Oracle Cloud Platform Virtual Summit: Banking on data
MAXIMO DIEZ BLANCO: Welcome to the Oracle Cloud Platform Virtual Summit Banking on Data. My name is Maximo Diez Blanco. And I am a Vice President of Oracle Financial Services Industry Strategy Group. It is almost inevitable to start any conversation today without making a reference to the pandemic. The financial services industry is immersed in a profound transformation to adapt their business operations to be able to serve their customers remotely while still providing key financial support at a very difficult time and challenging time for all of us. Our goal today is to share with you the unique business insights and technology innovations that are helping our customers navigate the social and economic conditions driven by the global pandemic.
Hey, I'd like to introduce our three panelists today. Let me start with Vijay Krishna, Senior Vice President at Mastercard. Our second panelist, Tim Walsh. Principal at Deloitte Consulting. And then we also have the pleasure of having Eric Probst, Senior Manager for Fraud Prevention at Certegy Payment Solutions. Thank you very much for joining us, guys.
Great to have you. So Vijay, tell us a bit more about your role at Mastercard. VIJAY KRISHNA: Firstly, thank you so much to Oracle and yourself for inviting me to this conference. I'm delighted to be here today, and along with my fellow panelists Eric and Tim.
In my role in Mastercard, I lead the product management function for Mastercard Send. And Mastercard Send is real time peer to peer and account to account digital payment solution. My team is responsible for the product strategy and the commercialization of the business. Which really means that we are working with our government partners, our banks, acquirers, digital customers, and fintechs, to drive real day-to-day use cases like B2B transactions or disbursements. And giving people a very safe and secure real time payment option.
So that that's what my business does. MAXIMO DIEZ BLANCO: Thank you, Vijay. I'm really excited to hear about Mastercard insights.
And I look forward to hearing more about that throughout the panel. So Tim, tell us about your role at Deloitte. TIM WALSH: Thank you, Maximo.
As you said, I am a principal in Deloitte Consulting's banking and capital markets practice. And what that means is I spend all my time with US and global financial institutions on a number of their large strategic programs. Now that can cover everything from compliance programs, and tax programs, all the way through large scale front, middle, and back office transformations using technology, and artificial intelligence, and other forms of innovation.
So I'm really excited about where the industry is. And really excited to share my observations with this audience. MAXIMO DIEZ BLANCO: That sounds great, Tim. I really look forward to hearing more about your insights, and talking to all of those large financial institutions. Really look forward to that. Hey, Eric, tell us a bit more about your role at Certegy Payment Solutions.
ERIC PROBST: Maximo, I am a senior manager in the Risk Analytics and Fraud Prevention Department with Certegy Payment Solutions. We are primarily, right now, a check processing company. But we do payment processing. I've been working in the risk department and preventing fraud now for 15 years.
MAXIMO DIEZ BLANCO: Excellent. Thanks again. Great to have you on the panel. Now, if you're OK, let's get started. Vijay, let me start with Mastercard. When COVID-19 hit, financial services organizations around the world struggled, but also made a huge effort to adapt to how people get access to their financial resources and get access to their money.
What was the biggest challenge that Mastercard faced during the crisis? And how did you overcome that challenge? VIJAY KRISHNA: Yeah. I mean, the crisis was tough for everyone. But let me start with the positive aspect of what we saw from the crisis from a payments industry perspective.
One of the few positive aspects was the fact that this pandemic actually led to an acceleration of previous trends that we saw in terms of conversion from physical payments like cash and checks to digital forms of payments, which is always safer, et cetera. And that entire adoption actually got compressed into months versus years that we were expecting. So as a result, what we've seen is that there is a considerable number of people who are using their contactless cards to pay for groceries for instance, which is day to day behavior. And there's a lot more of e-commerce. And as we see this trend, and we are looking at these trends, we are also seeing that is becoming very sticky behavior. So 7 out of 10 people that we surveyed in the recent past said that they expect to use a contactless payment card this year.
So this is good trends. This is important for us from a payments industry perspective where the ancillary benefit is that we are driving out cash and checks that really kind of are a drag on the system in a lot of ways. But on the flip side of it, we also actually saw an uptick in terms of fraud. And what happened was as people went more online, a lot of people were actually using digital payments for the first time.
