Prakash Pattni - IBM: The winners in the Financial Services will be those maniacally focused on customers

Show Notes

Prakash Pattni is MD, Financial Services Digital Transformation, responsible for partnering with financial services clients to deliver their transformational outcomes through IBM Cloud. 

Prakash spent over 20 years working at esteemed banks, such as JPMorgan and Goldman Sachs. Bringing deep financial services experience gained across technology, investment banking operations and finance and has led numerous initiatives including public cloud transformation, agile and product model implementation and infrastructure modernization. 

Prakash uses his extensive client side experience and understanding of the challenges faced by financial services organizations to help IBM clients accelerate their digital transformation journeys.

Today he is joined by Ioan Iacob, Founder and CEO of FlowX.ai, and in today's show we discuss the most important perspective changes needed for a technology company to embrace for the financial services industry today. 

What is Unbounded: Talks on Growth in Financial Services?

Join the conversation and discover how to unlock growth for your bank, neobank or fintech. Each week will talk candidly with leading entrepreneurs, executives and engineers that are building the future of banking.

[00:00:00] Mike Parsons: Welcome to unbounded talks on growth in financial services. Hi everyone. I'm your host Mike Parsons and Unbounded is powered by FlowX.ai, today Ioan Iacob and I are talking with Prakash Pattni from IBM. The big blue is here and he is a big deal because he's spent over 20 years working at esteemed banks, such as JP Morgan and Goldman Sachs.
[00:00:28] Joining me today as a co host is Ioan Iacob, CEO of FlowX.ai. Ioan I'm looking forward to this show and digging in with Prakash. How are you feeling?
[00:00:41] Ioan Iacob: Definitely, very excited.
[00:00:51] Mike Parsons: So all of you our listeners, get ready to dig into the growth equation. Prakash, welcome to the show.
[00:01:00] Prakash Pattini: Hey, great to be here. Good to meet you, Mike and Ioan, I'm looking forward to this discussion.
[00:01:06] Mike Parsons: You're very welcome. Let's jump straight into it. We teased it a little bit. That's what we do here on Unbounded Talks, but I'm really fascinated how you came to this junction in your career.
[00:01:19] You've worked at some very well-known brand names in the banking business, JP Morgan, Goldman Sachs, and then quite equally, if not bigger as a name is IBM, that sounds like a big pivot in your career. Tell us how did that come about and how did you find yourself running all of these financial services experiences for IBM all around the planet? How did it all happen?
[00:01:47] Prakash Pattini: As you said, 20 years in banking and I've seen how much technology has changed. How much that internship has impacted our businesses. I remember many years ago when I was at Goldman Sachs, how we used to trade contracts.
[00:02:03] People used to use the phone and make deals and then we'd fax contracts to clients. And then you had teams of people responsible for managing that process. All of that's now been automated. And that's part of what led me to IBM ultimately. It's like I spent a lot of time with the banks working with them and their clients, but also largely in the technology space.
[00:02:28] I could see how that was going to be a pivotal driver of change in this industry. And after spending many years there and especially the last five years or so, I was working predominantly on public cloud. And how do we help the bank move and leverage that technology? I was running into a lot of problems as we got further down that journey around, how do we protect sensitive data?
[00:02:52] How do we work with partners like FlowX and others? And there were lots of internal barriers and things which are slowing us down. So when the opportunity arose to come and work with someone like IBM who really works with I think 47 of the fortune 50 companies and has deep experience in financial services, it felt like a really good fit for me to be on the other side.
[00:03:17] Is it worth bringing that knowledge experience I had to helping solve clients problems and to help accelerate innovation using technology, et cetera? So that was the journey that sort of took me from working within the banking industry to helping solve some of the problems that they're hitting and encountering with organizations like IBM.
[00:03:40] Mike Parsons: Do you think it's fair to say that you remember Ioan and I talked previously about Marc Andreessen's famous quote from 2011, that software is going to eat the world. Is it fair to say you saw this transformation happening, and this was the [00:04:00] big clue that you got in the day-to-day business of the bank.
