Stacking Benjamins - Fintech Friday
Release Date: 06/15/2020
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Summary: On this episode of COMMERCE NOW, you will hear from Diebold Nixdorf CMO Devon Watson, who recently was a guest on the Stacking Benjamins podcast. Devon spoke with Joe Saul-Sehy, and was on their Friday FinTech segment, where they discussed the hottest new tech hitting your wallet, and the merchants you'll someday shop with again.
Speaker 1: 00:15 On this episode of COMMERCE NOW, you will hear from Diebold Nixdorf CMO Devon Watson, who recently was a guest on the Stacking Benjamins podcast. Devon spoke with Joe Saul-Sehy, and was on their Friday FinTech segment. We hope you enjoy this special segment of Commerce Now, as we come together with the Stacking Benjamins podcast.
Doug: 00:42 Live, from Joe's mom's basement, it's The Stacking Benjamin Show.
I'm Joe's mom's neighbor Doug. Hey there Stackers. On our Friday FinTech segment, we'll talk to a guy sitting at the backbone of some of the hottest new tech hitting your wallet, and the merchants you'll someday shop with again from Diebold Nixdorf, It's Devon Watson. And now the guy that can blah, blah, blah, all this away, except now with a mask, it's Joe Saul-Sehy.
Joe Saul-Sehy: 01:27 It's amazing. When I was seven, I always wanted to wear a mask and now I get to do it. It only took me a few more years, but sadly we are at that point. Hey everybody. Welcome to another quarantined edition of The Stacking Benjamins Show. I'm Joe Saul-Sehy. Average Joe Money on Twitter. So I'm so happy today that we're going to hello to Devon Watson. How are you, man?
Devon Watson: 01:46 Fantastic. Glad to be here.
Joe Saul-Sehy: 01:49 I'm so happy you could talk Friday FinTech with us. You guys, I think different than a lot of the FinTech companies, Devon, that we talked to, you guys are a little more in the background. We are more consumer facing where I think you guys, I think of you as more B2B, but you're really right at the intersection of a lot of these solutions that we talk about every week. Tell me about what you guys do so we can kind of bring everybody up to speed.
Devon Watson: 02:15 Sure. So you can really think of us as B2B to C. Diebold Nixdorf is a top 10 global financial company. We're in about a hundred countries worldwide, about four and a half billion in revenue. We're really the software, the services and the devices behind many of the, every day banking and shopping channels that people use. So, from the digital experience, you might have banking or shopping on the go to the self checkout that you're using at the grocery store, to the ATM that you're using outside the branch. Even the point of sale device that you interact with at maybe one of your favorite retailers, we provide those solutions. In the branch, in the store or online with your mobile, we're there automating and digitizing the way people bank and shop.
Joe Saul-Sehy: 03:07 It's actually funny Devon. I think about you guys the same way that I think about Cisco for the internet, like you're everywhere. We just don't really, you know, as a customer, we don't see you a ton. Every once in a while we'll see the name Diebold but not that often.
Devon Watson: 03:20 Yeah, exactly. And you know, if you start looking for it, you'll see it all over the place. When you're not looking forward, it's one of those seamless things that just keeps running and keeps powering the way you bank and shop. Over 2 million ATM and checkout devices globally, if you look hard enough, you'll see us about a third of the time.
Joe Saul-Sehy: 03:40 Well, I want to start out with banking. I want to talk about two different things. Let's talk banking first and then let's talk commerce second, but pain points, as you know, better than I do Devon. Every day, you've got bank branches closing down, right? Making it harder for people to do face to face banking, which means that we're relying on devices even more than ATM's. Tell me kind of what you guys are working on there. What are the big pain points you guys are trying to solve for customers now?
Devon Watson: 04:07 Sure. So in the banking sector, innovation these days is really about digitizing the user experience. You know, as you rightfully observed, there is a reformatting of the bank branch networks globally. That's a global phenomenon. They're not always just closing, they're reformatting, they're making smaller ones or opening different ones in new locations. And I'd say right-sizing, but you know, more than anything, the bank brands have to compete for consumer's attention. It's a global war for the attention of a consumer, and that applies to every participant in the ecosystem. So for a bank, they've been focused for the last several years on this vision of omni-channel, which for many bank brands meant taking their branch experience, their online experience, their mobile experience, and making those things cohesive. That's been helpful, right? That's I'd say step one of the journey, but when you kind of look at what that did, it made it a better journey for a very small piece of what somebody might be trying to do.
