Fireside Chat: TRIHold Co’s Bea Franchetto and Trovata’s Brett Turner

Moderator: Today’s story I’m delighted to say is how TRI HoldCo automated its cash reporting with Trovata. I’m Mike Hewitt your moderator. I’m joined by Bea Franchetto, Corporate Controller of TRI HoldCo. Hello Bea.

Bea: Hello, Mike.

Moderator: Hi. Brett Turner the founder and chief executive of Trovata. Brett hello.

Brett: Hi.

Moderator: Bea can I start with you, can I ask you to describe your role at TRI HoldCo, give us a flavour of what you and your team do, the kind of transactions your working with? Give us a picture of the situation you were in and why and how you decided you needed to be a little more automated in the approach you take.

Bea: Sure, Mike. I work at a parent company which is the corporate level. We have 2 subsidiaries. 1 of our subsidiaries has a Canadian subsidiary so as a controller I manage my team and my team and I work together to bring everything together, multi-currency, and consolidate all these reports for all of our executives. I honestly didn’t know I had a problem until I saw the Trovata demo on Facebook.

Moderator: You saw it on Facebook?

Bea: Yes, on Facebook. So, I clicked on all those learn more things anytime it has anything to do with CPA, controllers, ERPs. I saw it and I ignored it and I saw it and I ignored it. Then finally I was like, ‘what is this?’. So, I clicked on the demo and I said ‘i didn’t know we needed this but I think we need to look into it’. So, we ended up doing the demo with Trovata and I took it to the team and they came back with several suggestions on how we could implement it into all the manual processes that we do.

Moderator: So, give us a flavour of those processes and what they were in your pre-automation days? I think we have a little illustration of how that worked. How serious was that manual workload?

Bea: It was serious, Mike. We have, I want to say 7 bank accounts with the 3 companies plus the foreign entity as well. On a daily basis, we would have to, I wouldn’t my team would bless their heart, they would go out every day and download all the transactions from the banks and put them into a spreadsheet and then sort them out by credit card, by cheques, by payments, by stripe, square. To find out the fees, to find out the payments, cheques and then 1 subsidiary had at 1 point in time 9 locations. So, we had to post those to individual locations. It was 2 1/2 to 4 hours a day, 5 days a week for 1 person to do this.

Moderator: That’s a lot of manual work. Can you give us a flavour of you mentioned stripe, you mentioned square, what kind of flows are you getting involved in, what sort of transaction does TRI HoldCo manage?

Bea: So, we have our 1 subsidiary is a professional task preparation company. So, they have clients coming in and we invoice through Quick books, we invoice through Lester. They have all kinds of different payment options, they can do a square payment, they can pay at the front desk with Clover, a lot of them write cheques. Then our tax audit subsidiary, everything is done credit card or stripe. So, that comes in through the bank, through our in-house membership services database. So, all of those functions have to come in differently into our accounting department and then we put them into a spreadsheet so that we can bring them into our ERP.

Moderator: You got a sense you could automate some of those processes. Did you decide to go for a formal RFP, did you just make a phone call and reach out to the guys at Trovata? What was the process in terms of getting engaged and deciding to go forward?

Bea: It was actually when I clicked on the learn more and said yes show me a demo. When we got the demo I was working with the team at Trovata and they gave me some example files and quickly on board with Bank of America, who we bank with. They told me how easy it was going to be to get that linked in so we did a little trial to see if it was a fit. I was sold after the demo but of course, you have to do the RLIs and show the executives that it is a return on investment and we will save money and we will save time and it is going to be, as you can see on the screen. I’m manually tracking these every day and one thing I will say is if my senior accountant was out on leave and he’s the one that did this, I had to do it. When I put my value to 2 1/2 hours a day ears started perking up.

Moderator: So, it was a fairly clear picture of a trade-off between the hourly or daily rate of those people, including very senior people such as you, who were spending their time on these manual processes versus the ultimate cost of implementing Trovata. Brett Turner if I can turn to you, you, of course, are not just the CEO of Trovata, your its founder, and your own background of course is on the other side of the fence. Are the problems that Bea’s describing, do you think these are common?

Brett: Absolutely, it is just great honestly it’s stories that we have heard.

Moderator: (TC 00:10:00) Bea, we will continue our conversation on how we are implementing Trovata at the moment. Was it all done remotely? Did you have to have Trovata people at your premises and get your own IT department involved?