[00:04:02] So that is a career tenure of 20 years.
[00:04:06] Prakash Pattini: I think so. Most of these companies that I worked for, you'd be surprised, even though JP Morgan has over 250,000 employees, it's got over 50,000 developers. It's bigger than many software companies, in terms of development capability. Most organizations see that they're having to transition to becoming more like software companies and driven by that technology. So I think to a large extent it is right. I think you're seeing that happen in almost every industry. We see it from ordering food to platforms like Airbnb, et cetera.
[00:04:45] So it does feel like that is coming through. If it's not already.
[00:04:50] Ioan Iacob: I'm just curious what you feel is the most important, let's say perspective change that you feel you're able to bring in a technology company coming from your financial services industry background.
[00:05:06] Prakash Pattini: I think it's that the knowledge that I have, when I'm talking to clients, I understand all of their internal processes. I understand what they're having to go through with the regulators and a lot of those challenges. So I think part of it is, you're bringing that insider view.
[00:05:23] You can speak that language and you've really experienced the problems. So it's not just a case of here's a new interesting technology. And, are you interested? It's what's your business problem? I know this is a real problem, and this is how technology can help you address that problem, be it speed to market.
[00:05:39] Be it evidence to the regulators. But, you really do have your environment under control, whatever it might be. So I think that's the different lens that I can bring to the discussion and the story. And I think that's what really helps. And IBM has been doing a lot of that.
[00:05:54] They've been hiring more people with industry experience and not just in [00:06:00] financial services, but in other sectors they work with, because I think they realize it's really important to have that, to be that customer focused on, to have that customer side view of things.
[00:06:10] Mike Parsons: Prakash, if I was to visualize what you just talked about, it's like building a bridge between business and technology. What's the most important thing to do in those moments? What helps. Technology and business work together. What is the act? What is the mindset? What is the thinking that needs to happen there?
[00:06:30] Because all too many times when as users we're using technology from financial services firms, but very often it doesn't work for us. It looks like it works for the compliance department at the bank or at the insurance company. How do you make sure that there is a great customer experience? That is a great piece of tech, but also serves the business. What can we do to improve that connect?
[00:06:57] Prakash Pattini: I think you're absolutely right. Sometimes, people, over-engineer these things. They put on the hat of the compliance expert or whatever it might be. I always find the simplest thing to do is really to put yourself in the customer's shoes and to always have that at the top of mind.
[00:07:13] We have capabilities at IBM, we call it the design thinking type workshops where we really do think about the persona here, who is the end user and what are they doing and what are the steps they need to go through? And if it's a good customer experience or not, in this digital first world customers are used to, or clients and consumers are used to almost instant gratification, they want the same experience from the banks as they get from ordering food or booking cinema tickets. They want seamless experiences, which are personalized too. And I think that's been one of the challenges for traditional banks, the fintechs and the newer players in the market haven't got all of this legacy to deal with.
[00:07:57] And it's very easy for them to create those experiences and incorporate AI. Whereas for some of the more traditional banks, it's harder to do, but, just getting back to your question I think it's all that complexity that is introduced by. That legacy that sometimes makes the experience clunky.
[00:08:17] And I think being able to solve that, but always having that end user view in mind and not making compromises as you go through that development process. So I'm not going to cut corners, just because it's easy for you as the bank, but it makes the experience worse for the user.
[00:08:36] So I think always having that focus on the user, on their experiences is really critical in being successful, especially for the traditional banks.
[00:08:47] Ioan Iacob: Just curious here though when you're talking about user experience, how important do you feel is the customer experience versus the employee experience? Because I think a lot of companies are just looking at a customer experience and I think sometimes maybe employee experiences is often forgotten.
[00:09:09] Prakash Pattini: I think people do forget that there are employees involved in these transactions. And if the employee is having a poor experience this will reflect on the customer experience as well. So I do think that is really important.
