How Technology is Transforming Banking?

Like it's doing to the rest of the world digital technology is in the process of transforming banks. And in the forefront of that transformation of people like Cathy percent she is bank of America Merrill Lynch chief operations and technology officer Cathy is in New York today to celebrate her number one ranking among its. Usually testers top tech 50 and it's hardly any wonder of bank of America's 209000 employees 100000 I repeat that 100000 employees report up to Kathy.

How Technology is Transforming Banking?

Kathy welcome liberty great to have you here David thanks for having me so I guess most obvious which is one of those 0 people doing and the prime one hand wouldn't give you those people begin once I'm done with what they doing everything from designing great technology to processing manual checks to make sure it making sure that coins in cash are an ATM machines not just in the United States but around while. Give me a rough sense how much of this if I can put in these terms as defense of it how much was often so. How much is incident we gotta comply with things we've got to have some systems to check on things as opposed to we're really changing the business. Well one of things I love about my space is that technology operations actually do both at the same time see there is no such thing really as defense of our offensive if for complying with the regulation we should be using that to produce great customer service. And if we are moving the business forward that should in turn reduce risk so I I see them as a totally interrelated listen let's be to see first business to consumer alright what exactly are your 0 people doing in your relations with the individual depositors and customers of black America will they really trying to do I think 3 things first of all they're trying to make this ubiquitous to customers.

Stories in a digital era want just want everything that they can get from us when they want to see and where they want us to number one try to be back with us. Number 2 we've got to be flawless in our execution. And they expect perfection today and they get perfection in so much of the payments world so delivering flawlessly is important plus the cost of poor quality in social media environment is just devastating. I'm in third they expect speed they expect incredible speed and we work every day to take latency out of every part of the system. You're in a very special position to see into the future at least look into the future try to see in the future. I would have branches 5 years well yeah I think we well I think we will have they may not they won't be maybe our primary service channel but we will have branches people still will use currency. People will still process manual tracks.

That is the challenge for banking and really for many industries that have a combination of retail and digital presence is to say how do we marry those together how do we ensure that I'm that there contemporary with the time so you'll see fewer people in our financial centers but physically they'll still exist and how do we put technology into them. So they are as ubiquitous as your mobile device and had we make the mobile device capable of being the branch in your hand one of things that technology is done in various industries. Is break down some of the walls it expands it makes it easier for him to move into your business. It also makes it easier if you move into other people's businesses.

So what you're competitive set how is that changing now it's not just Wells Fargo is not just JP Morgan you've got apple pay you've got how lending club you got all these other competitors how do you see that world well for one thing I think that competition and the threat of destruction is nothing but good for clients and customers it produces better capabilities at lower prices and it causes us to be better. And I think we sort of think about it 3 ways I are our competitors are now digital companies fin tech firms we can either buy from them which we do extensively and in many cases we help them grow or we can partner with them apple pays a good example we share actual client on economics. Or in places where we feel like it's absolutely core to our competitive advantage.

Will compete like. The way things are you have because of this technology is a lot of data. And big data is a favorite thing for people to talk about what are you doing with that big data what can you do that big data. Well I we can do a lot and there's no question that the future of the firm depends on us doing more. So today we do simple things like truck like Amazon try to anticipate what you might need next time try to make sure that the offering that we have is right in front of you when you want it. I had to make sure that we for large corporations that we can and massive data and research in a way that gives our corporate clients a competitive advantage but that's just scratching the surface were trying to be better at that but but the uses of the future will go way beyond that discs man the top line or does it save costs. It should be better if it should produce great capabilities for customers should produce revenue opportunities which our very important in a business at like ours it is Stanley margins to begin with.



But that thin margin and heavy capital that we all carry that by regulation has to be patient the cost side of things and the cost takeout opportunity that comes from technology and productivity on better faster cheaper is the way that I think about it on that that costs take out capability actually helps us bring tough to get revenue to the bottom line to create a shareholder proposition that actually works gives an example or 2 before you could be creating new business increasing the top one is that taking market share from some of your traditional rivals a banking is it creating new businesses words that money come from well I give an example and I wealth management space we've worked very hard on them on them mobility of our wealth management offerings said that a financial adviser can communicate with the client not just added to ask. But anyway that client wants to be communicated with their for at the moment the client is making a decision I. E. producing revenue for the firm potentially we have financial advisors with deep information and the ability to give excellent advice right face to face or electronically face to face with customers at the moment of decision and that creates revenue. Is it finally we can't talk about technology and banks that are what cyber security. A very big issue I know on your plate.

Brian Warner has been on this program talking about that but give us a sense of the state of the play right now even just this morning's report that perhaps Iran attacked Saudi Arabia's governmental systems and their computers what do you do a bank of America to try to defend against those sorts of attacks. Well first about the attack tax across all industry are increasing at exponential rates and so it isn't as simple as a defensive posture we have to take an aggressive offensive posture and and forward looking posture as well so it it's a very strange space because you're only judged up to the second.

That you're in there's even less than the next 10 seconds something could happen so very difficult space manage so we say 2 things first of all we're not going to constrain our company by resources or by great talent and this is a place cyber where resources and talent and especially talent really matter. So we work to have a world class team. And they care a lot about defending the firm. And we insure that every element of how we design our business actually reduces cyber risk rather than increases it you know the counter intuitive saying is that electronic banking it's much easier to defend than the old manual way of doing business as if. Get the sense thank you so much for being here today that's Captiva centuries BankAmerica chief operations and technology officer.