BMO Financial Group: How Digitization is Disrupting the Financial Sector
An interview with Matt Kirchner, David Casper – US Chief Executive Officer and Brett Pitts – Head of North American Treasury and Payment Solutions, BMO Financial Group
Matt Kirchner
Our regular listeners know that we talk a lot about market disruption. And we dive deep into the disruptive role that technology, the exponential economy, Industry, 4.0 and IoT are having an every aspect of our economy. And in doing so we introduced the world of tech ed to some of the most interesting personalities who are seeing this disruption firsthand.
Now, oftentimes, this discussion centers around manufacturing and industrial technology, around logistics and distribution, around the transportation sector. But listeners have heard me say many times that no segment of our economy, no vertical in any sector is immune from disruption and change, especially in this new era of smart technology. This rate of change affects those economic sectors already mentioned. And others like agriculture, hospitality, retail, insurance, and the list goes on. And yes, it includes the worlds of finance and banking.
Now, I don’t brag about this at cocktail parties, but my first career out of college wasn’t in technology. My path certainly lead in that direction. But that’s not where I started. My first job was a bank auditor. And believe it or not, ever since then, I have been fascinated by finance and banking, and particularly in the role that technology IoT, Big Data, and artificial intelligence play in that world.
That is why I’m really eager to get started on today’s topic and introduce today’s two guests. We begin with David Casper. Dave is the US Chief Executive Officer for BMO Financial Group. He began his career at BMO working at Harris bank in Chicago, and rising from those beginnings to his current role in which he is responsible for the overall performance of BMO Financial Corp. Dave, first of all, thank you so much for joining us on The TechEd Podcast.
David Casper
Matt, I’m delighted to be here. Thank you for inviting us.
Matt Kirchner
And we are delighted to have you and your sidekick that’s joining us today, Mr. Brett Pitts. And Brett is the Head of North American Treasury and Payment Solutions for BMO Financial Group. In this role, Brett is responsible for all aspects of the organization’s North American Treasury and Payment Solutions business, including treasury management, commercial deposits, and corporate cards and BMO’s business to business digital and payment strategies.
BMO stands out among financial institutions
Matt Kirchner
So Dave, I want to start with you and have you familiarize our audience a little bit with BMO. You’re the oldest bank in Canada, and combined with your very significant presence in the United States, the eighth largest bank in North America. Tell us a little more about BMO, its history, its purpose and its mission.
David Casper
We are the oldest bank in Canada. In fact, we are 50 years older than Canada itself. So we were the bank for Canada, provided the currency for Canada. Have always been since 1817, a bank that focused on commerce. And I think what really has propelled us is kind of the burning desire to always grow commerce in North America on both sides. And so many of our clients do business in both Canada and the US.
Now as we get to 203 years of age, Matt, we’re just starting to kind of figure out how to do things. And we have one thing that we all – every, all 45,000 of our employees – know, and that is our purpose, which shows up this part of the question, our purpose is to boldly grow the good in business and in life. And that’s how we run our bank. And that’s how our employees run their part of their careers at the bank.
Matt Kirchner
So boldly growing the good now for some 203 years, going back to 15 years before the inception of Canada. That’s certainly a rich history back to 1882. So certainly a very, very strong and solid record of doing exactly that and achieving your purpose. Dave, are there other things you might point to that our audience might be interested in knowing in terms of what makes BMO unique among other financial institutions?
David Casper
We’re unique in a couple of things. We’re one of the oldest banks in North America and one of the top 10 in terms of consecutively paying the dividend to our shareholders for over 190 years. And that puts us in a pretty, pretty unique class. What I think is unique about our bank, and as I think about it in the US, is that so many of our employees, whether they were from M&I or from Harris Bank, they spent their careers here, and have focused largely on what I said is thinking about how they can help in the community and help their clients. We’re probably more commercially-focused, although we have a great retail bank in both Canada and the US. We probably overweight a little bit in our commercial business. And that’s because it’s so important for what we’re trying to do, which is always be one step ahead of growing commerce. And that’s been our focus. I think that probably sets us apart.
Matt Kirchner
And I’ll admit that I did not know that your history of paying a dividend goes back 190 years. Certainly unique for not just financial institutions, but for any corporation. So that’s certainly impressive, shows your dedication to your owners and to your shareholders.
Career pathways are unique and non-linear
Matt Kirchner
Now, your career goes back a ways – not quite 190 years. But I know you’ve had a really interesting pathway through Harris Bank, through BMO. One of the things we love to explore with our guests here on The TechEd Podcast is just a little bit of how did you get to where you are? How does somebody become US Chief Executive Officer of an institution like BMO Financial Group.