[00:09:29] I think that the companies that are really successful in this space do focus on both. But I definitely agree with you. It needs to be both. And I think part of what tools like FlowX.ai, and some of the solutions IBM can bring. Do actually get you to think about that. It's not just about the end customer, it's about the end to end experience and all of the parties and all of the personas involved in that transaction. I think that's critical to getting a holistic solution that works for everyone, because as you say, otherwise, it's a little bit [00:10:00] mixed in terms of the end result.
[00:10:02] Mike Parsons: It really does feel like at the end of the day, the great challenge for those who are driving traditional banks is to not only delight their customers, but their employees too. What do you think?
[00:10:15] Prakash Pattini: Yes. We've done some recent studies around what people think about their organizations, whether they enjoy working for them and whether they'll be there long-term. IBM got good results because I think it does think about that. I've been at other organizations where maybe the net promoter scores that they get from customers have been positive, but internally it's not been strong in terms of the culture.
[00:10:36] And a lot of that is around how employees are treated, and also a lot of the processes and systems that have been built and that people are using. People aren't going to be happy if they're having to jump through a lot of hoops and bureaucracy and process. So there's been a real focus in recent years that I've seen at least in the corporate world to focus on that and to remove a lot of that.
[00:10:57] So again, I absolutely agree with you both here that we need to tackle both of these. And I think again, it's taking that holistic approach, which is critical to solving the needs, but also creating the right culture for organizations.
[00:11:12] Mike Parsons: You did mention pulling things together and that to not only delight those customers, but really make those employees productive as well.
[00:11:19] But before we jump into this sort of Batman and Robin combination of IBM and FlowX.ai, I want to remind all of our listeners that they're listening to Unbounded Talks, it's powered by FlowX.ai. And if you would love to get our transcripts and show notes, or find out more about Prakash, head over to unbounded.flowx.ai, and you'll get everything you need.
[00:11:47] Now, this brings us to this really interesting topic of system integration platforms, integration liberating some of these core services, some of these legacy systems, so that these financial institutions who have built enormous trust over the years, can keep up with those neobanks and those fintechs.
[00:12:12] How do you see IBM actually playing a role here? You touched on this earlier. I'd love to go deeper. You have such an arsenal of great technology from Watson, the cloud. There's a lot to bring to bear, but where do you think your strength really is? When we talk about creating growth in financial services?
[00:12:33] Prakash Pattini: I think our key areas of growth, and from our technology that we've built, really goes to the heart of some of the problems that the financial services industry is grappling with. So on the one hand we have banks that have access to our customer's most sensitive data.
[00:12:49] They want to obviously use cloud technologies to drive innovation and they want to work with fintechs and organizations to help in that space. But there's also a lot of risk that comes with putting sensitive data on the cloud, unless you protect it. We've heard about compromises that have happened and you can lose trust very quickly with your clients.
[00:13:10] So some of the solutions IBM has built have been around confidential computer solutions, which allow you to protect that data. We're also working very strongly on trying to address some of the concerns that are out there around portability and vendor lock-in. So our clients and regulators are getting concerned about concentration risk and having too many critical providers or critical fintechs sitting on the same platform.
[00:13:37] Part of our strategy has been around building hybrid cloud solutions. That allows you to port across different clouds, but also there's a lot of legacy systems, as you've mentioned. So we don't see everything moving to the cloud. Ultimately I think clients are realizing it's going to end up being a little bit of a hybrid model with multiple cloud providers and legacy systems.[00:14:00]
[00:14:00] So some part of what we've been doing through open shifts solutions. And then the whole reason for buying Red Hat was to address that part of the market, to build solutions that are hybrid in nature and give you that portability. But also just to point about fintechs, we see them as critical partners in what we're doing, but also in continuing to evolve and drive the financial services industry.
[00:14:27] Companies like FlowX.ai in the vanguard of delivering the capabilities that allow financial services customers to truly meet their digital transformation goals. And I think a lot of the approach you take around, rather than having to redesign legacy systems , which can be complex and time consuming.
[00:14:47] Just the ability to allow customers to integrate the modern solutions with existing technology through plug and play functionality really allowed you to deliver value, multiple times faster. So there's a lot packed in there, but I think it's all of these pieces that add to a lot of complexity in the market and in this environment.
