Podcast appearances and mentions of amy lombardo

Welcome back to this week's edition of Carpooling with the RV! Today, I am delighted to have Jackie Kopito again on the podcast. As we know, she is the author of the book Twintastic. Today she is joining us with her identical twin sister Amy Lombardo. You can find their fun Instagram videos for all things twin-related.  Website: www.jacquelinekopito.com Instagram: @jacquelinetwin Facebook Page: Jacqueline Davidson Kopito Author YouTube Channel: Jacqueline Kopito- Twin Expert and Author LinkedIN: Jacqueline Davidson Kopito Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome back to this week's edition of Carpooling with the RV! Today, I am delighted to have Jackie Kopito again on the podcast. As we know, she is the author of the book Twintastic. Today she is joining us with her identical twin sister Amy Lombardo. You can find their fun Instagram videos for all things twin-related.  Website: www.jacquelinekopito.com Instagram: @jacquelinetwin Facebook Page: Jacqueline Davidson Kopito Author YouTube Channel: Jacqueline Kopito- Twin Expert and Author LinkedIN: Jacqueline Davidson Kopito Learn more about your ad choices. Visit megaphone.fm/adchoices

Summary: In today's podcast, our Head of Advisory Services and Consulting, Simon Powley, will touch on what FIs are doing to protect their employees, while continuing to serve their customers during COVID-19 Crisis. Replay On-Demand - April 29th Webinar:  https://www.dieboldnixdorf.com/en-us/banking/insights/ondemand-webinar/whats-next-for-financial-institutions-during-the-covid-19-crisis Related Content:Diebold Nixdorf COVID-19 Web Page: Page:https://www.dieboldnixdorf.com/en-us/about-us/news-and-events/covid19 Transcription: Amy Lombardo:                00:15                     Hello again, this is Amy Lombardo, your host for this episode of COMMERCE NOW. During a recent Diebold Nixdorf webinar with guest Forrester Research, we shared ongoing research tracking how financial institutions are responding to the COVID-19 pandemic and what and how they are communicating to customers in this time of crisis. As the pandemic continues to grow and our economies continue to be impacted, how can financial institutions respond? Amy Lombardo:                00:43                     Well today I'm joined by our head of advisory services and consulting, Simon Powley, and we're going to touch on what FIs are doing to protect their employees while continuing to serve their customers during this unprecedented time. So welcome Simon to COMMERCE NOW. Simon Powley:                  00:59                     Oh, thanks Amy. It's great to be with you again. Amy Lombardo:                01:01                     Awesome. So let's get started here. My first question for you is this webinar that we had recently here, we saw new consumer behaviors and also shifts in channel usage. Based on these changes, how are we seeing banks initially adapt and really cope with COVID-19? Are we seeing an importance for more digital initiatives and the usage of those digital channels? Simon Powley:                  01:27                     Yeah. It's a great question, Amy. There's a lot of exciting things happening in the turmoil caused by COVID-19, especially for banks and financial institutions that are impacted by this. Simon Powley:                  01:39                     I thought it was a great webinar. I listened to it a few weeks ago. I thought it was fantastic. Simon Powley:                  01:44                     We're seeing a lot of changes. Early adaption is really driving a lot of changes in the way that they are operating and really touching customers. We're seeing branches being closed or certainly reduced hours. We're seeing call center volumes increasing dramatically as customers who are used to trying to reach out and communicate with their banks and be advised and guided through this. Obviously with the closures of banks they're looking to other channels to be able to service them. So it's been very interesting to see those changes. Simon Powley:                  02:17                     I think not only are our customers beginning to see the value associated with these digital channels in times like this. What I mean by that is people that we were talking to executives out there and a lot of our customers with banks, they're getting a lot of questions from people who either did not see value in digital channels in the past or were reluctant to use them for whatever reason, really beginning to gravitate and begin to not only have interest in these particular channels and how they can self service their deposits or get questions asked or check balances or what have you. They're really looking for solutions from their banks on how to do this in a new vibrant way. Simon Powley:                  02:58                     So we're certainly seeing those digital strategies and initiatives begin to change a lot for banks. It'll be very interesting, and we'll talk more about this in future, be very interesting to see how banks are defining their channels as a result of this and how they're leveraging that with their customer base. Amy Lombardo:                03:16                     Right. That makes complete sense, and we see the news cycles and note that responses and reactions that they're changing quite constantly. Right? We're in this different place today than what we were weeks ago, a month ago, even at the turn of the calendar year. Amy Lombardo:                03:31                     So with that said, what themes are you seeing emerge as the weeks change? Are bankers holding to their continuity plans? Are you seeing more gut reactions? What's that type of feedback you're hearing? Simon Powley:                  03:45                     Yeah, it's a mixed bag. Absolutely. Things are changing extremely quickly. I think if asked, most senior executives or even CEOs within the organizations, over the last couple of days we've seen JP Morgan Chase and Bank of America kind of come out and everybody is repositioning and changing their 2020 strategy. Certainly you're seeing that from