Finextra sat down with Chis Ward, EVP enterprise payments for Truist Bank to talk about what he sees coming in the future of payments.
Truist is among the top 10 in the US and 67th in the world rankings by assets ($535 billion.) As a large bank, there is opportunity for differentiation and specialisation that Ward believes helps Truist stand out among its regional and national peers.
Ward joined the Charlotte, North Carolina-based institution, a key sponsor of the AFP conference in Nashville, over two years ago. Previously EVP and head of data, digital and innovation for PNC, Ward had the honour of presenting the finalists and IBM as the winner of AFP’s The Pinnacle Award just before keynote speaker Malcolm Gladwell took to the stage at the Music City Center.
With a strong background in treasury management honed through roles with PNC, Capital One, and Wells Fargo, he shared Truist’s purpose, that it’s all about the customer. “We’re really trying to focus on being the trusted payments provider for our clients.” And that, he said, means “speed and simplicity.”
In today’s economy, Ward explained, the typical customer, no matter what their size or scenario, wants things to be simple with their banking, just as – in the case of small business or corporate clients – their own customers seek the same objectives.
“I describe things as the three ‘S’s’ – which are really simplicity, speed and safety. Everybody wants a simplified experience, but they also want to transact in a safe, sound manner, so when you’re sending money to somebody, you want to make sure you’re sending it to who you intended it for. If you think about where things are going – and as companies are trying to do more with less, how do you do more with less? You make things simple; you have them done in a safe way.”
Ward is also a board member of The Clearing House – one of two key promoters of real time payments in the US with FedNow, and represents Truist on the Early Warning/Zelle management committee. When asked about Zelle’s expansion and fraud experience, he’s enthusiastic about the product’s prospects and pragmatic about its problems. He referenced a key point from Gladwell’s keynote presentation, relating the “asymmetrical” nature of many problems, meaning that sometimes problems – or benefits – stand out as common issues when actually they are uncommon relative to the norm.
“We have a tendency to focus on one or two [Zelle fraud] stories, painting [a situation or service] with a black brush,” he said. Further, noting that where the industry has been progressing and trying to provide safety and soundness, and really trying to manage fraud, “I think we’ve been doing an excellent job, and I think if you do comparatives to other [payment systems], we do a really great job of trying to help protect people. But, also, everybody has accountability in transacting. If the deal’s too good to be true, you probably shouldn’t [do it] right? “
With his background in technology, especially on applying it to solve common – and not so standard – cash management challenges and problems, what’s Ward’s view on the future of treasury and payments?
“I think technology will continue to evolve as everything. People like to do certain things in particular ways, consumers especially. People like using Zelle so they use it.” Ward also mentioned another Early Warning product. “There’s a place for everything, and competition is great. If you look at what we’re doing with Paze [automated online checkout solution] and other things, as an industry, I think that’s all really going to be helpful for the consumer. And once again, creating a great way for consumers to be able to transact, as well as businesses, in a safe secure manner.”
What will be the impact of ISO 20022 standardisation in the payments world? Will its capability to provide easily applicable remittance details with an electronic payment finally allow the US bank system to rid itself of cheques?
Ward is at best skeptical this will happen, or at least right away. “The sad part is, the reason why the cheque is so effective, is that most people make the cheque and the remittance data in the same envelope, and you actually know what the payment is. And so, for all the people who disconnect the payment from the remittance information, that’s where people get frustrated with electronic payments, because they actually get the cash, but can’t apply it. Will ISO enable you to get richer information? Absolutely. But you have to send them [payment and remittance detail] together, And that’s really the crux of the matter, is that we actually have to get people to make payments with data at the same time. You think about how we’ve got expanded capabilities and Fedwire and CHIPS and ACH and RTP. There’s definitely the ability to do it.”
Ward said it’s a question of customer preference, habit, providing simple solutions. “As I tell people all the time, when you’re getting ready to transform payables, walk down and talk to the receivables people at your company – and ask if they’d like to receive payments that way, and if they would, then you’re good. But, if you’re gonna make an electronic payment and send a PDF by a different route, vs. when you get the cheques and the remittance information together – that’s why works so well. I’m not advocating for cheques, I’m just saying…”
We also asked Ward if he believes AI will have a real impact on the banking of business clients. He sees its advancement into common usage as a long-haul process. “I think you would be crazy to say it isn’t [going to impact business banking practice] but we’re probably in the first year of a ten year [cycle]. If you think about how technology evolves over time, I think there are lots of great things that are going to come with AI. You’re going to spot trends better, detect fraud better, which most big banks are doing behind the scenes now, but the businesses aren’t doing it as much. And will you maybe spread a company’s financial statements using AI or use the machine to do that vs. somebody – and then have that person focus on judging the findings? I think that is actually gonna happen. Now I say that all in the context of AI being used for nefarious purposes as well, right? So, you’ve got to balance [these developments with the fact] that cybercriminals are always watching. I tell people all the time – you’ve got to have the right policies in place, and think things through. At the end of the day, to take advantage of AI, you have to have your data in good shape,” with people onboard who know how to use that data and work with it effectively, he asserted.
“They’re models, they repeat things, right? It goes back to the fact that you’ll have to continue to refine things just like you would in any system. Look at where the car was when Ford created it, how cars are today – the engines are completely different, air filters are different. Just as in any industry, in anything, there’s gonna be an evolution in AI.”
Ward’s thoughts on RTP in relation to business management? “I think it’s, in the US, the new frontier to solving a lot of the [challenges] we were talking about with remittance and payments going together. Most payables and receivables departments spend a lot of time answering questions like ‘Where is my payment?’ or ‘Did you send me a payment?’ and so forth. The beauty of a real time payment is that while it’s real time, you can do it when you want it, but it comes with all kinds of confirmations. And that’s the only payment system that we have [in the US] where you make a payment and you actually get notified that it was received by the recipient. And in addition to that, you can take it one step further and provide a confirmation back that you’ve applied the payment [to the beneficiary’s account.] That ratchets down a ton of ‘noise’ (associated with many payment transactions.)
“I go back to my earlier statement: people want speed and simplicity, and speed involves transparency around what’s happened. I can point to many cases where small businesses, medium-sized businesses actually do want to make faster payments because of how they are running their cash flow. They’d like to make a payment as close to possible as when it’s gonna be due and know that it got there to a very critical supplier, as opposed to just paying as late as you possibly can, because everybody else is doing so. There are all kinds of reasons why I think it’s actually advantageous, and it’s going to help in the future, and the information, in addition to the transparency, is going to be transformative over time. But it’s just going to take us more time because, unlike other countries where they can mandate, we don’t have that legislative capability. I mean, we need an act of Congress.”
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