Q2 Holdings, Inc. (QTWO) Earnings Call Transcript & Summary

Well, it starts with data analytics. The reality is we have a ton of data, both internal and external, we can learn more and more about our customers, our members in the industry. We also can create insights. The best institutions today are democratizing that, and they're making so that more people within the organization have access to data, have access to insights and I'm going to keep on coming back to that final mile, are building ways to implement against it. So how powerful would it be for a teller branch who's underused right now on a transactional basis, to be able to call up brand new customers and help them along their journey to say, here's services that people like you have thought to be very interesting, and here's why we believe it would work on your benefit? That only gets done if you're sharing data insights. We have the ability technology-wise to recognize people as soon they come into a branch, as soon as they pick up a phone, as soon as they go to a website, as soon as they do anything on mobile banking, to be able to provide them answers to questions that they may not have asked yet in much the same way that Netflix, Hulu and Amazon do. One thing happened with COVID, it became really awareness, the awareness really rose from the consumer's basis on what's possible with data and analytics. I know longer go to the quarter drug store to pick up my everyday needs. What I do is I order on Amazon. They're going to get to me that afternoon. It doesn't cost me much. And that value transfer the fact that they know what I've ordered, when I'm going to order it and sometimes prompt me to order it again is a value transfer that I'm currently paying for want to be cool if with the data analytics that we can build on a customer with the insights we can build that the customer would pay us to actually help them become more financially fit.

That's fantastic. A lot to unpack there. So I just want to hit on a couple of things. So one, really key concept in the report is the democratization of the data, right? And you mentioned the teller example sharing that. Are you seeing more and more financial institutions moving in that direction, putting -- because that requires a real commitment from a talent perspective, from a leadership perspective, from a change management perspective. So kind of who's on the leading edge of that? And are you seeing that more from larger institutions with deeper pockets. Are you seeing some innovative smaller community banks and credit unions moving the needle on that as well?

Great question, Carlos, is what's interesting about this year's report. And we saw the trend starting 2 years ago. We're finding that the organizations are the furthest ahead on implementing against trends and positions being mature in the digital transformation process are the largest who have the money and the smallest who are the most agile who have leadership that realizes they can't do banking the way they've done banking before. As a result, those organizations that we see the most innovation around analytics around building insight to actually deploying them against solutions in the marketplace are actually the smallest organizations. There's a couple of reasons for that. Number one, the large the organization, the more tentative they get around risk. They're no longer managing risks, they're avoiding risk. If you're going to avoid risk, you're not going to serve the multitude of consumers. In addition, you're going to probably find reasons to not to do things rather than do things. I have found especially in the last year that the most innovative organizations, the ones that surprised me the most are the small organizations doing great things. They are the organizations that are taking the tools they have, building partnerships with third-party providers to deploy digital solutions that consumers want today, not tomorrow, not 3 years from now, they're implementing at speed and at scale.

Love that. And just the role of technology in that for leveling the playing field because they don't have the deep pockets that, for example, the mega banks would have, but they do have that advantage of being directly tied into the community as well as that's being more nimble and agile, right?

Plus there -- they were the first ones to build relations with fintech firms and with third-party providers to say, how can I deploy at speed and scale to the customers that I want to hit the most?

Excellent. So another thing you mentioned the Amazon example, and I love when people talk about Amazon because one of the things that they have done an amazing job over the years is how do you remove friction from the journey? Like I want to make it as simple as possible for someone to buy something, right? And they actually look at many different facets for doing that and using data at the core. So just any other examples as far as that kind of friction, removing friction, looking at data opportunity for doing that could be, for example, all the way up front from the account opening process or basically any interaction that you have with your customers.