Bea: We did get our IT department involved because they had to vet the security and bring on Trovata’s backing to our firewalls to make sure they passed our test. Everything was done remotely, it’s in the cloud. We were issued logins and we were set up, blank canvas screen and given training on how to add users, how to add the banks. I want to say we were done in 1 hour.

Moderator: Was your own IT department comfortable with the idea of what is basically a cloud system?

Bea: They were. We’re very much cloud based with a lot of things that we do. So, they have and we have a third-party security audit that comes through and vets everything that we do. So, they have a guideline, they went through the guidelines and Trovata checked the boxes so I was given the green light. That’s typically something that we have to do anytime we want to implement anything before I can even present it to the ESC, our executive steering committee. They want to know did you check it with IT because we’re not going to go down this road unless you’ve checked it out.

Moderator: So, IT are happy, they checked it out and approved that connection with Trovata and that whole process was remarkably fast. I guess the core of this solution seems to be that automated connectivity with the bank. The idea that your effectively sucking data from bank servers so you don’t have to rekey it. Was that process straightforward forward or did it have its own challenges?

Bea: Connecting to B of A was very simple. It took a little bit of time, I think. We originally thought it was going to take 5 – 10 days and it ended up taking almost 20 business days. So, were chomping at the bits getting ready to get this new thing on board and it took a little bit of time for B of A. Unfortunately, our sister subsidiary and the parent company, we use a bank that doesn’t have API connectivity. So, local bank, it’s a small bank and that has caused us a headache. We’ve been with Trovata, Brett I think did we sign in December/January? We’re still fighting with that little bank to get them on the ball.

Moderator: What a great point for Brett Turner to re-join us. Before you left us I was going to ask you whether the issues that Bea had faced in terms of a lot of manual processes, a lot of time spent on these things, is that something you’ve seen both in your much earlier life before Trovata and with the clients your working with now?

Brett: Yes, absolutely. I was starting to say, of course, I get excited to hear these stories from customers like Bea who are experiencing this because it’s a big part of starting the company. Having been in Bea’s shoes starting out as a CPA (ph 14.48) at Deloitte as a controller as a CFO. These aren’t just common, they’re pervasive. I think that’s the other thing too. A big part of my passion for Trovata is not just the large companies that have established treasury departments who are more specialised in handling these kinds of workflows but the broader masses of companies. I mean cash is king for everybody. It’s a very basic 101 bank reconciliation, cauterisation, understanding your cash flows, understanding your different cash in cash out. It’s just a very basic fundamental thing for every corporate controller as well. So, small companies, medium-size companies, large customers, it’s pervasive and really that’s where we come in. The banks are providing these APIs, there coming online and it really is opening up the doors for new technology to really change the game here and really automate a lot of the things that Bea’s talking about.

Moderator: We had just heard from Bea that while one major bank was actually quite quick to get with the API program, the other bank, which you can name Bea if you want to?

Bea: There our local bank, its Five Star bank.

Moderator: Five Star bank there we are.

Bea: There growing but they’re growing slow.

Moderator: Brett in your experience, are the banks getting this? Are the banks okay with APIs generally?

Brett: Yes, maybe I’ll just give a quick visual here. I mean, this is really what’s been happening here. The API era has really begun. We are in the early innings. I think just with where we headed now banks globally it’s all moving and trending toward this sort of past the baton or open access to data, to really foster these kinds of new and innovative experiences. We’re embracing that. The big part of our story is that seeing that this was going to play out, we were ready. We had essentially built a lot of the tech before even the banks were ready. In the early days, I was describing more what an API was to banks but I think even in this situation with Bea’s bank, community bank, it is a little harder to build these APIs. It’s a little easier for the big banks who have a lot more resources. That’s really what happened, sometimes you’ll see that start with the big banks. I believe it’s going to trickle down through all banks globally, it has to, this is where it’s all moving, this is a 3 billion dollar bank as a service digital transformation of financial services. It absolutely is going to happen so I think when you think about the fear of this intermediation, I would say that’s years old and maybe started 10 years ago when really what modern tech rose, what we all know and experienced in the last 10 years, while that’s finally finding its way into banking. The banks know that they need to open up, there embracing these APIs. We’ve been the first company to connect. We started with JP Morgan, Wells Fargo, and the B of A, who Bea has, and who are able to automate a lot of these workflows and it’s just again more of a testimony of when the banks actually provide this level of access, it helps them. That’s our story too. We have a very bank first strategy. We’re basically working with the bank and providing all of this augmented tech that is hard for the bank to do and hard for the bank to deliver for their customers. So this whole next-gen experience, more of a bank agnostic platform because most of their customers are working with multiple banks, those are all of the things we can foster in. It really helps the banks and it helps the bank’s clients.

