering if you have any
00:06:38
ideas on how how banks can engage more
00:06:42
actively with Millennials in terms of
00:06:44
customer acquisition mm-hmm I think it's
00:06:46
it's a good question but I think it's
00:06:48
actually maybe a false perception
00:06:51
because we hear of a couple fintechs
00:06:53
that are doing really well and and they
00:06:55
have great PR like Sophie Robin Hood has
00:06:58
done an extremely great a great job of
00:07:00
acquiring customers and there is a
00:07:02
couple it's like a handful but there's
00:07:04
thousands of FinTech companies out there
00:07:06
and one of their main struggles is
00:07:08
customer acquisition they're actually
00:07:10
resorting to very old-school forms of
00:07:13
marketing like direct marketing where
00:07:15
customer acquisition costs are 500 to a
00:07:17
thousand dollars or more which is
00:07:19
extremely high and not sustainable and
00:07:22
that's why we're seeing a lot of
00:07:23
consolidation of fintechs where they're
00:07:25
either shutting down or they're having
00:07:28
to partner with banks to be able to
00:07:29
create a sustainable customer
00:07:31
acquisition strategy so I think it seems
00:07:33
like they're doing a great job in terms
00:07:35
of customer acquisition because they're
00:07:36
sexy and it's a great user interface and
00:07:39
they're finally paying attention to the
00:07:41
customer experience but in in reality
00:07:43
banks are much better at customer
00:07:45
acquisition because of the stickiness of
00:07:48
the direct deposit checking account
00:07:50
relationship and it's interesting we are
00:07:53
a bank for the Malayan Millennials Bank
00:07:54
mobile and still about 25 percent of the
00:07:58
customers that we have are over age 35
00:08:01
okay so there's a perception that the
00:08:05
non Millennials do not want to get
00:08:07
engaged using digital means but I think
00:08:12
it's the age 35 to 55 maybe is less
00:08:17
receptive but above age 55 is almost
00:08:21
more receptive because they feel like I
00:08:22
don't want to be left behind and
00:08:25
definitely the Millennials consider it
00:08:27
to be a real pain to deal with someone
00:08:30
with a brick and mortar when they can
00:08:32
get a better product at a lower price
00:08:33
and it's more convenient through digital
00:08:36
means I have a question specifically for
00:08:39
you because you have spent so many years
00:08:41
in the banking industry in fact I think
00:08:45
when the last time knowledge at Wharton
00:08:47
interviewed you you were the CEO of
00:08:49
sovereign bank
00:08:51
which was later taken over by banco
00:08:52
santander and so my question to you is
00:08:56
as you enter this new world of digital
00:08:59
and mobile banking from a personal
00:09:02
standpoint are there things that you
00:09:04
have had to learn or unlearn about how a
00:09:07
banking is going oh no question about it
00:09:09
but at the same time the basic business
00:09:12
of banking hasn't changed at all which
00:09:15
is acquiring customers getting engaged
00:09:18
with those customers and considering
00:09:21
customers for life as the faz through
00:09:24
your model for the business and what is
00:09:26
it that the customers are looking for
00:09:27
they're looking for ways on how we can
00:09:30
make more money save more money get more
00:09:32
money get some help on how we can manage
00:09:34
the money it's basic stuff in the bank
00:09:38
branches it's a lot tougher to do that
00:09:41
basic stuff because there's no
00:09:42
consistency and certain bank branches
00:09:45
cost you millions of dollars just like
00:09:48
the one across from Wharton over here
00:09:49
you know between the old Commerce Bank
00:09:52
and the sovereign bank or something
00:09:54
they're bank branches the millions per
00:09:56
year if you can find a way to attract
00:10:00
those customers through digital means
00:10:02
and that's where it hasn't changed so
00:10:05
yes we were looking to acquire customers
00:10:08
through bank branches all the time when
00:10:10
I was running sovereign now we say is no
00:10:13
bank branches how do we acquire
00:10:14
customers so we have developed
00:10:17
partnerships and partnerships is the way
00:10:20
to go in the digital means you look at
00:10:22
any disruptor they are all they're
00:10:25
usually not always usually going from B
00:10:28
to B to C you look at uber you know you
00:10:33
look at Airbnb you know the ones with
00:10:35
the unicorns they're all doing that why
00:10:38
are banks not doing that was a question
00:10:40
that I kept asking and we kept asking
