PNC's Client-Centric Tech Journey: APIs, Data Insights & More

Brett Turner:

Welcome guys. Yeah. Excited to be here at podcast Fintech Corner at AFP. So much going on and I appreciate you guys carving out some time out of your busy schedules Of course. And to talk innovation and whatever comes up. So I think maybe first off too, just would love to have you guys talk a little bit about your backgrounds and what you guys do and we can get into some of the other things.

Tom Lang:

I’ll start it off. My name’s Tom Lang, lead product and operations for PNCs treasury management business. Been with the bank for about 10 years and it’s always fascinating to watch this business and see what changes. There’s so much, what I like to say, the mix of the old and the new and finding ways to innovate with our clients is really exciting and look forward to chatting about it.

Howard Forman:

Thanks, Howard Forman. I head our digital channels team in the corporate and institutional bank, work with Tom. I’ve got responsibility for our online and mobile banking platform for our commercial customers, as well as building out and externalizing APIs for our products and services and building connectors into a lot of different platforms that our clients use to run their business. I’ve been with PNC, gosh over 20 years. Not all in a row though. This is my second gig at PNC, so I’ve been back for 11 years and had about eight or nine year stint at another bank. And historically I’ve been in the payment space, so I spent most of my career in payments and then moved over to the channels when I came back to PNC about 11 years ago. And it was actually a great time to get into the channel space when everything was going down with mobile. And then that kind of rolled right into embedded finance and everything that we’re doing, building out and externalizing the APIs and embedding services. So timing was good. I think I probably lived through the heyday of payments, but there’s still a bunch of good stuff going on in payments too, but I’m happy to be in channels.

Brett Turner:

Awesome, awesome. Yeah. And I’m Brett Turner, founder and CEO of Trovata. I’m sitting in for Joseph as he’s the normal host. So switching up things a little bit, giving him a break. So let’s just kick off, talk a little bit about innovation. I mean, think of the last 20 years, whether there’s a lot here, I think this event has changed over the years, but you think innovation has changed and just even over the last two or three years, so much accelerating. How do you guys see that for the bank? What are some of the things that you’re seeing? It’s really top of mind.

Tom Lang:

And I would totally agree with that sentiment. You can see the energy around this room and what’s really driving that from our perspective is what we’re hearing from clients. Clients are embracing the change. There’s been technology and changes in technology and that certainly helps. It helps us do our jobs, helps us innovate for clients, but without the clients asking for it due to all be for not right. And so what we’re hearing from clients really is the desire for seamless modular solutions really around being able to interact with our solutions in the way they want when they want to, all with an eye towards being able to run their businesses more efficiently because especially in this type of economy, it’s really important that they’re focused on the really important things for them. And there’s a couple of themes I think that we’re seeing with that, that we’re hearing from clients.

The first being around data excitement around data energy, about wanting to use that data in different ways versus necessarily just what I’ll call old school canned reports, right? But a desire for flexibility and the information from the data. And then interestingly, an expectation on us as a provider to be able to use that data to offer better solutions. I’ll think of our intelligent routing payment solution. It allows clients to hand off some of the decision making. So is it better to send a wire an RTP in any particular case on a given day? Let us make those decisions for the clients. And then Howard touched on this a bit when he was leading off, but really the desire to be able to ingest our solutions in the ways that they want is that visiting for us Pinnacle is that an API is that embedded finance, but there’s a really strong push coming and I think it’s been building up for years, but the time is definitely now.

Brett Turner:

So data’s ruling the world is that,

Tom Lang:

It’s definitely ruling the world.

Brett Turner:

Are you just also hearing the voice of your customer more than ever? I mean asking for more things, just the pain points, maybe kind of going up on their end and responding to that.

Howard Forman:

I think what we’ve seen is our customers, like everybody, they’re continued challenge to do more with less. They’re not not getting big treasury staff, so they want their treasury organization to be as lean as possible. So it’s all about driving that efficiency, driving automation, driving the seamless interactions. And APIs are perfect for that because it helps our customers take aspects of our services and embed them right in the platforms that they’re using, whether it’s a treasury management system or an ERP system. And it just makes ’em more efficient to be able to retrieve a balance, retrieve a check image. And so that’s what we hear a lot. But I would also say, I think where I like to push our customers is thinking about the ways that the technology that we have helps them offer better services to their own customers. And treasury can be that strategic partner in an organization to say, Hey, the banks have these capabilities with the API technology that the bank is offering. We can build a better payment service for our customers that embeds capabilities that the bank is offering, whether it’s verifying an account before initiating a payment or doing something that makes a much more elegant process for the individual that you’re paying or it’s paying you.

