-: I'm DJ Seeterlin,
chair of the ABA Core Platforms Admin Committee
and Chief Information Officer with Chesapeake bank.
I'm here today with John Weinkowitz,
the VP of Retail Core Product with Finastra.
Welcome John. -: Oh, welcome.
Yeah, thanks for having me.
-: Terrific.
So John, I'd like for the people that are watching this
to understand a little bit more about what you're doing
in the realm of core solutions 'cause that's our focus.
-: Yep.
-: Can you talk about what you're doing in cores,
how many cores you offer and how that works?
-: Yeah, Yeah.
It's interesting because I've been
at the company four years now and I come
from a banking background and when I got the chance
to run the core business and products that...
I got a lot of double takes.
I think it's the most exciting part of really
what banking is because it's the heart of it.
At Finastra we have, I say we only have four cores.
Two of them are legacy that we've announced end of life.
And one, ultra data is one that we continue
to serve a number of 100 plus credit unions on that one.
And then Phoenix, Fusion Phoenix
is our go forward core platform for both banks
and credit unions and we get asked a lot,
why did you make the decision to sunset some of the old.
At least the two older cores.
And it was really just a responsibility we had.
Older technology, now data technology, stack hardware
that's hard to maintain needed to put our customers
in a position to grow.
So for Phoenix, we've always been built on Microsoft.
So we're an Azure cloud partner.
84% of our customers are in Azure.
And that's up from 65% 18 months ago.
So, we've built a very open
and it has always been open API framework around it,
we're like everyone else,
we're going down the microservices,
cloud, modernization journey.
We're pretty far down that path but we believe
that enabling and investing in the core particularly be able
to kind of build and enable innovation around it
is what's gonna help our customers be successful.
-: So, that you've made a strategic decision then
to invest your R and D dollars in a couple cores
and not those legacy cores.
-: That's right.
-: That focuses around speeding innovation
for those products.
Is that what that is?
-: You mean for the ones we continue-
-: For the ones that you continue, right.
-: And particularly Phoenix.
Yeah, yeah, yeah.
I think Shaban hit on it the other day,
about 30% of our revenue goes back into R and D
and that's just on the Phoenix side.
Within Finastra, we have a few different other product
and business units like FusionFabric.cloud
and we're heavily invested in data.
We've got a team of data scientists
and a number of innovation.
We've got a chief innovation officer.
But within Phoenix, yeah the idea is.
We continue to open it up and that adds tremendous value.
We've also done a lot of things to improve
to the time of implementation.
When I first started about 18 months ago,
it took about 15, 18 months.
Now we're around the nine month mark.
-: To do-
-: To do a core migration.
-: Okay.
-: Maybe 12 depending on the size of the institution.
But we've reduced some of the complexity by 30%
which ultimately drives the time down.
And we'll continue to invest there.
So we can turn on innovations like CECL reporting
and new tech partners like Bank BI
which does board level reporting.
We don't do that in Phoenix.
So we're able to kind of turn those things
on pretty quickly.
And then we're also...
We think it's a continued investment
in the onboarding process to reduce that time it takes
for a customer to get up and running.
-: And those are for the customers you're transitioning
from your deprecated cores or your end of life cores
or from another competitor core.
-: Both. -: Both?
-: Yeah, yeah.
We've really created blueprints.
Now, it's interesting when you say blue...
Everyone thinks that the data and the technology pieces
is really what we blueprint.
The uniqueness comes with each client.
I mean some clients have seven people
that are doing the migration and running the bank
and then sometimes you have very large FIs
that have more sophistication.
And we try to find the right approach based on the number
of resources that our bank customers have in order
to be able to drive the right time to deliver.
But I had a conversation with an FI today.
We're also realizing because of what we learned is,
we've done...
I mean we've really been growing.
Is that how are we going
to help our customers three months post go live,
six months post go live.
So that's another area where we're starting to invest in
to say, hey, are you getting
what you thought you'd get out of it?
So yeah, that's a real big area of focus for us, yeah.
-: Since you talked about conversions
and of course there's two signs of the conversion,
there's the coming on and then going off sometimes.
If it's the right fit, maybe it's part
of an M&A strategy for the banks participating in.
Many of our banks have come to us and said,
we've really struggled working with our core provider
and in some cases it's contract provisions
and often it's just data access.
The core has my data
and they're charging me significant amount
to access my own data.
What's your strategy around providing data access
to your customers?
-: Well, it's their data.
And we've actually always...
We've always been built on a relational database,
Esco database, it's always been their instance
and we've always provided access to it.
And many of our customers,
they'll put reporting tools on top of it.
So getting access to their data
is not a barrier for our customers.
And then of course when they do migrate off,
it's our responsibility and we've got no barriers in place
for us to move the data out, we have to do it.
