Published : 8 months ago, on 23/04/2024

Navigating the Transformative Banking Landscape

A Deep Dive into Innovation, Digital Strategies, and Cloud Technologies with Boe Hartman 

In this insightful exchange, Kapol Tandon, Head of Business – Americas at Infosys Finacle spoke to Boe Hartman, Co-founder and CTO of Nomi Health. Boasting nearly 25 years of experience driving innovation in banking, Boe shares invaluable insights and success strategies. With notable contributions at Goldman Sachs, including spearheading the development of the Marcus brand and Apple card platforms, Boe’s tenure at Capitol One and Barclays laid the foundation for his current venture, Nomi Health. Nomi Health focuses on real-time medical payments, aiming to alleviate healthcare costs in the US.

Kapol Tandon, Head of Business, Americas at Infosys Finacle

Kapol: I want to express my gratitude to you, Boe for joining me on this discussion. Our collaboration has me eager to delve into topics such as evolving market forces shaping banking today, the key to win with new propositions like embedded banking, scaling success with cloud technologies, and learnings for building a digital-first organization. 

To begin, market forces have been driving change in the banking industry for a few years now. The past couple of years have seen the confluence of these forces and pace of change making it more complex for the banking leaders. What according to you are the major shifts that are driving significant change in the industry?

Boe: I see three major forces that are driving the evolution of banking as we know it today. 

Boe Hartman, Co-founder and CTO of Nomi Health

One, digital-natives, are the ones that are coming of age and those of us who were not born digital-natives, have become accustomed to engaging in real time and with on-the-glass experience. This is forcing banks to advance their technological capabilities and foster innovation. We see it happening across the planet though not evenly. 

The second one, that’s really become prominent in recent years is regulation and data residency. When I first got into banking, data residency wasn’t even a thing that was a concern. Now it’s becoming a major concern because of the major penalties of taking customer data out of the country in which it resides. Banks need to think about leveraging a global technological footprint to drive innovation, and collaborate with regulators around the planet, to implement those changes. 

The last one, which I really find fascinating, is the rise of artificial intelligence and how it’s becoming more prevalent. How do we interact with it? How do we protect our clients and customers by leveraging those innovations and tools that will make their experiences much better? All these need focus and attention of leaders. 

Kapol: With the rise of embedded and open banking, what according to you is the key to winning with these new propositions? 

Boe: As you know, the whole concept behind building Marcus by Goldman Sachs was to answer that exact question. And it always makes me think about what a friend of mine told me – only 2% of the digitization of banks have taken place so far. Which makes me believe that what we did at Marcus was very forward thinking. So, what can banks learn from what we did to participate in the evolving ecosystem? The large institutions must get to the place where they minimize the core technologies to make sure that they do exactly what they should be processing for the customer transaction activities. Then on top of that, they need to move some of the logic, that actually creates the innovations, out to the edge where it’s easier to change and innovate, because you have faster technologies. You also have the ability to implement SaaS partners into those plays. And then lastly, on top of that, is a very thin customer interaction layer. On the open banking embedded finance side of the house, though, it’s all predicated on the concept of opening up API’s that you can integrate with partners, like we did with JetBlue, Amazon and others. And that to me is where the large institutions need to move to, so that they can participate more robustly in those ecosystems.

Kapol: Let me now pivot to the technologies that are unlocking newer possibilities. With a promise of agility, flexibility and control, hybrid cloud offers the best of both worlds. In your view, what is the role of a hybrid cloud approach in helping banks accelerate cloud success? How do you see this evolving in the future? 

Boe: I actually think it’s very exciting that the large institutions have either begun their journey or in some cases, they’ve gone fully through their journey. In the early days, it was big bang and that caused a lot of challenges. There were cybersecurity concerns, management concerns, and cost concerns. I think hybrid cloud is the best strategy because it allows you to easily step into the cloud computing route – whether it’s an on-prem, private or public cloud. I really like the private and public cloud approach because you can have a private cloud for data residency, that I spoke about earlier. But then you can off-shoot the processing to public clouds. I also like private cloud concept in hybrid because that’s where your operational stability and efficiencies can be built in for your main business processes. By using the public aspects of it to do quick development, agile innovation, and other processing, you could have lower cost, but a more robust way to approach getting them to market.