[00:15:05] But I think it's trying to bring all of that together and make it really simple. For organizations, rather than giving them very complex decision trees, they need to work out with lots of multiple, dead ends I could potentially go down. So I think that those are some of the things that we're working on.
[00:15:20] And also partnering with companies like FlowX.ai.
[00:15:24] Ioan Iacob: And speaking about that integration and that unified experience around multiple existence systems. I feel there's this one particular unit core that banks and generally financial services companies have been chasing for I think the better part of the past two decades, maybe even more, and that's the mythical Omni channel.
[00:15:49] But then I was wondering even today, how real do you feel the true omni channel experience [00:16:00] is in financial services?
[00:16:03] Prakash Pattini: I think we're getting closer to it. I know there's so many channels out there. But also just that one thing that this sparked in terms of an idea is just how the different channels and the usage of channels is changing.
[00:16:18] So we're working with a number of companies in Africa as part of our FinTech program, where the traditional channel of going to a physical bank somewhere is not possible because they're farmers working in rural environments in the middle of the country and it's a very long way to get to them.
[00:16:37] So how mobile banking is really driven by democratization as it were for financial services, that everyone gets access to it. So just the fact that these channels maybe didn't exist 10, 20 years ago. And now, there is the fact that you have so many different channels through which you can access these services now, I think it is all good.
[00:16:58] It's all helping make financial services much more available to the wider population and it's improving people's lives, ultimately. So I think all of that's good. I think you have different channels with different levels of experience, but I think that's now equalizing a lot.
[00:17:20] I think as the technologies become better and more available and in a cloud comes to the fore I think all of that is now starting to become a lot more of a reality. I don't think we're there yet, but I think we're pretty close to it and definitely a heck of a lot better than where we were 10, 15 years ago in terms of this.
[00:17:38] Mike Parsons: So let's double click a little bit on this omni-channel topic. And in particular, I think it would be really interesting for us to understand what you saw change over the last few years. There's a little thing called COVID that came along and branches for financial service companies weren't so in vogue anymore. So I think we know that there's a change afoot. Tell us. What are you working on right now? And what are some of the challenges with deploying mobile or maybe even mobile first experiences? What are you seeing there? What are you learning at the coalface of omni-channel and going into really mobile playing a really significant role in the customer experience?
[00:18:24] Prakash Pattini: Most of the clients we work with have a mobile channel and what we've seen happen, especially over the last couple of years with COVID has been where that shift is accelerated. Whereas we were working with clients and they were saying, oh, we think it's still going to be, I don't know, a certain percentage in branches that percentage through PCs and laptops, et cetera and maybe an equivalent percentage of mobile, we've seen that shift where they've moved a much more significant portion now coming through the mobile channel. I think people got used to that and also new capabilities have been launched around where you can deposit checks through your mobile phone.
[00:19:04] So that's been a removal of the need to go into a branch. I remember I've got a bank account in the U.S and occasionally, checks here from companies for dividends or something, from the U.S and when I was making regular trips to the U.S I could deposit those checks.
[00:19:22] But now I have a mobile application and I just scan it and it gets deposited. All of that just made life so much easier, but also I think you've just seen that massive shift, more towards mobile. Now that in turn has had an impact in terms of how we build our technologies and being able to almost scale up very quickly.
[00:19:42] Clients may build their technology to only cater for a certain volume in a particular channel. And that will create latency or it'll slow things down from a customer point of view, but now I think people realize that they need that ability to switch very quickly between channels and to be able to scale up and cloud technology enables a lot of that.
[00:20:01] A lot of what we're doing is working with companies and how do you build the architecture in such a way that you can flip very quickly between channels? And so as far as the customer's concerned, they're not really experiencing any downgrade in functionality or capability or speed, but in the backend there's a lot of things going on in the technology space which means that, this all feels like a very consistent common platform from a consumer's point of view. So those are some of the things that we've been seeing in terms of how customers and clients are coming to us and asking for different solutions.