And fraudsters was looking at opportunities to take advantage of all of the chaos around. And they were preying on people's anxieties. And I think that's where we realized very early in this pandemic that as these positive trends emerged, we had to step in and kind of play a part as a network. And we did a few things just to mitigate this trend.
In the US, for instance, we committed to do $150 million funding for small businesses for financial security. We enhanced and rolled out more of a financial crime solutions and identity verification solution. But also very importantly, we used our data to help support governments globally to, again, give them insights and for financial crime solutions, et cetera, that would help them in their roll out of the aid that they were giving out. So this was how we stepped in to kind of mitigate the fraud that was coming in. The other trend that we saw, which was very again very early in the pandemic where our public sector teams in Mastercard were reaching out to our state and local government partners, was that they were finding it really difficult to disburse funds to the people in need.
So they had access to funds, but they weren't able to disburse of it in an efficient fashion or in a timely fashion. They were just not set up for it. And that's where we actually kind of looked at partners like Oracle, and we quickly came together to create solutions that we heard real time from our public sector partners that they were direly in need of. And that's where we kind of created this solution, which today we call Civic Assist. MAXIMO DIEZ BLANCO: That's great. Tell us a bit more about the collaboration that you worked on with Oracle during the pandemic.
VIJAY KRISHNA: Primarily, I think, what I really find exciting is that two organizations, really big organizations, came together selflessly to my mind. It was really with a common purpose and with the tremendous sense of urgency. And I think I can kind of talk about the timelines that we worked with.
But it all started with a phone call on a late Friday evening from the city of Los Angeles-- the mayor's office. They had created a fund that they wanted to disburse to people who were impacted by the pandemic. And as soon as they announced the program, they were absolutely overwhelmed by the number of applicants. And they had no way-- I mean, they had a few people in the back office ready to kind of look at these applications.
But they had no processes in place to take the deluge of applications. And they reached out to Mastercard and said, can you help us? That fateful Friday evening, we also wanted to talk to our partners in Oracle and said, hey, listen. Can we get together and help them? And then we actually started the process of creating what we call a Civic Assist today.
And in a nutshell, it's a modular kind of solution that we've created. A platform where Oracle has come in with its strengths, which is really a lot of the front end pieces where there is an application process, there is an eligibility process, there is an entire back office function that allows for decision making offline for a document upload process. All of that Oracle does really, really well is what Oracle brought to the table. And what Mastercard does well is to really provide the last leg in terms of how the pay that-- funds out. And where we actually use Mastercard Send, which is a real time payments network, which allows for immediate disbursement of funds to people's accounts directly.
And knowing the demographic that people working with, we also added a Mastercard prepaid card, which could be a virtual or physical prepaid card as an option for the recipient. So what we ended up doing in a matter of four weeks-- it was really actually, I believe, four weeks-- where we put this entire end-to-end solution. The mayor's office was delighted. They managed to actually impact 100,000 people. Disperse $36 million of funds in the span of three weeks.
And there was one joint solution from two organizations that were kind of working independently. But then came together for this joint cause. MAXIMO DIEZ BLANCO: That's a great story, Vijay. Thanks a lot. I'm so proud and thrilled about this collaboration with Mastercard.
Now, Tim, let me ask you the same question. As you said, you meet with some of the largest financial services organizations in North America. And for that matter some of the largest in the world. What were the biggest challenges that Deloitte's clients faced during the crisis? And how did you help them overcome these challenges? TIM WALSH: Obviously, the last 18 months has been very interesting for Deloitte's clients, and for Deloitte ourselves. And we had situations where whole operations had to go virtual overnight. And in some cases, these were operations that we're used to that.
In other cases, not. We had instances where contact centers had to be moved to people's homes overnight. We had instances where relationship managers that had built their business model around face to face interactions had to go to a virtual setting. So the move to virtual was absolutely a big deal. And I would say the other thing that impacted the banking sector is any large bank at any given time has a large number of projects underway.
And in many cases, those transformative projects were used to people in global innovation centers and project centers. And we had to figure out how to do project work virtually overnight. So there was a lot of disruption without question that occurred and incurred in the banking sector. It occurred across industry for that matter. What I guess what I've seen is just the amount of innovation over the past 18 months.
And just the creativity of our technology providers. The creativity of our clients. The creativity of our firm to rethink in many cases how work's done. And how do we really accelerate the move to digital. So I'm going to share a little bit more later.