David Casper
Well, you started out as a bank auditor. My first job was working on the bottling line at Miller Brewery in Milwaukee building number 60, as a member of Brewery Worker Local Number 9. And I think that was probably my key to someday becoming the US CEO for BMO. You need to know, especially if you’re gonna buy a bank in Milwaukee, you need to know how to make beer, bottle beer, distribute beer, and sell beer.
Beyond that, I would say my success has largely been – the one thing I think I’m pretty good at and Brett is a very good example of that is picking good people to work for us, and then leaving them alone and letting them grow. Brett’s got a huge background in digital business. He’s brought us so many ways into the forefront of both our commercial and our retail business. And we have that throughout.
So I think I’m pretty good at identifying talent, and convincing them to come work for a place that will give them lots of leeway to grow and to help shareholders and all of our stakeholders. That’s actually pretty much the story. I didn’t ever get to become a bank auditor. But when I decided I wasn’t going to make beer for my career after college, I decided I wanted to get back closer to the Midwest and Harris Bank was where I started and almost every day has been a pretty good day. Not every day, but almost every day.
Matt Kirchner
Well and you’re bringing back great memories for me. I certainly know Miller Valley well, being a lifelong resident of southeastern Wisconsin and of Milwaukee. I will note that you talked about if you’re going to do business in Milwaukee, and you need to know how to make and distribute and sell beer. You didn’t mention drinking beer, and I’m not going to ask you about that. But I’ve got to believe that fits in there somewhere as well.
As we turn our sights now to Brett Pitts, and as we mentioned in the intro, Brett is the Head of North American Treasury and Payment Solutions for BMO Financial Group. Brett, I’d love to ask you the same question. Obviously, you’ve risen to a level of great responsibility within BMO, and would be really interested in understanding what that pathway felt like for you.
Brett Pitts
You know, Matt, like a lot of people, my career looks like a well thought out plan only in retrospect. I’ve had a wide diversity of jobs like Dave was talking about also. Over 30 years, I’ve had the opportunities to do lots of different really interesting things. And I’ve been really fortunate in that regard. I grew up in the southwestern part of the US. And after graduating from college back in the early 90s I worked in the auto industry in Detroit, I worked in the defense industry, again, back in the southwest. I’ve been in intellectual property research and development in different parts of the country. So I spent my 20s and 30s moving around through different industries, getting a lot of different types of experience.
I finished graduate school in 2001, which was then when I moved into financial services through the technology organization. So, among other things, I worked with a team to build out the next generation of internet banking for Wells Fargo in the Bay Area, where I ultimately became Head of Internet Financial services for Wells. Got the call from BMO end of 2017. And I just found myself really impressed with the business, with the vision, with the ambition that the leadership had, including all the people I talked with both in the US and Canada. I got a real sense I think of a moment and an opportunity at BMO.
So I picked myself up and my family and moved to Toronto to join as the Chief Digital Officer, which I did for about three years before Dave gave me the opportunity to join his team as the Head of North American Treasury and Payments, which I started at the beginning of this year. I am lucky enough now to be sort of crossing my 90 day milestone, so I’ve learned just enough to be dangerous; really, really interesting space though.
I think that the common thread that I’ve had for the past 20 years, even as the customer segments and the products and the business models and all these things have changed, is that I’ve tended to have walls that have, you know, sat at the nexus of business and technology and customer experience at a time and financial services of just perpetual high velocity change, which has just been absolutely fascinating.
Matt Kirchner
And we’re looking forward to talking about the nexus of all three of those. And certainly your background, interestingly enough, in a lot of different markets, Brett, in automotive, and defense, and IP, and research and development, I’m sure lends itself really well to your current role. And as we dive in before too long into some of the aspects of how technology is disrupting the world of finance, I’m really looking forward to that part of our discussion.
How has COVID impacted banking practices?
Matt Kirchner
Before we get there, another form of disruption that we have all seen over the course of the last 12 plus months is, of course, the global pandemic, that we have all been living through in so many different ways. And one of the things that I reflected on, Dave, quite a bit over the course of the last year is, you know, what if this pandemic had happened 10 years ago, 20 years ago – how much different our business technology was how, how less connected in so many ways that we were. So in some some ways, it’s almost been a silver lining, has it not? That we’re having to experience this in this day and age as opposed to 20 years ago. I’d be curious, though, about how BMO is navigating the COVID landscape, and how technology has helped augment your ability to service your clients in this current age?
