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Upending an Industry: How Digital Banking Will Simplify Corporates’ Financial Needs


In this episode, Hari Moorthy, head of Transaction Banking for Goldman Sachs, talks about innovations in banking technology for corporations and what it’s been like to build the first-ever digital-only transaction bank over the past two years.  

This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
This is exchange- The Goldman Sachs, when we discuss developments currently shaping markets industries in the global economy objects you, a global head of corporate communications. Here, the firm today were joined by hurry, Marthy global head of transaction banking here Goldman Sachs over the past two years. Hurry is overseen the build up of an entirely cloud based Transaction Bank, that's gonna, tomorrow, Tuesday June sixteenth, in this episode me talking about the opportunities in the transaction banking space. What's been like building I'd form in house the impact of gold nineteen on accelerating banking technology demand from corporates and much much more I welcome the problem. Thank you dig. So, let's start just a little bit of explanation. What transaction banking, why it's been slow to modernize in some respects banking.
technology is pretty intuitive and transparent for consumers, but it's taken longer for corporates to modernize. Why is that? As the great question is, if we think about transaction banking audits, simplest possible level, you tonight the tea for somebody to bank to keep their deposits, make their payments and get the receipts ass. He correctly say this is one of the founding principles on how the modern banking had come about right. All applicants most things checking account and they certainly and pay, and they make the payments the difference between consumers incorporates he's wonder of complexity right. So each of us has a bank account and be probably you know, get out right deposits from our salary, and we pay out somebody thirty two forty built a month. It's too our household. It is fairly simple and straightforward birth. Imagine a corporate harding, ten sub hundreds of entities and hundreds thousands of bank accounts across multiple countries receiving
and in some cases from that clients, in tens of millions, sending out payments to hundreds of and ceased across hundreds of countries, so the ship complexity. Rounded he's just magnificent an historically the fin tax and the banks to modernize the consumer experience, because in some base that the problem one that obscure meaning the number of consumers, but decent the cities and making it easier for consumers to use it. But ass for this be simple for corporate the thing. Tax need to have a huge balance sheet very good relationships with carpets and here Thirdly, the elected that, for you C b, so the lagging of using modern technology in this area compared to many that consume areas, so common, has its roots in investment banking. I wasn't a commercial banks, so we were a little slow. to get to this space. This not been our space with corporate clients,
Why is the firm seen an opportunity and transaction banking and decided to go so active right now so quickly? and wanted us to be in this business right at the beginning Business? I remember taught me somewhere between hundred to two hundred planes, and they know the form spoke to hundreds of plans even before they brought me over to to sort of need this programme and the feedback from plans are clear in that they want a modern banking solution to modernize their treasury and position. It more offensive me, as opposed to playing difference and the existing participants industry had no reason to modernize it. already warning fifty to sixty percent of revenue. By of this industry, So, as you said earlier, that need to be a provider that must have strong technology background, a good risk management practice.
on balance sheet and, more importantly, a credible plant relationship and that existed. Goldman Sachs just even, if you think about five years ago by the technology it's not evolve to the point about the case today. So hundred percent have what we did was completely unfounded: and the amount of security that we have today wasn't available just about three to four years ago, and the availability of data using the data to modernize, to provide inside your plans and make an easy, bottom grinder Treasury, it's the right time, dry place and the rightful to do it I know, but indeed we re about as being late from an industry, bus This is the right time, has the leap frog and these kids whole generation of technology, and we, then to the next generation technology and that's the real sort of beauty. The solution, so you
two common before you left. You rejoined in twenty eighteen when this project was just getting under way and you ve been with it ever since talk about that The fundamental decision to build it entirely in house versus just by an existing platform to if you could be market today as it exists, the market has an great technology in terms of what the planes can use there is a big lack of api. This lack of using big data abusing good high quality security protocols. so, even if he wished there isn't provider that had all the things that people looking for in providing this modern platform, so one of the founding principle, have you thought about building, this is the you think that's different shaded anything that is meaningful, anything that new in house anything that is consumer ized, anything that is already commercialized off the shelf me look away the buyer partner, so
is not the sort of thing we would do everything from scratch: bad a credible tools and technologies and innovations happened. We were absolutely embrace them, but doing organically meant that we had an ability to put every book and that wall in a very reasonable, concise way and that'll countered warplanes. Absolutely. then be final thing right. Jake is Bobby and walked in this project. He spoke directly back to wander. Planes When obsessed about listening to our plans and plant feedback, which meant, if you ve, got to get it external provider or excellence and assistance that were not carried to what our clients want. Since we were category plants very meaning. Who fashion we went with what be thought to be the right built, which is to do it in the house So you have to have an engineering background talk about what it actually takes from attack build perspective to launch