A great example with Amazon as we think that as we're building warehouse is nationwide, it seems like every old mall has now turned into an Amazon warehouse. The reality is if I'm going to be ordering Advil today, it's not like they're stocking enough Advil for 3 weeks of deployment out of that warehouse. They're doing just-in-time inventory. They're only stocking what they know is going to be asked for today, and their models are going to tell them, right now, there can be this many people in this marketplace are going to order Advil, just take it as an example. They then work with the packaging companies and the manufacturing companies to make sure that nobody is keeping inventory that's not going to be needed immediately. Now what's in the future? Well, a data analytics, will it be possible that I'm going to give the delivery of my house before I push the button that says, "I want to order." In much the same way, am I going to find solutions at my financial institution and say, by the way, the market went down today. We think you should do this based on that and how can you then deploy these funds in a new way, especially in a rising rate environment like today?

Excellent. Well, just staying with the customer experience, we talked about friction. We talked about using data. One of the things I loved about the report is this concept of not just about the experience but really engagement, like a great customer experience should drive engagement. There was a really good statistic around 2 negative experiences can result in 70% -- 76% customer attrition. So I think for the audience, can you dive deeper into what does it really mean? Because some people think about experience engagement start using those terms interchangeably, some of those people are in marketing. So can you talk just more into that, like experience versus engagement?

Great question because we are not keeping track of attrition, the way we need to as an industry. And that should be the bellwether what's going on. We always have taken the attrition being a number of customers that have left against our total base. The reality is customers don't have to leave today. They can bring their accounts to a minimum amount, never closer accounts while they're opening accounts elsewhere. When I go on the road to speak, I'll ask people, how many of you have closed a major depository or lending relationship in the last 5 years. Very few people raise their hand. I then will ask how many of you have opened a brand-new finance relationship in the last 2 years? Everybody raises their hand. What that means is, while we're keeping the accounts, the relationships are actually being decentralized or being -- there's attrition -- for instance, for myself. I have my primary personal bank and my primary business bank. My primary personal bank probably thinks they have all my money. They also know a lot about me, but they don't ever give me solutions. As a result, I have an Acorns account. I have a SoFi account. I have a Robinhood account. I have an Allied Bank account always solve certain needs I had. Wells Fargo, my primary personal bank could provide me the solutions for. And I have no doubt, Wells Fargo is meeting the needs of what I have on a daily basis, but are they going to that next level of saying, "Here's what you need going forward." And so what happens is when you don't know what the person wants next, if you haven't really built a data and analytics platform to say, "How do I personalize? How do I build this engagement where there's a give and take?" You're not really -- you don't really own my relationship. I'll take it a step further on my business side, I've a business bank account. They hold my business funds. However, PayPal manages all inflows and outflows and as a result, they have more information on me and they regularly offer me bridge loan, if I want them, it's a small business owner, I can get those instantly. If always go to the traditional route to my traditional bank. It may take me 5 days to 14 days to get the same money. And that's assuming I'm going to get it. I don't worry about the cost difference right now because speed, simplicity and having a so as a seamless relationship is more important to me. What that is, is that's engagement. In addition, like being up PayPal, why did they get into crypto a couple of years ago. They realized that you'll go to your mobile PayPal app more frequently if they provide a crypto as a product that you would look at regularly. If I'm opening my app and I'm hitting that PayPal app more frequently, I'm engaging. You're not a passive relationship. From in my instance, Acorns. It's a very active relationship. They're regularly telling me how I can invest more, how I can make more on my money that's being deposited on my behalf based on things I can buy. They're always communicating with me and also provide me content specific to my needs. I'll take one last step is at OpenTable. I found out that because I'm a power user on ChatGPT, OpenTable is now going to have the ability to I'll be able to use conversational format to ask, "Where should I go with my wife to celebrate an anniversary is going to have a mountain top view and specialize in fish anywhere in the Midwest?" It will come back with answers to me in a conversational tone. It will go and you're going to be able to ask what you're really thinking about when you're looking for restaurants. It's usually an occasion, there's usually a reason. There's usually a type of food you want. It may involve different people. If you can ask it on a global basis, how much power is that to be able to say, OpenTable is now going to help me with Open AI technology to answer my real question, and that engagement model is going to only skyrocket.