an earnings and how they're really dealing with this downturn in different ways. Simon Powley:                  04:10                     So yes, certainly things have changed from the beginning of the year in the guidance that they're giving and their strategies are changing. From a week to week and a fluid environment I would call it is I think financial institutions are learning from this. So we're seeing a lot of trends emerge such as how do we leverage our digital channels again to be able to change with our customer base? Simon Powley:                  04:34                     I saw an article come out even this morning from Lloyd's Bank that they will be providing educational seminars for people on their digital strategies and giving away iPads to customers that are impacted by COVID-19 and I think specifically for customers that are over 70 for instance. Amy Lombardo:                04:53                     Oh wow. Simon Powley:                  04:53                     Yeah. So those kinds of strategies are obviously new, and I think I'm hearing from a lot of banks really from an internal standpoint is as they're doing this they're saying, "Okay, here's ways that we've always done things. Everything's on the table right now. How do we open up and change the way? What are we learning for this and what ideas of solutions do we have from our teams in the organization on how we use this to begin to change the way we interact with our customers and clients? How do how we support them during this time?" So you're seeing a lot of interesting things and things come out, which is just exciting even in the midst of terrifying weeks in some cases for people. Simon Powley:                  05:30                     So I think these continuity plans will continue to change. I think that we'll see a lot of people looking at new ways to reinvent the business and leverage a new way to talk to consumers. Simon Powley:                  05:42                     When we look at how customers really want to be interacted with, you have to look at the experience driven by Amazon or a Microsoft or an Apple in terms of how you leverage the customer journey. Right now those journeys have been completely disrupted in the traditional sense. So those are completely being reinvented. Simon Powley:                  06:06                     This I think in the long term will be very good for banks, and allowing them to be focused on PPP, the small business loans. The banks did not have long to stand those up and get those moving and being able to process those. So that took a tremendous amount of capacity. Simon Powley:                  06:25                     When you have digital channels, and some of these strategies already outlined on how to help your customers without being touched by a human being for all of their needs, you're able to adapt and adjust a little bit more quickly. So they're fairing a little bit better I think right now. But even in the smaller maybe community banking space, they're coming up with good creative ways, and I think that they will re-look at how they want to interact with their customers and the value proposition of technology. Amy Lombardo:                06:55                     Right. You mentioned something interesting about the tablets available for the elderly. It's interesting how the topic and the importance of financial inclusion is now coupled with how banks and credit unions are communicating how they can help here during this crisis. Simon Powley:                  07:13                     Yeah. We touched on it a little bit and certainly we can talk more about this down the line. But around that I talked to several folks in the industry and you're absolutely right, Amy. What we're seeing is a proactive stance not only on driving the awareness of digital channels, but outreach to help customers in some very unique and interesting ways. Amy Lombardo:                07:34                     Sure. That's an interesting point. Okay, so Simon, last question here. Is there a recommendation or best practice that FIs can use or approach with their business plan? Maybe even here, is the approach simply the current and near term plans to deal with this situation and take it more day by day, week by week? Simon Powley:                  07:55                     I think it's a combination, amy. I think first of all, it's triaged, but we're beginning to get out of that triaged perspective. People are getting used to working at home from a corporate bank perspective and the branches, they're beginning to define their journeys and how they can operate in this environment. Simon Powley:                  08:12                     The biggest thing you want to do right now is learn from this and gather as much data and information as you can, because what the next phase obviously is what are those business continuity plans going to look like and as you evolve, how do you create those and learn from that to change the way you're going to handle that the next time this comes up? Simon Powley:                  08:30                     Then it's the longterm trajectory. Looking at the roadmap of are your products and services still the same need that they were going into that and how do you begin to look at what your plans are over the next, let's call it 12 to 36 months. How do those plannings change as a result of that? Amy Lombardo:                08:46                     Yep, makes total sense. To hear more on this topic, listeners can listen to our on-demand webinar. Simon covers how to balance the needs of consumers, small and medium business clients and staff, the unique solutions FIs can put into action with digital automation at the forefront and the changing expectations for personalized experiences and operational efficiencies. Amy Lombardo:                09:17                     Listen now at DieboldNixdorf.com/COVID-19, and as always, thank you to our listeners for tuning in to another episode of COMMERCE NOW. Until next time, please keep checking back on iTunes or however you listen to your podcasts for new topics on COMMERCE NOW.    

