Amancio Bouza

They are not curious about the end customers. They're more curious about optimizing processes and selling products but not curious about who the customers actually are really kind of a of a personal level and also what are their goals outside of of their banking products and services

Kevin Montalbo

This is the Coding over cocktails podcast, a free pool of thoughts, ideas and advice from it. Experts, innovators and thought leaders exploring the world of digital transformation APIs, microservices cloud adoption and more. Welcome to episode 53 of the Coding Over Cocktails podcast. 

My name is Kevin Montalbo on the show today. Toro Cloud CEO and founder David Brown, talks to an API thought leader taking on many roles in the tech space, serving as a digital ecosystem advisor, technical lead consultant for various organizations and co author of the book API product management, product strategy and execution for the digital economy. He recently became the chief product officer for Conta Vista A G an organization that enables data driven banking. We had him over last year to talk about digital transformation in the new normal. Today. He's with us once again for a second round of cocktails. Hi man. Welcome to the show.

Amancio Bouza

Hi, Kevin. Hey there. Hi David. Thanks for having me. Always excited to be here with you guys.

David Brown

all. It's our pleasure. Thanks for coming back. You are our first guest to actually come back to the program. So that just shows how much we enjoyed the first one. Let's jump in and talk about your role at Cont Vista A G, you're the chief product officer there.  Now we understand the company leverages new technologies to turn bank data into meaningful applications. So what role can Fintech start-ups play in assisting traditional financial institutions to adopt new digital solutions? Which I imagine the company that you've joined is innovating in that space.

Amancio Bouza

Um I think the major role that we can do is really provide a kind of a different perspective on banking because from what I asked also so far with banks, they live in sort of a bubble. It's it's an old industry, always doing the same and always kind of OK, we have products and people come to us to get some money. And nowadays also with internet, all the the new fintech arising the users or the other customs staff, really um they expect a different thing and our role as start ups and Fintech is really helping the bank to first um start with the customer and really understand, OK, what are their needs and really help them um with the curiosity part because that's what I'm missing. quite some, sometimes they are not curious about the end customers, they are more curious about optimizing processes, selling products, but not curious about who the customers actually are really kind of a of a personal level. And also what are their goals outside of of their banking products and services. And I am the big role here is really to help them with the curiosity, educate them what really customers want. Because it's always funny. For instance, we we provide white lab solutions for banking and we integrated, then we ask, OK, how many users are using this feature? How many or who are your users? They don't make analysis. They have no clue about how many people are using Eban. And we help them to understand their customers also based on financial transactions, of course, and also their goals and helping them to um for the end customers to get better financial habits. I think this is one will one big role that we have to do. So the adding the curiosity and educate the banks about their customers. And the second part is um you know, from outside, you can always say maybe you have this picture in mind. There are two guys pulling kind of a car but the wheels are quite radic. Not, not, not round. There comes a consultant telling you, you need this round wheel, it becomes easier and they're really stuck in, in the, in there all day processes. They know they are slow, it needs a lot of alignment, a lot of compliance and there what you as a fintech or a starter can really provide is kind of read speed because they are more almost looking at outside of their company to really bring their kind of ideas or strategies forward to really make some progress. So really speed and simplicity, it doesn't have to be the perfect solution but really kind of something that can be integrated really fast. That's what the banks are really looking forward to.

David Brown

Yeah, before we get into the questions about the fintech industry and and and general questions about what's driving the space and the like, what I find interesting about the role you're playing with Conta vista is you're actually partnering with banks. You're not trying to disrupt the financial sector and become a new payment mechanism or you know, banking system or whatever it, maybe you're actually trying to facilitate digital transformation with existing banks, modernize them, get them to understand what the customer is after. Is that right?

Amancio Bouza

Yeah, that's what describes it perfectly. So um also, I mean, you can always choose to replace the bank with some kind of new, new services or leverage all the experiences that the Yeah, all all the assets of banks, the products and the whole company to really provide value to, to the world.

David Brown

So what would be the deployment model there? Because um most fintech would have like a, a cloud based sort of service. And but if you're trying to deploy those kind of services within an ex bank's existing infrastructure, um for example, you mentioned the banking, they don't know sort of analytics of usage and all sorts of stuff. So if you're wanting to make modifications to their existing infrastructure, that's going to require all the privacy and security related concerns with that bank, our third party certification and all the rest of it. So what is the deployment model when you're partnering with these banks?

