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Prakash Pattni - The winners in the Financial Services will be those maniacally focused on customers

10 minutes reading time

 

Prakash Pattni is MD, Financial Services Digital Transformation, responsible for partnering with financial services clients to deliver their transformational outcomes through IBM Cloud. 

Prakash spent over 20 years working at esteemed banks, such as JP Morgan and Goldman Sachs. He brings deep financial services experience gained across technology, investment banking operations, and finance, and has led numerous initiatives including public cloud transformation, agile and product model implementation, and infrastructure modernization.

We are fascinated by how you came to this junction in your career. You've worked at some very well-known brand names in the banking business, JP Morgan, Goldman Sachs, and then at IBM. Tell us how did that come about? 
 

In 20 years in banking, I've seen how much technology has changed. How much it has impacted our businesses. I remember many years ago when I was at Goldman Sachs, how we used to trade contracts.

People used the phone and make deals and then we would fax contracts to clients. And then you had teams of people responsible for managing that process. All of that's now been automated. And that's part of what led me to IBM ultimately. I spent a lot of time with the banks working with them and their clients, but also largely in the technology space and I could see how that was going to be a pivotal driver of change in this industry. 

And after spending many years there I was predominantly working on the public cloud, helping the bank move to and leverage the cloud. 

As we got further down that journey, I was running into a lot of problems around: How to protect sensitive data? How do we work with partners like FLOWX.AI and others? And there were lots of internal barriers which were slowing us down. So when the opportunity arose to join IBM, which works with 47 of the Fortune 50 companies and has deep experience in financial services, it felt like a really good fit for me to be on the other side.

And there were lots of internal barriers which were slowing us down. So when the opportunity arose to join IBM which works with 47 of the Fortune 50 companies and has deep experience in financial services, it felt like a really good fit for me to be on the other side.

Customers are used to almost instant gratification, they want the same experience from the banks as they get from ordering food or booking cinema tickets. They want seamless experiences, which are personalized too.

Do you think it's fair to say that software is going to eat the world?
 

Most of these companies that I worked for have thousands of developers. Just the IT department in JP Morgan it's bigger than many software companies, in terms of development capability. Most organizations see that they have to transition and become more like software companies, driven by technology. I think you're seeing that happen in almost every industry. We see it from ordering food to platforms like Airbnb.

What do you feel is the most important change that you're able to bring to a technology company coming from your financial services industry background?
 

I think it's the understanding of all of the client's internal processes. I understand what they have to go through with the regulators. You can speak that language and you've really experienced the problems. So it's not just a case of “Here's a new interesting technology”. It's “What's your business problem?” and “This is how technology can help you address that problem”, be it speed to market or evidence to the regulators. So I think that's the different lens that I can bring to the discussion and the story. 

And IBM has been doing a lot of that. They've been hiring more people with industry experience and not just in financial services, but in other sectors, because they realize it's really important to be that customer-focused.

As users of financial services - banking, insurance - when we interact with these companies it looks like the experience was designed for the compliance department. How do you make sure there is a great customer experience? 
 

I think you're absolutely right. Sometimes, people over-engineer these things. They put on the hat of the compliance expert. I always find the simplest thing to do is to really put yourself in the customer's shoes and to always have that top of mind.

We have capabilities at IBM, we call it the design thinking type workshops - where we think about the persona: who is the end-user, what they are doing, and what are the steps they need to go through. In this digital-first world, customers are used to almost instant gratification, they want the same experience from the banks as they get from ordering food or booking cinema tickets. They want seamless experiences, which are personalized too. And I think that's been one of the challenges for traditional banks: it's all that complexity that is introduced by that legacy, which makes the experience clunky.

I always find the simplest thing to do is to really put yourself in the customer's shoes and to always have that top of mind.

When you're talking about user experience, how important do you feel is the customer experience versus the employee experience? Because a lot of companies are just looking at customer experience and maybe the employee experience is often forgotten. 
 

I think people do forget that there are employees involved in these transactions. And if the employee is having a poor experience this will reflect on the customer experience as well. 

The companies that are really successful in this space focus on both. And part of what tools like FLOWX.AI can bring is to actually get you to think about both the customer and employee experience. It's critical to get a holistic solution that works for everyone because otherwise, it's a little bit mixed in terms of the end result.

We've done some recent studies on what people think about their organizations, whether they enjoy working for them and whether they'll be there long-term. IBM got good results but I've been at other organizations where the customer net promoter scores were positive, but internally the culture was not that good.

And a lot of that is around how employees are treated, the processes and systems that have been built, and that people are using. People aren't going to be happy if they're having to jump through a lot of hoops and bureaucracy and processes. In recent years I’ve seen a real focus in the corporate world on simplifying it. 

Platforms like FLOWX.AI actually get you to think about both the customer and the employee experience. It's not just about the end customer, it's about the end-to-end experience and all of the parties and all of the personas involved in that transaction. I think that's critical to getting a holistic solution that works for everyone.
This brings us to the topic of system integration platforms, liberating some of these core services, some of these legacy systems, so that these financial institutions who have built enormous trust over the years, can keep up with those neobanks and those fintechs. How do you see IBM playing a role here when we talk about creating growth in financial services?
 

I think our key areas of growth, and the technology that we've built, really go to the heart of some of the problems that the financial services industry is grappling with. 

So on the one hand we have banks that have access to our customer's most sensitive data. They want to obviously use cloud technologies to drive innovation and they want to work with fintechs and organizations to help in that space. But there's also a lot of risk that comes with putting sensitive data on the cloud, unless you protect it. We've heard about compromises that have happened and you can lose trust very quickly with your clients.

