Latest / Leaders In Payments / Tede Foreman, President, Payment Solutions at Jack Henry | Episode 253

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Tede Foreman, President, Payment Solutions at Jack Henry | Episode 253 · Leaders In Payments

• 0:01
  Speaker 1: Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape.
• 0:06
  Speaker 1: We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments.
• 0:14
  Speaker 1: We will also hear stories from our guests about their journeys to the top.
• 0:18
  Speaker 2: Payments will become even more invisible as embedded payments continues to grow.
• 0:24
  Speaker 2: If you think of it that way, Transactions, including check payments, will move to faster payment rails, slowly, but first and then the rate, I think, is going to accelerate.
• 0:35
  Speaker 2: You're going to see the Treasury become a bigger player in how fast adoption takes place.
• 0:47
  Speaker 3: That was TD Foreman, the president of Payment Solutions at Jack Henry.
• 0:51
  Speaker 3: He is my special guest this week on episode 254 of the Leaders in Payments podcast and I'm your host, greg Myers.
• 0:57
  Speaker 3: Jack Henry strengthens connections between people, businesses and financial institutions.
• 1:02
  Speaker 3: Td discusses the payment solutions provided by Jack Henry, including open banking and real-time payments.
• 1:09
  Speaker 3: He goes on to talk about AI use cases and his passion for teamwork.
• 1:13
  Speaker 3: We've got a great episode ahead, so let's get started.
• 1:25
  Speaker 3: Thanks, greg, looking forward to the discussion.
• 1:27
  Speaker 3: All right, let's dive right in.
• 1:28
  Speaker 3: If you don't mind, tell our audience a little bit about yourself, maybe where you grew up, where you went to school, where you currently live, a few things like that.
• 1:34
  Speaker 2: Yeah, sure thing I've got a pretty interesting background.
• 1:37
  Speaker 2: I grew up in Army, Brad.
• 1:39
  Speaker 2: I traveled around pretty much all over the US and got to spend some actual time living in Germany.
• 1:45
  Speaker 2: I was born in New York, spent three years in Germany, graduated high school in Oklahoma, ended up going to college in Kentucky, moved away for a little while and I reside in Kentucky, Louisville, Kentucky, today.
• 1:59
  Speaker 3: Okay, okay.
• 2:00
  Speaker 3: Well, let's talk about Jack Henry.
• 2:02
  Speaker 3: Let's talk about what Jack Henry does, sure.
• 2:04
  Speaker 2: So really, at the end of the day, we're a well-rounded financial technology company and we're really focused on really strengthening the connections between financial institutions and the people they serve.
• 2:19
  Speaker 2: We really like to ensure that our clients basically can enable innovation faster, really create some differentiation, and we've been in business for more than 46 years.
• 2:33
  Speaker 2: We service about 8,000 clients.
• 2:36
  Speaker 2: Today.
• 2:36
  Speaker 2: Our mission is really to help reduce the barriers to financial health, and then we've been on a recent journey.
• 2:43
  Speaker 2: What you'll hear more about, or you have heard about, is really a technology modernization strategy, and this is really creating basically open banking or banking as a service, and payments really fits in there, and I'm sure we'll talk a little bit more about it is really our payment as a service platform, so the ability to embed payment functionality into banking services, fintechs, etc.
• 3:07
  Speaker 3: Okay, and how big is the company?
• 3:09
  Speaker 2: About $2 billion in top-line revenue.
• 3:11
  Speaker 2: We've got around 7,000 associates across the United States Interesting Through the pandemic.
• 3:18
  Speaker 2: We've actually hired folks.
• 3:20
  Speaker 2: I believe we have people in every state in the United States right now working for Jack Henry.
• 3:26
  Speaker 3: Okay, and your core customers, at least traditionally, have been banks and credit unions.
• 3:30
  Speaker 3: Is that pretty much still true?
• 3:32
  Speaker 2: Well, we have.
• 3:33
  Speaker 2: If you follow us, we basically have three segments.
• 3:37
  Speaker 2: We have our core segment, which a lot of people traditionally think of Jack Henry, as we have our payment segment, and then we have our complimentary products segment.
• 3:46
  Speaker 2: So if you look at how we're reported to the street, we really track basically on those three segments.
• 3:52
  Speaker 3: Okay, let's go ahead and dive in and talk about the payments section a little bit, if you don't mind giving us some sort of details around what that product set looks like and how you help customers there.