mostly from scratch and using a couple existing platforms, but to build this house in the space of just twenty four months. If you look at the best distractions happen in the digital companies in the last twenty years, those destruction happened through acknowledges applying the technology to that business problem in a meaningful manner and in a vague, controlled manner and in a highly secured. And obviously bringing in a diverse group of leaders and team together. So that's it fuck. You fuck, you Don T expect in that. Although these acknowledging play being super clear on our mission. We spoke a lot of wines and in fact we were so upset. It outlined feed We spoke due not only to the plans, but we and then decide our whole user interface on a human centred design basis I plan to illegal cool and they decided what we just they wanted and what they did not want. The beauty of doing this in house is obviously figuring out what plans
didn't tell you, but they thought about it, and if you did something that they would like it so that required a mini alterations for us to do it rested with them. and see if that is what they meant or if the another solution that would exist, that size, weddings and remarkably you have done, is to assemble a team of about three fifty people that included industry experts in transaction banking. Highquality thing tack and technology folks, as well as what the best it he can offer seats. The combination of all three constituencies that created the speaking, but it takes a village today It was something like the expense said just now that the expect him alone Jape elevated. It is quintessentially the best of what she could offer so everything Isn T working walls. We had deep partnerships that global markets, especially the facts we have Mission without anybody teams be took a huge form of learning from moccasin the launch of market
Needless to say, we had huge support across the investment bank intuition, with every Philip a farce, helping in width. The planned conversations ass, well ass, sort of bringing us that lets. So I will give you shut out to the team and the expense This sort of work is not possible without a huge amount of creativity and tight focused on being our insight in view and delivering it two thirds of the tunnel. Banking team, is extra Goldman Sachs, I'm super impressed by how the all embraced Goldman Sachs an even more impressive, how Goldman Sachs embrace them so like to sort of time each and every one of these two members in transaction banking, by working as hard as they did and delivering as high quality as they have done. So from a strategic perspective, how do you make sure your building the platform that the clients wanted and where there is space serving you?
the competition you you talked a couple times about all the energies. You did. What else did you hear from the clients that made you convinced that you could build something where there would be demand? That's actually a fantastic russian dig Bruce I say that is: the plans have been remarkably assistant in their feedback and I'll, give you a few anecdote that answer ground. This idea. He takes rough me about thirty. sixty days to open a bank account for many culprits. That's office, We got a lot of Fedex papers, nucleus papers, so it was very clear to us he beheld to develop something it has more than it has for digital, and we need to make it easy. For our claims to operate are acknowledged for their efficiency. And we need to do it in such a way. We don't lowered the quality of controls on regulatory threshold set out came a product bad now. We could credibly open it back account under ten minutes, perhaps in many cases much lower than that. So compounded with, We need to sixty days deal
you got a lot of appeal to our planes envy Thirdly, on but quite a lot of planes in a very short period of time and created accounting that platform as well as he said, human centred design. a cold part of what we did above all, we not only candour planes to begin Ashley provide cash management, transaction banking, Let me also created a financial ploughed, better, be good. To their planks, meaning it clients planes that it's a business, hurry consumer, we could enable them to grow and actually care for their needs, so are punished. Is not only Catherine complaints and direct sales basis, but all having a financial blood to be able to provide solutions using API eyes to integrate in their systems for their business processes. makes our solution, so you make an industry and every plan that you have spoken to welcomes that idea,
so you ve reference couple times, building it in the cloud. It's a cloud only transaction bank or tax, be as you call it over some of the challenges of doing that, since it hadn't done before you know, upholding high standards in terms of controls upholding the values the form has in terms of security. Perfect the plans, data and having very clear segregation of duties and and responsibilities come about ensure that we are carrying the highest quality. What plans I've been said in her he comes at all, but be expected, he comes to be on a daily basis. In other words, we had more hiccups than what we thought we would have some one of the things we had very early on is a set of rituals every morning behind a standard engineering team they ve been all issues, then we stand up its operation steam bring that issues, then stand up at the end of the day, without plain freezing team that they would actually bring about issues submitting a twenty
our period, we would actually spend like twenty minutes each every day, you get to know the top issues for that day, that feed that meant that year, what it allowed us to do is to sort of prioritize. Once more potent and how do you, Ashley Shape our strategy under execution, on the most important issues, as well as our goals and tools, a small, its process of sort of prioritizing Hilda, since most of the high quality security issues and concerns, and he kept very early on in the project. Oh you're launching tomorrow, but you in some ways expected to have some client. You could tell us out with you, actually have a hundred seventy five corporate clients on, what for more ready. We more than you expected explain how covered nineteen might have had an impact on accelerating the need for these concepts as well. As you say, you didn't expect to have so many clients.