But we had a large discussion about how work was done. But we had an equal amount of innovation in adoption of new ways to do work in the tooling to perform it. MAXIMO DIEZ BLANCO: Now, that's great, Tim. Thanks for that. That's super insightful. And just like Deloitte, we also work with some of the largest financial institutions oftentimes, together-- right, Tim? Deloitte and Oracle.
And we see some of the same patterns that you describe that are so really excited. And I want to single out a few that you mentioned. The dramatic change and speed of change from face to face the digital. You mentioned the projects underway. Those didn't stop. A number of them continued operating.
And then the third one, which I really liked was the amount of innovation that we saw through over the past [INAUDIBLE].. So thanks for that insight. That's great.
Eric, how about you? Certegy provides banking authorization and risk management at scale in excess of I believe it's $43 billion writing check processing. How do you see the biggest challenges in the past year for you for Certegy Payment Solutions? And how do you deal with that? ERIC PROBST: Maximo, it's been quite a year, hasn't it? In our business, what we learned are two things. One, checks are still a viable option for payment. And in the past year, or in 2020, we decisioned over a billion dollars in stimulus checks sent out to Americans. And we also cashed tens of millions of dollars in unemployment checks.
We also learned that there is a demand for contactless payment. Nobody wants to touch anything anymore. So we developed and currently are deploying bank pay, which is an ACH solution used on an app to pay for goods and services at the point of sale. From a risk perspective, this is a completely new. Traditional check controls are kind of going by the wayside because this is a ACH.
And what we're doing is developing and deploying machine learning, spatial studio, and graph studio in order to track and link fraud. And better protect consumers and our merchants. The challenge of safeguarding the funds being distributed.
I read the Wall Street Journal article that speculated 50% of the stimulus funds were stolen. And I hope it's not 50%. But we did see a large spike in checks being cashed fraudulently during the pandemic. And the key to preventing this is cooperation. With our risk management system, our analytics and tools we have put us in a great position to partner with the federal, state, and local governments along with merchants, banks, and consumers to protect funds. I mean, think about what we could have done with those funds that were stolen.
MAXIMO DIEZ BLANCO: Absolutely, Eric. And I think you brought again two great points I think resonate with a lot of us as individuals as well as with our customers. And how we put and channel all of that innovation for the good of the financial systems and individuals.
Detecting fraud. Again, channeling that innovation for better use in society. And I think it's a great thing.
And I thank you for that insight. So maybe let's change the pace a little bit here if you're OK. And let's switch to regulation, which is maybe one of those topics that it's always there in the financial services industry. It's very pervasive. And maybe it's one of the few things that didn't change the epidemic. Or maybe did.
What is the impact of in this context in the industry of regulatory change in your organization? And specifically, what are some of the considerations and requirements for regulatory compliance when selecting the right technology? Tim, what is the impact of regulatory changes that Deloitte from a consulting perspective you saw when working with your clients and their organization over the last 18 months? TIM WALSH: Absolutely. I think if there's one thing, Maximo, that we to be true is regulation is constantly changing on a global basis. Quite frankly as the market evolves and our regulators look for ways to evolve those frameworks as we go to things like real time payments, as we go to fully digitized channels, et cetera.
So I think it's safe to say that regulation on a global basis does and will continue to continuously evolve. And I think through that I think it's safe to say that the industry continues to look for different solutions, different operating models, and different ways to deploy technology and innovation to best enable the organization to both address regulatory requirements and, to a degree, try to be future-proof for what customers expect as well as regulators expect. And so we continue to see the industry as a whole have a host of programs around the deployment of new technologies and new techniques to meet and exceed regulatory expectations. If it's artificial intelligence in certain areas.
If it's using more intelligent driven workflows and automation in the processes. And then I think lastly it's how do we continue to further and further digitize the financial marketplace so all these really important aspects about contracts, and clients, and interactions is digitized in a way that we could drive a better set of compliance to both a jurisdictional set of regulations as well as a global set of regulations. So seeing a lot of evolution on the regulatory space. And an equal intense focus from institutions on using technology and innovation to meet those regulatory requirements.
MAXIMO DIEZ BLANCO: Yeah. That's a great point, Tim. Thanks for that. As you said, as the businesses have had to accelerate their change and evolution toward digital, the regulators have also had to adapt as I heard from you. New measures.
New controls. And so the industry as a whole is having to re-adapt. And technology it's actually being part of that strategy as well adapting to meet those regulations.
