Deva Annamalai on FinTechMafia, machine learning, guacamole, bitcoin, blockchain and how traditional banks must evolve rapidly

By @SimonCocking. Some interviews take a while to come off when you’re dealing with busy people making a real difference to the world around us. Delighted to get this one over the line, with some really interesting and thought provoking insights. Introducing Deva Annamalai,  #FintechMafia member, more here.

What is your daytime job?

I am the Director of Innovation and Insights at the Digital Banking group in Fiserv. In my current role I work heavily with Financial Institutions who use Fiserv Digital banking products. I work very closely with our internal product marketing teams to promote our Digital banking product usage and adoption. I manage the team that provides insights and analytics to our clients that empowers them to better identify their customer profile and behaviors, both from a Digital banking and payments perspective. I also work very closely with the Fiserv Internal Innovation team to promote our new offerings to our clients.

Your background, how did you end up doing what do you now?

I started my career as a technologist. I was into software development in the early years of my career. After I got my Masters in Computer science in India, a software company based out of U.S hired me in campus. They worked very closely with Professor Watts Humphrey from Carnegie Mellon University who was a pioneer at Personal Software Process. I was part of a team that developed the set of tools for software development teams to follow this process. Fred Brooks’ “The Mythical Man Month” was one of the first books I read which shaped the way I evolved my career doing software development for various Fortune 500 companies that include Caterpillar, GE, American College of Radiology, UPS, FreddieMac, FannieMae etc.

My technology background allowed me to learn the business challenges facing a variety of industries. I consider myself very fortunate to have this diverse background that allowed me to analyze problems and present the solutions. I find the exercise of taking a project that is late and turning it around very intellectually simulating. The last few years I have been exclusively focusing on Financial Industry. I worked at Zions Bank for close to 5 years as a Technology Strategist. I also ran their Marketing Technology and Analytics team.

Thanks to all Financial Brand readers who made my entry on mobile wallets one of top 10 entries @FinancialBrand https://t.co/YdS2w4Setz

— Deva Annamalai (@bornonjuly4) January 4, 2016

How did you come to be a member of the FinTech mafia?

Becoming a member of FinTech Mafia was a fortunate accident. I was a latecomer to twitter and I met some of the members of the current FTM at Bank Innovation conference in 2014 at San Francisco. We started tweeting about the conference happenings and I realized that these were the folks I was able to identify with since we shared the same interests and frustrations that are still plaguing our industry. I quickly bonded with them because I was able to learn a lot from their experience and knowledge. I realized some of the titans of this Industry were so easily accessible and were able to embrace and welcome a new comer like me, which was very humbling.

As our group grew, we broke the continental boundaries and started forming friendships all over the world. I have never met some of these ladies and gentlemen, but I feel I have known all of them for quite sometime now.

@hussainalhilli @seccobank @cgledhill seemed fine when we chatted. pic.twitter.com/mRFlnCvrTs

— FinTech Mafia (@FinTechMafia) December 12, 2015

How has the last 12 months been for you?

Very busy. J Working for Fiserv requires tremendous energy. The scale of problems we try to solve here are huge. We get to work with financial clients of all shapes and sizes. My environment allows me to work hard and play hard and I like that about a job.

Anything you’d do differently?

I would love to write more in my blog. I would love to blog my everyday thinking about FinTech, but due to my busy schedule, it gets pushed back into the back burner. With the pace our industry moves, no one cares about yesterday’s innovation, so sometimes the ideas in back burner never see the light of the day.

You wrote about how 2015 will not be the year of mobile payments. 

Looking into 2016, are we any closer? Is this a classic case of us (humans / observers) under estimating the complexity of all the elements that need to be coordinated to make it work seamlessly? When is a more realistic estimate?

I was quite frustrated by the state of mobile payments when I wrote that article. As revolutionary as Apple Pay was, building mobile payments mechanism without industry participation can result in fragmented solutions. As a lowest common denominator, we as an industry need to take a step back and ask the question, will this payment scheme address the base case? (Can my grandma use this without having to ask for help to set something up?)