[00:20:37] But again this is also requiring them to do a lot of re architect, just to be able to have the application of that capability move between these channels is meant them having to do a lot of fixing of their architecture so that it is cloud native and can integrate with solution providers such as know, such as FlowX et cetera.
[00:20:56] And I think that's where FlowX comes into some of this as well. I think some of the capabilities you have help address some of these.
[00:21:01] Ioan Iacob: And I think, you mentioned a couple of key things there, which is, architecture and scalability, and I feel there's one other thing that comes along with this where IBM cloud is particularly strong, which is with this new exposure to new channels, mobile first and all the increased exposure to other new channels, security's becoming much more interesting as a topic overall. Is that something that's, you're seeing.
[00:21:34] Prakash Pattini: Yes. I think you hit one of the critical barriers that we see with clients, is that as they've started, I think they've done some of the easier work as it were, as far as migrating to the cloud is concerned.
[00:21:46] They've moved to that from 10, their web facing. Part of their systems, but as they start to move towards the middle and back end now, because I think clients are starting to do that, they're now starting to hit some of the more sensitive data and some of the systems that process that data.
[00:22:01] And there's lots of regulatory type concerns, obviously that kick in when you start to move that type of data to the cloud. So some of what we've been working on has been solutions that really protect that data. So we have our confidential compute solution which allows clients to ensure that when they're processing their data, it's done in a very secure way that if they are encrypting their data, only they have access to the keys and no one else. So all of this is helping provide that confidence that that data is safe and secure. And that was partly what drove us to build the IBM cloud for financial services that you mentioned right at the start. This was around addressing all of those control regulatory security needs and building it into a stack so that clients do that themselves.
[00:22:51] So that was partly what we were seeing, we were seeing clients solve the same regulation, security problems over and over again. So we wanted to build something that would allow them to consume the cloud in a secure way at speed. And again, trying to move some of those barriers that slowed them down from building their own hardening of their services and security around the cloud. Absolutely these were some of the big drivers of some of the solutions that we've built and created.
[00:23:18] Mike Parsons: It really feels if we sit in the hot seat of the modern banking, executive Prakash, that confidential data is such a great story for the challenge on one side, you need data security, confidentiality, but on the other hand, you need portability, extensibility, scalability, and performance to put it in all the right channels at the right time.
[00:23:43] Do you think that's really where we move to solutions that take the best of the IBM cloud and take this sort of platform, user first, customer experience, platforms like FlowX.ai is this almost that Batman and Robin combination in order to transform the business of the modern traditional bank, is that really the two pieces then?
[00:24:13] Prakash Pattini: Yes, I think if you'd asked me that question a few years ago, I think you got an answer which would have been slightly differently, especially when I was on the the banking side, because I think there was an issue early on, some fear around working with other partners because I think the banks felt that they were here to eat their lunch as it were.
[00:24:33] But now you find it's very much more of a partnership. I think they realize that they have to work with partners in the FinTech community like FlowX who bring these new solutions that can help them accelerate and deliver ultimately for their customer. So I think one, you've seen a paradigm shift.
[00:24:49] And a reliance that Batman does need Robin and that Robin is there to help not to become Batman himself. I think you've seen a shift there. But also you've seen enormous investment. I think there was a recent statistic around I think it's six fold in terms of the investment in just UK FinTech startups in the last Year alone.
[00:25:08] So you can see that there's going to be massive growth in this. And you've got to leverage this and it's going to drive so much more innovation, I think, and it's all going to help the bank. Yes, I think, one, there's been a shift and two, I think also the technology that's coming through now is at a different level from where it was a few years ago.
[00:25:29] And I think all of that combined with a recognition by the banks that great technology is starting to come through. And the willingness to partner with them is leading to a much more balanced and a much more effective answer to driving ultimately innovation. And, meeting market needs and delivering better value for the customer.
[00:25:47] Yes, absolutely. I think I agree with you on that and the Robin analogy.
[00:25:53] Mike Parsons: We have the dynamic duo or in the case of this podcast, the triumvirate.