David Casper
Great question. I hadn’t thought about what it would have been like 10 years ago, but you’re right, it would have been different. So we should probably acknowledge at the outset, it’s – at least at the time of this recording – it’s been just about a year. So, so much has changed. And I think about our first COVID case, which was just about a year ago. And all this happened and all the things that we didn’t know at the time, Matt, and now that we do know.
It’s been, it’s been nothing short of amazing. And the technology that we have today, we didn’t even know we had. So we had to convert 45,000 employees almost overnight to have the ability to work remotely. Other than our tellers, and some of the people in our call centers in some select areas, we were able to have a substantial – the vast, vast majority of our people work out of the office. The technology around that has been nothing short of amazing. We quickly converted from nobody knowing how to use Skype, even though they had it all on their computers to everyone using what’s now Microsoft Teams. And you know it’s interesting that technology has gotten better all the time.
There’s a lot of calls that take place with our clients. The ability to see them and interact with them through Teams or Zoom or whatever you’re using, has actually made this much more acceptable than it could have been. And the personal connections as we reach out to our clients. And now we are certainly seeing clients face to face where it’s acceptable and obviously socially distance, but just the ability to see them during very, very difficult times, Matt, was critical. So our big function was obviously take care of our people.
But then, so many of our clients had the same issues. And you know, the clients that are borrowing money or dealing with, you know, huge payrolls, what do they do when their business stops? We were one of the I think in Wisconsin, the largest provider of PPP loans, and in the Midwest, one of the largest. We didn’t really know what we were doing on day one. We were one step ahead of our clients, and probably a couple steps out of the government. But how quickly we and other financial institutions use technology, as well as just basic common sense and spending time with every one of our clients to figure out what they needed, how much they needed, if they needed anything, how quickly we could get that get the PPP loans into the system – we saved probably hundreds of thousands of jobs with 20,000 clients that signed up for this. And that was in the first round and a good number in the second round as well. And what it told us -and by the way, using Brett’s capabilities and the digital capabilities in his world to open accounts digitally much faster than they would have before. Because nobody could come in and sign things.
There’s just so many things that we learned how to do, and also things that we learned not to do: things that we had done in the past that we realized, you know, we just don’t need to do this anymore. And all of the focus on making it as easy as possible for our clients and our employees to do their job in very, very difficult circumstances. You know, when you’re working from home for a day or two, that’s one thing, but when when BMO becomes your houseguests for a year, as we did so many of our boys and still today, you know that can wear on people.
So we’ve used a lot of different technologies to kind of bring people back to feeling like they’re actually in the office, or at least with people. And the optimism that we’re seeing from all of our clients, almost all of our clients to get back, get back into the swing of things, whether they bring everybody back to work or they come in drips and droves. Getting the enthusiasm back, getting people on their front foot, again, is very impressive. I can’t tell you how impressed I am with just the overall economy.
Matt Kirchner
You know, it’s springtime in so many ways, certainly in terms of weather, but it also feels like an era of new beginning coming out of this year of COVID. And I think you’re right, it is finally starting to thaw out. And we are looking forward to getting back in person. But I’ve also learned a lot in the last 12 months or so about how we can continue to do business, even in the shadow of a global pandemic.
What’s changed in banking technology since the start of 2020?
Matt Kirchner
So Brett, I’m wondering as you listen to Dave’s answer – which was fantastic -on the technology side, are there ways that you’ve been able to leverage technology at BMO working its way through COVID? And for the benefit of your clients?
Brett Pitts
Yeah, absolutely. I think Dave touched on a lot the most important points. And, you know, I hear sort of as we crossed the one year anniversary, a lot of people talking about the new normal, and are we in the new normal now? And I don’t think that anybody’s interested in 2020 or 2021 becoming sort of a perpetual state in just about any regard. But to your point about silver linings. I think that, you know, with vaccines and with collective changes across just about every aspect of our lives, the world is going to be different in a lot of important regards than it was certainly at the beginning of 2020. And I think that ultimately, we’re going to see that a lot of these differences are going to be viewed as positive.
We think about consumers and businesses and corporations and how they’ve used technology over the course of the past year. When I was on the retail side and responsible for contact centers and digital when we just were ramping up on all of this about a year ago, I don’t know that we saw a lot from a technology perspective that was brand new. It’s just that we saw a whole lot more adoption of it much faster than we had ever seen before. I mean, companies already have people working remotely. You know, collaboration products like Teams and Zoom, have been in the market. For years, consumers had been shifting a lot more their daily tasks – opening bank accounts, ordering food, streaming movies – they had been doing those things increasingly, digitally for years.
And BMO certainly, from a business perspective, if we look kind of behind the scenes, we were already digitally enabling more customer and employee interactions and processes end to end, because it made things a lot faster and easier for our customers. And because it made us more efficient and brought down the cost of service and the cost of a lot of the things that we did. So you know, things that used to take weeks now take minutes or seconds.
