Global Fintech Interview with John Dangoia, VP and Head of Product Management at Infosys Finacle

To comment on how traditional commercial banks are revisiting their payment technologies to offer better connected cash management and supply chain finance operational ease we had John Dangoia, VP and Head of Product Management at Infosys Finacle join us for a chat:

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Tell us a little about yourself John, we’d love to hear about your journey through the years in fintech…

Thank you very much for inviting me! These are exciting times for Infosys Finacle, which is helping banks to pave the way for their digital future. I head up Product Management for Finacle for the U.S. and Europe regions. My role is to lead product strategy and execution, to ensure that we are more relevant than ever to our financial services clients.

I have a passion for product management, leading teams, and being a quarterback of sorts, which is why I gravitated to these type of executive leadership roles in the past 20 years. I was fortunate to get a start in banking right out of school and haven’t looked back. The first half of my career was spent in a large financial institution in the U.S., where I worked for some tremendous leaders and learned the ropes, so to say. As my career progressed, I have had the opportunity to lead teams in product, sales, marketing, and even operations. The second half of my career has been spent working for technology partners of financial institutions, leading high-growth and innovative products. Leading transformational efforts to drive product growth and leading high performing teams is my specialty. Today, I have the good fortune to be leading Product Management for a high growth software division within Infosys that is delivering Better Banking through technology to our 500+ clients around the world.

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Over the years, what are some of the bigger dominant changes and evolutions in B2B fintech that you’ve seen shift the market, also, can you talk about some of the biggest trends that turned the market in 2020 due to Covid-19…?

Payments have been a very hot space for some time. It has been fascinating to see the new players emerge and look to disrupt the payment ecosystem by providing a better customer experience through innovations, such as contactless transactions, which have surged recently. Banks have been investing in their retail digital channels for over a decade, but in recent years, they have started to invest more in their commercial digital products. The pandemic has put things in overdrive, as corporate banks, which lag retail banks in digital technology adoption by a distance, scramble to adapt to changes, such as remote working. Having seen the light, we expect corporate banks will now seriously look at investing in technology, particularly in cash management, supply chain finance, and liquidity management tools to help their corporate and SME customers better manage their cash flows coming out of this crisis.

What are your thoughts on the response of the banking and financial services / financial institutions to the changing demands amid the pandemic; what according to you can banks and institutes do better with their fintech vendors to support changing customer needs?

First of all, our hearts go out to all of the people and businesses that have been impacted by this pandemic. I don’t believe anyone would have predicted where we are right now. This crisis is affecting people in a way never imagined and unfortunately, it is still not near the end. Covid-19 has surely affected the way companies do business in every vertical and financial services is no exception. There will be winners and losers when this is all said and done.

To start with, financial institutions offer an essential service and hence need to keep their operations running. This makes them highly reliant on digital channels for servicing as well as acquiring customers. Similarly, there is a dramatic increase in the number of employees accessing enterprise systems remotely, as many bank operations have started working from home.

Within a span of days, banks had to accept applications for the PPP in the U.S. and other government programs globally and disburse the loans. Some of our clients said they had given more loans in April than they had in all of 2019. Call centers were overrun with multiples of their normal volume overnight. Then there is the issue of strained credit books and near zero or negative interest rates in some markets. These, combined with payment deferrals and increasing non-performing loans, are presenting banks with unique challenges in dealing with the short term financial and liquidity stress. In turn, they have responded by re-imagining their operational processes and making changes like recalibrating their credit policies almost on a daily basis.

With short term challenges getting addressed one by one, we see that the focus is shifting towards mid and long term strategies to re-establish and regain the lost momentum. Financial institutions will have to reassess their IT and operational strategies against the backdrop of the experience gained from Covid-19. So, like most industries, ours has been quite hectic over the past few months.

How are you seeing digital banking solutions evolve during this time; what are some of the ways in which newer technologies like AI and ML will influence the state of digital banking in 2021 and beyond in your view?

‘Low-touch high-tech’ will continue to be a priority for some time even after the pandemic is over. We are already seeing heightened focus on digital channels like online and mobile. It’s expected that while continuing to strengthen and scale up these traditional digital channels, financial institutions will further increase their focus on alternative channels that are currently in nascent stages. For example, WhatsApp banking and video banking. Advanced analytics and AI will become more pervasive. Whether it is for underwriting or risk assessment or transaction and fraud monitoring, or simple customer interactions, analytics and AI will play a big role in a post-Covid scenario. Usage of bots and other assistive tools will also grow to ease the reliance on human interactions. RPA automation will continue to gain traction and bots will become more cognitive and user friendly.

We’d love to hear your thoughts on the global fintech startup marketplace- can you talk about some interesting innovations you’ve comes across? Your thoughts on a few startups that you feel are set to turn into fintech unicorns in the new future?