Summary: Today's podcast is an oldie but goodie.  A podcast we first released in May 2019 was so popular we decided to share it again! In this episode, we take you on a journey of how self-service has woven its way into so many of our daily activities from paying for gas to checking in for a flight and really what are the consumer expectations for these types of offerings.  Resources: Chart your Path for Retail Growth - Connect with our Retail Experts here Blog: Retail Self-Service: Today, it's WAY more than self-checkout  Transcription: Amy Lombardo:                Hello again, this is Amy Lombardo, your host for this episode of Commerce Now. In today's episode we're joined by Matt Redwood who is the head of self service checkout for Diebold Nixdorf's retail division. And today we'll discuss how self- service has woven its way into so many of our daily activities from paying for gas to checking into a flight and really what are the consumer expectations for these types of offerings. So hi, Matt and welcome to COMMERCE NOW. Matt Redwood:                Thank you for having me. Amy Lombardo:                Always a pleasure to talk to our friends in the retail division. So Matt, let's talk a little bit about your background first. Can you tell the listeners a little bit about yourself? Matt Redwood:                Absolutely. So as you said, my title is head of self service for Diebold Nixdorf. Been in the company about 15 months now. It was brand new position within the company and DN saw the need to put more focus on the self-service checkout. So look after the self-service checkout business for Europe, Middle East and Africa. I've been in and around self-service my whole career. I've been in retail for a nearly 10 years.  So, I've worked with multiple different retailers all across the globe on their self-service strategy. But also that self-service implementations to make sure they're deploying the right solution into the right place. Amy Lombardo:                Very good. So Matt, what I wanted to do was start at a very high level and talk about some macro trends that are shaping the retail industry because you can't get away with reading any headline of any major industry publication these days without seeing something about self-service in there. So can you talk a little bit about some of those macro trends that are shaping the retail industry today? Matt Redwood:                Sure. So self-service in the form that we see at most grocery stores has been around for 15 years, which you know in the retail landscape is a long time. But it's taken a long time I think for retailers really to understand self-service checkout to get to a position that deploying it in the right way and of course for the consumers to adopt it in the right way. I think we're really at a tipping point now where from a consumer perspective is, there's self-service in every part of our life. Whether you go to the gas station, whether you go to the train station on the app or you go to the grocery, there is a self-service option and what we see in our data is that consumers really now see it as point of convenience for them. They see the benefits of self-service checkout and they've moved past the point of not only wanting it but they actually now dictate it to retain it. Matt Redwood:                So we have a lot of retail customers that come and want to work with us purely because that's [00:02:30] amazing that stores are actually demanding it. I think when self-service initially came on the scene and a lot of retailers saw it as a great way to strip costs out of that store. And so a lot of retailers, particularly in grocery, really went for very very high density self-service checkout deployment. They stripped a lot of stuff out of their stores but what they came to realize that actually they saw a bit of a drop in the consumer experience within their stores and I think the assumption was that they put self-service checkout and they remove staff, customers will use it and everything will be fine. But actually what happened is that had a detrimental effect on the consumer experience in the store because there weren't staff to help where consumers really valued the experience within the store. Matt Redwood:                So what other retailers now do is actually, it's not about a reduction in staff, it's about a redistribution in staff. Amy Lombardo:                Right. Matt Redwood:                If you take tasks that were normally done by the system and you give it to the customer to do, that frees up that member of staff to then be in other areas of the store to make sure that customers can find products, or the shelves are well stocked, they're well priced. So actually getting the experience right or getting the efficiency right at the self-service checkout as a knock on effect on the customer experience all the way right back through the store. Amy Lombardo:                Right. So Matt, can you explain how consumer's knowledge and their comfort level is shifting in terms of how consumers are engaging with the self-service technology today versus maybe what they did when retailers first started introducing it many years ago? Matt Redwood:                Sure. So I think there's really a perception shift with self-service checkout that's happened over recent years. I think when self-service was first introduced to stores, there was a bit of negativity and a bit of push back from consumers because they saw it as a replacement of the members of staff within the store, especially very loyal consumers that went to the same store every single week to do their shopping. They built a reputation with the member of staff. The thought of that member of staff being taken away and replaced by a machine was hit with a lot of negativity from consumers. The shift that's really happened over the last couple of years is consumers value the choice, the choice to check out or to interact with a brand, a retailer in the way that they want. Matt Redwood:                So now what we see a lot of retailers doing is focusing on giving consumers as many channels to shop within their stores or checkout within their stores as possible. So the role of the assistant has changed completely from just a member of staff and the checkout to really kind of a customer experience manager within the store. So the tasks that would normally be done by an assistant at a point of sale system will now be done by the consumer either on a mobile device or self-service checkout or a kiosk. Matt Redwood:                And that frees up that member of staff to actually deliver the right level of customer experience within that store. So I think the perceptional shift has been away from that machine is taking a member of staff's job to actually that machine is an option for me to check out of the store and it's freed up the member of staff to deliver a better customer experience somewhere else in the store where I wouldn't normally get it. Amy Lombardo:                So Matt, I wanted to comment on what you just said because I think about how when I go to my local grocery store and I use self-checkout all the time, maybe because I'm a control freak and I like to see what I'm actually scanning and paying for. I let my kids do it sometimes, but then I hear time and time again, you'll see certain generations that come up and they say, I don't want to use this, this takes longer. And there's always a problem with it. And I'm just wondering is that a perception issue? Is it a training issue? You know, can you comment on that a little bit in terms of maybe just generational preferences and using self-service? Matt Redwood:                Sure. I always say to retailers, deploying self-service