So the example I use is, Joe, if you decide that you want to have Joe's Famous Donut Shop, and you can go to your bank to open up a small business loan, the technology trend over the past several years around omni-channel would say, let's make sure that that loan origination process for Joe is pretty seamless, no matter what channel he uses. But that's not enough to really compete for Joe's business, because to Joe, opening up the small business loan is only a small piece of your journey to being a small business owner. You got to figure out where's the best place to put a donut shop? How am I going to run my checkout? What's the merchant acquiring I'm going to do so I can swipe a credit card when somebody comes in and tries to pay with their Amex? Where am I going to get my equipment for the back office? Do I need insurance? Et cetera, et cetera, et cetera.
The brands that can help you and can address the larger journey that you actually have, are going to be the ones that win. The vision that we have for our bank clients is to really engage that larger consumer journey, use API ecosystems in order to work with other players, that can bring value to Joe is he's on his small business, opening a process and compete for that. If you look at what's happening in the retail world, that's already playing out. So I'll use the quick example of Amazon. They follow me every single place I go, whether it's at home with an Alexa device in the living room, I got an Echo Dot in my little gym area, I've got their app on my phone. They're absolutely following everything I do so that whatever the need is, they can be there to try to fulfill it. That's what the leading brands are doing, and the banking industry is quickly learning from that and trying to figure out how do we also compete along all those steps of the journey to own that customer relationship. So that's the big idea.
Joe Saul-Sehy: 07:21 It's funny you mentioned Alexa because Gertrude, our social media manager had a joke online recently about, she told her husband a joke and she laughed, Alexa, laugh, Google laughed. Like everybody's listening to you. It seems like Devon, there's a fine line between being helpful and feeling a little big brotherish. I bet That's got to be difficult for institutions to navigate those waters.
Devon Watson: 07:45 So that's a key backlash. I actually use a tweet, a screen capture of that exact joke in a talk I give to banks. And I think that's something that the bank brands have learned from. There's in all technologies, there's this helpful versus creepy line that you don't want to cross. There's definitely a little bit of a pushback on the retailing side of this. You're starting to see consumers take their privacy more seriously. We have GDPR in Europe, which is, I think the right move for protecting consumer privacy's online. Bank brands are very cautious about how they experiment with whatever the technology might be. Whether it's banking by voice, things like that, not crossing that line. But at the same time, if you don't experiment with these new technologies, whether it's biometrics, whether it's voice banking, et cetera, you're going to be left out. So the trick is to learn from some of those mistakes, to be very, very smart about how you're handling consumer privacy and security, especially, but still innovate.
Joe Saul-Sehy: 08:57 It sounds like what you're talking about, Devon, is still much, much, much, much more than having a more robust banking app. You're talking about something many, many degrees larger.
Devon Watson: 09:07 Exactly. And you know, this is something that we see as a longterm trend towards this kind of vision of connected commerce. A more robust banking app would be certainly just a small piece of that. The end to end orchestration is how I would think of it, that's really the game changer. Just doing one step along the way really well, isn't going to be enough. And I'll give you another example. You know, right now we have a lot of pretty interesting challenger banks, online, pure plays, kind of reminiscent of what we saw in the early days of the.com boom popping up. Europe in particular has a lot of these. There's this interesting experiment being run on pure play digital. And one of the best examples of that is Ant Financial. Ant Financial, which is associated with the Alibaba Group is as deep pocketed and capable a digital organization as there is on planet earth.
A little over 12 months ago, they made a bid to buy Money Gram, which is a international remittance company. On the surface of that, you would say, okay, they're trying to get into the remittance business, that's smart. But if you dig a little bit deeper, I never really thought that was a compelling explanation because from a technology perspective, they can whip up the anti money laundering rule systems and all of that software that they need to conduct a remittance business. What would they have gotten if they actually were successful in acquiring Money Gram? They would have gotten a few hundred thousand over the counter location and a few tens of thousands of kiosk locations around the world. That gives you the biggest physical distribution network for banking services ever seen.
Joe Saul-Sehy: 10:54 Game changing.
Devon Watson: 10:55 Absolutely. The kind of aha moment that I talked to our clients about what that is, that's a pure play digital and one of the most sophisticated ones in the world, making a very bold move to get into physical distribution. So this intersection of physical and digital channels, and being able to traverse the two and compete very, very effectively in either, I think that's really what the best brands of the future are going to be doing.