That is fantastic. And would you agree that at that point, you're really thinking about what is going to be most helpful and useful to that person? What are they really trying to achieve? I'm not trying to just book a reservation at a restaurant, trying to give an amazing experience to my wife for the anniversary. And the more, in this case, OpenTable can be in service of that goal, right, the more you're going to be little loyal to them?

Well, use the experience is not just the good food and the nice atmosphere. It's the engagement we had with the waiter, with the sommelier, whatever it may be, and you're saying that engagement ahead, oh, and the reservations a question they ask, the fact that when they ask there's a special reason for this, that they made this experience higher by engaging with me, that's what we're looking for. We're looking for that as consumers also. For instance, we want proactive engagement. That's why Netflix and Hulu do so well. When I turn on the TV, it immediately is engaged with me saying, "Here's what you probably want to watch next." I didn't know it at 6:00 or I'm going to watch, 7:00 what I want to watch and the types of shows I want to watch on a leisurely time. They come to me with those recommendations. Why can't my financial institution use the same, in fact, more data to provide me recommendations that are going to improve my financial wellness. I want a financial services concierge that's going to give me the GPS view of the future on my behalf, taking the data that they know both internally and externally to make it a better engagement.

You mentioned something earlier that we talk about a lot, which is if you think just rewind, let's say, 20 to 30 years, banks and the credit unions out there when you go into the branch was really at the center of that financial relationship, really, you mentioned the relationship and consolidating the relationship. So do you view data and analytics, and I love this concierge concept is one of the keys for how financial institutions can really put themselves back in the center of that financial relationship that has been fragmented because of all the fintechs, you mentioned all the different examples. Because that's something that comes up quite a bit is how do we regain that being the middle or the center of those relationships?

I guess on trust and now more than ever, trust is important. If you're using my data for my benefit, I'm going to trust you, and I'm not going to get skittish around privacy as much around privacy and security because you bring me a higher value. Again, Amazon knows everything I buy. They know how often I buy it. They know how I pay for it. Uber, the same way, they know where I want to go, what I want to do. They're making recommendation as to the restaurant for the destination I'm going to knowing what I've done before as far as restaurants. Why do I allow that all to happen? Because they use my information and they build a better value transfer. At the end of the day, consumers aren't going to get a skittish if we're using their data and analytics for their benefit to help them. The components of convenience now are speed, simplicity and empathy, more than location. I need to know that my financial institution actually cares about my outcome as opposed to being just a transactional relationship. That's why we go and open other accounts elsewhere with organization that truly believe that they will help me.

And it's important to always remember at the center of this, the people, people that need help, financial wellness, just guidance, everything around that. So I love that.

When you look at open banking, too, it doesn't have to be within your 4 walls. Why can't my finance institution provide me the lead to an organization that help me as a small business owner. Maybe an account, maybe a small business that also does podcast, for instance, or reports and understand me better but using partnerships outside of the 4 walls of the bank. That's the beauty of open banking. That's the beautiful embedded banking too, where you can provide me services outside the 4 walls.

Excellent. Well, I'm sure there's a lot of excitement, and you probably get a lot of agreement like, yes, we should be able to use data. Of course, we want to drive deeper engagement. Yes, the customer -- a better customer experience can help with that. So any recommendations from the report around looking at leadership culture of people, right? Because wanting to do all these things there's probably a lot of want, right? Making it happen is different.