checkout is not as simple as deploying a point of sale solution because innately it's a change in so many processes in your store. So we really refer to self-service checkout as a business change solution because it enables retailers A. To make their stores more efficient and but also B. Delivering a much, much better customer experience to their consumers. But the byproduct of that is because of the interaction is so different between the brand and the consumer, that retailer has to change so many processes in their stores for self-service to really be efficient and work well. Matt Redwood:                So things like cash management, how they staff their stores, how the staff interact with the customers, how their customers interact with them as a brand, all changes. So there's a huge amount of operational shift that has to happen. So I'd say a big part of getting self-service right is how you operationalize it. Ultimately it puts a lot more onus on the staff to deliver a better customer experience because you're taking away so much human interaction within the store. But when [00:07:30] staff do interact with consumers, it's that much more important that they deliver a much, much better service. So I think it's probably a combination of not just the technology but how you staff the stores, how you operationalize your stores. It all comes together to really deliver the right customer experience. Amy Lombardo:                Got It. And so in self-checkout or really varying ways to shop, it goes beyond just self-checkout. So there's smart phones, there's handheld scanning devices in the stores, [00:08:00] all of these different types of self service options. How have these changed the way consumers engage with brands? Matt Redwood:                Well, I think it's giving consumers a lot more choice in terms of how they do interact with the brand. If you think about a customer journey of a grocery shopper five years ago, they'd make the decision that they want to go shopping and that may be influenced by family or what they're going to eat tonight, what they have in the fridge. [00:08:30] They'd make the choice to go to the store. They'd shop that store, they'd pick their products, they'd go to the checkout, they'd check out and they'd leave. Matt Redwood:                Now what we're seeing is the customer journey is actually a lot more cyclical and yeah, retailers really have to focus on the digital journey. So how do I influence that consumer when they're away from my store, when they're away from my brand? So yeah, while they're watching type TV, how do I influence them to actually shop at my store, rather go to a competitor store and then how do I drive that consumer into that store [00:09:00] and enrich that customer journey when they get there? Matt Redwood:                So give them the choice to shop your brand in the way that they want. Once they get to your store, enable them to shop the store in the way that they want, but put the right technology in there to enrich that consumer experience. Apply the right level of staffing to the store as well to supplement that technology journey. Allow them to check out in the way that they want. I think now more than ever we're seeing retailers really put the most amount of choice in that technology [00:09:30] that consumers can use to interact with a brand than ever before. Matt Redwood:                But then it doesn't stop when they leave the store. Once they left the store, how do I influence that consumer to come back my store and actually driving the consumer into the store and actually making sure they come back is as a bigger part of the customer journey as the in store piece. So just giving the consumer a good in store experience isn't enough anymore. You've really got to enrich the consumer experience all the way around the circle. Amy Lombardo:                [00:10:00] Do we see custom retail apps tied into self service options? So I think of Target for example, and I have their cartwheel app and I always get special discounts given to me just through the app. And then a lot of times then it's for the ease of self service. So do we see that customized apps maybe have any type of leverage on how self-service is used? Matt Redwood:                Yeah, absolutely. So [00:10:30] when you think about a mobile app, and more than ever, every single consumer has a mobile, a piece of technology that allows them to effectively never go to a store again. But what retailers can do with that app is they can actually influence that consumer come to that particular brand or that particular store. And as you said that may be through personalized adverts, it could be through promotions or through a loyalty system. But ultimately that's an amazing tool for retailers to, I wouldn't say target [00:11:00] specific consumers, but definitely engage with consumers when they're away from that store or make sure they come into their store. And then really the use case flips because if you take the online second screening type of example of, I want to buy a TV. I might go into a store and look at TVs, but there I'll be using my mobile phone to second screen. And actually I'm researching prices all the time. Matt Redwood:                So I'm now a professional shopper because I'm price matching as I'm going through the consumer journey. So it's really important that [00:11:30] retailers don't shy away from mobile. They actually embrace it because consumers don't like to be forced down a particular path. They want choice and they want clarity as well. Clarity of what they're buying. Clarity of pricing. So really retailers have to accept that every consumer has that mobile device and really put a lot of focus on using that to enrich the in store experience. Matt Redwood:                Of course., as well, consumers could apply the application to allow them to actually shop the store. So scanning products and [00:12:00] actually use it as the checkout. So yeah, self-service checkout then becomes a supplement to a mobile application because it allows them to finalize the journey within the store, potentially pay cash or pay card or get help from an assistant or coupons or loyalty. So really the self-service checkout on the mobile device shouldn't be seen as competing technologies. They really supplement each other. Amy Lombardo:                That's an interesting way of looking at it. So when a retailer is ready to make the shift to self-service or they need to modify their existing plan, something's not working right, maybe they are ready to add on some new functionality. What's your advice on how that retailer begins? And I ask you this because I go back to one of your initial comments here was the over simplification of self-service solution. So you can't just set it and forget it. So you know, talk to us a little bit about some of those advice pieces. Matt Redwood:                [00:13:00] Absolutely. So really important, as I said previously, not to consider self-service checkout as another point of sale solution. And as you said, which I'm going to use actually set and forget. We don't want any sets and forgets because it's not a guarantee that our consumer is going to use that device. So if anyone wants any help with that process, we have some great advisory services where we work with retailers specifically on identifying the right solution to put into their stores A. For what they're trying to achieve as a [00:13:30] business but B. For their consumers. So staff from a data point of view work out what the trading profiles of your store are. Work out what you're trying to achieve by putting self-service checkout at the store. Is it efficiency, is it customer experience or