So great, great insight, Tim. Thanks for that Eric, perhaps a slightly different question for you. What insights on security fraud detection prevention that using real time data and analytics can you share again from a Certegy perspective? ERIC PROBST: So for us, fraud detection is taking an exciting new direction. The Oracle tools that we have available to us now include machine learning, spatial studio, and graph studio. Machine learning can help us on multiple levels. It can help us take our aging attributes in a statistical model.
And it can also give us a day to day alert of fraudulent patterns. We see us using spatial studio to track fraudulent groups graphically. So we don't have to block the Southeast of the country if there's a group in Tampa Bay for example. It'll let us micro-target those. And then kind of track their pattern if they're traveling on the highways.
And block the stores where they're heading to. And then graph analysis, which can link all this stuff together. So if somebody is using the same address over and over again, we can link that to all the different checks they're using-- the bank accounts they're using. And then block that. It's extremely helpful for law enforcement. We have an investigator who works with them.
And the link charts are crucial in prosecution. So with these new tools, we anticipate reducing fraud by at least 10%. Improving the customer experience by not declining the good people. Because remember, we're chasing 5% or less of the population while 95% of the good people are getting caught up.
So we want them to have a good experience while we're blocking the fraud. And I think these new tools will take us there. MAXIMO DIEZ BLANCO: Yeah. That's a great perspective, Eric.
And I thank you again for bringing something which we feel very close at Oracle. How we put our technology to use to the society to drive again, a safer world in fighting fraud, fighting financial crime. Again, to help us, our customers. Most of all customers improve our lives. And through the pandemic as well.
So that's great insight. Thanks for that. Tim, let me ask you this last question to you.
So COVID-19 has brought as we discussed significant challenge. But also great opportunities. We've learned a lot in the face of adversity in the last 18 months. And especially from a sustainability standpoint. Building a sustainable post-COVID future requires people to innovate. And we're discussing some of that as well.
Right? In a way that allows us to address those challenges and problems, and create new opportunities. From your perspective, what is the future of work look like, Tim, for the financial services industry? And what current trends mean for today, but also for tomorrow? TIM WALSH: As we look about now moving forward-- and we've been doing this research for quite some time-- we put things in three big buckets. We think about it in terms of work, workforce, and workplace as we think about of the future of work.
And as it relates to the type of work, in many cases, we're looking at the individual processes and the jobs that are being done by individuals as we fully digitize certain types of products and services. And some of these products and services go from intraday processes to real time at any time. We have to look at the kind of work that people are doing. And we have to look for ways how can this be effectively done virtually so as it relates to either operations or transformation. And then the second is, how do we use automation to the fullest extent to look at types of work that quite frankly I don't think a lot of people generally enjoy doing? And they and they quite frankly doing it manually doesn't keep up with the speed of an economy. And so we see things around like manual processes around reconciliations, or matching of contracts, or other contractual term documents.
How can we change the work that's done so it's stuff that keeps up with our real time digital economy, and it can be done in a virtual manner? So that's work. When I think about work force, what are the kinds of skills that we need for individuals to happen be it if they're in line relationship managers at the bank, if they're middle back office personnel at the bank, or the service providers that partner with the bank, what does that workforce look like as the marketplace evolves? So we always have, I would say, the traditional skills that you would expect. But we've seen a number of institutions put in place data analytics and AI accounts. We've seen institutions start training their high quality talent and all their talent from traditional technologies to new methods. And I heard Eric mentioned graph, and graph technology, and graph data structures.
So we're seeing an extension. And then we're also seeing people retrain on how to be effective at connecting to clients to potential clients through what has been these kind of interactive virtual sessions as opposed to a face to face handshake. And so that's been more about, what's the workforce? What skills do we need for that? And then last thing is workplace. We figured out a way to work virtually.
We've decided that there's certain things that are best done still co-located. And so as institutions and their partners bring people back in the office, people aren't going to want to go into the office to sit at a cubicle to do Zoom sessions all day. That's a lot of expense. That's a lot of friction for what is an experience you can get from home. So what is the experience that we need office space to provide to allow people to get more sustained throughput in their client interactions in the projects that they're performing? So we're also thinking for that workplace, what's the workplace of the future? And that's changing dramatically as well.