As I said at the beginning, what people know they need to do, what people say they want to do and what they're doing, unfortunately, are not in sync. We're finding -- I'm finding in the interviews I do for the podcast and the writings I do for the reports and in the articles are write for the financial brand, as we interview organizations, those organizations that are getting it right, that are moving forward at scale are those organizations that have leadership that are willing to embrace change that's all around us, take modified risks and disrupt the old business models that have served them very well in the past. The challenges, except for some recent examples, financial institutions have done very well financially. They continue to record profits. If you aren't filling in pain, you're less likely to change your behavior. This is in a personal level or business level. So why would I care to change what I'm doing today, my legacy processes if things aren't wrong. Well, they are wrong. The customer's suffering. Until I fix my back office to deliver a better digital engagement experience until I rethink what I'm going to do and how I'm going to get to a certain place until I completely rethink how I build things. The reality is today, why are smaller institutions are doing so well because they realize they are third-party providers such as Q2 and many other fintech fund companies that can provide solutions that are faster, that are bigger, and it can be scaled to a point where I don't have to build it within. And I can partner with an organization that's going to do the thinking for me and keep me in front of the marketplace. Because in 300 interviews I've done 1-on-1 in the last 2 years to finance institution, individuals. And I asked them one question, what's your biggest challenge today, invariability, every single one of them have said, not enough time. So what these organizations has to do, they still have to innovate, but they have to innovate at a speed and scale capability where they're going to partner with those organizations that will solve the problem. Now one big caveat, let's say you have an organization that says they want to embrace change. Let's say you find an organization that has leadership that says, we want to do things better, how do we avoid the legacy process getting the way? I'm going to use the example of a digital account opening experience. Let's say I partnered with Q2 on a brand-new digital account opening process that is going to get down to between 3 and 5 minutes, which we find to be the holy grail but the most important and the length of time of customers are going to spend on an app. I engage with you. And then the first day you come in to serve me and to build this platform. I tell you, I'm going to require a driver's license in the first step. Your salesperson, your strategy team, your development team are going to have the role, I told them back ahead because that almost invariably has 5 to 7 minutes right off the bat. So don't get in the way of what you bought or else you're not going to get the benefits you're paying for. And what that does, it takes a real rethinking as to what is a digital know your customer process as opposed to analogue one? What is the digital loan application process? What is the digital account opening process as opposed to one that looks digital but has analogue process in the background, which you can't get to the holy grail if you have that going on.

It's a great point. So you're saying that don't use past workflows as a limiting factor on how you should basically operate in a digital world, which gives you much more convenience, speed, flexibility, scale, et cetera?

Between automation and also the use of AI as a platform now with ChatGPT and Open AI, we're now going to be able to build customized content for every single customer and every single member. We're also going to be able to improve internal processes because it's going to help us solve those problems. The question is, will you listen? Will you implement against that? Will you truly disrupt the business plans and the business systems you've had in the past knowing that there could be jobs at risk? Now I will say to all those banks out there that are worried about those jobs at risk. The reality is, if you stay on board what's possible, you'll be part of that digital future as opposed to being run over by it.

Awesome. Let's shift gears for a minute because you talked about the back office a minute ago on the back office experience. And one of the things in the report is this concept of the total experience. And the impact of the employee experience and employee satisfaction will impact the customer experience as well as customer engagement. So if you could just dive a little bit deeper into that total experience concept and really thinking about the bigger picture around the experience?

Great question because it really plays off my last answer, my challenge to the industry is that you need to make sure that employees understand they can be a part of the digital future. And by becoming part of the digital future, we're going to give you the tools to be better in what you do than you ever had the ability to do before. If you give the tools to the branch employee on who to sell, what to sell, what's the next best product, these people are in the business of serving customers. They were hired because of their customer relationship skills as opposed to their balancing skills. In today's world, if we give them the tools, they can be part of that future. Well, there'd be jobs lost, yes. But the reality is, if you get the technology, if you give the tools, you're going to make the employee experience better, because certainly have more victories. They are not going to be doing menial jobs as much. They're going to be doing things that are actually going to position them for the future. I mean I look at COVID time and time when people spend at home. Those people that are the most satisfied today are the people that we thought about what their future is going to be and how they'll be part of the future. I mean, we have a history in our country of innovation and technology, taking the place of everything from farming to auto manufacturing to the way we're doing rockets right now.

Comes back to the [indiscernible].

Yes, exactly. It's happening in banking as well. But with every one of these jobs that were lost, other jobs are created. Am I going to profoundly say, it's going to be a net 0, probably not. But do I want to be part of that future? I mean I'm lucky enough if I've -- anybody knows me well enough knows that I've transformed myself on a personal level, moving from working in a marketing services company to actually building content for the industry. But my son and my wife, both also completely transformed themselves to be part of what will be the future. As I said at the very beginning, that's the change that's so tough to do because as humans we're not really want to seek out change. We'd like status quo.