What we’ve seen over the last year is the adoption behavior, I think has dramatically accelerated. And interestingly to me – I mean, I spend a lot of time thinking about technology – I think a lot of that’s going to stick because enough time has passed and a lot of people’s habits have fundamentally changed. And people have been rewired in terms of how they perform activities. And I actually think that’s going to be a good thing.
Even as people return to the office, companies are thinking really differently, as you know about commercial real estate, how much they need, what they’re using it for. As a lot of our employees move to more of a hybrid model, where they’re in the office for a few days a week, and maybe remote you know a couple days a week, I think we’ve all learned how to use the technology to enrich a lot of personal interactions when people are in different places. And to actually have more of a personal connection that doesn’t always rely on physically transporting yourself from one place to another in order to be able to look at somebody’s face. It’s not a substitute for being together. And to Dave’s point, I think people are looking really forward to getting back to that.
But the things that we’ve learned how to do and the technology adoption and habits that have been accelerated over the past year, I think are going to be really good additions that are going to endure, because it’s an improvement over where we were at the beginning of 2020.
Matt Kirchner
No question. And I think you make a couple great observations there, Brett. This whole idea, we talk a lot of times about how it takes three weeks to make a habit. Well, we certainly had much longer than three weeks to create new habits. And I think you’re right: some of those habits that certainly benefit our workers, benefit our organizations, those habits aren’t necessarily going to go away. Your comment that things that used to take weeks through technology are now taking minutes or even seconds. Certainly that’s a fascinating observation in the world of finance.
How has COVID impacted businesses?
Matt Kirchner
I think Dave, we’re seeing some of that same rate of advancement in the world of the commercial sector as well. Certainly, you mentioned early on in our interview BMO touches a lot of different companies in a lot of different economic sectors. And you get an opportunity to work with businesses across all sectors of our economy. You know, I’d be interested as we kind of turn the topic here to the role that changing technology is continuing to play. How are your customers telling you that technology is evolving their operations?
David Casper
Well, that’s been one of the fascinating parts of this. As I look to see a number of the guests that you’ve had before, a number of those are customers as well. So you’ve already heard from some. I’ll tell you what though, our business covers so many different groups, I mean, from food producers, to truckers, the manufacturers, to real estate developers, the gamut. And within manufacturing, it’s just about everything. And we haven’t even talked about the services side. I think it’s really safe to say, Matt, that almost regardless of the industry, technology has had a very, very positive impact on their evolution as they’ve gone through this past year.
When you, as you can imagine, when you’re lending money to companies – and we do a lot of that – you spend a lot of time with these companies, and you get to know them, you understand what the technology evolution is pre-COVID. And they tend to be ahead of the curve. We’ve seen some of our older companies, companies that have been steady state manufacturers, for example, totally streamline their operations during this period of time.
We have one client that has had a business that had probably 1000 SKUs. It’ss a typical 80/20 rule though, where 80% of the revenue and the profits was coming from about 20%. And when there were shortages, and there was all the inventory jams, they totally restructured their business from start to finish, substantially grew their sales, most probably quadrupled their online sales, and basically cut their SKUs by 80%. And they basically just say we cannot produce this anymore. They’ll never go back. So 80% of those SKUs are gone. But they’re making far more money. They’re producing faster, quicker and getting most of what is needed to the clients much faster.
And we have clients in the food business, where half their business was selling into grocery and distributors there and half was going to restaurants. Well guess what happened in the first year? There was no business coming from half of their business. And the restaurants were closed. Hotels, restaurants, everything was closed. They quickly quickly moved and there was obviously great demand for food. So they repackaged things, they move very quickly on the online side. They became for a number of large grocery stores the number one online provider.
So just everybody adapts. That’s what’s so great about our business. Every day at my job, I learn more about how companies make money and employ people. But during this last year, I’ve seen how so many have basically pivoted on a dime. And I’m sure this is with your company as well. To basically understand what the client needs, quickly pivot, get their clients or get their customers focused on it, and getting their employees focused on it. That’s been probably the biggest silver lining that I’ve seen in the commercial business
Matt Kirchner
Without question. And it’s been fascinating to see how companies have had to – with a great deal of agility – literally, as you put it, pivot their entire business models. You know, we think back, you referenced our business back to the weekend of March 14th – I’ll never forget it – of 2020. And we realized what was setting in. We literally pivoted our business to a digital business model over the weekend. And we’re a company much like yours that relies heavily on person to person contact, walking into facilities, meeting people, building relationships. And we knew that we still had to be able to do that even in the wake of this huge change that was taking place in the economy. And that agility I think in many ways has made businesses better although it was certainly a tough pill to swallow and a tough transition to go through.