Given we are still in the middle of a pandemic, I think it is fair to say that early stage funding will likely be a bit tougher today versus a year or two ago. We were already seeing a reduction in new start-ups. That being said, leaders with innovative ideas who have a proven track record tend to navigate the angel investor market quite well. Like most verticals, it is all about the confidence in the business plan and the executive leaders’ ability to execute.

 As global fintech trends change and the market shifts due to business environments (and also Covid-19), what are your predictions on the state of fintech in 2021 and beyond?

Let us first start with the challenges our customers may face in the coming year as clients tend to vote with their wallets, so to say. Our banking clients will be faced with a low interest rate environment, with increased credit losses and some continued global uncertainty. There is also a concern regulatory oversight will intensify as we look ahead to a Biden administration in the U.S. and the scrutiny on fintechs and non-bank providers continues to increase globally. So the key is to innovate to grow revenue in this environment by improving the customer experience. For many it will also be about finding a way to automate to reduce operating costs without diminishing the experience. It starts with having a digital engagement platform that is dynamic enough to deliver a unified experience across  multiple digital channels.

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From a servicing perspective, AI and RPA will start to drive more of the decisioning in the back office. This can be fully or partially automated and served up to a customer service agent for a premier experience. I believe we will continue to see the increase in non-traditional data sources for loan approvals. This is a space that has been slowly gaining traction, but may soon have its day as the lending business becomes more competitive.

This could be the year that open banking and networks like BIAN really make progress. These concepts are a positive for the industry and will only improve our ability to innovate in the future.

Lastly, with the increase in overall digital activity, it will be more important than ever to have advanced biometric solutions, cybersecurity and fraud tools in place.

We’d love to hear about some of Finacle’s upcoming plans / innovations?

Sure! We help both commercial and retail financial institutions in their digital transformation journeys with our cutting edge solutions. Financial institutions can leverage our Finacle suite of solutions to solve business challenges, innovate and launch new products, and create frictionless banking experiences.

There are three distinct reasons why we stand apart. We have a global platform leveraging some of the best and brightest minds across the world; we have a highly configurable product, and ours is truly one of the most scalable solutions in the world.

We are proud to do business with financial institutions of all sizes and business models in more than 100 countries, serving more than a billion consumers. To describe the depth and breadth of our client base, let me draw you a picture. Think of 4 quadrants.

The first has the traditional banks; the ones with large branch networks. Our client list is lengthy in this area and includes banks like DBS Singapore, rated as the best digital bank in the world.

The next category would be the direct banks like Discover Financial Services in the U.S.

The next group are the fintechs, like Paytm in India. And the last are those institutions that are non-banks, like the India Post Office, which actually has the largest branch network in the world. In fact, just a few years back, we completed the worlds’ largest core banking transformation for India Post which services 560M customers.

We believe our experience and customer base are why we are consistently ranked as “Leaders” in this space by independent industry analysts like Gartner, Forrester, Aite, Celent and many others.

To speak to the global platform and the power that it brings… in the fourth quarter of last year, we had our annual client conference in Dubai on the theme of “Scaling Digital”. Clients from all over the world joined us.  It was a great event. We let our clients do most of the talking at this conference and what was striking was that despite being in different markets and different regulatory environments, the mission was very similar. So imagine for a second having the best and brightest from across the globe working side by side with you to bring in new product enhancements that all clients can leverage. To me that is really powerful. One of those clients was Emirates NBD and they were talking about the success of their new app Liv. This is an all-digital bank that:

1. Launched in 2017 and signed up over 370,000 customers, 5 out of 6 being millennials, and acquired customers at 10-20% less cost than a traditional bank.
2. Opens accounts instantly on smartphones, and offers features, such as an AI enabled assistant called Olivia, and a digital wallet.
3. Is seen as a lifestyle brand, and is growing 30% faster than the nearest competitor and now services more than 8% of the population on the Finacle platform. Now that is innovation and we are proud to partner with them.

Configurability and scalability have also been hallmarks of our products. For example, with our product factory, banks can easily configure say, a new deposit product or a loan product completely on their own in days versus months earlier.  With the help of our digital engagement hub, banks are able to provide a unified experience to their customers across multiple channels of engagement.

Lastly I would mention that we have made significant investments in the localized compliance of our solutions. We have an excellent compliance team that lives and breathes the new regulations coming every day so that our clients can rest assured that we have it covered.

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Before we wrap up, what are the biggest learnings and tips you’d share with fintech innovators and leaders?

Fintech and overall investment in digital for financial services will continue to be vibrant in the coming years. Digital transformations are well underway in some institutions but still in the early stages in others. Leaders will need to stay focused on the customer and on improving the overall experience of the digital journey. As the Millenial and Gen Z populations continue to grow as a percentage of GDP, getting this right will be even more important than ever. While our space has been very exciting over the past few years, I see the pace of change increasing and those who are agile and create a frictionless experience will be the winners. Clients today are looking for strategic partners, and not only technology partners. May we continue to innovate and lead the way so that our clients not only survive but thrive coming out of this unprecedented time in our history.