• 4:03
  Speaker 2: Yeah, sure so we have three main payment verticals, I guess you could say.
• 4:09
  Speaker 2: We have our card platform, so that is basically issuing debit and credit.
• 4:13
  Speaker 2: We do full service credit.
• 4:15
  Speaker 2: We've got an agent program.
• 4:16
  Speaker 2: We also drive ATMs.
• 4:19
  Speaker 2: We have what we call our enterprise payment solutions, and this is around remote deposit capture products for both banks and credit unions, and we've got some alternative payment methods there.
• 4:31
  Speaker 2: And then what we have is our consumer and commercial payment segment, and that is really, if you think, in terms of bill pay, a to a, p to P, real time payments.
• 4:43
  Speaker 2: So integration with, like the FedNow rails, rtp and then offering Zell as a service too.
• 4:50
  Speaker 2: So those are basically our three key threads.
• 4:53
  Speaker 2: Our payment products are what we also call agnostic, so they integrate with Jack Henry cores, but we also integrate with cores that are outside the base.
• 5:04
  Speaker 2: We service or we have clients that represent about 6,800 financial institutions, credit unions and banks, both.
• 5:13
  Speaker 3: Okay, and is it a global footprint or mainly just North America?
• 5:17
  Speaker 2: Yeah, north America.
• 5:17
  Speaker 2: We service community banks in the United States.
• 5:20
  Speaker 2: That's correct.
• 5:21
  Speaker 2: Okay, it's a big enough market, right?
• 5:23
  Speaker 2: Yeah, well, community banks and credit unions sorry, but yeah, both in the US.
• 5:26
  Speaker 2: We're really, really focused, both in the payments world as well as Jack Henry, on supporting community financial institutions, because we really believe that they're a differentiator in a community.
• 5:40
  Speaker 2: So, you know, making sure they've got the tools and features that allow them to compete in their local markets.
• 5:46
  Speaker 3: Okay, you mentioned some sort of hot trends there, or buzzwords, however you want to look at it.
• 5:51
  Speaker 3: I want to dive maybe a little deeper on a couple of those.
• 5:54
  Speaker 3: You mentioned open banking, so maybe tell the audience sort of what you guys are doing in that space.
• 6:00
  Speaker 2: Yeah, I mean.
• 6:00
  Speaker 2: So open banking is really where unbundling the traditional core and allowing features to be basically embedded together to offer services so General Ledger, new account opening, payment processing, lending really, if you think about it as basically cloud native, containerized micro services that can be put together like a puzzle to create a solution that you want.
• 6:31
  Speaker 2: So if there's pieces outside of Jack Henry that you wanted to leverage as part of an open banking framework, you could do that.
• 6:39
  Speaker 2: What's not these traditional monolithic applications as we think of in the past.
• 6:46
  Speaker 2: That's really at a high level what we're looking at as far as open banking.
• 6:50
  Speaker 3: Okay, okay.
• 6:51
  Speaker 3: And then the second one is real-time payments, obviously, with the FedNow launch happening recently, maybe talk about anything kind of new and different that you're doing there.
• 7:01
  Speaker 2: Yeah.
• 7:01
  Speaker 2: So we've spent a lot of time kind of building out a payments hub that connects real-time payments, and it was built basically as a framework that, as new rails come on, it's basically not for a better term plug-and-play.
• 7:18
  Speaker 2: So we built our payment hub that connects Zell and RTP and then when the FedNow rails came out, it really enabled us to plug those rails into that payment hub.
• 7:30
  Speaker 2: And the piece that to me, makes it a very strong solution is it's integrated with all four of our cores.
• 7:38
  Speaker 2: So we've got three banking cores and one credit union core.
• 7:41
  Speaker 2: It is integrated with all four of our cores.
• 7:45
  Speaker 2: So there's not additional integration work that has to happen.
• 7:48
  Speaker 2: It's plugging the rail in.
• 7:50
  Speaker 2: So we're real excited about this hub.
• 7:53
  Speaker 2: When it connects Zell in there, it also connects RTP.
• 7:58
  Speaker 2: We just launched the FedNow rails.
• 8:00
  Speaker 2: We've got a backlog of over 100 clients right now that are interested in turning on the FedNow rails as well.
• 8:08
  Speaker 3: That makes sense, yeah absolutely One of the things that I've read about the whole FedNow and bringing that technology to market, which it's not brand new to the market, right.
• 8:18
  Speaker 3: But I think people are talking about some unique use cases.