Yes. So true, so true. So one of the things that you mentioned earlier and one of the things that can be exciting about change is innovation, just -- the number of opportunities to innovate in the digital world is incredible, right? And one of the great things in the report is this concept of collaboration to drive innovation at speed and scale. So what -- talk about open banking, talk about the fintech ecosystem and if you think about the rate of change, like what's out there, what financial institutions can leverage. Just if you could dive deeper on this notion of collaboration either from an open platform -- or open banking perspective or the fintechs?

I'm going to give you my best example today. And it came out of a podcast, I did 3 weeks ago with the company Coastal Community Bank out of Everett, Washington. And in talking to them, they said they've very -- the leadership brought into change and innovation and being part of the future as opposed to sticking to the past. They are a $3 billion organization that was only about $1.5 billion just 12 months ago, 12 or 18 months ago. They decided to build solutions for the banking-as-a-service platform. Not all their partnerships have worked out perfectly. They've closed some down, but that did not bother them. They realized that was me part of the process. They also built on others that actually took a greater footing. One example was they built a platform, behind the back office platform for a company called One. One is a digital transformation or a digital application process for banking services. What was interesting was, One was a banking-as-a-service platform that got bought by Walmart, Walmart using One as the foundation for the back office for their banking services. Walmart serves 300 million customers a year. We're talking about a $3 billion organization that could have 300 million relationships through a banking-as-a-service platform. They focus on scalability, they focus on speed, and they focus on innovation with partners to bring that to bear. In addition, the same organization, again, I want to make sure people realize, size doesn't matter when it comes to innovation. They also, on their website, have a Metaverse platform where a person can get on their computer and actually digitally through VR and AR, look and see how to bank in a Metaverse type platform. That seems unheard of in my mind for a financial institution that small. And I asked them, why are you doing that? They said because it allows us to know what the customer's preferred journey is and is helping us to build new products and services in the way that consumers actually use them. Now, this is a platform that's open space pretty much. and a consumer builds the way they want to do what they want to do. Well, it's not a huge number of customers. It is giving them insight into how to do things differently. This is much the same way the AARP built their banking platform. Back probably 10, 15 years ago, I asked the people at AARP, why did you invent the mobile deposit capture? Why did you invent voice banking? They said because many of our employees, many of our members, I should say, are overseas. They had to take a picture of the deposit as opposed to traditionally depositing the bank the way that we would. I said, how about voice banking. And they said, we do this because there is a good proportion of our members that aren't able to use a mobile device, aren't able to use a computer because they may not have all the facilities that we have, hands, fingers, and voice was the only way they could bank. When I asked them about the profitability of either those services, they said it didn't matter. It's what our members demanded.

I love that. It comes back to what you said earlier on empathy. It really starts with having that empathy and understanding and then being in service of. Fantastic. As far as just staying on this collaboration and innovating through collaboration with FIs partnering with third parties around these digital relationships, are you seeing financial institutions embracing that at a faster pace? Is there any concern that if you're not, you're going to be falling behind just given the rate of change right now?

Right now, it doesn't matter how big a financial institution is when it comes to partnering with third-party providers and fintech firms. In addition, even with the recent things that we've experienced with Silicon Valley Bank, I was on a panel last week with fintech meet up, and I asked 3 large financial institutions, Huntington, Wells Fargo and Chase -- or Citibank, I'm sorry, and Citibank. What is the future of fintech and third-party collaboration to get things done, to innovate, to move forward? Number one, Huntington said, we're doubling down we think it might be a buyer's market. So it's an interesting take. The other 2, Wells and Citi both said, we're not changing it. We still have things we have to solve for. We cannot build as fast as third-party providers can build. In addition, we don't have the teams to keep these things up to date, the way we require our partners to keep them up to date. And what was interesting, I then turned to the audience and said, realize [indiscernible] 3, what you would consider to be big organizations. The other distinctive component of these are 3 organizations that have leadership that totally embrace change and moving forward. And as an audience, you may have organization of all these different sizes. It really more than technology, more than data, more than automation is going to get down to the differentiator is leadership and culture. I've seen in the interviews we've done for the financial brand, digital bank report and the banking transform podcast that if an organization doesn't have leadership that is willing to take chances is willing to totally embrace the changes going on and more than just given a lift service actually implementing against they say they're going to do. If you don't have that, you're going to be in the same place next year as you are this year. And in many cases, people partner with third-party providers because I can get my solution in 3 months as opposed to a year. And I don't have to be intimately involved in every step of the process at the time that I'm already overwhelmed with what I have new daily.