Tom Lang:

Yeah, I think something for an example, e-payments where we’re often talking about getting a paper out of business processes. We’re traditionally sending insurance check for a claim or some type of refund, our e-payments product gets the check out. But importantly, I think to Howard’s Point, really changes the customer experience of our customers and that resonates really well.

Howard Forman:

It gets the check out, but it also, while you’ve got the customer engaged, almost let them know exactly how and when they’re going to receive their payment. Right? So if we’re able to make a payment via real-time payments, they can tell that person, you’re going to receive that payment within the next 30 60 seconds and here’s why and here’s why. Right? And if it’s maybe not going to an RTP eligible financial institution, but we can get it out through another same day mechanism, say, well, you’ll have it by the end of the day today and here’s why. Or worst case is we might have to get you that payment tomorrow depending on time of day or where you’re banking.

Brett Turner:

I mean, do you guys see too, just over the last 10 years with the cloud and everything kind of become more digital? Do you guys see also along those lines that in some ways you’re helping your customers, like you say, more successful even downstream with their customers. It’s almost like you’re in some ways kind of getting into their business a little bit in a good way to really empower them. So it’s part of that extension really that’s taking place in a way that didn’t happen 5, 10, 15 years ago.

Howard Forman:

That’s right. That’s right. I mean those are the types of things that we want to do. It makes us a much more valuable partner to our customers. I mean from a relationship perspective, those are stickier relationships when we’re embedded in the client’s business and it just plays on our whole relationship banking model. We’re there for the long haul with a customer, it’s not transaction.

Brett Turner:

So then APIs, because that’s definitely one of these innovative things. And I know, I dunno, maybe talk me through a little bit about when that first maybe even came on the scene. I’m sure because it’s new now you’re having to deal with all of the aspects that probably a lot more questions early on.

Howard Forman:

Oh my gosh, yeah.

Brett Turner:

What that meant and it’s no secret, this is really a bit how just started working with you guys. We’ve even shared openly your guys’ API is awesome.

Howard Forman:

Thank you. We appreciate you acknowledging that.

Brett Turner:

It’s Wild West right now still. It’s been five years since really the first APIs, but in some ways you guys leapfrogged a little bit, have just a great API for your customers. So

Howard Forman:

Yeah, I mean early on our API usage was largely internal sharing data between internal applications and then that evolved to figuring out how we could externalize the APIs and make them available to our customers. I think the very first thing we started with was a remote check deposit API, and then we quickly pivoted to information reporting or things that really lent themselves well to real-time exchange of data where you can and an instant get a bank balance or see the transactions that are posted to the account intraday. And then naturally payments was a fast follower there. And I think timing was right because that was right when real-time payments was hitting the scene. It’s like, wow, talk about a payments application that was tailor made for an API interaction. Because I mean, you had something that wasn’t quite ubiquitous yet, so you needed to know is my receiving account eligible for this payment type? So how do I find that out quickly and then turn around and actually make the payment if it is. So the timing worked out really well I think to have RTP available and now we’ve got almost, I think every payment I could think of, wire A-C-H-R-T-P pushed the debit card,

Brett Turner:

Virtual card payment and no shortage of debate from the beginning till now internally within the bank. Probably about,

Howard Forman:

Oh yeah, there was a lot of explaining how it was basically a, it’s a new channel, that’s why we managed it from the digital channels team. It’s a new channel. We weren’t inventing new payment systems, it was just letting our clients access the information or deliver information to us in a much more,

Brett Turner:

That’s a good way to put it.

Howard Forman:

efficient and real time manner.

Brett Turner:

Early on too, as we’ve been building out, it’s like there’s this little bit of maybe skepticism early on and it was more of like, well, we’re not, customers get their information from Swift. They get it from the host file, so it’s just another channel. That’s a good way to address it because, and it clearly shows to the level that you guys have really thought through that and built something that’s a really great, it

Howard Forman:

Was thinking about these integration partners. And there’s different flavors of integration too. There’s some that were an app in a marketplace, there’s others where our clients are permissioning the data sharing. So that for example, with Trovata, right, they’re asking us to deliver information to you or accept payments from you. It’s a different model than what we might have with another platform.

Tom Lang:

And I think it’s importantly, it gets back to the clients want to do business this way. The clients are asking, we’re not doing it for fun. We think it’s cool. We do think it’s cool and interesting, but it’s at end of the day, right? The clients want it there and we’re able to do it in a way in which is secure and transparent to the client. I think that’s the key, but that paradigm really is different.

Brett Turner:

Well, and hats off the way you’ve even architected from allows for a really fast onboarding process because not a lot of the banks have thought through to that level. In some cases it may not be because they can do it that way, but you guys have done a great job with that experience.