• 8:21
  Speaker 3: Are you seeing that?
• 8:22
  Speaker 3: Are you seeing financial institutions bringing to you guys some somewhat unique use cases for it?
• 8:27
  Speaker 2: We're starting to see the concept around what use cases are going to get developed.
• 8:33
  Speaker 2: Our recommendation right now is to turn on receive with both RTP and FedNow and then, as use cases get developed for send and request for payment is, choose which side you want to roll with based on the use cases that are probably more beneficial to you.
• 8:50
  Speaker 2: I mean, we're looking at integrating the real-time payment rails into our own products at Jack Henry.
• 8:57
  Speaker 2: Think in terms of real-time bill payments.
• 8:59
  Speaker 2: Think in terms of real-time person-to-person payments.
• 9:03
  Speaker 2: Think in terms of new account opening and being able to fund a new account real-time.
• 9:09
  Speaker 2: I like to use that analogy.
• 9:11
  Speaker 2: Quite a bit is think about you being able to whether you're virtually or walking into a branch being able to open a new account, being able to fund it immediately and then walk out the door and have a debit card that is digitally issued and provisioned to you that you can start spending that afternoon.
• 9:31
  Speaker 2: I mean, to me that's really helps a community financial institution with driving deposits as an example Real-time funding and then being able to start spending on a digital-issued and provisioned debit card.
• 9:44
  Speaker 3: Yeah, I mean we've come a long way in this world where you used to have to go into a branch and fill out a telephone book full of paperwork to get a bank account and now you can do it digitally and then to your point, funding it real-time and then being able to spend.
• 10:00
  Speaker 3: I mean that's a really cool concept.
• 10:02
  Speaker 3: I know there's probably a lot of banks working on that or maybe some that can already do it, I don't know, but I think that's a really cool example.
• 10:09
  Speaker 2: Yeah, and real-time bill payments I mean that's another one that we really think is going to drive consumers back to the financial institution.
• 10:17
  Speaker 2: There's been a lot of fragmentation in the payment space with fintechs and non-traditional financial basically providers out there.
• 10:27
  Speaker 2: I mean it's not uncommon for a millennial couple to be doing business with 30 to 40 different, basically payment type vendors.
• 10:36
  Speaker 2: So we really feel like creating that digital experience with regards to payment capabilities and functionality is going to really help the community financial institution Again creating opportunities for the younger generation consumers members to stay within their credit union and banks.
• 10:54
  Speaker 2: I mean, real-time bill payments is another one basically competing with the bill or direct sites as it is today, versus your traditional ACH fire and forget.
• 11:04
  Speaker 2: You schedule a bill payment, you walk away from it.
• 11:06
  Speaker 2: It happens three or four days later versus oh wait to the last minute.
• 11:11
  Speaker 2: So creating those types of things within the payment ecosystem.
• 11:15
  Speaker 3: Right?
• 11:15
  Speaker 3: Well, you guys obviously compete in a very competitive space.
• 11:19
  Speaker 3: So what would you say?
• 11:20
  Speaker 3: Differentiate you guys from your competitors out there.
• 11:24
  Speaker 2: I would say we're not a payments company, we're not a core company, we're not a complimentary company.
• 11:29
  Speaker 2: We're really a well-rounded technology provider and, again, we embrace co-opetition.
• 11:36
  Speaker 2: So if there's a vendor or a solution out there that not for a better term, is better than our product or a financial institution, the ease of integration is there for them.
• 11:49
  Speaker 2: I mean, we've got probably over 950 FinTechs that have already integrated into our technology ecosystem and a lot of those we don't even know about.
• 12:01
  Speaker 2: Just with our open banking model or open technology model, you know, a lot of these FinTechs go to our developer portal and they're plugging in creating solutions that they're offering for their customers as an example.
• 12:14
  Speaker 2: You know, I think our reputation out there, relationships and service are a huge differentiator for us.
• 12:22
  Speaker 2: And then, from a payments perspective, back to the open position, we really feel like we've created a open payments ecosystem that's going to allow FinTechs, small businesses, credit unions and banks embed payment capabilities into the solutions that they're offering for their customers.
• 12:42
  Speaker 3: Okay.
• 12:43
  Speaker 3: Well, where do you see the payments industry headed, say, in the next maybe three to five years?
• 12:48
  Speaker 2: That's a good question.
• 12:50
  Speaker 2: Payments will become even more invisible as embedded payments continues to grow.