Well, speaking of overwhelmed, one of the things that we get asked and we hear about and I'd love to get your perspective because you talk to so many leaders across banking is where to start? Like who should they be partnering with, especially if they're early in the journey, let's say that, they do have an open platform, they do have some open banking capabilities, but it is such a big market out there as far as the types. You could look at financial literacy, digital customer service, AI, I mean, there's just -- it's endless that things that you could do. So what kind of advice to get people to say, look, lean in to these areas or at least, I know it's going to be situational, but any kind of guidance because it tends to be like where should we start?

You need you look at your overall business model and say, where right now are we failing the customer? And I'll be honest with you, I usually in focusing on new account opening, new loan applications and the speed at which you can actually get the customer where they want to go. So if I'm a loan customer, how quickly can I get the approval and get those funds dispersed with the least amount of involvement. I always use the Apple Card as an example of how easy it is to do things digitally than in an analogue basis. So find out where the process that are broken and then doubled down on fixing them. You can't say all we need to fix our digital account opening is taking too long and not realize that it means you're going to have to change the way the back office works to make that happen. You're also going to find a partner that is already solved it for a number of financial institutions already and that you trust to work on your behalf to go down the field and score. It's so important today. Again, because I'm overwhelmed that I'm going to pick organizations that I trust. I was fortunate to meet with a number of your people today, and I realized the efferent that you went through to make sure that your partners at Q2, all the fintech partners you've had, all the third prime providers that you had, you did some new due diligence because of what happened at Silicon Valley Bank. That's important. What organizations are going to take that lead and say, I'm going to do what I know you're going to want me to do and probably do things that you wouldn't have thought of doing because we're in this with you. And again, just like consumers are going to pick the financial institutions that they trust is going to work on their behalf. Financial institution has got to say, number one, where is my biggest challenge. Number two, we're trying to get the biggest return with the least amount of time because if I'm picking the right partner, they're all stand by the solutions I'm [indiscernible] to implement against. But if I had to do a step by step, I want to be able to do it speed. Number three, who's going to have my thoughts in mind with regard to how quickly I'm going to implement. I'm going to end up getting the way invariably as a banker, I must somehow in some way, get in the way. I need to pick an organization that's going to push me to be better, but also it's going to accept me pushing them. Finally, what's really a good news in the industry right now. Most third-party providers have the ability to work with multiple other third-party providers and fintech firms. They've had the map already laid out. While they may not always want all those relationships out there, the reality is they realize I'm working for the customer, the bank as opposed to the other solution providers, I'm going to make sure we all work together. And I've seen the amount of collaboration over the last 3 years, more than ever be so strong between solution providers saying guys we got at the end of the day, serve this customer before we serve ourselves.

That's fantastic. So as part of service is the challenge to push, pull and have those conversations, right, and help sometimes guide and sometimes no when to pull back and those kind of things as well. But at the center of this is the customer that you serve, customers that we serve, but ultimately, the communities that they serve and the vision behind that, right?

Right.

Fantastic. You've been -- you're on the road, I'm guessing a lot.

A little bit more than I used to me, yes. It went down a little bit during COVID.

Yes. So any tales from the road, like anything recently, even in the last 6 months that you're seeing that you just want to share because you talk to so many amazing people?