is it just because everyone else is doing it or your biggest competitor is doing it? Matt Redwood:                That's quite an important [inaudible 00:13:51] to start from. And then I think really focused on the customer journey. So why do your shoppers shop at your store and what kind of customer experience are they [00:14:00] expecting? If you can nail those three points, then you can really identify what type of self-service checkout to put into your store. But then more importantly, how you operationalize it within your store. Matt Redwood:                So the landscape that we see now with retailers, particularly with retailers that are quite far advanced down the self-service checkout journey, they're not just putting one type of self-service checkout in to a store, they're putting three, four, five different types of self-service into a store and really focusing that particular solution [00:14:30] at a particular customer demographic. A. It delivers them the best operational efficiencies but it also delivers the best customer experience for their consumer, because it gives them the choice. So I would say focus on the operations and focus on getting the right solution for your stores and for your customers and then operationalize it in the right way. Amy Lombardo:                That was a good way of listing it out here for our listeners. So you talked about some of these new industries or just [00:15:00] the fact that retailers want to get on board if they're not there with self-service. Can you talk a little bit about maybe some of the unexpected types of industries that you're seeing? Because we all know of the grocery model or the C-store that it's pretty easy to grab something quickly, pay and go. But what are some of those like unexpected industries? Matt Redwood:                Sure. Self-service has been around for almost 15 years in the grocery industry, but for the first time I think retailers outside of grocery are starting [00:15:30] to sit up and notice self-service checkout as a way of enabling them to deliver the right in-store experience. So we're talking to fashion retailers, the petrol retailers, the GM retailers, the DIY retailers. Ultimately there should be no bounds to self-service checkout. The same person that shops in a grocery store is going to be the same person that goes to the DIY store on a Saturday because they're renovating the house or goes to the petrol convenience store because they want to buy petrol for their car [00:16:00] or takes their family shopping and goes through a fashion retailer. It's the same consumer. So I think we as a supplier to the industry really need to realize that actually every consumer is the same whatever shopping type their shopping in. And so if a consumer is demanding self-service in a grocery environment, why wouldn't they expect it in any other shopping environment? Amy Lombardo:                I think it makes our lives much easier and it gives you that piece of empowerment and control your shopping experience a little bit. If you're making the list [00:16:30] and you're checking your coupons, why shouldn't you just be able to finish the transaction as well? But maybe that's just me. Matt Redwood:                I completely agree. Amy Lombardo:                So Matt, I think this is a good place to wrap up our discussion today and I thank you for joining us here and sharing your insights. And to our listeners out there, if you're interested in more information on self service and retail, go to dieboltnixdorf.com/retailgrowth or click on the link in the podcast show notes. Until next time, please keep checking back on iTunes or however [00:17:00] you listen to podcasts for new topics on COMMERCE NOW.  

Summary:  On this podcast we discuss how to transform from traditional sourcing to an “as a service” economy. Today’s consumers expect “anytime, anywhere” access to the self-service channel, leaving financial institutions with the challenge of optimizing availability without driving up costs. For many FIs, this challenge can quickly become overwhelming.  Resources: Blogs: Banking Innovation: 4 Ways You Can Make a Big Impact Quickly The Growing "XaaS" Service Economy Trend Websites: COMMERCE NOW Diebold Nixdorf Transcription: Amy Lombardo:                00:13                     Hi, this is Amy Lombardo, and I'm your host for this episode of COMMERCE NOW. We're coming to you live from DN Intersect 2019 in Las Vegas. I'm joined today by Homi Karkaria, who is head of our Solutions Group, and he's presenting to our bankers today a topic that's entitled Evolving the Operational Model, which I think is a little intriguing, due to your role in the software market. So let's talk on the topic of software as a service model and why a banker should think about this as an operating model. So my first question for you, Homi, is where do you think the global software as a service market is headed right now? Homi Karkaria:                   00:52                     Sure, thank you so much. Well, there has been significant increase in the global software as a service market as we look at things. For example, if you look at everything as a service, or what people would coin XaaS, that market has grown by 38%, or is expected to grow by that by 2020. When you look at the software side, which is the software as a service, that is also growing at healthy double digits greater than 20%, with a cumulative growth rate expected to reach a huge 185 billion by 2024. Amy Lombardo:                01:27                     Does that sound about right for the role that you're in? Would you expect to see that? Is it something that bankers are accepting and gravitating now? Homi Karkaria:                   01:36                     I think bankers are really understanding this and accepting it. They have started realizing the advantages of why this is happening, what's in it for them, and how they could benefit, whether they look at initiatives like branch transformation, more automation, connectivity of physical and digital channels. I mean, all of this has to happen with limited cost, with limited infrastructure, with limited resources that the bankers have, and this is where software as a service can really help them. Amy Lombardo:                02:06                     Okay. So dive a little bit deeper into that. You mentioned a few of those benefits there, but can you explain them in a little more depth here for our listeners? Homi Karkaria:                   02:15                     Absolutely. When you look at customers, customers have different needs. So there are different needs for tier one customers versus tier two entry. A tier one customer might be able to have a large capital expenditure as a part of their budget. A smaller customer might not. So how do I have a solution which translates or which goes from a CapEx mode to an OpEx mode? So that's one benefit for the tier two segments. Homi Karkaria:                   02:40                     The second thing is, banks want to retain, in certain cases, their own cloud environments, their own private cloud. However, there are certain applications which are not business critical and they want to connect to a public cloud. So how do I build a hybrid solution which connects the best of [inaudible 00:02:57] from what Diebold Nixdorf brings with what the have in-house? Homi Karkaria:                   03:01                     When you look at the challenges that the banks face today, a lot of it is to do with upgrades. So I have done, you know, how much time does it take to do an upgrade and that could be reduced significantly in software as a service model. Homi Karkaria:                   03:15                     The