00:10:43
and we came to an answer and it's
00:10:45
working so so lovely I wonder if you
00:10:48
could talk about some of these
00:10:49
partnerships that you just mentioned
00:10:52
yeah how do partnerships fit into the
00:10:56
way in which Bank Mobile is being
00:10:58
growing yeah so for us we call it our
00:11:01
leverage growth strategy
00:11:02
so how in essence can we have one
00:11:05
distribution partner to give us access
00:11:07
to potentially millions of customers and
00:11:10
so today the way that we've really done
00:11:13
it is through virtual digital banks that
00:11:15
are actually eight hundred campuses
00:11:17
across the country so we have contracts
00:11:20
with 800 campuses and what we really
00:11:22
provide for them is proprietary
00:11:24
technology and a lot of regulatory
00:11:26
oversight for any payments that they
00:11:29
need to send between the school and the
00:11:31
students and we actually saved these
00:11:33
colleges on average about a quarter of a
00:11:35
million dollars every year for our
00:11:37
services and in return the students at
00:11:41
these schools get to choose this money
00:11:42
that they're receiving from the school
00:11:44
do they want it ACH to an existing bank
00:11:46
account or do they want to open a bank
00:11:49
mobile checking account and this has
00:11:51
been a great way for us to open about
00:11:53
300 to 400 thousand new checking
00:11:56
accounts each year which really makes us
00:11:58
the number one are close to the number
00:12:01
one checking account acquirer in the
00:12:03
nation with zero bank branches
00:12:05
essentially so I understand that you
00:12:07
have something like 1.7 million
00:12:09
customers that you've grown to in the
00:12:12
past three years was this primarily your
00:12:14
growth strategy yes so right now we're
00:12:16
really dominating the student banking
00:12:18
market so our 1.8 million customers
00:12:21
today have an average age of 27 and
00:12:24
primarily they are students so a lot of
00:12:27
people don't know but the student the
00:12:29
education system in the u.s. is 60%
00:12:31
two-year Community Schools and
00:12:33
vocational schools and and 40%
00:12:35
traditional four-year schools and that's
00:12:37
why our average age of 27 is a little
00:12:40
higher than you'd think
00:12:41
you know a 20 year old or a 22 year old
00:12:43
but it's great because we're able to
00:12:45
serve these customers when they're
00:12:46
looking for a bank account
00:12:48
it's an inflection point in their life
00:12:50
and to there's such a knowledge gap
00:12:52
about credit and how to use money and
00:12:54
money management and there's an
00:12:56
opportunity for us to play in that space
00:12:57
as well I'd like to come back to that
00:13:00
last point you made but I have another
00:13:02
question before that and that is both of
00:13:06
you talked about the importance of banks
00:13:08
engaging with customers in a way that
00:13:10
makes customers you know as you said
00:13:13
feel good about themselves
00:13:16
if you look at more almost all the large
00:13:18
banks today each of them has a sort of
00:13:20
banking app and are trying to add more
00:13:23
and more digital services so whether
00:13:25
it's Bank of America or Samsung there
00:13:27
they have apps that you can use for
00:13:30
checking your balances for transfers
00:13:32
bill payments basic services like that
00:13:34
how can a mobile first you know bank
00:13:38
like bank mobile differentiate your
00:13:41
offerings from the digital offerings of
00:13:43
the legacy banks
00:13:44
I wonder if how do you differentiate
00:13:46
yourselves in position yourselves yeah
00:13:48
that's a that's a 4-game good question
00:13:52
what they are focused on is engagement
00:13:56
with a customer and what we've shared
00:13:58
with you the business of banking first
00:14:01
is attracting customers engaging with
00:14:03
the customers and making them customers
00:14:05
for life so they are still totally
00:14:08
focused on attracting customers to bank
00:14:10
branches they haven't yet had that
00:14:13
so-called Kodak moment Kodak was the one
00:14:16
that developed a digital camera and the
00:14:19
digital camera put Kodak out of business
00:14:21
so they have all these hundreds and
00:14:24
thousands of bank branches they are
00:14:26
hoping that the customer doesn't stop
00:14:28
going to the bank branches so they are
00:14:30
very focused on making their branches
00:14:33
slicker open different hours glass
00:14:35
around it for stand outside invite
00:14:38