Yes. I think a couple of the takeaways I've had is, number one, the enthusiasm for serving the customer has never been greater. Number two, the enthusiasm for innovation and digital transformation has never been greater, and people are doing things. Number three, the floors of these events have been filled with people saying, I need to find the organizations that are going to get me there quickly because I can't do it on my own. Organizations are at these events that actually have invested in these people to learn things. They're not saying them there to learn. They're saying them there so they can come back and do. Today's financial institution that's going to succeed, it's going to be those that really do take what's available and implement it as quickly as possible on the benefit of their customers. And finally, I think the most amazing thing I've learned in the last 6 months is there's absolutely no disadvantage to being smaller. In fact, I'm more worried about it and all the research we've done, the midsized organizations, those from $10 billion or $15 billion up to the top 10 financial institutions because many of them have so many legacy processes, so many people that have a stake in whatever decision you make, whether it's good or bad for them. The smaller institutions are all right now, almost all punching above their weight. And it's exciting to see because while I'm not sure what the future is going to bring, to see these stories transform and to see these organizations that are doing truly amazing things for their members, for their customers, for their communities, it's really -- it's a good feeling for me who's been in the industry for so long that it's not just the top 5. In fact, I can probably find more fault with the top 5 or 10 financial institutions as to what they should be able to provide than I can find with the smallest organizations.

We could not agree more. We view just digital technology is a great equalizer, right? The technology and the landscape out there and everything that you can do with it. I'm just curious around any other findings in the reports you'd like to highlight, things that stick out that we didn't cover today?

Well, I think some things that have come up since the report. ChatGPT. It was part of -- we touched on it a little bit. We actually interviewed ChatGPT about the future of banking is our last chapter of the report which actually worked out phenomenally well given the fact that we did this interview in the first month that it was introduced back in November. But the reality is the ability to look at conversational transformation, conversational AI to build content where instead of you looking at a website and saying, I'm going to search for the right credit card that I can actually use Chat to say, here's what I need, help me solve this. And hopefully, your financial institution will not only look within their own portfolio, but we look elsewhere and say, we can't help you for exactly what you want, but this is the way to do it. And it can be done with digital technology as opposed to a human on a phone, who doesn't have always all the tools you need. So that's one of the things I was to take where we really hadn't expected because it was just a startup. And one thing we've seen recently with Silicon Valley Bank and the fallout around the different organizations that have had challenges. Initially, we had consumers move some money out of smaller banks and into the biggest banks for security. I think it did show as we look at that the regulations worked. It may not have worked the way we all thought it would or the fact that we gave insurance to everybody, we have to think about that kept the entire industry intact that made it so that the technology companies, the startups, the fintechs didn't fail because if they had failed we weren't aware of all the relations they had with the bigger financial institutions and what the ripple effect would be. I think as we look at the trends and the megatrends going forward, I think we still look at data and analytics. I still think we're looking at democratization of data. We look at engagement as opposed to just experiences. We look at leadership being the one thing more than any that defines whether all the other parts are going to work. We also look and say, how do we fix the automation element in the back office to make it sort of the top of glass which the way it should. Now what I'm hoping is that in the near future, my mobile phone on a daily basis is going to give me a recommendation from my financial institution, not just about what I should do in banking, but what I should do in other areas of my life that they're aware of. At the end of the day, the identity component is really going to own the market. Is identity could be owned by Amazon, Apple or my financial institution, who has the least amount of bias toward the stake in is probably the financial institution. So what I want to do is I want to say, how can we move forward in such a way that work on behalf of the customer, not just under second savings account, their CD, their investment services. On an embedded banking realm that says, to getting back to the very beginning of our conversation or my bank can go, "Hey, by the way, you want us to do an automatic transfer, you want to say for the next big ultra festival in Miami next year, and we can make sure we get the ticket for you now and do it on a buy now pay later basis or you want to see the best fire show in the world, let's go to Italy together."

I love that. That's a nice way to actually pack it and tie it back together. Just a couple more things that have come up actually questions, and this question comes up almost weekly at this point. But there's such a focus on deposits, deposits, deposits, growing deposits. So if you think about the trends and some of the learnings and the report, anything you want to share as people are thinking about digital and different strategies and things that you've heard around deposit growth?

