Banks are rarely considered the innovative ones when it comes to corporate financial services and treasury management. But with decades of experience in the field across multiple markets, Capital One’s new Head of Treasury Management’s Product Management & Innovation, Patrick Moore, will take a multifaceted path to developing new ways in which the bank’s corporate clients can manage their money.
MPD CEO Karen Webster discussed the position with Moore, and while he’s only been on the job for a few short weeks now, he has some expansive ideas about how to approach TMS development. The keys to success, he says, are within data, and within their corporate clients themselves.
KW: This is a really interesting role that you have, especially in thinking about innovation in a very digital financial services environment. What appealed to you about the opportunity, and what are some of the things you want to accomplish in the role?
PM: I’ve been in the treasury management and payments arena for 30-plus years, spanning operations, product management, managing corporate sales teams. I’ve had the opportunity to live in London for about two years as well as in South America during a time when that market was growing at double- [or] triple-digit rates. Over the years I’ve gotten the full spectrum of how clients across multiple market segments and cross-geographies are leveraging treasury management products.
As a result, I have an appreciation for how we need to customize our solutions to those perspective market segments. They all, in some way, shape, or form, are global in nature. Having that regional view has been critical.
Here at Capital One, it really is the focus on innovation that was the drawing card for me. When I started to have conversations with management teams here and understand their needs, it started to crystalize how innovation translates into the treasury management arena. Typically, you don’t think of banks as being innovative. But Capital One has a long history of it. It demonstrates the commitment to innovation and the leveraging of technology. It’s inherent in its culture, as well as the way people here think about problem solving, the way they collaborate, and, most importantly, the way we develop these innovative solutions. We take a client-centric view – and inward view out. We don’t develop around our hierarchy. We try to understand, from the client’s perspective, the pain points and how we can be a better enabler to work through that, to become more efficient, create a better end-to-end experience.
That was really the draw – their commitment to the business, to be a digital enabler in the evolution of treasury management and leverage the technologies and data that’s available on the market.
KW: That’s quite a compliment. You talk about being focused on client needs. In your view, what is broken in the treasury management process, and what are you looking to tackle in terms of your first year at the organization?
PM: We try to develop products that we think clients need, as opposed to understanding, from the client’s perspective, their environment and day-to-day processes, and their pain points. And we’re really not even talking about products – we’re talking about how we problem solve for the issue at hand. That’s a very different lens through which Capital One approaches product development.
I’ve worked at seven banks in my career. The whole concept of how we at Capital One develop and embrace the agile methodology, not just from a technology perspective, we institutionalized it. It’s part of our DNA. Even from a product management perspective, the way we do our planning and engage with our partners, our participation in the product lifecycle, is all within the context of this agile methodology.
We have new roles within product management that in my time in product I’ve never staffed before. Instead of talking about control disbursements, or ACH, or lockbox, and figuring out what the value is that we can expand upon, the flip of that is really understanding the pain point the client is experiencing in terms of collecting payments faster, being able to reduce receivables, increase credit availability to keep their cycles going, and really understanding where along that continuum the pain point is.
KW: Where do you see these client pain points? There is a lot of ground to cover, but where are clients screaming the loudest?
PM: I think there are two or three. This plays one of our cornerstones of success, and that’s around data. I do think that information is king, regardless of the size of the organization. Understanding who is paying for what, being able to reconcile quickly, enabling the updating of their internal systems – which are often homegrown, legacy, and built over time – I think that data is absolutely a vital, critical pain point that banks can help customers with. Given my history and how we’ve leveraged data over the years to expand and be innovative, we have a unique opportunity to be in a position to exploit that.
That’s one. Second is the integration points in terms of client systems. They’re often fragmented and not always inherent in the size of the company. It’s always shocking. Even when I was at other organizations that would cater to multinationals, you would think those organizations would be the most sophisticated, automatic and technologically advanced. That’s not always the case. I’ve met with large corporate that are still doing things off of Excel spreadsheets.
Size doesn’t translate to sophistication, and as a result I think the integration with banks and the ability to enable a seamless flow from an accounting system into a bank’s back-end for payment processing, or, conversely, receiving updates relative to receivables – we’ve got a unique opportunity and it’s a pain point for clients. If we can streamline those interfaces, provide for fewer interfaces that clients need to integrate, manage, and support, and create a win-win situation, it will drive more straight-through processing. That’s an area we’ll continue to explore.