• 12:56
  Speaker 2: If you think of it that way, transactions, including check payments, will move to faster payment rails, slowly but first, and then the rate, I think, is going to accelerate.
• 13:08
  Speaker 2: You're going to see the treasury become a bigger player in how fast adoption takes place with the launch of the FedNow rails Think in terms of IRS payments, treasury payments, et cetera, are really really going to start driving that.
• 13:25
  Speaker 2: I think interchange is, I think is going to be at risk as merchants look at focusing on the advantages of faster payments.
• 13:33
  Speaker 2: So a merchant today that was paying interchange freight based on a debit or a Visa or a MasterCard, and when merchant apps become available that leverage the ability to fund purchases, I think you're going to see some cannibalization eventually in some interchange.
• 13:54
  Speaker 2: I think, before that happens, though, you're going to want these faster payment rails are going to have to harden, and we're going to have to get stronger or more robust fraud tools, which I think is you're seeing a lot of fraud tools that are continuing to improve and basically get to a point where they're outpacing the bad guys.
• 14:13
  Speaker 2: I think the regulatory landscape will also continue to morph as faster payments, digital currency, ai adoption increases.
• 14:22
  Speaker 2: In summary, I think we're in for a roller coaster override yeah.
• 14:27
  Speaker 3: Yeah, and you mentioned AI.
• 14:28
  Speaker 3: Is that an area that you guys are exploring in your business?
• 14:32
  Speaker 2: Yeah, I mean we're doing some small things, you know, on the payment side with AI.
• 14:36
  Speaker 2: So, as an example, greg, if you work enough, you use bill pay at First Bank of Texas as an example.
• 14:46
  Speaker 2: You know, just hypothetically, and you've been paying your utility bill every month over the course of period of time and all of a sudden we noticed in August Greg didn't make his payment.
• 14:57
  Speaker 2: So we're gonna actually leverage some machine learning and AI to send you basically a push notification and say hey, greg, you know you've been paying your utility bill every month for the last two years.
• 15:11
  Speaker 2: I noticed you didn't make it.
• 15:12
  Speaker 2: You want me to go ahead and schedule that for you?
• 15:14
  Speaker 2: And so it could be a link on your Apple Watch, could be a text message to your phone, could be an email, and then you can just click on it.
• 15:21
  Speaker 2: It'd automatically go in and schedule a payment.
• 15:24
  Speaker 2: As an example, we're also within our money movement platform.
• 15:30
  Speaker 2: We've got a basically fraud monitor which basically leverages machine learning and AI across the payments platform to determine, based on some risk scoring, whether or not it could be a fraudulent transaction or not.
• 15:45
  Speaker 2: So yeah, we're getting into a little bit of the AI and machine learning.
• 15:48
  Speaker 2: I think there's a lot more to come there as well.
• 15:50
  Speaker 3: Yeah, I hope that the good guys use AI better and faster than the bad guys, if it's your spot on.
• 15:57
  Speaker 2: I couldn't agree more.
• 15:59
  Speaker 3: All right.
• 15:59
  Speaker 3: Well, let's switch gears a little bit and talk about you, so tell us about your journey to your role there as the president of the payment solutions group at Jack Henry.
• 16:07
  Speaker 2: Sure.
• 16:07
  Speaker 2: So I came to Jack Henry in January of 2011.
• 16:11
  Speaker 2: So just north of 12 and a half years big technology background.
• 16:16
  Speaker 2: I'd been working in the banking industry, actually had been working in the healthcare industry, owned my own company for a little while but came across an opportunity to join Jack Henry and it was right after they had acquired I pay technologies, which is the bill pay component of Jack Henry.
• 16:34
  Speaker 2: So I mean, I came on back in January of 2011 to help with the integration of I pay into Jack Henry and then progressively over the last 12 and a half years, I've been given the opportunity and honor and privilege to kind of move up in responsibility from leading I pay to leading us, a larger group, across payments to basically leading all of payments for Jack Henry background and technology product and a lot of it has been payments when I was in the banking industry specifically, I started my career early on as a software engineer, so I was writing code.
• 17:11
  Speaker 2: Then moved into more of managing leadership responsibilities and actually got into a little bit of the payment space when I worked in the healthcare area for a little while and then found Jack Henry kind of big.
• 17:22
  Speaker 2: My journey, yeah nice.
• 17:24
  Speaker 3: Well, what are some things you're passionate about?
• 17:26
  Speaker 3: So, maybe one work related passion and one personal passion.