other big challenge is, when I have an update, how do I ensure that my install base is not affected because of somebody else? How do I have a faster go-to-market? How do I have a seamless migration to have a positive consumer journey? So those are all the benefits that the standardized solutions which comes as a part of the SaaS models brings to the banks. Amy Lombardo:                03:38                     So where does security come into this model? Is it almost you're more protected by going through as a service model, or maybe what are the considerations that a bank needs to think about pertaining to security? Homi Karkaria:                   03:52                     Security becomes absolutely critical when we go to this model because the benefit is the flexibility across the different channels that brings with it the challenges associated with security. Now, when you look at security you're not just looking at security from a client end-point perspective, which might be the ATM, you also need to look at security from a backend server perspective based on the solution that's hosted in the cloud, and how are these two connected? How do I ensure that my end consumer is indeed the right one and is using the channel effective. Security becomes an extremely critical part of this equation. Amy Lombardo:                04:29                     Okay, so Homi, let's move a little bit into the implementation side. What does a banker need to think about as they want to move to the SAS model or are there particular models based on their own environment? Homi Karkaria:                   04:43                     Yeah, so I give simple example to illustrate what kind of models the bankers can think about. If you are an end consumer, you have multiple options. You could own your own car. That is equal to, in my books, putting a software on-prem at the customer side. But I could decide to lease a car. I don't want to own the car. I do not want to have the headache of it's a maintenance and upgrades, et cetera. And I want to change it after a couple of... so I could lease a car. And leasing a car is then synonymous to software as a service. I could also have a situation where, I don't even want to lease a car, I don't want to drive it. I want to take a taxi. I want to go from point A to point B today. I want to go from point P to Q tomorrow and I want to take a taxi. Homi Karkaria:                   05:28                     And that would be a synonymous to a managed service model where a customer is requesting, I have not only to deploy the solution but operated on the RBF. And finally when we look at something that we call biz sourcing, it's like taking a train. A train leaves a station, irrespective of the number of consumers that enter it. A train does not deviate. It goes from station A to B to C at a specific predetermined time period. And that's akin to what we call biz sourcing, where solutions ATM as a service come in. So bank needs to think of where are they today? Where do they want to go, how much do they want to invest? What's the level of maturity inside the bank? How do they focus on their core competencies of financial services versus focusing on technology and let us handle it for them. Amy Lombardo:                06:16                     Got it. Well that was a perfect example there and made very logical sense to me. You mentioned on premise and off premise servicing. Can you explain the differences there and and really is there any difference for the consumer? Homi Karkaria:                   06:34                     So from a consumer perspective there wouldn't be a difference. From a bank's perspective, there are a couple of differences. When you look at a solution that is hosted as a service, you have all those benefits, like a standard solution with faster go to market with the quick upgrades and seamless migration, et cetera. However, when you look at an on-prem solution, you have other types of advantages. Namely a customer might want to have a highly customized solution. They might want to have control over the implementation timelines. They might have specific integrations which are very proprietary to the banks ecosystem, so they might have cash on the balance sheet, which they want to invest upfront and they want to pay for the licenses right away rather than distributed over a couple of years. So it's a very different model when you look at on-prem versus SAS and that are advantages and differences between the two. Amy Lombardo:                07:32                     So it sounds like there's benefits either way, it's just based on how your organization's makeup is built and where you want to go with the offering. Right, Homi Karkaria:                   07:42                     Absolutely. I think especially for tier two banks, who do not have significant investments to be made on the technology side and have on faster go to market, I think a SAS solution would be better off than an on-prem solution. But otherwise, work models are very much work in the market marketplace. Amy Lombardo:                07:58                     Got it. Okay. So I think this is a good point in our discussion to end here. Homi, I'm grateful and thankful that you sat down with me today and to our listeners out there, keep following us along on COMMERCE NOW and for more information on our Vynamic Software Offerings go to dieboldnixdorf.com. Thanks for listening.  

Summary:  Guest Ben Hammersley speaks on his take on how you need to be present today, so you can be future ready for tomorrow. Resources: Hammersley Futures Website Ben Hammersley LinkedIn Profile Diebold Nixdorf Website Transcription: Amy Lombardo:                00:14                     Hello and welcome to COMMERCE NOW, your source for  FinTech conversations and emerging trends. Today, I have the unique pleasure of talking with Ben Hammersley. He's a globe Trotter and an author an adventure seeker, and he has the most wicked handlebar mustache you've ever seen. And today he's going to give us his take on how you need to be present now so you can be future ready. Sounds easy. Right? Well wrong. Let's get Ben's thoughts. So, Hey, welcome... Ben Hammersley:            00:56                     Thank you. Such a pleasure to be on COMMERCE NOW. Amy Lombardo:                                                Oh good. Thank you for that plug. All right, so I'm not gonna be able to do you justice. So why don't you tell us a little bit about yourself? Ben Hammersley:                                            So I'm one of those annoying people that disappointed my parents over the past 20 years by not having a job, they can describe, I'm currently a futurist or is a strategic foresight person. So I run a company called Hammersley futures, and we work with corporations and with governments and some high net worth individuals to sort of help them understand the future and specifically to help them understand innovation and the methodologies behind innovation. And that has come from 10 years of doing that. But, before that I was a technology journalist and I edited wired magazine in the UK and I was a war correspondent in Afghanistan and I've done many, many things. I run a digital studio making digital things for couture houses and luxury brands. And so I have this very strange background, which has come together into this one thing which is helping people understand the nature of innovation. Amy Lombardo:                01:57                     Okay. And, and what inspires you about your work? How, did this whole being of Ben Hammersley come together? Ben Hammersley:            02:06                     I think what inspires me is sort of two fold. There's this, there's