Amancio Bouza

So the draw all these ways really provide a white data solution so it gets installed within their infrastructure and they can integrate it into their front end. Um I I mean, either you provide a database with the front, front end so they can easily integrate it into the web views or provide APIs also. Um because also let's say that the larger banks who have really kind of the power of the resources, they are more looking into an API to consume the services because they want to control and manage that user experience also to iterate that fast. So that's really something they want to learn and own because that has a huge impact. So these are these two options like a white labor solution or APIs within the banks. The other solution that also happens quite often is the kind of billing and complete difference in infrastructure that happens usually with the current banks wanting to innovate and also try to um to um try out some new ideas. They really either create complete new um companies who do that or they create completely different apps that are completely independent of their current infrastructure, especially regarding apps. So many banks provide the kind of mobile banking app that is completely independent of their IT infrastructure.

David Brown

Hm And as an API evangelist yourself, you must be really interested in all that sort of goings on these banks and how they want to develop these APIs and take ownership of the APIs as well. But there's a lot of going on in the fintech space, obviously a lot of innovation, besides those sort of interfaces to try and improve customer experience and digital first operating models, getting rid of the old requirement to come into a branch to do your banking, that sort of stuff, what other innovations are we seeing? that's driving the investment in fintech industry.

Amancio Bouza

So, so the big investments are really kind of the changes are um the way how payments um how payments are done and also who controls and owns the payment process. This is um developing. So before it was really kind in the early days, like from bank to bank, like bank to bank transactions. Um Now it's all a lot of power have now the the credit card companies because a lot of transactions are done via credit cards. Now, they have made a big move into debit cards at least here in Switzerland. So credit cards get almost replaced by, by a new version of debit cards with which you can also pay online. And but really in the next couple of years and also the the huge or large um credit card issuers are preparing for that. It's really account to account. So really skipping credit cards, skipping debit cards and really um prepare for that people really pay directly from, I mean private people or business from, from account to account. So they the credit card issue, we lose this kind of control and also the banks. So it will be kind of kind of decentralized.

David Brown

Hm big threat to the credit card companies there that if the direct bank to bank transfer payment model sort of takes off. Um Let's talk about some of the other innovations that are occurring. What what's machine learning? It's obviously enabling a lot of autonomous finance whereby an algorithm would analyze and manage client risk, their portfolio, their investments, investment strategy. what can companies and consumers look forward to when it comes to autonomous finance?

Amancio Bouza

Um So especially let's say private people like you and me and what you can look forward to is really kind of a hyper personalization, not just like here are the best investment that you can do, but really, and what are you interested in? What do you believe in and really shape those products and offer to your personal preferences, like if I'm interested, let's say more in sports. So I get more kind of opportunities to invest into sport teams or es sport or if you're more interested into sustainability. So you will see more kind of recommendations regarding investment into sustainable products. Plus another thing is also um how I see banks, they are kind of the master of the, the fourth dimension like time like doctor who, who can time travel, they have somehow the power to um teleport your money from your future into, into the now and then help you with this kind of additional money really become your be your um your wealthiest version of yourself. And that is what where autonomous finance can really have a huge role to really understand. OK, what are your credit risks today? What is it tomorrow based on your kind of background, assets, education also similarities to other people and really find out the way. OK. What is the best way to make it to as this person? Because become wealthier means more business for the banks, right? And then really, um that's what auto finance then help you. The the 12 people really find this path and offer you the right choices and educate with you to really help you to become wealthy in order to really achieve the goals that you chosen to achieve.

David Brown

It's interesting. I was speaking to a gentleman actually, he just joined the IT department of a bank here in Australia. We have four, they call it four pillars here, four big banks in Australia. And one of the things he found was that the bank had made a big push into managing processes through people power. And they'd outsourced the process to, you know, cheaper jurisdictions around the world to, to process their paperwork where some of their competitors had started using machine learning, particularly for client risk assessment. So if they had, what he was saying is if they had a client come to them and say, I look at them after a home loan, they say great, we can get back to you in 25 days, that 25 days was their processing time to assess client risk. Whereas their competitors have made big investments in machine learning to automate that process, particularly scanning of bank statements, the like to sort of determine purchasing patterns and, and that sort of stuff. And we're able to process in obviously much shorter time frames. I don't know whether it's hours or days but obviously a lot less than 25 days. So what was happening is that, you know, they were coming back and say,, great news, your home loans were approved. I was like, well, that was weeks ago. I've already gone with another bank. So, obviously there's benefits for, for the autonomous finance with, with the customer, but clearly productivity benefits and, and real risks to your, to your organization. If, if you're not pursuing that autonomous finance as well. Just an observation I made through a conversation I had recently another,