Well, it's indices. It's one thing when you're talking about a checking account, it's another thing when you're talking about wealth management or CDs even. CDs are a legacy process. Do we make it easier or hard for a customer to find the right CD to stack the CDs in such a way that works to their benefit. Are we asking them the right questions to build the right solution? Or are we simply taking orders? With the ability of AI now to actually build better solutions for each consumer. Is it better for you to say, "I want a 1-year CD I need $10,000, I need a 2-year another CD of $20,000 or another one of $30,000." Or is it better for you to say, "I'm trying to protect against future rises or falls in the marketplace. I can accept a little less return to make sure I don't lose anything in the meantime, and I need accessibility to money. What's my solution?" We need the flexibility and we need to ask the question to get to the real crux of what the consumers wanting to do as opposed to always [indiscernible] to ask exactly what we have or worse yet to pick from the menu. At the end of the day, when I go to a restaurant, I enjoy the process where I go, tell you what, I love seafood. I love Asian techniques. I want you to select what's best for me. And they don't just do it, they ask me additional questions. Do you like starches? What's your feeling about this? Have you ever had the Korean barbecue, whatever it may be. But that interaction, that engagement gets me to a better experience I would have ever had otherwise or even better than if I was having to only stick with the menu or got told, I'm sorry. This is exactly the way we have it. And they have all these caveats on you can't split. You can't do this. Now which one is a better experience which way makes you realize that the organization working with is working on your behalf. And so I think as we look at deposits, we have to get out of our own way and not do things what we've always done. I'm saying we have 4 different CD types. We have different investment types. You can't take them out. Let's be clear, let's be transparent. More importantly, let's be mix so these are customizable investment solutions when we ask questions to get to where the customer really may not have known they had to go as opposed to be thinking, I only have 4 options.

Excellent. Excellent. Well, just last question and more of a comment. Any feedback for Q2 or the vendors out there? Anything that you'd like to share with us, things that we should be thinking about, how can we be more in service of the industry and be most helpful?

Great question. And it's one that I'm getting more and more. I'm probably doing as many presentations to sales teams of solution providers as I am for financial institutions. I wrote an article about 5 months ago, I think it is that solution providers aren't selling what bankers are buying, and it comes back from my sales background. That was a sales selling to banks for a long time. It also came from my recent interactions with financial institutions that I am too busy to implement the next big thing. I need the smaller things that are going to make me a hero today. So the one thing I'd recommend for solution providers. Number one, understand your corporate vision but don't stick to that as you're trying to sell the financial institutions. Tell them what your vision is, but then ask them, what are you trying to solve for today and bring that solution to the marketplace. You make it a small win but you're going to get a better relationship and you're going to get the trust that we're all looking for right now. I mean I spoke to your team today and said, while we have an amazing platform in Q2 around mobile banking and mobile services, the reality is we may have to compartmentalize some of these to say, "I need to be implemented against small business only right now or I need to be implemented against deposit services right now." And it may not be the big win that everybody would want both from the consumer or customer and the third-party solution provider. But at the end of the day, you're getting done with in today's environment with the economic uncertainty that people are ready to buy. And that's a better win-win for everybody.

Excellent. Appreciate it, Jim. So just for fun, because you said something a minute ago, which I loved buyer works in Italy, Ultrashow in Miami, which one do you pick?

Well, you knew the answer to this because we talked about it before. It's probably Springsteen in Hyde Park in July. It's a little bit of everything. I'll probably pick a little bit, see if there's an EDM festival as well in an area because if I'm going to go to on [indiscernible], I can't just do that, but I'm also foody, so I'll probably visit a few restaurants as well.

That sounds amazing. Well, Jim, thank you so much for the time. It's always a pleasure.

Thank you. Appreciate it.

Love the discussions, and I really want to thank the audience and for joining us today as well. You should see a link in the chat to download the report, it is an amazing report. There is a lot of great content. It is a media report over 75 pages long with really, really useful advice and great insights into the recent trends. So thanks again, everybody, and that's a wrap.