people what the for have video screens
00:14:41
in the bank branches but guess what
00:14:43
everybody's walking with a video screen
00:14:45
in your pocket why would they want to go
00:14:47
talk to you in a video you know in a
00:14:49
bank branch that's sort of crazy so they
00:14:53
need to disrupt it themselves
00:14:56
and the reason they are not disrupting
00:14:58
themselves is because of their
00:15:00
infrastructure and this they are making
00:15:04
money by keeping customers misinformed
00:15:08
and I'll be very specific today the
00:15:12
interest rates are such that consumers
00:15:15
as an example should be getting at least
00:15:18
1% of their savings accounts and you
00:15:20
know what Bank of America and JP Moore
00:15:22
and Wells Fargo's are proud of we only
00:15:26
pay point zero five percent interest
00:15:29
they're proud of that fact imagine a
00:15:31
business that says we are so proud that
00:15:34
we charge the highest prices but we give
00:15:37
them an app to get it but guess what we
00:15:40
have found a way to attract customers
00:15:42
pay them a competitive price not rip
00:15:45
them off that is true engagement all
00:15:48
right
00:15:48
give them the benefit of how do you make
00:15:50
more money and that's why they are
00:15:53
either gonna have to change themselves
00:15:55
or they'll have a gradual death that is
00:15:58
my belief haven't been a banker for the
00:16:01
last 40 years and they're realizing this
00:16:05
and the shift is taking place but at a
00:16:08
snail's pace so if you recently read
00:16:11
about JP Morgan launching fin and then I
00:16:14
think it was a Wells Fargo of greenhouse
00:16:17
so they're trying to create these sort
00:16:20
of millennial branded cool names where
00:16:23
it will be powered by JP Morgan so they
00:16:26
have some of the reputational
00:16:27
credibility behind them but they're
00:16:30
trying to use this as a customer
00:16:32
acquisition strategy the way that we
00:16:34
created Bank mobile but but it's taken
00:16:37
than what we we launched Bank mobile
00:16:39
like three years ago and and now they're
00:16:41
finally you know piloting these ideas so
00:16:44
they're thinking about it but it's it's
00:16:46
it's a slow pace I think within five
00:16:49
years you'll see at least a 50 to a 75%
00:16:53
reduction in the number of bank branches
00:16:54
and I think these banks will wake up and
00:16:58
they have the resources to wake up and
00:17:00
they will be fine like the Bank of
00:17:03
America and the JP Morgan Chase for the
00:17:05
world but Loveleen is so right that they
00:17:09
are moving at us very snail's pace Bank
00:17:11
of America closed 20% of their branches
00:17:13
last year hmm what will the bank branch
00:17:16
of the future look like Bank branch of
00:17:18
the future will be where people are
00:17:21
working out of their ok to interact with
00:17:24
their customers in the main segments and
00:17:26
they don't expect a single customer to
00:17:28
walk in but the customer will see it
00:17:30
just in case they ever need to walk in
00:17:32
they can walk in it's not going to be
00:17:35
the most expensive street corner all
00:17:38
right it could be in the 15th floor I'll
00:17:40
give you an example of customers back
00:17:41
customers Bank has a branch at 101 Park
00:17:45
Avenue in New York it's on the 11th
00:17:49
floor okay has 1.8 billion dollars in
00:17:54
deposits that by itself is in the top 50
00:18:00
tanks in the country in size and it's on
00:18:04
the 11th 4th floor of our building
00:18:07
imagine that is so much more efficient
00:18:11
than all these little branches all over
00:18:13
the place in the streets of Philadelphia
00:18:17
it's happening woken up yeah so let me
00:18:25
ask you coming back to Bank mobile you
00:18:27
have I believe you're spinning off Bank
00:18:29
mobile and merging it with flagship
00:18:32
Community Bank what are your goals for
00:18:35
doing that yes so for us so we basically
00:18:40
have a regulatory sort of arbitrage that
00:18:43
exists today because 70% of our
00:18:45
non-interest income is coming from what
00:18:48
you call interchange revenue that is
00:18:50
when someone swipes their debit card or
00:18:52
their credit card but here specifically
00:18:55
we're just looking at the debit card
00:18:57
being a bank under 10 billion in assets
00:19:00
which is what customers bank our parent
00:19:02
company was when we started our
00:19:04
partnership we were able to leverage as
00:19:08
much of this interchange revenue as we
00:19:10
possibly could but under the dodd-frank
00:19:12