Moderator: We can already see banks are coming on board rapidly. I want to come back to API in a few minutes. Before that Bea, we have just got the point in your story where it was going really well. What did the process feel like when you began to get those transactions coming in? Did it go as smoothly as you expected?

Bea: Yes and no (TC 00:20:00). 1 it was overwhelming because we were able to get so much information back to October. When I was in my brain, your picturing implementation, and your picturing okay from this point forward this is what it’s going to be. It was a blessing and a curse. So, we were all ecstatic that we were able to go back as far as we could go but then me being a controller and an excel geek and a data geek, was like ‘oh then we can see a trend, we can do all this from this point until now’ and my team was ‘no this point forward Bea’.

Moderator: Your problem was not being unable to access the data it was you had too much information?

Bea: Exactly. The executives loved it though because we were able to implement it and do trending and do reports for them. So, from this original slide that’s on the screen now we had all these multiple categories, and this was just a sample little spreadsheet on the right of just probably half of a day of transactions. So, we were inputting that and filtering it in, as you can see we’ve got all kinds of filters. Then we would take that and pivot it. Guess what, we’ve got all of this by tagging our data. We worked with Trovata, training was very simple, no question was a bad question. If we did something and there was a shortcut it was quickly shown so we weren’t wasting a whole lot of time. It was very easy to take those transactions, do a search phrase and say, ‘These are all now my credit card deposits, these are all my sweeps, these are all my cheque deposits.’ As you can see on the slide, just a simple tag on those transactions were able to develop very good dashboard reports, export that to excel, and with a journal entry were done and into the ERP. Now we don’t do it daily, we do it on a weekly basis. On Friday we get a total that says, ‘We deposited this much the week of-, We’re down to 5 minutes on a Friday.’

Moderator: You raise an interesting point, 1 of the stumbling blocks for treasury and for the controller and accounting function is that reporting piece where you know what’s going on but you’ve got to produce that in a format that executive leadership can understand. Is that now smoother for you or are they still asking for it in a different way?

Bea: They’ve asked for a pie chart which Trovata has. So, I can show them of the masses, this is where most of the money is, this is little account is struggling over here. The negative part of Five Star not being on board is I can only present what’s in Bank of America and that’s just 1 subsidiary. So, what I have to do is go out to Five Star and get my daily balances, it’s on an excel template which is very easy to copy and paste in, thank you Trovata. I still have to do it every day. So, they don’t get the full picture until Friday because I don’t do it every day, I do it on Friday mornings and then they get the balance. So, on a true cash flow projection where we are, where were we, why did we have that big dip in cash flow last week, there not getting it daily like they like to because of the activity missing in Five Star. They get it on a weekly basis, they get it in these charts, this is our accounting deposits and cheque sweeps. They get a beautiful little pie chart as well as a bar graph that says this is everything that’s in our bank accounts.

Moderator: Clearly, it’s not as simple as flipping a switch for many banks. Bea are you hearing from Five Star, are they keen to get this fixed?

Bea: Because there local I think that they’re working on it. When I’ve mentioned it, you have your banking relationship meetings every quarter what can we do to make you happy, what can we do to keep your business? I bring this up at every meeting and they said well believe it or not we are starting to hear this from more than you. So, other people are talking.

Moderator: Interesting. This is definitely the way of the future. This is a good time Brett to turn back to you and ask you, you’re dealing with many more banks than just 1 or 2, give us a flavour of how the banks are feeling about developing APIs? We have a question from the audience, does Trovata help banks to set up APIs? How much work do you guys do at Trovata to handhold banks into getting this process started?

Brett: Yes, absolutely. I think that where we really got started. We started to lean in with these 3 large banks that were working toward releasing the in formalised, an API team, they’re working toward that. That’s really where our journey started, now we’ve fast become the global leader in APIs but it started with customers like Bea who would talk to their bank just like with Five Star and just say ‘hey I really need this kind of connection’. They would say ‘well, why?’ Then she’d describe it and we would say we would be happy to talk with them, the customer like Bea would connect the dots, and then pretty soon it’s ready, and then they’re working toward releasing. If you think of when this started, February 2018, that’s over 3 years ago. We’re still in these early innings and I would say now we’re not quite to a tipping point but I would say maybe in 6 months or so, or 9 months were going to start to see that. I mean, the number of API connections that we have done, it was before maybe once a quarter, then it was once a month, and then it was multiple connections a month. So, that library is growing massively.