Howard Forman:

Yeah, thank you for that. Early on we realized clients, again, it’s a channel. They’re going to want the same transparency of their integrations, the same control over those integrations. And what better place to put that is in our other channel that they already access online, give them complete control over what data are you sharing, who are you sharing it with? What are those APIs doing when they connect to your platforms? Are they exchanging data? Are they passing payments information just like any user would do online, you want to be able to see what that API is doing. And so we built that whole three legged OAuth process around coming online and just permissioning it yourself. We didn’t want to be in the middle and have to do a technology change. Every time a customer says, Hey, we want to implement an API, it’s not scalable. We have thousands of customers literally that do data integrations with us in the platforms that they’re using. There’s no way we could scale thousands of implementations.

Tom Lang:

And plus you’re taking an elegant solution that’s supposed to be modern and easy and then putting paperwork around it, which we all do, but we really,

Howard Forman:

We try not to try not to.

Brett Turner:

Well, and I remember, I mean this a I journey’s been going off for a little. I remember when we hosted you at our office in our early going, that small little office we had in San Diego, but times have changed a lot. So where would you say things are going now? There’s been a lot there around the APIs. Is there more to go in different, say more channels leveraging the PI for enabling other things? Are there other things that you see that are coming that you guys, what’s maybe most interesting either the APIs or other new things that are starting to trend as you look out?

Tom Lang:

I think this is a fairly generic answer, but I also think it’s true, which is it’s all of it. I don’t think we could just look at the room in front of us and some of these are competitors of ours, some of these are partners of ours, but bringing this entire ecosystem together is nearly an endless drink. We could have unlimited amount of capital to go after and we’d still only be 10% of the way there. And at the same time, technology is changing and our clients are changing as we go down that journey. So I think it’s about making decisions about where to prioritize and clearly let Howard speak about, we got a lot of great work to continue to build out APIs, but then from at least from a treasury perspective where we’re seeing in our core solutions, clients want really streamlined receivables and payable solutions and we continue to invest there and think and know there’s a lot of opportunity in those solutions that Howard and team do a great job of bringing to life through the channels.

Howard Forman:

Yeah, I mean there’s no shortage of services and product features. We can continue to externalize platforms to integrate into. There’s still lots of opportunity with the platforms our clients are using. I think it’s natural to expect that we will expand beyond just pure core treasury services and how do we exchange information that’s required by our lending products where we can get financial information in a more automated streamlined manner rather than individuals uploading documents through an online portal. Can we just take that data and really automate the spreading process? So I think there’s great opportunity there. And as Tom said, I think we’re well on our journey towards really integrating our tmm suite of products and services, and I think that’s really exciting is when it all kind of comes together and then we could start looking holistically at all of our data, not just a client’s receivables data or a client’s payables data, but looking at it holistically and then finding all of the connections you could make between that data.

Brett Turner:

Getting back to that data data’s running the world team. So let’s maybe talk about this thing called AI or maybe more specifically generative ai. How are you guys thinking about that? I’m sure it’s coming a lot in conversations internally from your customers. Obviously we have are starting to work a lot with that too. How do you guys think about that with where that’s at and maybe where that’s going?

Tom Lang:

I’ll start off there. Yeah, I mean we are definitely exploring it and looking at it where the API journey might be a good analogy here, which is I think the generative AI especially is at the early phases and the work there should be at the early phases. And so being able to focus on things that are real and tangible today, we do have a focus on ai. We do leverage it internally from an operational efficiency perspective, but then they have been able to productize into certain areas. We have a claim predictor product on our healthcare side that helps providers with claims that are going to payers as well as a correspondence product in that area as well. So we’ve definitely have found ways to use AI to support our clients and bring it from what is a buzzword technology to something that’s tangible and add value, which is where we’re really focused. And do I think that generative AI will get there? Yes. In what way? I think it’s exciting, but very early.

Howard Forman:

Yeah, I think there’s a couple of obvious use cases in the channels right around digital assistance and some banks are moving further ahead there in terms of being able to take all the knowledge that we have that we’ve historically delivered to clients electronically on how to do things and letting a digital assistant take over so that we don’t have to make a phone call. I think that’s an easy win in terms of instructional information versus a more complex type of, I’m missing a deposit, help me find it. Something that requires a human to go through maybe four or five legacy systems. Maybe that’s not as easy a use case to solve for, but I think that and some of the things that you’re already doing in your platform where you’re able to use a natural language search on a large data set to find what you’re looking for, I think that’s another obvious use case in an online type of channel. I think the other, as I said earlier about looking holistically at the data, I think this is where you have such a massive amount of information. You don’t know what you don’t know, and something like AI can help us find the signal and all that noise and it’s like, wow, wouldn’t have even known to ask for that. And that’s where I find it be most exciting is what can emerge out of the data that we don’t even know what to look for or ask about.