Kapol: What we have seen is that everyone is now accepting of moving things to cloud, but they may not be harnessing the full potential. What is your opinion on the strategies for success here?

Boe: Taking the learnings from the three different financial services platforms where I have implemented cloud, I would say take the first opportunity to remove out the inefficiencies that you have in your old platforms as you move on to the new technologies that are on the cloud. So that is an opportunity to clean up some of the tech that existed in the past. The second one is the leveraging scalability and resilience. In the past it was difficult to talk about three nines of availability. Now we’re talking about five nines of availability, six nines, so we’re talking about 25 seconds of downtime and never interrupting your customer or your client activities. The third thing is especially from the high processing world, which I came from, is with the cloud capabilities, you don’t have to over-capacitize your infrastructure and just pay for when it is not needed. You can have it auto scale through the peaks and then when you’re in the valleys, it can tune itself out to the appropriate size. The last thing that I actually love, and which is most fun, is when you have that business opportunity or market opportunity, you can spin up instances and engage with partners or your customers fairly quickly. And that is just a complete game changer from the past world that we grew up in where it was six to nine months of getting the infrastructure in place.

Kapol: Further to your experience with Marcus which was a great digital first proposition – can you talk about what you believe are success factors for a digital-first proposition either in the banking industry or what you are doing now in the healthcare space?

Boe: Through my experience and through some hard learnings, the advice I’d give to everyone who’s on this journey is first off, when you say digital-first, mean digital-first. A lot of cases, organizations, just think of customer user interfaces, instead of thinking their processes from end-to-end. In some cases, we have to rethink your processes because the controls you had in the past may not be the controls you will have in future. Because of that, experiences will be different. So, think end-to-end is the first big lesson. The second big lesson that I will definitely pass on to everyone is to truly find out what the customers want and what they will use. In a lot of the first forays into the space, a lot of us just created what we thought they wanted, not what they actually wanted. So, in that vein, find out what are the features they use the most. And what are the questions that they typically ask in a non-digital world and see if they’re asking for it is because that’s what they need information for or if it is a bad process. And then either delete that process or automate it. Lastly, always remember, when we create digital-first experience, people actually don’t want to ask a question. They actually want you to anticipate their needs. So, get to understand your customer very well. Watch, how they interact with you, watch what are the challenges they run into. And those are the areas were you want to create great experiences and end-to-end digital processing. 

Kapol: You have moved on to a new role and new sector, which is health care. Could you elaborate a bit on what was you motivation to choose this sector and how has your banking experience helped you in taking on this new challenge.

Boe: It’s actually surprised me actually when I went on this journey. But what I discovered is that in the United States, we have a $4.5 trillion health care market. It is a massive market where the innovations have not come in. If I look back on my experience in banking for the last 25 years, as well as that of my peers, we pushed the envelope to make better infrastructure, to change to a digital experience, to become more compliant and transparent in our transactions. When I looked at the US healthcare system, it hasn’t moved into those domains. So, the US healthcare system has a lot to learn from the digital journey that banking has actually gone though over those years. The second thing that just really made me jump into this industry is that, in the United States, for every $100 of spends in the US market for patient care, the doctors only received $60. $40 is eaten up by middleman that provide no enhancements or increased quality of that care. So, using the experiences that I learned in the banking world of making it much more efficient and transparent, we can actually get those entities that buy the healthcare for their people to pay directly to the doctors. The doctor gets more and it actually reduces the overall cost of care. We actually believe that by bringing the innovations from the banking world into the US healthcare world of $4.5 trillion, we believe we can save the Americans a trillion dollars a year that could be redeployed into schooling, housing, and space exploration, those things that we really think will take the value and increase it forever. 

Kapol: Boe, your insights are invaluable. Thank you for sharing your time and expertise. Wishing you the very best in your future endeavours.