Cash doesn’t need training to use. So do Credit/Debit cards. I would consider mobile payments to have reached mainstream when a common person can use a phone to make a payment at a POS/payment terminal without thinking about provisioning and all the other headaches, which come with loading cards into the wallet.

Case in point, I loaded a credit union debit card into my iOS wallet to enable Apple Pay. It worked for a couple of months and then I started getting declines at the POS. I don’t have the time or energy to trouble shoot the problem by calling the CU. I switched my card to the other card in wallet. Mobile Payments are still in a complicated phase where they don’t seem to provide enough value to solve our everyday use cases. Rewards are being pitched as a value prop that may tip the scale, but if its AMEX or V/MC/Discover that provide the rewards, what is the incentive to use Apple Pay?

To muddle the waters further we have Chase Pay, MCX, Android Pay, Samsung Pay and a variety of mobile payment schemes being launched and are promised to be available in 2016. All these try to make your mobile as a payment device but the learning curve to use these are not simple and easy. EMV is not making life any easier either. Now we have to think about which card to use, whether its swipe or dip or contactless, if its contactless is it NFC or MST or QR-Code?  Do we really have to think this much to make a damn payment? No wonder cash is still king.

Recently a news article came about Bank of America and Wells are in a pilot to test out Apple Pay at ATMs. I think this is one of first steps to make people stop carrying cards as a backup option in their wallet. I am not a supporter nor against using cash, but having access to greenback does come in handy sometimes.

@brettking @AnotherCrowd @BenedictEvans Arthur C Clarke did call this out in the 50's 🙂 http://t.co/bVfGSwYzEu

— Deva Annamalai (@bornonjuly4) May 26, 2015

What FinTech trends are you excited by?

Blockchain. If a software company had proposed this scheme to build distributed consensus, no one would have given them the time of the day. If you think about it, traditional RDBMs do a real good job managing consistency across multiple trusted instances. However I think the beauty of Blockchain comes because Satoshi gave an elegant solution to the problem everyone thought was so hard to solve (the idea of electronic cash that solves the double spending problem) and built Bitcoin, which bootstrapped itself and is now thriving. As a computer techie, I personally think that is one of the coolest inventions since the Internet, Wi-Fi etc. (Remember the time we used to run cables from phone jacks to access internet?). The fact that some of the industry heavyweights like @pmarca supporting this is proof enough.

Another area, which excites me in FinTech, is Big Data and Machine Learning. The new ideas that come out of Silicon Valley scare me and excite me at the same time. My wife the other day ordered me to get a specific brand (RoTel) of Diced Tomatoes and Green chili can. I had no idea of what I was looking for so I googled the image of this brand in my iPhone.

Once I picked up the cans I returned home and was planning to make some guacamole. This time I used my Nexus 5x phone to search for a recipe and the next thing I know on the search results page, Google now is making me recommendation of where to find ingredients that go into the guacamole, the specific RoTel brand ingredients required to make it and which stores around my home and that had it on sale!

Remember, all was trying to make some guacamole J. The level of sophistication Google brings to guess what you are doing blew my mind.

Imagine this level of machine learning permeating our interactions/engagements in our everyday lives; this can be scary for some; but for the ones who embrace it, the levels of loyalty you can build changes the way how you attract, retain and excite the customers at the right moment. To quote Keyser Soze in Usual Suspects “The greatest trick the devil ever pulled was convincing the world he did not exist”.  Silicon Valley giants are weaving machine learning in our everyday lives that we don’t even think about how it’s done.

How well are conventional banks responding to the changing FinTech developments? What should they be doing better?

Read my RoTel story above. If I were a bank, I should be thinking of mobile moments where I can influence my customers the right way. The traditional way of selling products alone will not satisfy and influence the next generation of customers. I am moderating a panel in March at BAI Payments connect about “Determining How Banking and Payments Can Benefit in the Sharing Economy”. In this panel we will address how FIs can address the next generation customers who are more comfortable with the idea of sharing economy; who don’t want a 30 year mortgage commitment; who frown upon the idea of owning a automobile which is parked in a garage for most time; who like to travel and visit exotic locations using services like AirBnB. How do you attract a customer who doesn’t want a home loan, auto loan or even doesn’t care too much about CDs and money market?