Brett Turner:

I think that’s a big thing too, just even how much data the bank has and it’s probably not even tapping into utilizing. Yeah, for sure. Does it start to, you feel that’s one of the things too and more of this opportunistic aspect of, in some ways it’s going to force you to look internally at some of these things that you might not have called assets and now you can leverage them in a way that

Howard Forman:

It’s, yeah, whether you productize it or you use it as a risk management tool, like in helping reduce fraud using massive data that we have around payments transactions to help us better identify potential fraud.

Tom Lang:

Completely agree.

Brett Turner:

So with that said, is there anything along AI that kind of keeps you up at night or is there any sort of concern that kind of floats, if you look at maybe the adoption curve over time.

Howard Forman:

They told me I’ll be out of a job in a couple years, but it’s going to replace us.

Brett Turner:

Maybe one of the things it’s like, okay, or it’s never going to happen unless it does this or it can do this. Are there some of those concerns that you still have to mitigate before it’s going to be mainstream or help you guys in some meaningful ways?

Tom Lang:

I go back to we’re still in whatever the 10 yard line, use whatever analogy you want for generative ai, right? I remember back to the early crypto days where Bitcoin, all of that sort of all the imagined possibilities and all the imagined risks, and we could spend probably five hours debating what actually happened there. So I think a lot of that still needs to be feted out, but I do know that technology that can be used to solve problems, we’ll find a home and find a home in a, let’s use the word safe or find a home in the right way. I think that’s the work that we all have to do together to figure out can we actually solve real problems with this in a way that in an efficient way, sometimes the technology can do it, but actually just using some existing technology does a 99% as good of a job and that’s what the best thing to do is. So I think that’s the journey we got to go through with this particular one.

Brett Turner:

When you say kind of working together too, how has even now APIs and AI and just like you had mentioned in the outset like this in some ways an opportunity explosion, no matter how much you throw at whatever, you’re still not going to just put a dent into where everything is going or can go. Has that sort of changed or your thinking around even partnerships or working with the FinTech community or even just as we’ve explored and spent some time working together on various things, how do you see that unfolding as we fast forward with all this stuff and yet how to shape your thinking around working with other partners to help achieve that for some of your clients’ end goals?

Tom Lang:

I’ll start with, I mean, listen, when we think about building new solutions, we think about it that way, which is can we build this ourselves? I think it’s really important to have a view to that so that we are providing the best experience for our clients when we can, and controlling that pipeline of product that’s coming out sometimes either because of what we’re working on or because of what’s in the marketplace, working with outside partners, what makes the most sense, and clearly in some of the topics we’ve talking about with APIs, that is the way to do it because it is about an ecosystem. I think that’s an ongoing active conversation that we have and we prioritize again through talking to our clients about what they want. I am broken record on that.

Howard Forman:

I agree with what you said. I think sometimes it’s a speed to market decision, right? Can we get to market with something faster and at least try it without necessarily making a really big investment If we did our own build without having to go through the internal process that we need to go through to get certain initiatives approved, it sometimes is easier to work with a third party to get something in the market quickly.

Brett Turner:

Cool.

Howard Forman:

And niche players that are really, really good in a certain area, why not leverage that if we can? I think that’s part of the benefit of API technology is it lets us integrate. So we’ve talked a lot about integrating our services into platforms, but conversely, we can and do the same thing. We eat our own cooking and we integrate things into our ecosystem as well, and sometimes it could be encapsulated and we take the whole thing and put it inside, or we use their APIs so that we can still control the experience. So it is just all about what’s right for that particular service. What do we think is going to serve us and our customers the best way? Is it really important that we control the experience? Maybe we only want a sliver of the functionality and it makes it less complicated if we do an API and just pull a bit of functionality in. We did something really interesting with our wire transfer capabilities where we took our account verification service where we have several APIs to do account verification, identity verification, so on and so forth. And while you’re initiating a wire transfer, you could do a verification on that beneficiary’s account number to see if the beneficiary name and account go together to help our clients try to reduce email compromise or imposter fraud. That was, to me, a really innovative way of using some of the services that we build. We procure the verification from a third party, but we’ve leveraged it in a very specific niche way that I think was a really innovative thing for our customers, and they love it.

Brett Turner:

Cool. Awesome. Well, thank you guys for carving out time. It’s been great. And like I said, just really appreciated the work that we’ve done, excited about potential opportunities down the road that we can explore together. It’s great. And also just great work with you guys. Also, your customers are in good hands. Just the way you guys have been. Again, kudos to you guys of how you’ve thought through innovation and even the API journey has been awesome.

Howard Forman:

Thank you. Thanks for having us.

Brett Turner:

Yeah, absolutely. All right.