[00:25:58] But as we now cast out our eyes towards the future, what are some of the things you're really hoping for in terms of some of the solutions that can come to bear over the coming years? So not only the customers of banks can be delighted, but employees too can have everything. They need to do a great job on behalf of their customers.
[00:26:17] Prakash Pattini: So I think it's a really exciting time. Firstly, just to be in financial services, I think with the growth of fintechs with the technology that's coming out with the move to the cloud, I think all of this is just leading to massive growth and innovation. We spoke earlier about the ability to improve people's lives and to stretch these solutions and capabilities beyond the normal, at least in the UK, but to other organizations and places.
[00:26:47] So I think all of that's really great. I also think some of the new developments that are coming through, so you may have heard about things like quantum computing and that's going to completely change the dynamic and the environment. So I think all of that, just in a big melting pot means that you're going to see massive change and acceleration in that change as we go forward.
[00:27:07] So one, I think. Really interesting, exciting space to be in. And not to mention, I don't want to get into crypto's and things like that, but, blockchain and that technology, if you bring that in as well I think is going to completely change how financial services operate. I think all of that's still at early stages.
[00:27:25] But I think all that technology combined is going to be able to help us deliver the security that we need. I think solutions like some that we've talked about are going to help us address the regulatory security compliance needs, but also a lot of the portability needs. I think that the ability to partner with organizations like yourself is going to mean banks can accelerate their solutions and deliveries.
[00:27:50] And I think also just the difference in how people go about doing development is also going to mean that, we're going to address some of these cultural issues that we spoke [00:28:00] about. Operating in agile ways, does bring people in, but doing very short sprints and pivoting and taking feedback rather than trying to do these big long, I'm trying to build a very detailed specifications that then, by the time you've delivered it the market's moved and you're delivering something that's now out today.
[00:28:20] So I think all of that change in culture and ways of delivering all the technology means that we're going to be moving much faster. And I think that will mean that employees are happier because they can see they're delivering value faster and are involved. And I think also from a consumer point of view, they're just going to get much better and innovative solutions.
[00:28:40] So listen, I think overall a really exciting time to be here and in this industry.
[00:28:45] Ioan Iacob: Exciting time and space and technological environment full of so many technology innovations that we've seen over the past years, platforms, technologies, cloud. Do you feel, do you see there's a line that's getting drawn between the kind of the winners and the losers of tomorrow. Do you think there's some demarcation that's starting to happen in the financial services space.
[00:29:10] Prakash Pattini: I think you're going to see the winners are the ones that are really maniacally focused on their customers. I think there's still some organizations that may be still inward looking.
[00:29:25] And I think at least from my observation, that's going to be the big demarcation here. So the ones that are really looking to the future and willing to take some of those risks. I think sometimes organizations try to protect, or they have for too long and then the market's moved and it's grown exponentially.
[00:29:45] So I think those that are willing to take those risks focus on some of these new technologies. And really focus on their customers are the ones that I think personally are going to end up being the winners in this.
[00:29:58] Mike Parsons: What a perfect [00:30:00] way to wrap up the show, where the future belongs to those who will dare to create the new, those that will dare to embrace the uncertainty.
[00:30:11] Before we say goodbye. Prakash, our listeners would love to find out more about you and what you're doing, how do they find you out there on the worldwide web? What's the best way for them to look for you?
[00:30:23] Prakash Pattini: So you can obviously just go to ibm.com and you'll find me or I'm on LinkedIn as well.
[00:30:29] And I'm just there. You can easily find me on LinkedIn if you're really interested in learning more about anything that we've we've spoken about.
[00:30:36] Mike Parsons: Prakash, it has been an absolute pleasure to have you on the show. So our big thanks go to you and thank you to you, our listeners and viewers, we really appreciate you giving us this time to dive into this intersection between data security portability and the future of hybrid cloud.
[00:30:55] All of this is driving growth in financial services. So [00:31:00] if you want to dig into more of the growth. Head over to unbounded.flowx.ai by FlowX.ai, but better, still come on, join the conversation because we're on a mission to create growth. You can be part of it too. All right. That's it for the show, that’s a wrap.