Many times when customers leave us,
they're not leaving the Finastra family.
They might just be leaving the core.
So we take that responsibility
of the entire relationship very seriously.
So yeah, it's part of our DNA is to make data accessible.
It's been quite frankly one of our differentiators.
-: So as you talked about,
they may not leave the whole family because you offer a lot
of complimentary, ancillary solutions to that.
What's your strategy around offering more of those,
are those things that you build in-house
so you partnerships or how do you-
-: Well, we have a core set of products
in the North America market
which is the core banking solution,
the digital banking solution,
our lending compliance product, LaserPro, Mortgagebot,
and then our FusionFabric.cloud platform.
So, we build...
The philosophy and core is pretty simple.
We will build the best in class core to deliver best
in class experiences around onboarding, servicing, data,
payments, and APIs.
So with that we sell end-to-end solutions
where those ancillaries integrate,
we all use the same API framework
but we also offer a best in breed model.
So we are gonna build to that best in class core
so that our customers can use our components,
all of 'em, some of them, or none of 'em.
And we've had instances
where we've had digital banking competitors use
our realtime E statements capabilities
before we've done that.
Now, we are changing that because one of the things
that Shaban who's...
We're really lucky,
she's running our newly combined universal banking business.
She's a really talented and experienced leader.
And one of the things that we spent a good deal
of time talking about is let's make sure
we've got better roadmap integration
between digital core and analytics.
Because at the end of the day
that's really the customer engagement and data side of it
and relevance has to be driven
by bringing those pieces together.
-: So you mentioned universal banking,
what does that mean to Finastra?
-: So universal banking is the core capabilities,
the digital banking capabilities,
and then the analytics capabilities.
So those three product lines coming together
under a single business unit.
-: You mentioned earlier about I think the FusionFabric 360,
did I get that right? -: FusionFabric.cloud, yeah.
-: FusionFabric.cloud.
Is that like an API layer?
-: That is. That was a big, big investment
that our current Chief Digital Officer Eli Rosner had made
when he came to Finastra.
And that is building in Azure, our open API framework.
And then it really is a marketplace.
So it's a place for fintechs to get access to all
of the APIs around all of our Finastra products
and integrate in with us
and deliver those direct to customers.
So, if you think about it, we've always had APIs.
They've been more private endpoints.
And what we've done in Phoenix is start to lift those
to more of the public endpoints and being able
to turn those on to a lot of the fintechs
that are in the room and a lot of our partners that are...
Our competitors that are in this space as well.
So yeah, the API's always been open.
We have to continue to accelerate lifting them
to not only FusionFabric.cloud platform
but there's other API platforms that we wanna integrate with
because that's where our customers are.
-: So tell me what you mean
you wanna connect other things to that?
You mean to your ancillary products or different parts
of the core or what do you mean?
-: Yeah.
So, if you think about it,
we have a real time event engine and core that we've built.
And we wanna be able to enable that for apps
that are sitting on FusionFabric.cloud.
There's no reason why,
if our customers are using Code Connect with FIS,
how can we kind of plug into that in a way
that removes a lot of the friction
around the customer engagement experience,
around those products and services whether it's ours or not.
-: So the FusionFabric is connected to most of the core
but you've still got pieces to build out to connect
to make it accessible?
-: We do.
Yeah, it's not a barrier like for example,
if we have a couple clients that are driving banking
as a service initiatives and so we will shift
around our API roadmap to make them accessible
in the public cloud.
But if they wanna go out and start doing business today,
well they just access the APIs in a traditional way.
But we want 'em...
When I talk about a real time event engine,
that's where you kind of when you have a platform
like FusionFabric.cloud, that's where you can really start
to create dynamic experiences.
And so that's why we encourage going to FusionFabric.cloud,
more of a platform.
-: So one of the questions I ask when I talk to some
of these cores is about these developer portals,
do you own of a public developer portal?
-: We do, yeah,
that's all part of FusionFabric.cloud has a...
It's a free, you go there, you register,
you get access to all the APIs.
We have the developer portal already built in.
We actually do all the vetting of fintechs
that come on and are accessible to our customers.
So we manage that third party that at FinTech
as if they're our own because that's quite frankly
what the regulators require of our customers
that you may own the technology or not
but you're responsible for it.
So we've taken on a lot of the heavy lifting
around onboarding a finTech
and doing all the due diligence and the risk,
we use an outside third party risk review process.
So, it's pretty good end to end for the developers, yeah.
-: So to understand your strategy maybe
as how many differ from others?
You've got a technology development portal
and people can come connect to it,
and they don't need a custom integration for each component.
-: That's right.
-: But they would work with you to get authorized to-
-: Yeah, it's a real simple...
Yeah, it's a real simple process.
I mean, it's not a lot of friction there
but the strategy is to continue to be more open.