it's part of the Durbin amendment banks
00:19:15
that are over 10 billion in assets make
00:19:17
about 4 or 5 times less an interchange
00:19:20
revenue so for us to protect our growth
00:19:23
and our future opportunity it really
00:19:26
makes sense for Bank Mobile to be able
00:19:28
to again be part of a banking
00:19:30
institution that's under 10 billion in
00:19:32
assets and so we have a lot of room for
00:19:33
growth and you can give a customer's
00:19:35
bank perspective yeah we don't like to
00:19:40
charge fees we like to have tremendous
00:19:42
engagement we think in the technology
00:19:45
model ok you gotta be able to have a
00:19:48
very low cost operation
00:19:51
and the only way like Lavigne said that
00:19:53
we make money right now is when when the
00:19:57
our customers swipe their cards so today
00:20:00
we are making about forty five million
00:20:01
dollars a year just with customers
00:20:04
swiping their cards if if we wouldn't
00:20:06
spin-off Bank mobile and make it a
00:20:09
little baby Bank again then that forty
00:20:13
five million will go down to about
00:20:15
thirty million and that fifteen million
00:20:17
would have to be recovered by charging
00:20:19
fees which is not a part of our model
00:20:20
okay so we are basically spinning it off
00:20:24
letting the team flourish and we believe
00:20:27
there is so much room for growth in this
00:20:29
partnership banking that besides
00:20:31
students we've announced that we will be
00:20:34
having a very large white label partner
00:20:36
with a top-notch retail institution in
00:20:41
the nation and we believe that was in
00:20:43
two to three years you know our customer
00:20:46
acquisitions will go from 300 400
00:20:49
thousand a year to perhaps a million
00:20:51
checking accounts a year 1 million
00:20:54
that's what I meant by that would be
00:20:56
more than what Bank of America is doing
00:20:58
and that's only possible by spinning it
00:21:01
off that wouldn't be possible for us to
00:21:04
do if it was part of customers Bank
00:21:07
brings me back to a point you made
00:21:09
earlier about you know providing banking
00:21:13
services to those who may not be part of
00:21:16
the banking world today
00:21:19
how important is Financial Inclusion for
00:21:23
you as a goal he's passionate about that
00:21:26
you should you know part of the reason
00:21:28
we launched Bank Mobile is because
00:21:30
there's millions of Americans that are
00:21:32
really locked out of the banking system
00:21:34
whether it's you know because it's
00:21:36
cynicism and and they don't trust the
00:21:38
banking system whether it's they can't
00:21:40
afford the monthly fees the minimum
00:21:42
balance requirements and in reality big
00:21:46
banks are charging Americans thirty
00:21:48
three billion dollars a year in just
00:21:50
overdraft fees that doesn't create a
00:21:52
sentiment of trust so we wanted to
00:21:55
really provide a banking experience that
00:21:58
is affordable and that can really serve
00:21:59
these individuals that are underbanked
00:22:02
that
00:22:03
banks that are low middle-income
00:22:04
Americans so today we do that by
00:22:07
creating a very affordable banking
00:22:08
product which we have today we also have
00:22:11
a very strong educational component so
00:22:14
we have curriculums that help people
00:22:17
understand the psychology of money basic
00:22:19
money management to be able to
00:22:21
understand that credit components of
00:22:22
credit because even as a you know a
00:22:24
Wharton grad myself there was a learning
00:22:26
curve for me to understand what is
00:22:28
actually the components of credit and
00:22:30
credit is so important for all of us to
00:22:33
be able to you know aspire and reach our
00:22:35
dreams we're all going to need some form
00:22:37
of credit so we have one on one coaching
00:22:39
with our financial coach as well and we
00:22:42
have a blog that is be empowered and
00:22:45
we're rebranding as paradigm money
00:22:46
coming out in in January so there's all
00:22:49
different formats from visual from
00:22:53
auditory you know different ways that
00:22:56
people can learn and really connect with
00:22:58
us and and and really get a solid
00:22:59
financial foundation 20% of Americans
00:23:03
are spending more than 15% of their
00:23:06
income just to have access to financial
00:23:09
services 20% of Americans and that Bank
00:23:16
mobile will end there we think the ones
00:23:21
who can least afford it should spend
00:23:23
nothing and we should have a we have a
00:23:26
duty to help those who are underserved