Amancio Bouza

maybe I can also add, add on that because that's compared to, I mean, with machine and you can really understand the patterns from transactions. and also compared to a different kind of people to really kind of assess the the validity and accuracy of those models and also together in combination with open banking that makes it also so so such a huge thing because um if you think as a bank that the the the customer, that's the only relationship the person has with the bank, then you're usually wrong. So you only see one picture and watch us one dimension of of the customer as a whole and really have help with open banking and understand this kind of data and then use machine learning that really helps you to get kind of, yeah, maybe the the 360 view of the customer but at least let's say that the whole picture about the whole wealth, how income and expenses behavior to really make a greater credit risk assessments.

David Brown

I'm glad you mentioned open banking because it's one of the things that I wanted to ask you about. Um it aims to establish a standards based data exchange between banks and fintech. Tell me what open banking means. What, what is it and how, how is it bringing innovation to that industry? You mentioned some, of the benefits there.

Amancio Bouza

Yeah, so the benefits there are or what it actually is is um open banking. That means um all the banks or all the banks or all the parties are able to get access to your accounts to your financial transactions. Also are able to um to create payments and transactions on your behalf. And with open banking, if you have multiple relationships to several banks, you are really able to accurately get all this kind of information, then really choose where do you pay to whom via which bank service and so on which are so it enables really kind of opens up the banks, your bank information, your financial information to others to really provide, to provide you a better services.

David Brown

What control does the end user and the customer have over that exchange of data?

Amancio Bouza

Um you own this kind of information and you can or you have to or you should have to provide consent to the third party to really allow them to access this kind of bank. So banks would never kind of share your information or financial transactions and financials to all third parties without your consent.

David Brown

Hm And I imagine, you know, it, it sounds great, you know, in theory, having open standards around data exchange or banking, but I imagine there's jurisdictional differences between the open banking standards which are emerging. I imagine different countries or certainly continents would be standardizing on certain data formats and others on others. Is that the case or are we finding some sort of international standards around open banking?

Amancio Bouza

We are not yet there for an international standards. So whole Europe there is a PSD two. So this is a standard by the regulator that defines what you have to provide as a bank as API but it's also quite um not really specific. It's maybe just OK, here are the, the cost. So like I should have access to account and payment, but every bank implements it differently. So there is no kind of the standard. It's just the the services there are standardized but not really the content. So um was from our experience to really get this kind of analyze this kind of transactions and relationships that's super complicated because every bank has its own logic, then there's Switzerland, they have their own standard that is um pushed and driven by, by the industry. Um And we are 23 years behind Europe. So there's no an established standard. We are still fighting for one and to become 11 seems to arise as, as a standard that we are also choosing. Um But yeah, that, that's kind of the state of open banking.

David Brown

That's exactly what I read about the open banking as well. We're seeing a lot of growth in um banking as a service bass, which is reported to become a $7.2 trillion industry by 2030. Tell me what is bass and what can we expect to see from it?

Amancio Bouza 

So best banking as a service enables in the end to everybody to become a bank and really kind of rethink kind of relationship between your business and your customers. So main it's um these ways to, to really describe it as an example. I mean, for instance, you are an air airline and you want, you have a strong competitors, you want to kind of um make your customers more loyal with the loyal program with points. So you can create a debit card or credit card for your customers with which they can collect some airline points with your airline to get cheaper to get cheaper um um flights also, you can imagine. Ok, if you are an ecommerce shop, for instance, you have you become a bank and then it's not anymore about that, that you get the cash or the payment from your customer. But we provide service like, ok, buy now pay later and you provide them a loan to get it really earlier without going over a bank with all the, the, the slow processes of getting a loan to really get a product for the customer. And this really kind of um completely it's completely paradigm shift between this kind of business because it's not anymore about um really getting the cash for a service or a product, but really um creating a relationship, managing kind of debits, managing credits for your customer and leverage on that, which also means if you really are able to um go one step further, it's really, you can become a new way of hub, our payment hub where you can also collaborate with other parties or other business, share your loyalty points and really create a relevant ecosystem around the customer needs.

David Brown

Imagine with banking as a service, I mean, it used to be that to get a banking license was a huge deal and very, very difficult to obtain are the regulatory requirements keeping up with this and banking as a service, it seems to you know, the the technology is running faster than perhaps than the governments can keep up with.