Our customers are going to see growth
in non-bank own channels.
I mean, we're a pure software company.
And so we will build some components
and we'll partner with components.
So if there's something that we don't do well,
I mean for example we have a very light CRM system built
into the core.
But CRM is complex.
I mean, a lot of our customers are just getting going
with relationship management in branch,
that type of in branch of experience,
they can start off using our included CRM module.
But if they wanna graduate to something that's more complex,
maybe it's a Salesforce.
Well, we've got the data you can access,
we've got the APIs you can access and go at it
and graduate and we're there to support you.
-: Terrific.
I wanna shift gears from minute to talk about one
of the very current challenges that we're all dealing with,
which is cybersecurity.
And I know Finastra has experience working
through those issues,
there was some public challenges a couple years ago.
Can you talk about how you all have overcome that
and why banks should be confident,
you know Finastra manages that.
-: A couple things?
One is it's always been a very strong focus.
I think one of the things when you think about the incident
and then a very hard decision that Shaban mentioned
to isolate the threat
is I mentioned earlier were cloud based.
So there was no impact to customer data
but there was no breach of our cloud infrastructure.
And I think that's something that is a testament
to the investments we've made and the lifting
our infrastructure to the cloud.
And then all of the surrounding information security goes
around it.
I could tell you from a product perspective we continue...
I mean information security is part of everything we do
from a product perspective.
As we build out Power BI,
we go through a very detailed InfoSec review.
What's that business requirement,
what are the vulnerabilities,
what are the potential hazards?
And we have what a rightfully
very good friction-based conversation between enabling
the access to the information customers want
and protecting it at the same time.
So we've incorporated a lot of the information security,
what you would expect into our DNA of what we're doing
from a product development perspective.
I can tell you, we see an increase in the amount
of information security in audit.
I'll call them reviews for lack of a better phrase
but really what I mean by that is it's a quarterly review,
a monthly review,
it's part of the executive dashboard.
Review all the way up to the ELT insignment.
It is something that...
Like I said, every aspect of what we're doing comes back
to are we protecting the assets of our customers
and then all the way to tabletop exercises
which I'm sure you're real familiar
with business continuity.
We're involved in all of that.
So I think the confidence level,
listen we've always tell folks,
it's impressive to hear our CISO
when they come in and talk about
the actual investment in dollars.
It's the largest area of investment force.
-: So it sounds like you've made changes even even just-
-: Yeah, we would...
Yeah, I mean yeah.
I mean, it's interesting because we talk about changes
but we were already on this path.
And what's quite frankly I think is why our team was
so well positioned to respond.
But yeah, this was the path we were going down.
-: Perfect.
So as you move forward and work on those things
and work on protecting your banks and your customers.
We launched the ABA Core Committee, launched the principles
of strong bank core provider relationships
a couple years ago and Finastra agreed to those
and spoke to things like contract provisions,
data access, service level agreements.
Can you talk about any changes Finastra had
to make to adopt those?
-: No, no, no.
We didn't need to make any changes
because we were already doing those things.
I think for me when I look at the contracts,
it's all about are we removing the friction
for our customers?
And I think those guiding principles
are designed to do that.
So we didn't really have to make any changes.
I would say that it's an area that I know we want
to continue to look at and figure out how to improve right.
At the end of the day it's choice.
And are we setting the right expectations around
what our customers can expect from day one.
Even before day one, I think that's an area
that we're focused on the pre-sales.
Area is that okay, the contract is a contract
but do we actually understand what we're getting
as a customer?
So I think the more work we do, pre-contract,
we've already done a great job
on working with the guidelines.
That's why I see us being able to really help
and provide even more clarity.
Because it's their contract, it's their data,
it's their business.
Best compliment I can get as a core provider is,
can you just get outta my way,
thank you for being out of my way?
That's the best compliment I get.
-: Well John as we wrap up, anything else that you'd like
to share that we haven't touched on?
-: Yeah I just would kinda reinforce.
Open finance is what we're all about.
We are pure software provider.
In the areas of exclusivity,
that's an area where we are completely moving away from.
This is an environment that has to be flexible
and dynamic enough for our customers to have choice
and I think exclusivity thwarts innovation.
So we are really finding and looking for ways
to open up our ecosystem with partners,
competitors, and fintechs
because that's what we do as a pure software, got so many.
Now, Finastra is committed to this community banking space.
It's a really important area and it's an area we fund,
we're in and it's critical to our success
as a global company.
So we're here to stay and we're really excited for
what we can do in the market with our technology
but you know with our history.
And we know where we need to focus to improve,
I think that's the one thing we're not shying away from.
Yeah, like everyone, we are focused on how to improve
because that's what our customers
in the market need us to do.
So, very excited for this market.
-: Thank you very much for your time John.
-: Yeah, thank you. -: Thanks.