Some of the solutions IBM has built have been around confidential computer solutions, which allow you to protect that data. We're also working very strongly on trying to address concerns that are out there around portability and vendor lock-in. So our clients and regulators are getting concerned about concentration risk and having too many critical providers or fintechs sitting on the same platform.

Part of our strategy has been around building hybrid cloud solutions. That allows you to port across different clouds, but also there's a lot of legacy systems. So we don't see everything moving to the cloud. Ultimately clients are realizing it's going to end up being a little bit of a hybrid model with multiple cloud providers and legacy systems.

So some part of what we've been doing is through OpenShifts solutions. And then the whole reason for buying Red Hat was to address that part of the market, to build solutions that are hybrid in nature and give you that portability. But also just a point about fintechs, we see them as critical partners in what we're doing, but also in continuing to evolve and drive the financial services industry.

Companies like FLOWX.AI are in the vanguard of delivering the capabilities that allow financial services customers to truly meet their digital transformation goals. Rather than having to redesign legacy systems, which can be complex and time-consuming. Just the ability to allow customers to integrate modern solutions with existing technology through plug and play functionality really allows you to deliver value, multiple times faster. 

But I think it's trying to bring all of that together and make it really simple. So I think that those are some of the things that we're working on. And also partnering with companies like FLOWX.AI. 

And speaking about that integration and that unified experience around multiple existing systems, I feel there's this one unicorn that banks and generally financial services companies have been chasing and that's the mythical Omnichannel. How real do you feel the true Omnichannel experience is in financial services? 

Prakash: I think we're getting closer to it. I know there are so many channels out there. So we're working with a number of companies in Africa as part of our FinTech program, where the traditional channel of going to a physical bank somewhere is not possible because they're farmers working in rural environments in the middle of the country and it's a very long way to get to them.

So mobile banking is really driven by the democratization of financial services, and everyone gets access to it. And now, there is the fact that you have so many different channels through which you can access these services.

It's all about helping make financial services more available to the wider population and it's about improving people's lives, ultimately. I think you have different channels with different levels of experience, but I think that's now equalizing a lot.

As the technologies become better and more available and as the cloud comes to the fore I think all of that is now starting to become a lot more of a reality. We're not there yet, but we're pretty close to it. 

Let's double click a little bit on this omnichannel topic. It would be really interesting to understand what you saw change over the last few years. And what are some of the challenges with deploying mobile experiences? 

Most of the clients we work with have a mobile channel and what we've seen happen, especially over the last couple of years with COVID has been an acceleration to mobile-first experiences.

I've got a bank account in the U.S and occasionally, I receive checks from the U.S and when I was making regular trips to the U.S I would deposit those checks. But now I have a mobile application and I just scan it and it gets deposited. 

All of that just made life so much easier. Now that in turn has had an impact in terms of how we build our technologies and being able to scale up very quickly.

Clients may build their technology to only cater to a certain volume in a particular channel. And that will create latency or it'll slow things down from a customer point of view, but now people realize that they need that ability to switch very quickly between channels and to be able to scale up and cloud technology enables that. A lot of what we're doing is working with companies that build architecture in such a way that you can flip very quickly between channels. 

So as far as the customer are concerned, they're not really experiencing a downgrade in functionality or capability or speed, but in the backend, there are a lot of things going on which means that this all feels like a very consistent common platform from a consumer's point of view. 

This also requires them to do a lot of re-architecture, just to be able to have the application of that capability move between these channels. And I think that's where FLOWX.AI plays a role, the capabilities you have to address some of these issues of cloud acceleration and application modernization. 

You mentioned a couple of key things there - architecture and scalability, and I feel there's one other thing that comes along with this exposure to new channels: security is becoming much more interesting as a topic overall. 
 

I think you hit one of the critical barriers that we see with clients: as they start to move towards the middle and back end now, they're starting to hit some of the more sensitive data and some of the systems that process that data.

And there are lots of regulatory concerns that kick in when you start to move that type of data to the cloud. So we have our confidential compute solution which allows clients to ensure that when they're processing their data, it's done in a very secure way, that if they are encrypting their data, only they have access to the keys and no one else. 

So all of this is helping provide that confidence that that data is safe and secure. And that was partly what drove us to build the IBM cloud for Financial Services. We were seeing clients solve the same regulation, and security problems over and over again. So we wanted to build something that would allow them to consume the cloud in a secure way, at speed. 

 Also, the mindset in financial services is changing. Now you find it's very much more of a partnership.

They [banks] realize that they have to work with partners in the FinTech community like FLOWX.AI who bring these new solutions that can help them accelerate and deliver ultimately for their customer. There is a paradigm shift.

Also, you've seen enormous investment. And you've got to leverage this and it's going to drive so much more innovation, and it's all going to help the banks. I think also the technology that's coming through now is at a different level from where it was a few years ago.

What are some of the things you're really hoping for in terms of the solutions that can come to bear in the coming years? 
 

It's a really exciting time just to be in financial services. I think with the growth of fintechs, with the technology that's coming out with the move to the cloud, I think all of this is just leading to massive growth and innovation. 

Also, some of the new developments are coming through -  like quantum computing,  that's going to completely change the dynamic and the environment. 

And I think also just the difference in how people go about doing development is going to mean that we're going to address some of these cultural issues that we spoke about. Operating in agile ways, doing sprints and pivoting and taking feedback rather than trying to do these big long developments, that by the time you've delivered it, the market's moved and you're delivering something that's outdated.

Do you feel there's a line that's getting drawn between the kind of the winners and the losers of tomorrow? 
 

I think you're going to see the winners are the ones who are maniacally focused on their customers. I think there are still some organizations that may be still inward-looking. That's going to be the big demarcation here. 

The ones that are really looking to the future and willing to take some of those risks on some of these new technologies. And really focus on their customers. These are the ones that I think are going to end up being the winners.

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