The Changing Landscape of Fintech and Digital Identity

Posted November 21, 2017

In this episode Armen is joined by Sherief Khalil, SVP of Product at Citibank. They explore the relationship between Fintech and more established banks, and how change is the only constant in the world of technology.


Armen:   Welcome to the next episode of Digital Identity 360. We’re broadcasting live from the show floor at the Digital Identity Summit in San Francisco. And I’m privileged to be here today with Sherief Khalil from Citibank. Welcome, Sherief.

Sherief:   Thank you, great to be here.

Armen:   Excellent! Sherief, among other reasons was here to appear on a panel, and it was a really interesting topic around how traditional banks coexist, either peacefully of otherwise with the fintech. I’m gonna get right to the heart of the matter Sherief, because I, what I had in mind was maybe it’s not always a friction free relationship. How do you view the relationship between the up and coming fintechs and more established banks like Citibank?

Sherief:   I think that if you start with a point of view of curiosity, and wonder what you’re actually amazing at in delivering from an experience standpoint and what other people do better, you end up answering that question fairly easily. We partner with you on

Armen:   Yep.

Sherief:   That’s because by partnering with you, we deliver better value for our clients, or our shareholders, for our businesses. And I think understanding what we’re really good at and what other people are better at is the open question. So I’m on the products side, and a product person always wants to build.

Armen:   Yep.

Sherief:   They want to build things themselves …

Armen:   Not invented here mentality, right?

Sherief:   You got it. But it’s funny because in previous role, my job was to partner with startups and test their technology with live customers and employees. And I think having that open look about what do customers, clients really need? What adds value to them? Thinking about their overall journey, not just what they do in one back account or one experience, but holistically and then stepping back and saying, “What enables that best?” And then saying, “If I don’t know, then I should explore options.”

And if you think about fintech, a lot of fintech is about driving data in long tail experiences. And you’re looking at investment ranges in the 15, 20 billion dollar range a couple of years ago. That’s a massive amount of human capital targeted at solving problems that help our clients. I think that curiosity around do we think we can do it all ourselves? Taking my product hat out, hat sort of off, no, we can’t and nor should we try to. That’s how we’re gonna deliver the best

Armen:   Yeah. When I look at, that’s a great point. A product, a bigot might say, “Hey, of course we’re gonna build it ourselves,” but typically, a build by partner decision is the way it should be looked at. I think keeping that objective point of view, but to your point, the ultimate equalizer should be “what’s right for the customer?,” and then building the decisions around that.

Sherief:   And it sounds like a happy-go-lucky sort of answer, but the devil is in the details. How do you go about testing? How do you go about parsing out what those promises are? When we talk about partnership, that’s an overused word. What does a partnership really mean? Is it about distribution? Is it about reaching more people? Is it about capability? Is it about co-creation? Is it about learning, again, some new technology that people are still trying to figure out? And if you’re purposeful about that, if you’re honest about why you’re doing it, if you’re clear and define what success is, those partnerships work fairly well. And you can work until you figure out which ones make sense. If it’s sort of generic, let’s partner for partnering sake, that great. But it doesn’t get you the same results.

Armen:   I used to call those Barney relationships. I love you, you love me, but nothing becomes of it beyond that.

Sherief:   It looks great on paper, great conversations, but ultimately if you start with a how am I driving happier clients and customers, folks who, deepen their relationship, which is incredibly hard to do, where you make it frictionless and safer. And I think that sort of frictionless and safer need to coexist. I don’t think there’s friction. As we get to know clients and customers better, as we cut those slices and the segments down, as we look at the data, and more and more, as we build a relationship, rather than looking across large swaths and making a lot of assumptions, we can mitigate fraud and make it safer and make it easier. Those should be the same thing.

Armen:   Yeah, so some of your comments, you focused on ultimately the play here is servicing the long tail, right? That’s where the volume and the edge cases that can be very important are. The question becomes not in the long tail, you’ve got more similar behaviors establishing policies that can scale would appear to be easier. How do you serve the long tail when the needs are perhaps very, very different, the behaviors are different, use cases, scenarios? How do you address that in a scale of a way?

Sherief:   I think it is constantly about iterating and learning. It’s funny, the conference in Silicon Valley, in an ecosystem where everything is about a hypothesis and you learn and you test against, and you repeat. And you’re always repeating that cycle. It’s the same as providing fraud. I’m not the fraud expert in our world, we have many of those, but it is about even if you have the ultimate solution on Day 1, on Day 2 that’ll get compromised because someone will figure something out and it’ll change and it’ll iterate. So I think it’s thinking of it in terms of a journey, which sounds generic, but at the end of the day, the long tail is just as much about serving more customers, but I think that what it means to me is that it’s about deepening the understanding of our existing customers, so that we can better serve them. And that is not just looking at their behavior at a bank or in financial services, but their life, and what that financial service serves. It serves their ability to do something. Money financial services enables. It enables through safety and it enables through experience and if we think about what it’s serving and think of that journey, I think the long tail becomes easier to crack because we are no longer looking at a set of data.