Amancio Bouza

yeah, usually regulations comes some years afterwards. So, so they see all this kind of time frame where we can really um leverage and excel with all without regulations, regulations come afterwards. But the good thing also because um bank service are usually also back up by, by large bank, they already have the license and they they also with whom they get this kind of possibilities. They have control on, on that, but also kind of the securities. So, um, there nobody will lose money essentially if something gets wrong. So they have really, um all the security and compliance and regulations already in place, which makes the whole, the whole process really fast.

David Brown

I, I'd like to ask you, you know, you, you, you are an api evangelist and have that background in APIs and you've spent lots of time as a consultant working in various industries. Um We recently asked one of our guests, what, how, and what were the effects of the pandemic on digital transformation? I'd like to get your perspective as well. So the interesting thing when we asked this guest, they said they thought it was a lost opportunity and that was a different perspective for us is that we'd often heard,, this was a great time for, you know, the big companies were forced to plans they had in, you know, in, in, in motion for years, they all sudden had to put into action um such and get remote working happening and, and, and dealing with customers digitally and the like, but this guest argued that that was a response to an emergency, an unusual situation. It wasn't a strategic plan for digital transformation. What are your thoughts on this pandemic? Um a missed opportunity for the true digital transformation.

Amancio Bouza

Um I completely agree with this speaker or guest because it was really just a one time reaction on something huge because um but I also see, I mean, we also did studies also here in Switzerland about banking and businesses. what kind of behavior has changed or are they using more bank and so on? And the outcome was nothing changed for them. So there was no digital transformation going on, especially for, for the small to medium sized banks. Some tried to change the business model, a special restaurants. So adding takeaways on top of that but not much happened. But what pandemic really created was really kind of um resetting kind of default, especially homework. So employees now the default is homework and you as an employer can request from the days when I approve, I had to come into the office and not otherwise. So that there is a huge change of our perception really um huge change about the perception also about the new kind of the new normal. But what didn't change is really kind of um a continuous kind of reflection and learning how to improve things. Because that stopped now, now it's a, it's a new default. So people will live for the next 100 year, the same. So there will be homework but no kind of improvement. I also see it for instance, when we collaborate with each other. So we do need to brainstorm put the brains together. Um It's still kind of OK. Why, why did you call? But really to understand, to learn. OK. How can we do mape do we need different tools? Do we need tools that doesn't exist currently or do we come to the office to really to learn experiment? What really works as a team as a company? This all suddenly stopped. So it was really kind of more reaction adaption to a new situation, but the situation remains the same. So companies and employers stay the same. So um it's really no learning and digital transformation is really about adapting to learn, to fail and the speed of learning and really adapt and use the digital technologies that are around to to improve.

David Brown

There's one analogy that you made in your first podcast with us, which was the butterfly that did. The digital transformation is the caterpillar transforming into a butterfly that is doing transforming into something new. So is that what didn't happen? Certain certain processes were done differently but the the net result wasn't some new way of doing business. Is that, is that what I'm just trying to understand? What, what would you be actually looking for? If, if what if the pandemic didn't bring digital transformation? Then what is true? Digital transformation?

Amancio Bouza

So we got this this analogy, I think it still is true. But also with this analogy, I mean, the caterpillar either dies or becomes a butterfly and then stays to become a butterfly and never transforms again. And that's some of that is digital transformation. Not about really kind of just go to the next level and stay and stay there but really have this kind of this mindset of continuous seeing, checking our new technologies, how can it benefit the the business? And also how do I change as a as a as a company culture also as a leadership to really go to define and go to the right directions with this continues adaptation evolution um of the company and the business model that didn't happen.

David Brown

Mm And of course, it's easier said than done. So I guess during the pandemic, there was just a mad scrambling to just try and continue to have some continuity of business, let alone thinking about transformation. And so what we saw is people communicating via Slack and doing their work online and all the rest of it wasn't necessarily digital transformation, it was just responding to an event and, but what we should perhaps should be what, what, what should we be doing now now that we've got some time to reflect. OK, we're, we're over that hurdle. Looking forward to 2022. What would you like to see companies doing to get back on track with their digital transformation initiatives?