How has the internet of things (IoT) changed financial practices?
Matt Kirchner
Speaking on the front of making businesses better, Brett, you know we talk about these new technologies that are emerging, we hear words like the Internet of Things and big data, artificial intelligence and how they are totally transforming the world of we talk about manufacturing and industry, but they’re transforming the world of finance as well. I’d be interested in having you tell us how BMO is employing these tools in serving your clients and growing your business.
Brett Pitts
In a lot of industry conversations, I think it’s easy to get sucked into digital and technology topics like data or AI or open banking as subjects unto themselves. And you have a lot of sort of hammers looking for nail types of conversations. So I like the way you phrase the question because none of these things matter unless they can be used to make a client more successful or make their day to day business faster or easier to manage.
On the data side in financial services, I think like a lot of industries, our problem isn’t that we don’t have enough data, it’s that we almost have too much data. And sometimes it can be hard to figure out the most effective ways to use that data to deliver insights to clients. Customers on the business banking side on the consumer side have said to us for years: you ought to be sophisticated enough in financial management – my bank ought to be able to bring that knowledge to bear for me. My bank sees all my transactions. You know how much money I have. You know how much I pay vendors. You know what my payroll is every month. Everything. And I expect you to use that information to share insights about what I’m doing and how I could be making better financial decisions.
Historically doing that well had to take the form of a relationship with somebody at BMO who knew the client personally, and really understood their personal situation of their business. That’s going to continue to be really important. And it’s intrinsic to what we do from, from a BMO perspective. It’s just that we need to be able to do that, for all of our customers, no matter how big or small their finances are, or how big or small their relationship is with us. We want to be there for them and make them financially successful.
And the smart use of data, I think, now finally has reached a level of maturity, where it enables unprecedented customization of advice at scale. Applying machine learning, artificial intelligence to the really rich datasets that we have, it enables us to give all of our clients insights for us to be able to deliver those in the moment when clients are making payments or important decisions, to help them avoid negative outcomes or to have a higher level of confidence in what it is they’re doing from a financial perspective.
So a couple of examples: we use data and AI to forecast cash flows, both for businesses and for consumers, and being able to highlight for them in advance when they may either one short, or when they’re going to have an excess of cash that they can redeploy in ways that are going to be good for them. We also use AI in areas like really consequential payments, like foreign exchange or wires to scrutinize payment instructions at the moment that they’re being committed by a client before the payment goes out so that we can help them catch common errors or help them resolve questions to reduce the likelihood that they’re making a mistake and what can be a really large or consequential or sometimes sort of hard to reconcile payment if they wind up making a mistake.
So to reach the point where we’ve got an expanding set of tools and technologies that we can apply to making our clients’ lives simpler and easier, and be able to deliver those insights to them, either directly through digital or deliver it through an insight that a member of our team gives to them as the result of the digital interaction that an employee had with these types of systems, I think is absolutely terrific. And it feels like we’ve now reached a point where we can start to deliver on the promise that we’ve been talking about for 10 or 15 years.
Matt Kirchner
Well, and I think that customer-centric, client-centric approach to using data, machine learning, artificial intelligence – it’s such a really important point, Brett. You know, I just finished reading a book by Dr. Jay Lee, called Industrial AI, and here again, making connections between the world of finance and industry. He makes the observation in that book that they’ll bring data scientists into their manufacturing plants, and they want to go after the data first. And really what Jay Lee says is the data is great, but unless we have a problem to solve, the data doesn’t really matter. So let’s figure out how we use data to solve a problem, make the process more efficient, make a customer or clients’ experience, a better one. And that’s really the role of AI.
How does banking use artificial intelligence?
I was really actually impressed with the way that you answered that question and with your approach to that particular topic, because that’s exactly in my mind the way that we should be going about it. There’s so many different applications, so many different uses, not just of artificial intelligence, machine learning, but other technologies, especially in your world, things like online banking. And I’m curious how that technology has evolved and how it has changed the way that consumers do their banking, let’s say in the last five to 10 years?
Brett Pitts
I just I remind myself that this change started over 20 years ago, with sort of the first versions of online banking. And just watching the maturation cycle associated with that, I think that we’ve reached the point where it’s made managing people’s financial lives a lot easier and a lot faster, certainly than it was before. Especially with mobile, if you’re anything like me, your mobile phone is never more than 10 feet away from you. I mean, obviously anybody listening to this is listening to a podcast on their mobile device. So I don’t think it’s a controversial statement. But these things obviously become ubiquitous.