Moderator: Once a bank has set up an API for a client like Bea, can it be reused for other clients?

Brett: Absolutely. It’s more of the bank invests and releases the API and that way to connect. It’s the way on the bank’s terms to connect. In the retail world and small business and consumers, there are aggregators that actually will do screen scraping. So, there actually get credentials of the customer to go in. Obviously, the banks don’t like that. There’s a lot of tension with that, a lot of security issues. That doesn’t happen on the wholesale side with banking. That’s not what we do. We do it in a very friendly way, we really work with the banks. And go back and answer that question more directly, is that we do help the bank because we’re doing so many of these we’ll guide and provide some feedback. Even after they release it it’s not just once they release an API it’s done, it’s the evolution of the API. More data through that, richer data through that, more co-ord real-time. So, there’s these aspects, with JP Morgan there are V3 of their API. So, it’s a dynamic pipe that’s ever-changing and then that’s why it’s making sure that what we do is essentially become the bridge because these APIs are also really difficult to integrate with. Now we’ve done that, we can rinse and repeat the onboarding process that Bea went through and other customers will go through. That’s why we’re starting to ramp materially with those banks who have APIs. It’s a little bit like broadband is not in your area yet, or cell towers you don’t have connectivity yet in that area. I think that’s the wave we’re starting to see, it’s starting to happen and the more banks that have that, the better it is for clients and the more we’re going to lean in to connect, and then it’s really propagating these next-gen experiences.

Moderator: (TC 00:30:00) Bea I want to come back to you can complete the journey you’ve been on. What does the future look like? Where do you think this might go for you? What advice would you give for anyone else starting on this journey? Do you see this as an expanding relationship, has it inspired new thinking about automation?

Bea: It has. We go out to the Trovata data anytime the team asks a question, like ‘hey can we figure out what we’re spending on electricity’ let’s say, I’m just throwing that out. We can go out through Trovata’s data and do a search, our lovely vendor out here in California is PG&E, and we can do a search on PG&E and we can find out ‘hey we know that we’re now averaging X amount of money every month on PG&E’. The team can also, or I can, also go out and say how come I don’t have a charge from PG&E this month. So, we’re finding that we can utilise the data a little bit more than just going through and dumping out the ERP into a spreadsheet and doing a search and saying what are we missing on our trend. So, we can use the bank data as a trend. The one thing we’re missing is, we do a lot of ACH payments and the banks do not do those individually. So, you just get a bulk ACH payment of $50,000. We don’t know what that is. That’s a hiccup in our trending or data analysis. We have to go back to say what did we do with that $50,000. We see it as a forecast tool. We haven’t gone down that path yet because, again most of our transactions are with Five Stars, so as soon as we can get those transactions with Five Star in then we can do a little bit more forecasting and trending. We like that Trovata has a tool that you can say ‘okay if this is my trend what happens if I adjust that by 3%, what happens if I adjust it by 10%’. So, that we can get a forward-looking plan. So, my budget analyst is chomping at the bit to use Trovata for that type of analysis.

Moderator: Just before we jump to questions, Brett it will be interesting to hear about Trovata’s own journey and where you’re going? Give us the big picture and what you do and where the company is heading?

Brett: Honestly, this is such a great discussion and hearing Bea say these things. I don’t have a background as a treasurer or in treasury. So, a lot of what Bea is describing is really using cash data also as an FPNA tool for analysing more bottoms-up cash or cash forecasting and analysing those trends. That became my CFO dashboard, my whole team would manage parts of that and how to build that. In the early days many, many years ago it was all done with a lot of excel models and it felt that the early days of Trovata, this was back when I left Amazon managing their FCC reporting, the first bulk of my career was in financial reporting as a financial reporting specialist, controller then turned CFO. A lot of that, because everything had to be focused on cash, was really reinventing that around we can get cash data more in real-time and then have this, what became my dashboard as this direct method cash flow statement. So, I could literally just see cash in, cash out and where allocation of spend was in addition to reconciling from there. I think those are the early days that everybody needs those kinds of things and Trovata was built and designed to do that at scale. A lot of what I started to lean in and ask treasurer friends of mine, the long time treasurer at Amazon and treasurer Expedia, ‘How do you do this at scale, clearly you must use a system to do this,’ and a lot of it was legacy technologies that don’t scale well, poor experience, not very good categorisation and all of those things we’ve reinvented with modern technology and then native in cloud, native in APIs to really bring that experience to bring that to users like Bea. Also large companies, we have many large companies who are using it on the treasury side as well.