KW: Are data needs more important than payment needs? It’s an odd question, but we focus a lot on the act of making a payment. But is it the ability to make a payment, or the data and the process around the payment that is driving most of the pain?
PM: I do believe it’s the latter. In some respects, if you’re able to create seamless integration points, it’s a bilateral flow. There is an iteration from data to information to intelligence. For years, banks have been providing data in its rawest form. Now, there are more sophisticated, pre-formatted reports and cash flow forecasting delivered through an online channel.
The next evolution of how we take all of that information that a client has about their trading partners, and how we help them elevate to the next level of managing their business, is figuring out what intelligence we can help them glean relative to better payment terms, credit relationships with their partners, and the like. So, I wouldn’t say it’s data – I think it’s information, right now. I do think that the answer to your question is less about the payments, per se, and is about the process flow through the various channels and chains to get payments out the door and get information back.
There are still some clients that are doing their positioning online and in an Excel spreadsheet and manually doing a wire transfer online. Wouldn’t it be nice to create an integrated experience where, based on that workflow analysis, it populates a generic payment screen that, based on the timing that a client wants a payment to settle, we have the ability to send it via wire transfer or ACH?
KW: That sounds like Nirvana.
PM: We’re not that far away from that technology. That’s where we have a unique opportunity – having that perspective from the client’s viewpoint, and their pain points.
KW: The thing that I thought was interesting in your background is your expertise in financial crime, and it seems that data is a really important element of it. What about your experience in financial crime syncs up with treasury?
PM: It’s interesting: Five years ago, if someone told me I would end up in a compliance role, I would have laughed, quite frankly. But I have to say that it was an incredible experience. I learned things about the way a bank operates that, having worked in a bank for 25 years, I had no appreciation for. It’s been an illuminating experience, and I think I was unique in that I wasn’t a compliance expert in the role that I sat in initially. I brought a business perspective to the discipline. After spending three years in that space, then coming back to the line of business, I think I am in a much better place to understand the importance of how, as we build products and maintain the ones that we have, a heightened sensitivity around risk management is key.
It is just so vital. Given recent regulation and the sensitivity and importance of complying with regulatory statutes, it has made me much more informed in terms of the questions to ask, and the lens through which I look at certain things. It will be critical as we continue to push the envelope in terms of innovation and new technology – having that risk mindset and being attuned to those particular points of exposure. It will strengthen what we ultimately deliver to our customers, not only in protecting the banks, but also being a trusted advisor to our customer.
KW: You’re also leading the small business side of things, too. From your perspective, how will you approach that market segment?
PM: The small business market is ripe on so many levels. One, it’s just a booming market with huge potential for deep penetration. I also think that the way we segment the particular markets allows us to treat them as three different segments.
On the lower end, they’re looking for simple, out-of-the-box, easy to use, intuitive, non-sophisticated, non-global solutions. As you move up the continuum, the client becomes more sophisticated, and that’s where you get into the more robust product offerings, with potentially international payments. As you continue to move up, that’s where the potential is for integrating accounting packages, ERP systems and so forth. One of the challenges we face is how to build out products that can travel along that continuum. In some cases, it’s not feasible, so it’s important that we work closely with businesses to understand what their needs are, and build potentially custom products that meet them. I think banks fail in trying to build a product to satisfy that whole continuum. I’ve been there before. I’ve done that, and it hasn’t worked – it creates tremendous frustration. That’s that inward-view-out, as opposed to being more client-centric and understanding pain points. We need to be responsive to that, and that will drive our innovation. In the few weeks I’ve been here, in the back of my mind every conversation we have with clients is always about whether a solution aligns with their business segment and is scalable.
KW: It sounds like a fascinating opportunity, and certainly you’re an innovator yourself. It will be fun to watch what comes out of Capital One on the part of financial services, especially on the B2B side. The opportunity is massive.
PM: I agree. And regardless of the size of the client, what they expect is often a result of their own personal experiences in terms of how intuitive and easy a solution is – how many clicks it takes to get something done. It’s definitely influenced the way we approach and problem solve. It’s a human-centric view that’s driving the way we’re thinking and problem solving.