Joe Saul-Sehy: 11:24 I think that's exciting and fascinating, making digital more human and human, a little, a little more digital.
Devon Watson: 11:30 It's a great way to put it.
Joe Saul-Sehy: 11:31 Let's go over to the commerce side. I was listening to your podcast Commerce Now, which for people that are geeks in this industry, I think I can highly recommend that. They're short and fun and kind of a view of the future. But the people on the show, were talking about your shopping cart, and how physically going down the aisle at whether its a grocery store, convenience store, wherever, that the shopping cart is, is changing. Tell me about that because I found this technology really fascinating Devon.
Devon Watson: 12:02 So when you're thinking about retail, and it doesn't matter if it's grocery, whether it's fashion, whether it's fuel and convenience stores, all of these retail formats are in a race to digitize their physical shopping experience. Just like we were talking about before in the banking world, this intersection of physical and digital, super, super important. What's the one advantage that an online retailer has over a physical retailer? It's data. As soon as you go onto a online web front, to go shopping, I know everything you're doing Joe, right? If you go onto my website, I can see that Joe went to this page, then this page, then this page, and then he put this in the cart and then he took it out and he put this other thing in instead. And then he backed up and then he actually got three quarters of the way through the purchase decision, and then he added this other thing.
As I see that data stream, that payload of information if you will, gives me the chance to influence it. So I can suggest extra things, I can put smart advertisements around your shopping experience on my website, and some of the greatest minds of the last generation have fundamentally been spent, trying to figure out how to get us to buy an extra pair of socks online. I say that somewhat jokingly, but quite seriously. The Manhattan Project of my generation since college has been driving digital shopping.
Now with that advantage of the online folks, what is it that a physical retailers want to do? They want to be able to have that data payload. And if you just wait until the person shows up at your checkout lane, it's too late. So as one of our very smart industry pundits, Richard Crone says, check in is the new checkout.
Starting that shopping data payload early is something you can do through technology. That can be done with some of the innovations in shopping carts. That can be done with some of the innovations in self scanning. Many grocery stores you're going to start to see, if you haven't already, when you walk in, there'll be this rack of self scanners, and you pick one up off the rack. You associate it to your payment card and account, you wander around the grocery store scanning things, as you go on your merry way, you drop them in the cart. And instead of having to go through the checkout lane, take everything out of your cart, put everything back into your cart, you just walk out of the store. It's great. And what that does, besides the fact that made the queue shorter for you, made things easier for the retailer, now they actually have in technology terms, a user session for the whole time you're in the store. They can recommend things that can influence what you're buying. It's a real game changer.
Joe Saul-Sehy: 15:05 Everybody wins their Devon. I mean, on my end, I get rid of the pain point of having to stand there in line to buy the stuff that I've already decided 20 minutes ago, maybe half an hour ago that I wanted to buy. And on your end, you're getting data on me. I don't really want to be followed, but I also don't want to stand in line. So I'm willing to make that trade.
Devon Watson: 15:24 Absolutely. It really is a win, win. I think at least for me, as a shopper myself, I think the innovations in in store shopping that's digitally enabled just makes life easier. Right?
Joe Saul-Sehy: 15:36 Yeah.I also think though, as a consumer, the store of the future, I got to be even more mindful of my pocket book, and maybe use those online tools better because it's going to be awful easy Devon, for you to put stuff in my cart and walk away with that purchase that I might not have, before that technology hits.
Devon Watson: 15:57 At the same time, if you're Christmas shopping, hopefully you won't give the kids a toy that you don't have the batteries for. So there's an upside as well.
Joe Saul-Sehy: 16:09 That is very true. You're going to have a much better holiday season because he got all the accessories. Devon, how can people reach you guys if they've got more questions for you?
Devon Watson: 16:19 Sure. So www dot Diebold Nixdorf.com. That's the webpage. You can also search for us. Our podcast is COMMERCE NOW, or look us up on YouTube Diebold Nixdorf. We got a lot of content, podcasts, videos up there, great way to follow us. Or at Diebold Nixdorf on Twitter.
Joe Saul-Sehy: 16:38 Well, thanks for hanging out and talking about the future of banking and commerce with me. I really appreciate it.
Devon Watson: 16:43 You betcha. Thanks for having me, Joe.