For a long time, your bank is in your pocket. Anytime you want to know how much money you have, whether a payment is cleared, whether a paycheck has been deposited, those things are all knowable in less than 30 seconds. If you’re standing in line at the grocery store, and you need to check your balance before you get to the checkout in order to know whether you’re going to be able to make a payment for all the groceries in your cart. Or you’re shopping for a house and you want to check a rate, or you’re paying a bill that has just occurred to you while you’re standing in a kitchen. Your bank is now always there.
And I think that that kind of convenience has certainly shifted behavior because people are now taking care of more of their everyday transactions themselves. They’re not going into branches or calling us to do those things nearly as much as they were 10 or 20 years ago. And they’ve made that shift because it’s better for them.
At the same time, though, what we’re finding and sort of what distinguishes, I think more traditional financial institutions with these capabilities from fintechs and startups is, people do still like to talk with us when they’ve got a problem or a question or they’re trying to make a big financial decision. So it’s important that we’re available to talk and understand their needs, and work with them on all the ways that we can help them make those kinds of decisions, regardless of sort of what form that takes. Because we have so many different ways of working with them. We’re just talking with them a lot more often across all of our touchpoints, whether it’s online, or branch or phone or ATM than was the case before. If we look at our mobile active customers, they interact with us almost 20 times per month on average now, and they still use all of our channels.
So if we look at their relationships, the characteristics of their relationships, what we find is digitally active customers are quantifiably, they’re more engaged, they’re more loyal, they’re more satisfied, they’re more profitable, they have deeper relationships for us. The addition of digital and the way that it’s matured over the past 20 years, it’s been a win-win. It’s made the relationships, I think, much more valuable both for our customers and for us.
What innovations will finance see in the next 10 years?
Matt Kirchner
What a great observation. And you know, if you turn the clock back 20 years, and we heard a senior executive of a major bank, use the words, quote, your bank is in your pocket, they would have looked at us like we were crazy. But here we are. So in as much as the way that consumers have done their banking in the last five years, the last 10 years, that that has changed in tremendous ways in the wake of technology, Brett, I’m curious, what changes will you expect here in the world of digital banking in the next 10 years?
Brett Pitts
I think a lot of the changes are going to be both more subtle, and actually even more impactful than what we’ve seen over the past 20 years. I think, you know, the first 20 years in digital banking were largely about features and functionality. Thinking about banks and how they differentiate themselves based on who had which kinds of payments, who had a mobile app or not, who offered mobile deposit or not, who lets me as a customer apply for a mortgage. And I think for a long time there was actual differentiation of those features and functionality across banks. If you think about the present moment, I think the green field has been covered. By and large, just about every bank has got a mobile app, they’ve all got bill pay, everybody’s got mobile deposits. On the business banking side, you know, just about everybody offers the ability to be able to see and pay loans, initiate wires, conduct foreign exchange.
I think that currently it’s more about the quality of the experience. Thinking about whether the digital experience is intuitive, is it easy to use? As a new customer is it quick and easy for me to get up and running? Is the system reliable and responsive? Does it feel secure? If I’ve got a question, is it easy and fast to be able to get help from somebody in the moment? And if somebody is helping me who’s an employee of the bank, can they see what I’ve been doing online so that they can help without me having to recap my tale of woe on the way to actually getting some help? I think that people have now become accustomed to digital experiences being easy and instantaneous, because that’s broadly their experience across just about every industry. From a financial services perspective, that’s where a lot of our investment, I think, has gone over the past five years.
The next 10 years, though, I think it’s going to be making the next transition from these well-designed transactional types of experiences to experiences that are more insightful about me specifically and that help me make make better financial decisions in the moment and over time. As a banking customer, I want my bank to use the information that they have about me both in my relationship with the bank, but also think about the information that I’ve got more broadly, that has sort of a financial context: my relationship with other financial institutions, tax authorities, other technology providers to be able to make recommendations about what I do next, within and outside of financial contexts.
Especially on the consumer side, I think that a lot of people don’t feel confident in their financial knowledge or decision making. They don’t by and large know how to save, they don’t know how to manage credit effectively, they don’t know how to invest. And they’ve been asking for their bank’s help for years. It’s the kind of thing that in the past, the form that that help would take would be a dedicated advisor, which I think has been hard to do at a really large broad scale. So that’s the promise, I think for where we are now with the maturity of digital technology, with data and AI as we were talking about, with application programming interfaces and cloud and integrations, with new types of partners. I think that all of those things are going to combine to finally make sophisticated, scaled, personalized advice possible over the next 10 years for anybody who wants it. Which I think is really, really exciting, because this is the moment that we’ve been waiting for.