Moderator: Our top question is what is the barrier for banks in allowing API access? This is for you Brett. Is it a difficult thing for a bank to set up API access, what is stopping them from doing it more quickly?

Brett: Banks in large part are all constructed and built off mainframe computing. You look at their core systems, these aren’t things you can just-, people are like, ‘Well, just upgrade and move to the cloud,’ you just can’t do that. It really becomes a 10-year process, it’s very difficult. You look at the start of where really cloud came onto the scene in around 2010, 2011, and then really hit that tipping point, I lived through that, that was my last startup, in bringing, migrating the enterprise to the cloud through the journey with AWS that drove a lot of that. We’re in the final innings now of the cloud and it’s all around these difficult workloads that are in financial services, and I think that the banks that are in their own digital transformation themselves. So, it really becomes this commitment that needs to happen. Some engineering or technology resources to build that API and they have to be able to build that and connect it to their core systems to be able to have their own internal data and then be able to deliver that data. So, there going through their own digital transformation as there building those, as they’re releasing those. I think for our part we’re leaning in and helping, here are the ways to do that, how to build that API connection for how companies like us in the tech community or customers directly can take advantage of that and so it’s just helping along and, I think, sometimes that becomes that discovery process or making sure you want to build it right that can slow down the process. So, for us to lean in and help, here’s how to do it we’ve done this many many times, can help the bank move along also faster.

Moderator: From a functionality point of view, is there a difference between APIs and he’s mentioning swift, as an alternative messaging system? APIs versus swift very different?

Brett: Yes, very different. 1 is you’ll never receive real-time data transfer with Swift. I’ve used Swift, I know Swift is making a lot of advancements to but in a lot of ways we’re moving to this era from the old dial-up service connecting to the internet, analogue copper to 5G right. Even if your bank is not quite ready you want to be able to have the technology so it’s 5G ready when your carrier can provide it, that sort of thing. I think a lot of it is, you’ll never be able to get the right kind of speed, agility at scale with a file-based format because it’s a static shot in time. Like you say, do it 1 time, and it’s more quickly after that, that’s the API journey. With file-based the bank has to go through many many weeks every single time, bespoke connection, whether its SFTP host to host directly to the bank or whether it’s via Swift. That setup process can take a long time and it’s always just a static file at a point in time, it’s not a dynamic flow which is what the API can usher in. (TC 00:40:00)

Moderator: Bea question for you, you have touched on this, but they ask how did you manage the ROI discussion with the board to onboard Trovata?

Bea: Since my board consists of my direct manager who is the CEO/CFO and the other 2 CEOs are both MBAs, business number minded people. It was not a difficult sale because we’re always trying to figure out how to close the month faster. So, by the time I added up Colvers (ph 41.13) hours, my hours when he was absent, the cost, the point of purchase, and then we could possibly get to your financials 2 days earlier they were done. So, fortunately, my board’s pretty tech-savvy they are all about what can we do to get things done faster and just as accurate but faster. So, it was a pretty easy sale.

Moderator: Brett without asking you to tell us the cost of Trovata in every situation, I’m guessing it’s a fairly open pricing structure and relatively easy for treasury and finance people to justify internally?

Brett: Our cost, our pricing is more elastic relative to the size of the company and scope. I think the other thing is because we’re all built on a modern framework, all taking advantage of the latest and advanced web services, were built in AWS natively, we’re not a hosted solution, we’re a true native cloud solution. Because of that modern architecture, we can just deliver our services and this experience at a significantly lower cost than legacy technologies. So, I think that’s the other thing to help customers along to its like if your looking at something that’s maybe more than 5 years old you really should scrutinise that. It’s likely not natively built in the cloud and on advanced services from an infrastructure perspective. Because we’re built that way we can then pass a lot of that savings down to our customers and allow the price points to be much lower. The entry point to come in a lot lower, just allowing those experiences to really open up in ways that haven’t been accessible until now.

Moderator: Thank you to everyone who has attended this session.