but the same time in the plains. Wanted asked me what available for them. I said to the crisis as the inflow of yours dollars increased. You know that's a safe haven for many, the culprits to keep a cash in. U S dollars, they were looking to open bank accounts and They said earlier. Very many of them took somewhere between thirty days to sixty days and we would obey to open accounts and planes for easy to work with us and we have numerous breastplates testimonials telling us how greatly wearing open account and make it easier for them to work with us having to their needs in the need of their time. So it took us by surprise we were able to rapidly create about one hundred and seventy five relationships in a very short order but I ve been said, there are new relationships to perform their existing relationship in other parts of the fund, there, be they create a new partnership with our transaction banking and look that journey still continues codes. Just one of many,
that will happen in our plane, Johnny and we're very fortunate. solar planes and we were able to provide the right answer at the right time. Can you to sort of had the journey with them so tomorrow, In summary, is actually bringing in all of these products, study launched every quarter, so be it much five or six chronic. So far, it all in one single package to our claims in the: U S and subsequent to the EU is also planning to launch in UK in Europe over the course of next one taking much so super excited popular placed more the case at all. That Poland is my next question, which is what's next. What are the other geographies? You mention Europe. Uk Firstly, what are you thinking about in terms of a former path, so we ought to have ambitions in Asia, but, frankly Jake just like everything that you have done- far behind the viewpoint, obviously, but the list dark lines it their strong feedback or claims that Sir guidance to the right answers he would go. There would also, obviously it
enhance our products, make investments, making it easier and more customize to each of our tax. So that points were important, jailbreak we want to customize me want to standardize are offering internally, but we have a single platform and that still be customized for each one of our plants needs an unlucky creating a black comfortably plane, because obviously the basest unsustainable, low quality of service. what Bulimic focusing the next few months So I mentioned before this is your second stinted Goldman. You joined originally in two thousand and seven and then rejoined in two thousand and ten. There is a little Does the history, the trajectory of your career inside and outside our common sure some ice persons, the first Levin use of my career in thin text and start ups. I had my own started. Didn't you know dotcom days when we don't need to talk about it like now seen what what would have happened to that and then-
joint government in two thousand and seven first time. I remember the date December thirteen and I went to the problem. Which area in that's right before that, Ices head began in two thousand and eight one year of crisis, taught me a lot more about the financial products, financial market and capital markets, and frankly, created lot of relationships in that span of like about eight torments that those folks can you to be my friends. Even today, so truly sort of my thing tat days and start a base. You know you, your trained me, jack of all trades but coming Goodman and subsequently gonna Jackie Morgan taught me the idea for control and organizational mandate and having a very clear views and bringing things together. Subsequent ten years. I spent time in bodies, France. I learned a lot so many books,
two transaction banking in two thousand eighteen he's an ability to sort of bring a three sixteen on, and that is fantastic from it. Partly because we not only have a engineering team, but they have a productivity, have sale steam behind operation steam, Having those three sixteen and liberating everybody to sort of bringing what they are good at and being that cognitive, travesty across the geographical footprints? Is message? sleep, that's the biggest lesson at long last me, two years before I started to expand. Ok, so that's terrific overview about of your career and in transaction banking. I want to close one final question about: you: lead a weekly meditation with your team. How did that stuff and in what role do you think mental health plays in building up a good team? Absolutely look. I can't medication. Listen early, teens and just like any other
people do it, I dropped it and then I rediscovered that again in my early twenties and spin weapon for years, I ve been diligent about doing it everyday morning and evening. Some advocate an hour to say it keeps me very calm and keeps me saying and you know some of the best- I guess I'd come about doing those times for me personally that is not something I publicly discussed. Private is an sometime, in like early. Nineteen, when we were sort of in the middle of the experts, somebody asked me hey: what's your pastime, I gotta think How could anybody ever happen? Dimension, look over many data and somebody said hey, probably do it. We should try it out so beautiful. A fine. Every Friday will do at three p m So I remember the very first time and I didn't expect- I expect a couple people missing out in a room. Big room. There were fifty people sitting and then they told me the security people sitting in a waiting list. They would open up the subsequent mix
So we ve been doing that for every week are more or less the last year and a half it's been a lot of fun. Look I affecting meditation very useful in terms of mental health and fast in a sense of purpose, but its bell beyond that it actually faster team culture and Albania, have a team. The sexually motivated do certain things together, create that bonds that, in the spill bond it sort of blurs got a lot of lines, notably to diesel, overlook what you know We might actually think of as defects issues with each other, so if it blocks alive and tried to look at depositing of what others think the table. Six, an effective tool in managing personal and, more importantly, profession situation, as you can managing I'm a big workers up about this here, So how is it changed or is it sort of procedures the same in the Arab zoom is being pursued,
the same rob Zoom, but obviously we have more newcomers, anathemas, grown incrementally or repeat of last year, and a half some weeks about? Another is what many people, but you know it's been one constant part of our lives. well loud, certainly necessary in these difficult times. Eleven thanks for Johnny Essay, hurry absolutely That concludes this episode of exchange. The Goldman Sachs thanks for listening and if you and joy this programme, we hope you subscribe an apple pie, gas and leave a rating or comment in two for a weekly markets. Update Friday morning were leaders round phone provided could take on the latest in markets this podcast was recorded on Monday June, fifteenth, two thousand and twenty.
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Transcript generated on 2021-07-02.