How do we prepare students to work in a digitized world?
Matt Kirchner
The moment we’ve been waiting for. Absolutely perfect. We’re gonna talk now a little bit about the world of education. We’re going to pose a question both to Dave and Brett. And Dave will ask you to take this question first. So many of our listeners are people responsible for preparing our students for the next step in their career. As we prepare students for careers in every sector of our economy, what would you say are those key competencies that we should be giving our students during their education pathway? And talk a little bit about how these are changing as well?
David Casper
The first thing, Matt, is, and I appreciate you asking this question. And at the last financial crisis, just to remind you, the banks were all viewed as kind of the villains. The banks as a whole got a lot of bad publicity. And even though we didn’t, and we actually look pretty good amongst some of our big wall street peers, the issue was, and I was afraid for 10 years, we would lose the next generation of leaders coming out of school that would just move away from finance. And it took us a while during that period of time to bring it back. And have people understand how important the banking system is, and how they really can help grow the good in business in life, working with the right bank and becoming part of the financial system.
Nothing has changed in terms of how important it is, if you’re going to go into this industry. But I’ll tell you what is probably even more a focus. You have to have finance; you have to have some finance and accounting at some point for large parts of this job. But you don’t have to have it on day one. What you do have to have, and it’s probably more important than ever, is a real strong intellectual curiosity. That’s something that is so critical to our business. To understand every day, whether you’re dealing with retail clients, or commercial clients, what makes them tick, how they grow, what they want to do in terms of their future.
And having the skill set to not only empathize with those clients, but also to intellectually engage with them. So that’s critical. I could say you need to learn these skills, you need coding skills, and we can teach a lot of that. But if somebody is coming out of school, what we can’t teach, and what is innate, the intellectual curiosity to want to grow and help clients grow. Again, retail or commercial.
Matt Kirchner
Excellent, and very, very good advice: the importance of that intellectual curiosity as they enter their career pathway. So another great observation. Brett, I’d be interested in your thoughts on that as well, thinking here about education pathways, and as we prepare students for careers in multiple sectors of our economy, what are those competencies that, especially in your role from a digital standpoint, are really important that students have as they’re being educated?
Brett Pitts
I think we have more and more roles that are now interdisciplinary. So kind of the blend of financial knowledge, accounting knowledge, as Dave was saying, product management, data analytics, sociology. I’ve got people on my team who came from technology, telecom, traditional banking, consumer packaged goods, people who have joined financial services from regulators, so people who have come from all over, if I look at our product development managers, whether it’s traditional or sort of digital product development managers, the people who build and manage our products, the people who work on payment mechanisms on digital experiences, they’ve all got really deep knowledge of marketing, the user behavior, design, finance program management, I think what’s happened over the past 10 years that I’ve seen within the space is that people’s jobs become both deeper and broader at the same time.
I think you can look at that on the one hand and find it daunting, because it implies experience and proficiency and a lot of different areas that, frankly, almost nobody has at the beginning of their careers. But on the other hand, it means that people from a variety of backgrounds and with the right approach and set of circumstances can actually come into digital finance and be really successful. And I think that it also gives people a lot more degrees of freedom for how they move throughout their careers.
I’m a perfect example. I’ve had 20 years of jobs that didn’t even exist when I was in college. And I’ve had the opportunities to step into roles that years ago, I might not have been well suited for, because things like technology and digital execution has become an important part of just about everything. On the one hand, the demands have become more. But on the other hand, the good side of that is that people can be much more creative and much more flexible in their careers, I think, than they have traditionally been.
Matt Kirchner
It’s certainly that creativity and that flexibility has served you well in your careers. I love the observation that you’ve had 20 years of jobs that didn’t even exist. When you graduated college, certainly evidence of the fact that we need to be continued continue to be incredibly agile as we move our way through our careers. And speaking of that topic, and we’ll stay with you, Brett for the moment and then pose the same question to Dave, in as much as there were career opportunities in the last 20 years that you would not have even dreamed existed. When you were graduating from college, I think the same is probably going to be true of our current college students or high school students, or what have you. What are some of those careers that will be available for today’s students in the world of finance, relating to technology or otherwise, that didn’t exist 10 years ago, or might not even exist today, but will exist in the future?
Brett Pitts
I think it’s the things that sort of sit now at the intersection of what have traditionally been separate from each other. So again, people who have deeper experience and expertise in sociology in user experience design in technology, and product and portfolio management. And what we’re going to see is a bunch of different business contexts that are going to recompose those types of disciplines to be able to get different types of outputs. But the base experience and the base skills, I do think are going to remain fairly consistent, even as the forms of those jobs change.