• 17:30
  Speaker 2: So, work wise, I really really think that collaboration, communication and transparency are really really important in leadership.
• 17:41
  Speaker 2: So really believe on team concepts and making sure teams are put together and I think that's so important now in the virtual space that I think we're all moving into.
• 17:54
  Speaker 2: You know, ever since COVID has kind of changed the way we work.
• 17:57
  Speaker 2: It is so important to have transparent, collaborative communication across all the groups today.
• 18:05
  Speaker 2: So really really passionate about building strong teams would be probably on the work side.
• 18:10
  Speaker 2: Personal side is really work life balance.
• 18:13
  Speaker 2: I'm really a big outdoorsy kind of guy, so love to run, bike, swim.
• 18:20
  Speaker 2: I've done a couple of triathlons, really like the outdoors kayaking, hiking, snow skiing.
• 18:26
  Speaker 2: So I think really being able to disconnect from work and having a passion that kind of brings you outside of that somewhere in the outdoor space is important to me.
• 18:35
  Speaker 3: Yeah, it's interesting.
• 18:36
  Speaker 3: I was listening to an interview with a CEO of one of the largest banks in the US and he was talking about how it's your responsibility as an employee to unplug.
• 18:48
  Speaker 3: The company can't make you do that, but find something that allows you to do that, and it sounds like for you it's the outdoors.
• 18:55
  Speaker 2: Yeah, and that's a good point.
• 18:56
  Speaker 2: I mean, I think in this day and age, with technology, I mean you know you've got your phone right next to you.
• 19:02
  Speaker 2: You know more than likely your email is on the phone, your instant messaging application, texting, so it is difficult to disconnect.
• 19:12
  Speaker 2: But I think it's important to recharge your batteries.
• 19:15
  Speaker 3: Yeah, absolutely, absolutely Well.
• 19:17
  Speaker 3: One last question If someone's coming out of college, let's say, and they're looking at the payments industry or the fintech industry or even banking as a career path, and they come to you and they say, td, what do I need to do to be successful in this space?
• 19:32
  Speaker 3: What would you tell them to do?
• 19:33
  Speaker 2: No, it's a good question.
• 19:35
  Speaker 2: I would say payments are very complicated and they're getting more and more complicated.
• 19:42
  Speaker 2: I would suggest getting into the financial services space, not limiting yourself to banking, card processing, e-commerce, personal finance, cryptocurrency.
• 19:54
  Speaker 2: Sign up for as many financial apps as you can I'm being an early adopter so you can really understand the new technology that's coming out.
• 20:02
  Speaker 2: Subscribe to relative blogs, newsletters, subscriptions.
• 20:08
  Speaker 2: This will really help you stay in tune with the landscape.
• 20:11
  Speaker 2: Then I would try to find a mentor, someone who is experienced in the payment space, so they can help you navigate what areas you might want to get into.
• 20:24
  Speaker 2: From a payments perspective, it's very, very exciting.
• 20:28
  Speaker 2: I guess you'd call somewhat of a payments geek very excited about where we're going and what we can do to help our community financial institutions drive payment adoption, because payments are really a significant part of a community financial institution.
• 20:46
  Speaker 2: Those would probably be the key things, understanding, probably, the rules and regulations as well.
• 20:52
  Speaker 2: That's going to change, especially as you start thinking about digital currency.
• 20:56
  Speaker 2: Digital currency is going to become more prevalent as well.
• 21:00
  Speaker 2: I think you're going to see cross-border payments, international payments, just a lot of different things to cover, but getting into the financial services space will give you a good basis to start.
• 21:12
  Speaker 3: Right, we've covered a lot of ground, obviously, about you and your background and the company.
• 21:17
  Speaker 3: Is there anything else you'd like to add before we wrap up the show?
• 21:20
  Speaker 2: No, greg, I think I'm good.
• 21:21
  Speaker 2: I appreciate the opportunity to share things that are going on at Jack Henry and my passion for payments.
• 21:27
  Speaker 3: Great Well, thanks again for being on the show.
• 21:28
  Speaker 3: I know your time is very valuable, so I really appreciate you being here.
• 21:31
  Speaker 3: All right, thank you, greg, and to all you listeners out there, I thank you for your time as well, and until the next story.
• 21:38
  Speaker 1: Thank you for joining us this week on the Leaders in Payments podcast.
• 21:41
  Speaker 1: Make sure you visit our website at leadersinpaymentscom, where you can subscribe to the show and where you'll find our show notes.
• 21:48
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