Ginger Schmeltzer

Owner and Principal at GDS Advisors, LLC

Atlanta, Georgia

@gschmeltzer | LinkedIn Profile

How did you go about deciding on a career in Financial Services?

It happened by accident, really. I got a job out of grad school working as a consultant for a boutique payments consultancy, Edgar, Dunn & Company. I never really looked back after that – I found the payments industry fascinating and loved working in a space that all of us deal with in our personal and professional lives every single day. While a lot of my work centered around traditional credit and debit cards, I very quickly got focused on emerging payment technologies and was hooked. Even in my relatively short almost 16 years in Financial Services, the way we bank and the way we make and receive payments has changed so dramatically that we would barely recognize the way we lived our financial lives 16 years ago. And I expect it to continue to change at a rapid pace for the foreseeable future. I really get energized working on, thinking about and speaking about how these changes are being driven by new technology, consumer demands, and non-traditional players.

You’ve had the opportunity to drive strategy and digital for a large bank (SunTrust). What are the key obstacles that ban
ks must overcome to successfully address the required transformation to digital?

The traditional reliance on the branches as the hub of sales and service is a big obstacle for many banks of all sizes. Bank customers are demanding greater convenience, greater access and greater control over their finances, and many banks are struggling to adapt to the rapidly changing world we live in. Most banks have creaky, aging infrastructures that can’t handle the demands of an increasingly complex banking and payments system that is becoming virtual, real-time and on-demand. And the ability of most banks to enhance existing products or offer new ones is limited (and slowed) by that antiquated infrastructure.

Banks are also challenged in that they are the trusted protectors of the money their customers deposit with them. That trust is taken very seriously, and there is a constant struggle between maintaining the tightest security to protect those funds, and providing customers the convenience and speed they demand. Most customers do not understand the complexities involved in the security vs. convenience struggle, and may get impatient when transactions are made less convenient in the name of maintaining security.

As banks move to become more customer-centric in their approach to product development, customer service and channel management, they are being challenged by the non-traditional players who have been moving into their territory for the last decade or more. Non-traditional players that don’t have the same legacy, regulatory or compliance burdens that the banks have.

Despite the many obstacles laid out here, banks provide a valuable service and are well-positioned to continue to do so. They still have the opportunity to maintain their central role in consumer’s financial lives by rethinking many of their systems and approaches to adapt to the rapidly digitizing world their customers live in.

You witnessed firsthand the rise of FinTech during your time at Fiserv. Are you a proponent of the FinTech hype? Will banks be displaced?

The financial services industry is a complex, often dysfunctional system that has developed over decades of evolving technology, changing government regulations and globalization. It is an industry ripe for disruption, and there are unsurprisingly hundreds of entrepreneurs and nontraditional players trying to disrupt it in large and small ways. So I think the hype is real and that these would-be disruptors are forcing a healthy and much-needed examination of the systems and their shortcomings. That being said, the level of hype and the amount of money following it is at bubble proportions, and we are due a rationalization.

I think banks will always have a role to play, at the very least as the holders of their customers’ money. But they are already being displaced as the primary point of interaction for initiating payments, as myriad other players take over the front end of the customer experience and the bank systems are pushed into the background as the facilitators of the transaction. In many cases, this is a positive change for the consumer, providing them greater flexibility over how, when and where they spend their money. Instead of trying to ensure that their customers always transact within the banks’ “walls” (physical or virtual), there are ways the banks can explore to ensure they stay relevant to their customers by seeking ways to provide access to financial information when and where it is needed. This will mean partnering with non-traditional players, deciding which financial information can be made available outside the banks’ “walls” and what the necessary security levels are to sufficiently protect that data, continuing to examine the convenience vs. security tradeoffs.

Most of all, banks need to embrace our increasingly digital world by shifting to a digital first mindset. This will take some time and some banks will not be able to make the shift.

How influential are the major processors and solution providers such as Fiserv, TSYS, FDR, etc. when it comes to production innovation in banking?

