05/24/2016

Building a Bank of the Future

Suresh Ramamurthy Chairman/CTO of CBW bank and winner of American Banker’s Innovator of the Year award explained changes that will help transform financial institutions into banks of the future, at the 2016 AFT Spring Summit in Orlando, Fla.

Ramamurthy, an innovator with Google, entered the banking world wanting to bring the speed and vigor of the web to an industry languishing behind in innovation. After spending several years looking for a bank to acquire, he purchased the Citizens Bank of Weir, Kan. in 2009 and renamed it CBW Bank.

He then changed the technological culture at the struggling 123-year-old institution and created an extremely profitable fee-income producer using disruptive financial technology.

At CBW, in order to make payment process faster, Ramamurthi said he had to "rebuild the plumbing." He discovered that he would have to become an expert in both compliance and technology. One of his first steps at CBW was to offer customers an online portal to sign up for an account.

CBW Bank launched a new payment tool, ONE Card, to provide its customers access to a secure and convenient alternative to traditional bank accounts. The solution gives banks, program managers, and corporate clients access to a powerful and flexible platform, designed to support a wide range of product categories including, direct deposit, money transfers, and payroll.

Among the areas financial institutions need to conquer in the future is payments, Ramamurthy explained. Google, for example, can pay and receive payments in every nation around the globe.

In order for financial institutions to compete in the changing payment ecosystem, they need to break away from siloed legacy systems. “As a banking system we shouldn’t be looking to compete with Citi or Chase, we should be looking at what happens if Google becomes a bank,” Ramamurthy said.

Ramamurthy also believes financial institutions need to embrace the challenges and opportunities presented by mobile technology. For example, they can create payment on demand or real-time payments leveraging the legacy infrastructure of the major debit card networks. This includes payroll processing.

Ramamurthy thinks financial institutions need to find ways to speed up money transfers at a time when the banking industry is starting to renovate its ancient pieced together payment system.

He also foresees 3D printing changing the supply chain globally, banks opening up the marketplace with open APIs, payments becoming ubiquitous through a number of vehicles.