Amancio Bouza

Um I mean, last time also, my current thing is it's not about only technology and also a business model, it's also cultural aspect, but it's not only the culture of, of, of a company or depending a little bit on how you define, but it's also about the leadership because if the leadership doesn't understand, so they can really block everything. So it's really kind of a new way of really um um behave as a complete organism or organization really have an exchange between leadership and all the brains of the employees because there's all the the collective intelligence to really um get that into use and really have a kind of a cycle exchange between leadership and also the company culture and, and the employees to really excel on that. So it's not only about the employees and their culture, how they about their mindset, how they evolve, but also about the leadership who also needs to learn, not only to um to manage and but really understand where to lead and also when to change and adapt which directions to go and also trigger and invoke the right thoughts and ideas and give it the space for the employees to to change and really adapt the digital transformation.

David Brown

And this cultural change theme, it's recurring, comes up time and time again in our podcast. And it's interesting you talk about leadership because it was also recently mentioned where that leadership should exist. So where in your opinion, should that leadership be coming from? Is it, is it the CEO's responsibility to drive down that kind of initiative? Is it a digital transformation officer, an operations officer? Is it the board, is it a go as high as the board of directors? Um Where do you think it's most effectively driven from to try to drive that kind of cultural change?

Amancio Bouza

Um So that's difficult because it's also responsibility from people that are not in a position or not in the role of leadership because let's say the ones that are in the role of leadership, they can show directions, ideas and and the company is also really the people, they show leadership by selecting those the right ideas and really committing on those and convince all to really follow full on that. So it's really kind of leadership not a position that you have, but it's really kind of a role and everybody can, can take this role by really deciding on what to commit. And also regarding leadership. It's also um especially for larger companies. So they lost kind of the feeling of urgency and that's the huge advantage of, for instance, start up small companies. They know if they don't change, if they don't get successful, don't change the business model such as it works. They are out of, out of money in half a year, in one year, latest and large companies, they don't have this urgency. I also see it with banks, especially in Switzerland. They are so rich. They don't fear fintech. Why should they change? They have years to add a new app on the App Store. So really this, this feeling of urgency that's really crucial to really also adapt and also understand why the benefits of digital transformation.

David Brown

Yeah, that's interesting because you mentioned that, that, that it's that leadership role drives right down to that sort of operator level. It doesn't just come from the sea level executives. What you ultimately want to see is the sea level level executives creating an environment where that person at the cold face, who is actually understanding that customer requirement and what they, what they really would like and how they would like to do business in the future, they're empowered to facilitate change. So it's not necessarily a directive from ab above, you need to implement these changes. It's more about a mindset change, driving down a cultural change and empowering those people which are dealing with the customers and other stakeholders, business partners and the like as well that they should have the mindset that they can think in new ways and what ways can we facilitate business better in the future. So it's an interesting point there that you make is that it's not just coming from the leadership, it's not just coming from the, the top level executives, but when kind of expecting that leadership to come from lower down the chain, which is closer to those stakeholders, whether they be customers or business partners or even employees for that matter.

Amancio Bouza

That's also, let's say maybe a new kind of understanding or meeting of a CEO like the Chief Executive Executive Officer. It's more about the Chief vision officer. We say, ok, this is the vision of our company. That's our purpose. That's why we are here. But I can't tell you what exactly you should do because we are hired or what Steve jobs said, we hire people such as they say, what, what we should do. That's exactly this kind of leadership or, or the new way of thinking.

David Brown

It certainly is Amancio. It's always a pleasure to talk to you. Congratulations on your new role as product officer, chief, product Officer at Conta Vista just remind our listeners of where they can follow you on social media and what you're getting up to.

Amancio Bouza

Yeah, you can follow me at medium. There are posts on medium.com, there are post all articles also kind of my journey on doing chief product Officer work also how I develop or how I fail and what I learned doing this way, also the product thinking within banks. So there are a lot of things also linked in just a month. You both can search for me. Let's connect there and sometimes also Twitter.

David Brown

A fantastic. Thanks for your time again today.

Amancio Bouza

Thank you, David. And thank you, Kevin. It was nice being here.

Kevin Montalbo

All right, that's a wrap for this episode of Coding over cocktails to our listeners. What did you think of this episode? Let us know in the comments section from the podcast platform you're listening to also, please visit our website at triple W dot Toro cloud.com for a transcript of this episode as well as our blogs and our products. We're also on social media, Facebook, linkedin, youtube, Twitter and Instagram. Talk to us there because we listen, just look for Toro Cloud on behalf of the team here at Toro Cloud. Thank you very much for listening to us today. This has been Kevin Montalbo for coding over cocktails. Cheers