00:23:29
become more financially literate and
00:23:32
financially less dependent upon the
00:23:35
society where do you hope to go with
00:23:37
bank mobile or the next couple of years
00:23:40
you know for us we want to become the
00:23:44
number one acquire of checking accounts
00:23:46
and it's not just about high volume and
00:23:49
getting as many customers that we can
00:23:50
but it's really about this social
00:23:52
mission that we've been talking to you
00:23:53
about there is 65 million Americans that
00:23:57
are unbanked and underbanked there's
00:23:58
such an opportunity to serve these
00:24:01
customers and and provide them with the
00:24:04
financial foundation they need to really
00:24:05
reach their dreams and so it's it's
00:24:09
really about creating customers for life
00:24:11
adding value to their banking experience
00:24:13
all the way from convenience to
00:24:16
your products and services that they
00:24:18
really need and I hope that in the
00:24:21
process that we serve our customer
00:24:23
customers we also have 220 employees to
00:24:27
be able to impact their lives and in
00:24:29
beautiful ways and be able to expand
00:24:31
their lives professionally personally
00:24:34
our shareholders we hope to really grow
00:24:37
Bank Mobile in terms of very profitable
00:24:39
endeavor over the next three to five
00:24:41
years which should be a awesome
00:24:43
opportunity for our investors and the
00:24:45
communities that we serve so really
00:24:47
excited about the opportunity I think we
00:24:50
are doing good and at the same time
00:24:52
doing really well you know and those
00:24:54
kind of opportunities exist using
00:24:56
technology I've been in like you said in
00:24:59
the banking business for forty five
00:25:01
years this is about the most exciting
00:25:03
times I have ever been in the business
00:25:07
you see an opportunity to use a new
00:25:10
means to really has your exponential
00:25:14
growth it's no longer that 10% growth
00:25:17
American businesses have been going
00:25:20
through either cutting the cost or
00:25:23
finding Schloss small ways to
00:25:25
incremental ease have slight increases
00:25:27
in revenues so that the street expects
00:25:31
if you get 10% increase in revenues you
00:25:34
are a growth company well I think with
00:25:37
technology the street is gonna be
00:25:40
realizing that 20% sustainable growth is
00:25:44
possible and that's only possible if you
00:25:47
do something unique in and deliver it in
00:25:50
a unique way and you have a disruptive
00:25:53
model so the future of banking in my
00:25:56
opinion is going to be based upon doing
00:25:58
few things really well
00:26:00
it'll be niche banking I believe
00:26:02
business banking will remain at least in
00:26:06
the foreseeable future as a human
00:26:07
contact that relationship at the
00:26:11
eyeball-to-eyeball level but consumer
00:26:14
banking is going to go through a very
00:26:15
disruptive change and that's why like we
00:26:19
were talking about the role of the bank
00:26:21
branches is going to be totally
00:26:23
different I just hope there are more
00:26:24
entrepreneurs looking for restaurants
00:26:26
because bank branches to
00:26:28
we'll make some very nice restaurants
00:26:29
you know easy to get in and out of
00:26:32
because I can't imagine banks being able
00:26:35
to continue to afford them anymore and
00:26:37
we have found a way to continue to
00:26:41
attract those customers that is the key
00:26:44
you cannot get engagement unless you
00:26:47
attract them and just like if knowledge
00:26:49
at Wharton could get over 3 billion 3
00:26:53
million users globally you know we think
00:26:57
just bank mobile should have between
00:27:01
three to five million checking account
00:27:04
customers within a five to a seven year
00:27:07
period that is very possible and when I
00:27:10
was running sovereign sovereign was the
00:27:13
20th largest bank in the nation and we
00:27:16
had 1.2 million checking account
00:27:19
customers that's it so you're talking
00:27:22
about three times bigger than sovereign
00:27:24
in consumer banking within a ten year
00:27:27
period because it's been in business
00:27:28
three and I'm talking about maybe seven
00:27:30
more years that's called exponential
00:27:32
growth thank you both very much for
00:27:35
speaking with knowledge at Wharton it's
00:27:37
been great to have you here thank you so
00:27:39
much for more insight from knowledge at
00:27:43
Wharton please visit knowledge Wharton
00:27:45
UPenn edu
00:27:50
[Music]
00:27:52
you