Matt Kirchner
Absolutely. And certainly, it’ll be interesting to see as the forms change how important those base competencies and those base personality traits are in the success of people, because in many, many ways, and in many cases, it’s those core traits that ultimately make us successful, regardless of how those career opportunities evolve. Dave, I’d be interested in your views on exactly that same question. What are some of those careers that are available today or tomorrow in the world of finance for our students that are just moving into their career pathway that didn’t exist 10 years ago?
David Casper
One area that we actually haven’t talked about much today, which is a growing area for our bank, and many others is wealth management. And while the career existed in the past, what has happened over the last 10, 20 years is as an industry, we’ve recognized that wealth management is an important aspect of our job and our responsibility. And it’s not necessarily managing the billionaires, but it’s the education that comes when you’re in high school, when you’re in college, when you’re in your first 10 years, and you’re 30 years, and it’s the education about how you manage money. What are the certain different ways you can do it.
There’s a whole career that starts with people coming right out of school that will start and actually work with younger people that are just at the beginning of their career path, and help them all the way through. You know, managing and helping people manage their money smartly is a very important career that we need more people that can get in, And again, we can teach them part of this. But having the empathy and the willingness to work and talk to people over a long period of time and see their net worth grow is an important part of what the financial services business do.
Matt Kirchner
Well and really such an important aspect of what it is that you do is creating flexibility, creating freedom, creating options for people to responsible management of their of their money of their capital of their assets, thinking long-term getting people started early. Teally, really interesting observation. So Dave, I really appreciate that observation.
How can educators improve the way they prepare students for STEM careers?
Matt Kirchner
I think we have time for one more question. And we’re gonna pose this one to Brett. You know, Brett as you know, we spend a lot of time with educators and many of our listeners are people who are teaching STEM, teaching technical education, not just in the US, but really around the globe. And one of the things we like to get some thoughts on from our guests is if there was something that you could change about education; if there’s one thing that you think our educators could be doing a better job of, what would that be?
Brett Pitts
I’m actually on the advisory board for the graduate Business School for the University of Texas in Austin, which is where I did my undergrad. And something that we’re spending a lot of time on now is how you break down the traditional linear sort of episodic way of thinking about education. If you think about the path that we all sort of grew up with, you know, you had high school, and then you went on to four years of college, some people more. After college, you work for a while, and then maybe you go back to graduate school for two plus years. And then that’s kind of it, you know, for your educational career.
A lot of the subjects that we’ve touched on during this show, and what we’re seeing now, particularly in business is that the velocity of change is perpetually increasing, and the need for topical specialized knowledge is also increasing. So the notion of more and more frequent periods of education throughout one’s career, I think becomes increasingly important. We have to think about the availability of structured focused education in bursts and on an as-needed basis, and to think about how to deliver that when people are in different life stages that don’t always lend themselves to stepping out into full-time education for years at a time.
The logistics of that I think are hard to land on. There are a lot of interesting experiments that are happening right now. And more and more businesses and institutions, I think are thinking about what that looks like in ways that I think are going to be transformational to education over the next 10 to 20 years.
Matt Kirchner
There’s absolutely no question about that. In fact, if we look at disruption in education, the whole idea of lifelong learning, advancing technology, what I call the exponential economy, that what we’re doing today is so much different than what we were doing 10 years ago. And what we’ll be doing 10 or even five years from now will be totally different. That may not have been the case for our parents or our grandparents where you could have a skill, you could have something that you were really, really expert at and that could serve you for your entire career. I think those days are changing and changing quickly in this whole dedication to lifelong learning, to understanding the importance of being flexible, being agile, and being creative in how we continue to educate not just our students, but our incumbent workers and our entire economic sector is going to be so very, very important.
Here on The TechEd Podcast we’ve had such a great discussion today with Dave Casper, the US Chief Executive Officer of BMO Financial Group, with Brad Pitts the Head of North American Treasury and Payment Solutions for BMO Financial Group. I want to thank you both. Dave, let’s start with you. Thank you so much for spending some time with our audience today. I know they gleaned a tremendous amount from your insights. We want you to know how much we appreciate you joining us.
David Casper
Well, thank you, Matt. And I hope we will cross paths again soon.
Matt Kirchner
There is no question about that. And Brett to you as well. Just tremendous insights on the way that technology is disrupting your world disrupting your clients world and how you are quickly adapting and even getting ahead of that change, to make sure that everything continues to run as smoothly as it has and will continue in the future. Brett, thank you as well so much for being with us.
Brett Pitts
Thank you, Matt. Happy to spend the time with you.