GlobalFintechSeries Interview with Michael Hagedorn, Senior Executive Vice President and Chief Financial Officer at Valley National Bank
Modernizing core banking systems and focusing on a seamless digital transformation journey without sacrificing end user experience in the process, comes down to choosing the right technology partners. Michael Hagedorn, Senior Executive Vice President and Chief Financial Officer at Valley National Bank shares more on the future of banking and impact of fintech in the B2B marketplace in this chat with GlobalFinTechSeries.
Can you tell us a little about yourself Michael?
I serve as the CFO of Valley National Bank, responsible for leading all finance and capital market strategies while working closely with the Board and executive leadership team to define and execute all corporate plans and initiatives. Additionally, I oversee financial reporting, accounting, taxation, corporate treasury, balance sheet management, and investor relations for Valley National Bank. Valley has been working for some time on a new technology roadmap that will transform both the customer and associate experience as we know it today. The first major project under this initiative will be the SAP S4/HANA financial system which demonstrates the value Valley places on data and systems used to make the best possible decisions for our company. We are currently partnering with several fintech providers and have their functionality on our mobile apps currently. We continue to believe that a blending of bank operated systems combined with fintech solutions is the best possible outcome for all our stakeholders, including our customers.
We’d love to dive into the biggest problem areas for banks looking to focus on a 100% digital service offering, what big challenges do banks face when trying to enable end to end services via apps for their users?
A lot of banking organizations use legacy technologies for critical bank operations like deposits, withdrawals, and reporting among other tasks. Using these legacy technologies is not conducive to a seamless customer experience, and many are facing the option of continuing to fund outdated, non-unified solutions or fully digitally transform all operations.
Keeping critical operations going while also completely overhauling the foundational tech solutions of a banking institution can be challenging.
What are some of the best practices you’d like to discuss when it comes to enabling a wholesome digital transformation strategy for a banking unit?
Ensure that digital transformation is not happening in a vacuum, but rather as a collaborative effort across the entire organization. A key area of digital transformation is full integration of systems to provide the best possible data and user experience. If that innovation happens in pockets, processes are only going to become more complicated.
Additionally, it’s important to engage with employees throughout the process to make sure you’re providing the right tools to foster continued innovation and a positive user experience.
How do you feel the face of banking (from business and individual user point of view) will change because of the ongoing Covid19 pandemic?
From an individual perspective, customers will look to banks for entirely remote money management options. Even after the pandemic goes away, many customers will likely continue to leverage online banking tools over in person interactions. Having the solutions needed to enable strong customer experience will be a key factor in success. From a business perspective, budgetary constraints that arose during the pandemic will not go away instantly. As organizations look to become more agile, banks too will follow suit, leveraging tools that integrate disparate systems and cut out unnecessary and inefficient processes that can cost excess time and money.
What are some of the recent innovations leading banks have taken to ensure a better user experience during this global downtime that you’d like to share with us today?
Reorganizing processes alone is not enough to drive better outcomes. The integration of intelligent solutions into banking operations, like AI and machine learning, are driving innovation in the banking industry. More often than not, meaningful business decisions are only as good as the data used to inform them, and the leading banks are using AI to distill massive amounts of data into actional insights.
What according to you will the global banking marketplace look like in a decade from now? Do you see neobanks and challenger banks completely transform the need for traditional banks?
There are a few clear trends emerging that help shape what it might look like and what financial providers will need to do to remain relevant in the customer’s eye. First, digital technology will allow the customer to conduct business when and how they want. It will be device agnostic and transactions that today require human interaction will be completed by the customer without upfront human assistance. Second, digital technology will impact all lines of business within a traditional bank, including commercial banking. And finally, the manner in which customers are defined will change. Loyalty will need to be real and customer acquisition will not be solely based upon price and/or product features, but more importantly how easily someone can do business with your bank and how your firm can demonstrate that they are furthering society of key areas important to customers.
Before we wrap up, would you like to share specific finance management or business tips for Marketing and Sales or Finance teams struggling through this uncertain time due to the Covid-19 pandemic?
While COVID-19 has been devastating to our economy and the loss of life horrific, the one thing most businesses can certainly say is that it has accelerated their digital plans. The need to be online from anywhere for both customers and employees has been laid bare. Gone are the days when you could have IT folks available remotely 24/7; now almost your entire labor force needs to find a way to accomplish this.
As the principal subsidiary of Valley National Bancorp, Valley National Bank is a regional bank with approximately $32.5 billion in assets. Valley is committed to giving people and businesses the power to succeed. Valley operates over 200 branches across New Jersey, New York, Florida and Alabama, and is committed to providing the most convenient service, the latest innovations and an experienced and knowledgeable team dedicated to meeting customer needs. Helping communities grow and prosper is the heart of Valley’s corporate citizenship philosophy.
Michael Hagedorn is the Senior Executive Vice President and Chief Financial Officer at Valley National Bank