Do you think bitcoin (or something similar) will achieve wide adoption, if so how soon, or why not?

Bitcoin is an interesting experiment. I am fascinated by the dynamics of how it has evolved and how it has managed to still keep and sustain the momentum. Unfortunately as a currency, it sucks. I bought some bitcoins long time ago and I have no idea what it is even trading at today. I think a currency, which trades like commodity is a bad idea to go 100% in. The volatility associated with Bitcoin is its biggest weakness. I think it still has its valid use cases and applications in areas like international money movement. However the chances of it replacing a fiat currency seems very remote. I am a bit skeptical, but stranger things have happened before. If you had told someone in the 60’s that we would all be walking around with a device in our pockets which is more powerful than the mainframe computer of those days they would have thought it was a crazy idea. Bitcoin becoming a global currency in future seems like an idea very similar to this.

I am bullish on the Balaji Srinivasan’s idea of bitcoin computer.  I can’t wait for enough IoT devices that generate bitcoins in low power mode enough to pay for my weekend movie rental from iTunes or Amazon.

We have a lot of FinTech innovation happening in Ireland and in Europe in general – how does the US banking sector compare?

I think there is lot of FinTech innovations happening in the UK and Ireland. I feel there is a healthy competition that is a good thing for the industry. I follow a lot of the influencers on that side of the world and I learn a lot from them. A lot of the FTM members are from UK and their points of view show some of the challenges we try to solve are global in nature.

Your plans for the future? 

Keep doing what I am doing and make some good friends along the way. Integrate some of the work I am doing into worthy social causes. I love what fellow FTM Member Sam Maule is doing in interviewing Femtech leaders around the world. Even in developed nations pay inequality still does exists and having this brought to light is essential to solve these issues. I am very inspired to read and get to know these Femtech leaders. http://www.femtechleaders.com/

Blogging, who do you follow / like?

That list is huge. I love the thoughts from Brett King, Chris Skinner, Jim Marous, Brad Leimer, Matt Wilcox, Ron Shevlin, Cherian Abraham, Duena Blomstrom, Sam Maule, David Brear, David Gerbino, JP Nicols, Alex Jimenez, Mike King, Simon Taylor, Lisa Kuhn Philips, James Wester, Bailey Reutzel, Mary Wisnewsky, Tom Noyes, Richard Gendall Brown, Gideon Greenspan, Nick Holland, Nicole Sturgill, Mike Dudas, Ghela Bhoskovich, the list goes on.

A beautiful skyline while landing at Salt Lake City in a @Delta flight. pic.twitter.com/1WRoQ5STE7

— Deva Annamalai (@bornonjuly4) July 21, 2015

How do you manage life / work, and online / offline balance?

Still figuring that one out. My 7-year-old and one year old keep me occupied most of my offline time. They are a joy to be with. When things seems to spin out of control I try to remember former Coke CEO Roger Knapp’s quote:

“Imagine life as a game in which you are juggling some five balls in the air. You name them – work, family, health, friends and spirit and you’re keeping all of these in the air. You will soon understand that work is a rubber ball. If you drop it, it will bounce back. But the other four balls – family, health, friends and spirit are made of glass. If you drop one of these, they will be irrevocably scuffed, marked, nicked, damaged or even shattered. They will never be the same. You must understand that and strive for balance in your life.”
I also love skiing. I learnt to ski very late in my life (when I was 36) so I am not really good at it. But the idea of being out in the mountains of Utah every weekend with my 7 year old feels very therapeutic. No matter how bad I suck at it, it’s the idea that I was able to learn this new skill and keep going there every weekend motivates and makes me happy.

Anything else to add / we should have asked you?

My educational background – when I graduated high school, and enrolled in college, I thought undergrad is how far I would go. Then at a whim I enrolled in Masters in CS (well, computers were fun). I never thought I would end up with three Masters Degrees  (2 in CS and an MBA). Life sometimes takes us through strange tides but I feel sometimes never saying no can be a good thing J

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