the selfish reason, which is that it enables me to be increasingly eclectic and, and taking lessons and taking influences from, from lots of different things, which is very selfish because I'm, you know, I'm fundamentally sort of unemployable and the regular day job or you know, I'm, how would you put it neuro atypical. And so, so being, having a career where I can travel a lot and taking a lot of input and then synthesize it into something else is a great privileged but also the slightly wider thing. I think the thing that really inspires me over the past couple of years is that I think we've come to a set of methodologies and an approach to our work, which is genuinely helpful for people are at as sort of a holistic level. It's helpful for them in a business point of view, but it's also, I think it's genuinely helpful for them sort of personally and that sort of pastoral care aspect to it. If that's slightly weird way of putting it. Yeah, Amy Lombardo:                03:13                     no, that's a unique identifier. Yeah. Ben Hammersley:            03:16                     Is actually is very satisfying because, because I get a lot of people coming to me immediately after I get off stage routes out of a meeting or comes to me six months later and say that thing, that approach really changed the way that that I think and it's made my life or my business or you know, whatever it is that they're particularly interested in has made it better. And that's, that's incredibly satisfying. So that's, so I get to, I get to go away and be weird, which is, which is helpful and I, and I get to help people, which is great. Amy Lombardo:                03:47                     All right, so we're at a banking conference here. Intersect 2020. So can you give me some examples of areas you think banks are missing the boat? You know, opportunities that they can be capitalizing on. Ben Hammersley:            04:08                     So I, I think actually that question really highlights the difference between my approach and, and other futurists or other technologists approaches to these things, which is that I don't think there is a boat as it were or a collection of, of large boats that people are missing or not missing. It's very easy and I am very typical of the sorts of conferences and not just banking conferences but any, any industry conference to say, ah, you know, if you are not paying attention to, you know, subject X or if you're not paying attention to new technology Y then you are than you are falling behind and you're missing the boat as you say. And that's almost universally bullshit to be honest. In the vast majority of those conferences. And the vast majority of those subjects very specifically are things which are overblown and misunderstood and probably aren't at least right now relevant to the, to the individuals in the audience. Ben Hammersley:            05:12                     So instead of thinking about the world as in terms of innovation boats that you can get on or not, and if you don't get on them, then you're going to be left behind to continue the imagery. Instead, what I try and teach people is to, is to look at the boat and see if it's something that is suitable for their business in the context of their business. Okay. So another way of looking at this is that the vast majority of futurism that I do, where I, in terms of when people ask me directly, you know, what are the new technologies that we should be paying attention to? Almost all of those technologies aren't things that don't exist yet. They're technologies which do exist and are being used a lot, but they're being used in another place. Okay. And so in a lot of industries you can be very, very innovative literally just by being up to date. Ben Hammersley:            06:02                     Right? Banking in the U S is a good example of that. In that, in that if you compare banking in the U S too, as specifically consumer banking, if you, if you compare consumer banking in the U S to consumer banking elsewhere on the planet, you could very easily innovate massively radically for the U S just by being about five years behind Europe or you know, or 10 years behind China, right? Like if you really wanted it to be up to date, just big, just go and do what the Chinese are doing 10 years ago. Those sorts of things. So there is, there is a saying that William Gibson, the science fiction writer said that that the future is already here. It's just not evenly distributed. And that I think is very true. But, but all of these or this sort of talking around this highlights the thing that I like to talk about, which is that innovation is not a step change to a new future that everybody agrees on. Ben Hammersley:            06:54                     Instead, it's a methodology of continuous improvement based on your own personal context and the context of your business. And that takes, that looks at those new technologies. It looks at those big boats as you say and says this, the suitable for us is does this, you know, yes, this is getting the front covers of the economist and everybody's very excited about it or whatever. But it isn't necessarily the thing that our customers are most likely to benefit from the most or our business will benefit from the most. And so what do we teach you is a much more holistic and continuous practice of continual mindful attention giving innovation on a daily basis rather than going, everybody needs to be on the blockchain or we're all dead. Amy Lombardo:                07:41                     Right? You know, you have this unique thinking on this concept of being present or recognizing what is right around you and you have to be able to capitalize on that before you can look ahead and you maybe unpack that a little bit for me and just give a little more examples. Ben Hammersley:            07:58                     Sure. Maybe like some concrete examples of what you see in your business. Sure. So, so let's start actually from the beginning of the talk I just gave, which is that because of the exponential rate of change that we have at this time on the 21st century and rate of change in everything. And you know, as I as I said on stage that that technology and society and culture and business are all interlinked in a fundamental way. When one changes then all the others change in the olden days. So 20 years ago, 30 years ago, technology was, was this specifically technology was the sort of layer on top of business. So you have business and then you have the technology that comes in and makes it a little bit more efficient. Right? Like this fancy bolt-on. Yeah, exactly. And you know, fancy precisely that. And, and the, the CIO of the business or the CIO. Ben Hammersley:            08:48                     So the business was probably not even on the board. It's probably one level down at the same level as say the, you know, the facilities manager, something like that. Whereas today, specifically in, in data-driven businesses and financial services and banking are perfect example of that. Your business is what you do with your data and what you do with the data is fundamentally technologically driven and so everything is tied back to the technology, but that technology is so intertwined with the rest of the world that everything changes. Everything else, everything is as a codependent uprising and everything changed. When one thing changes, everything else changes because technology itself changes at an exponential rate because of phenomenon like Moore's law, which is this phenomenon that for roughly the same price every year, you can fit twice as many components onto an integrated circuit, which means that again, speaking