Armen:   No, that’s a really important point because if you flip it around and say okay, if you understood more about your customers outside of the banking relationship you may or may not have with them, you may or may not have the context to be more prescriptive and almost make it feel like it’s a segment of one. And so not to put ad here, but that’s our point of view, this concept of global shared intelligence that must be diverse across geographies, industries, used cases, tokenize and anonymize, but provides the context. I think that’s the point you’re making, with the right data elements and attributes, you can serve the long tail in a very bespoke way.

Sherief:   That’s ultimately the whole promise of big data and insights, that we’re constantly deepening that human relationship using technology and that is fundamentally what we do all day, every day with our personal relationships with the people we work with, our families, our friends. It’s the same with clients and customers.

Armen:   Very cool. So you’re in a very cool position at. You’re looking at the fintech landscape and how to apply that and building products to support that, but when you look at the landscape of all these fintech players that you might see out there, is there too much technology out there right now? Are there companies destined to not make it, or do you see an opportunity here? Or is this a question for you?

Sherief:   Are there companies that won’t make it? Absolutely. I think that’s the only constant. I think the question is along the way what they learn and what we learn together and picking who to partner with. That’s a tough question. More and more and more the stack is commoditized and reliance on data is the promise. But the delivery of that is still a competitive advantage and who does that well and who can bring unique insights and drive that next level of understanding is much harder said than done. So we work on it, we partner and I think Fintechs have the creativity to experiment, but they have less access to data, and so they are both advantaged and disadvantaged. They have speed to market, which is fantastic, but then they have the need to scale, which is something that companies like ours can help with. So part of it is understanding when to engage, who to engage with, and where we really should figure things out ourselves. There are competitive advantages from an assurance, from a security, from a- trust is very hard to win and incredibly easy to lose and that underlies the experience that we provide and the decisions we make around keeping folks safe.

And how we do that and continually innovate is a balance, it’s that tipping point, it’s those scales of justice, the scales of- and I think the only right answer is, if you’ve ever been on one of those scales, the old manual scales, then you always adjust it. You adjust it up and then down and then up and then down until you get the balance and I think that’s the constant daily challenge. And every day you think you’ve got it right, you need to readjust.

Armen:   It’s never set it and forget it.

Sherief:   I think one of the advantages that we have that I am very fortunate to be a part of is this global view- and you had sort of mentioned the global data you bring together against identity. That looks very different in different markets with different government interactions and regulations and customer behavior. How we pull those from markets that are adopting early and are doing really interesting work to understand where the behavior is and where it’s going is something that global firms have a competitive advantage in. I think those learnings are incredibly insightful and help us serve all our clients better.

Armen:   Good point. When I think about one of the more interesting points of view I heard today, it was a quote that basically said a great customer service experience is indeed a competitive advantage and to take that further though is it assumes a customer centered point of view and it assumes, to the discussion we’ve had, is that you have access to the data of which to make the right decisions.

So we’re at a point where we need to wrap it up here, but I would love if there is any parting thoughts, just observations that you might’ve seen here at the Summit today, or just based on this fairly quick conversation we’ve had here right now.

Sherief:   Sure, I’d suggest two opposed points of view that I think are actually one and the same. I think against experience and fraud, that those are the same. As we get to know customers better, both of those things get better. It’s not about reducing one at the expense of the other. I think that’s the old mantra where we had less data and it was less connected and it really was- so I think that goes away. And then I think against what we do ourselves versus where we work with other folks-

Armen:   I have to stop you. This might be a first. We’re on this episode and we’re interrupted by

Sherief:   I think they’re gonna keep us safe.

Armen:   I think so. I’m feeling secure right now. Any final comments? You had a deep thought there, but you were cut off. Can we get back on track or should we just cut it off?

Sherief:   You got it. Experience and the fraud and I think that doing things ourselves and partnering continues to be a balance, too. And I think that’s just driven by curiosity and continually adding our understanding. So it’s like deepening any relationship, people do it over a lifetime; we should do it with our customers over a long period of time.

Armen:   Well Sherief, I really appreciate your time here. Very interesting point of view from Citabank. Thanks for joining us on this episode.

Sherief:   Thank you very much.

Armen:   All right, take care.

Sherief:   Take care.

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