I would say they are very influential, although I think most of them are more reactive than proactive when it comes to innovation. That is to say that, much like most of the banks, the processors and providers are watching most of the innovation come from small, often startup companies, as opposed to driving the innovation internally. All the major players monitor – to a greater or lesser extent – the new offerings coming along in fintech. Their influence really comes when they choose to license that new technology (or buy the company offering it) and incorporate it into their product offering. Because so many small and mid-size banks buy their entire suite of product offerings in a package from one of the solution providers, the product innovations those players decide to include will have the opportunity to scale very quickly (and, conversely, those they decide not to include may die very quickly.)

So, yes, the processors and solution providers are highly influential, but they are in turn highly influenced by the needs and demands of their bank customers. Bank client demand for new technology offerings can push the providers to re-evaluate new technology and to incorporate it into their product roadmaps; this often happens when the larger banks successfully roll out new technology and the rest of the industry determines that they need to add it to their solution set as well. Enter the processors and solution providers to incorporate that technology into their product suite so the technology becomes broadly available. Mobile deposit capture is a great example of this dynamic.

You’ve recently started your own consultancy firm. What led to this decision? How do you find the change in roles?

After some very difficult events in my personal life, I took time to reflect on my professional life and decided it was time to step out of corporate America. I wanted to devote my energy to things that I was passionate about, and do it on my own schedule. This has included working a variety of small and interesting consulting projects, getting engaged in the fintech startup community in Atlanta, continuing to speak and write about the changes we are seeing in banking and payments, joining the board of a refugee girls’ school, and increasing my involvement in my children’ school and activities. I am also teaching myself Portuguese and learning to play the piano. And you know what? I have never been happier (or busier!) Having always been very ambitious and driven, it took me a long time to come to the conclusion that stepping off the traditional career path was okay, that my ambitions and drive could be re-focused on things that met my own definition of success, not the one defined by the company I work for. And I think the timing was right to make the decision – the experiences I gained from the companies I worked for and the roles I held are now invaluable in helping me choose where to focus my time, and to provide value to my clients, companies I mentor, and audiences I speak to.

You were named by American Banker as one of Most Influential Women in Payments in 2013 and 2014. One: congrats. Two: why do you believe you were recognized? (Come on, you can brag a little).

It was such an honor to be included in that group of amazing and talented women (I feel the same about being included in your FemTech series.) There were women who were CEOs, ran huge organizations in large banks, or had started their own very successful payments companies. And then there was me, a mere SVP trying to drive payments strategy and product innovation at Fiserv. I’m still a little amazed I was selected. But I really think it was because I have been out there for years talking to clients, conference attendees, and the press about how rapidly the banking and payments space is changing, how much the rise of digital in the rest of our lives is impacting our payments’ needs, and how important the consumer experience is in whether those changes succeed or fail. And it appears people were listening. Go figure.

Looking back at your career, what is the one or two life lessons you wish you would have embraced earlier?

I don’t have many regrets where my career is concerned. I have done a lot of interesting work with some amazing colleagues and been lucky enough to be in the payments space at a time when the way we live our financial lives is rapidly changing. And I even took about 20 months off in the middle of all that to go travel the world, teach SCUBA diving and study Mandarin Chinese, and was able to get right back into it when I came back to the States. So what lessons have I learned? That life is too short to work at something that doesn’t excite you, that following your passion will make you successful if only because you are happy with how you spend your days, and that there is value in directness and honesty in all discussions….even when what you sincerely believe and have to say is not what the person on the other side of the table wants to hear.

What do you see as the 3 leading future trends for FinTech?

Mobile, of course, will continue to evolve and radically change our behaviors (financial and otherwise). The Internet of Things is fascinating to study and watch evolve, as various aspects of our lives become more automated, integrated and analyzed. And the many different ways in which fintech is enabling the extension of financial services to the unbanked and underbanked is something I will definitely be keeping my eye on – this is a huge market with many unmet (or badly met) financial needs, and there is some great new technology out there which can help improve that segment’s financial lives.

There are so many more things happening in fintech than any one person can keep up to speed on – blockchain, alternative lending, the list goes on. As I’ve said above, it continues to be a fascinating time to work in banking and payments, and I can’t wait to see what the next few years brings.