So and through that you're seeing the usages of new technologies, new innovations, new collaboration software. And just a host of things. MAXIMO DIEZ BLANCO: Thanks a lot, Tim. That was really, really insightful. You actually brought up a great point that I believe are truly interesting. One, the future of work.
The future of the workforce. And the future of workplace. And by the way, I think that we all agree that there's no going back. So there's a lot of change coming back for the future for all of us.
Now with that, let me turn it around with Vijay at Mastercard. So Vijay, what does the future look like at Mastercard? VIJAY KRISHNA: I think the pandemic has changed a lot of ways in where we work. Apart from the how we work at work, it's also how we are looking at our products and solutions. And the one thing-- I think there are a few factors that we figured are important. In day to day lives, instant, remote, and digital access to funds has become super critical. All of these are important.
Instant, remote, and digital access to funds. And these are important to various segments of customers that we work with. It could be small business owners. It could be gig economy workers who are waiting to be paid for the gig work that they've done.
It could be government benefits as we talked about. Or just consumers looking to pay each other money. Like my daughter's voice coach needed money. And I needed to be that person because of the lessons that they were conducting over Zoom. So this became an important need for us.
And this is something which was very clear was a trend that was here to stay. So what we've done is we've taken a step back. We've taken a step back, and our entire product development process now imbibes this.
We've kind of taken this entire thing and we've said, how can we integrate this thinking into our designing of our products? So what we are doing is we're designing digital products from ground up with physical not just being an option. And that is kind of a big shift for a company that is called Mastercard where a card with a physical manifestation of our products and services. We are also using nonsensitive data for enhancing security-- for instance, we tokenize card numbers. So essentially what happens is that when the card is actually put into a merchant website, that card number gets converted into a token, which becomes useless when it's actually compromised. The fraudster cannot do anything with it. And it saves a lot of pain for the merchant.
It saves a lot of pain for the consumer who then once is that the recipient of a fraudulent transaction, has to now go through the pain of trying to change their credentials everywhere. Then there is this move to rapid, faster, or instant payments as we call it. The ability to send and receive money quickly to any device.
It could be a phone. It could be a bank account. It could be any other device. And that's a corporate priority. And that's where my business, Mastercard, fits in front and center. We are about instant payments.
We want to make life easier for people to give people access to their funds at the earliest in the most safe and secure fashion that we can. And the last piece of this puzzle to my mind is that we want to provide choice. We want to make sure that the people who are receiving the funds have the option to choose the payment product that they want to receive those funds on. It's what we call a material strategy. And like in the case of Civic Assist, as I mentioned, we realized that there was going to be a lot of under-banked or unbanked customers who are going to come in to look for that aid. We added the prepaid card as an option for these people to be able to get access to their funds.
So that's the kind of thinking that we are kind of making sure that this is definitely a part of how we operate going forward. And we make sure that this choice for the end recipient is integral to any offering that we have. So finally, I mean, I would just say that making it easier for governments to prioritize scarce funds, bringing immediate assistance to those in need, it really does speak volumes about the power of digital payments. And how together, we can actually address the digital divide as we call it. And I think we see ourselves, as well as Oracle, playing a very important part in this process.
MAXIMO DIEZ BLANCO: That sounds really exciting and interesting, Vijay. Thanks a lot for that. I think really exciting times ahead for Mastercard as well. And Eric, what's the future look like at Certegy Payment Solutions? What did you see as the next thing that you guys are working on? ERIC PROBST: Well, Maximo, hopefully our future looks bright. We are pivoting in the changing world. People want contactless payments.
We've created an employed the app or our bank pay service in the app while maintaining the check business. Because as we saw before, checks are still a vital payment option. The new Oracle tools will make it quicker to do analysis and get actionable controls into the system to prevent fraud. And when fraud does get through, we have to link analysis that our investigators can use to work with law enforcement to catch the criminals and recover merchandise. So in the end, hopefully, we save us all money. MAXIMO DIEZ BLANCO: Thanks for that, Eric.
By the way, I think there's a great future ahead as well for Certegy. There's no there's no question in my mind about that as well. And with that, I want to thank our panelists. Vijay Krishna from Mastercard. Tim Walsh from Deloitte. And Eric Probst from Certegy Payment Solutions.
With Oracle's complete suite of data driven applications and cloud services for the financial services industry, we can help you rapidly respond to what your customers need while improving your business operations. I'm Maximo Diez Blanco. And I thank you for joining us.