roughly every year, computers get twice as powerful for the same price or the same power computer harms in price roughly every year. Ben Hammersley:            09:47                     Because of that exponential growth and because exponential growth is itself incredibly difficult for human beings to comprehend because technology grows like that, the rest of the world changes at the same rate and therefore for a futurist like myself, making strategic forecasts, saying what the world's going to be like in 10 years time, I am completely lying, right? I'm just making shit up at that point because it's impossible to do so. And I think we only have to look back over the past three or four years or certainly the past decade and see how society has changed in the past decade or the last 11 years since the launch of the iPhone to today in every aspect of of human endeavor, whether you're talking about business or culture or society or politics or everything, all of that is now utterly unrecognizable compared to where it was 10 years ago. So if I come up to you and say, Hey, this is what the future of banking is going to be like in 10 years time, I'm [inaudible], I'm just making things up and I might be right. Ben Hammersley:            10:39                     In which case in 10 years time you'll think I'm a genius, but I'm not going to be right. Right. And nobody's going to be right. And so if we, if you start from the basis, the fundamental basis that, that, that five year plans or 10 year plans are just wrong, then there has to be another way of living your life. There must be another way of actually doing your job if you're a member of the leadership team of a, of a bank. If your job, what to be on the board is to guide this organization into the future. And yet it is structurally impossible for you to predict what the future is going to be like, then you're going to need another way of doing it, right? And so what we came down to in terms of our work is that that other way of doing things is doing it as a continuous process one day at a time. Ben Hammersley:            11:24                     And this isn't necessarily new. In fact it's, it's something that was in manufacturing. For example, Toyota invented the Toyota system in the 50s and, and that's what made Toyota. And in a cultural and religious context, you have a lots of people's spiritual practices, which are about continuous improvement. And you have lots of physical practices like yoga for example, where you can't win yoga, right? There's no end game of yoga, but it's a practice that you do every day and you get better at it, but you're always going to get back. You know, it's something you just do unless you're doing very yoga or wine yoga. Well indeed, but that, that, that does actually that's Dan, it [inaudible] other than that magnificent sounding activity, there's, you have to be in the States. This is what we do. It's exactly that. Goat yoga [inaudible] get tired after awhile. This is the thing. Ben Hammersley:            12:19                     But the thing of the thing about all these prints is that they're continuous practices. And so we try and look at what would it, what does it mean if innovation is a continuous practice rather than a continuous [inaudible] gentle practice rather than a kind of violence every five years we take on the, the, the new technology and an upgrade to it or half upgrade to it because everyone's confused by it, which is the standard Silicon Valley model of innovation, which is every five years they invent a new thing and everyone goes around and stands on stage and says, if you want us embracing this new thing, then you're all going to die. And so whether it's blockchain or the cloud or big data or AI or whatever it is, and of course those things aren't, that's AIDS, it's just not true. But it's also just not a sustainable method of innovation. Ben Hammersley:            13:09                     Right? Yeah. So, so I try and help people do that gradually. And so then the question is how do you do it gradually? And to do it gradually, you have to do it by really asking quite fundamental questions about what it is you do on a daily basis ordinarily and why you're doing them and who you're doing them for and who you're doing them with and how best can you serve those people or how best can you structure your teams or structure your internal processes so that you can put yourself in a position where you can better serve those people. And that involves things like employing more cognitively diverse teams. So you guys as many ideas and as much as much sort of empathy within your organization as you can. It means talking to your customers a lot more. It means paying attention to all of the processes you do and asking yourself on a, on a daily basis, why aren't we doing this in this way? Ben Hammersley:            14:08                     Because a lot of the things that many companies do, I've done that way because somebody decided and then that person left and nobody can remember why, but that's way the way they've always done it. And so now that that approach is actually much more uncomfortable than doing the same thing for five years. And then having somebody turn up and say, Hey, now you need to do the blockchain thing. Or Hey, no, he needs to do the AI thing. It's much less comfortable in that everybody fit many people. And I think most people actually through human nature kind of prefer to just sit around doing the same thing and then just to be told what's due next. It's much more complex and much more uncomfortable to be continuously, continuously asking, am I doing the right thing and what am I, what am I? Yes, and what am I assumptions. Ben Hammersley:            14:56                     Yeah, exactly. But it's also, it's a daily practice of what am I, what assumptions we make. Eating is what we thought we were doing is the concepts that we had 12 months ago. Are they still true? And asking yourself these fundamental questions. But if you do that, if you do that practice, then very rapidly you bring yourself as an individual and your team and your organization right up to the cutting edge of today. And once you're there and it's become a habit to be there, then the future takes care of itself. And in the vast majority of industries, just being up to date pots, you in the top three and in many industries that puts you into the top one. Because most companies, you know, when it's 2019 you know, in the world it's like 2002 inside the organization. Yeah. Yes. And if you just bring your organization right up to 2019 and you know precisely what it is that you're doing and who you're doing it for and what they want and what you, what you can provide and all of those sorts of things. Ben Hammersley:            15:57                     And you get there by asking these quite difficult questions and making these sort of mindfulness practices as it were. If you can get yourself up to that level, then you're profoundly well positioned in a way that all of your robots won't be. So one last question for you. Sure. And you're probably not gonna like me for this question because you just can't predict the future. But I have to ask this question because I want to get a different perspective. Sure. Because you are not a banker. So what do you think the future of cash looks like? So my personal assistant is Chinese and she was on holiday for the past two weeks and she just came back and she went back to her family in China and going Joe. And she was, she was telling me about this a couple of days, you know, a couple of days ago at time about the whole day, you know how it went. Ben Hammersley:            16:47                     And she was saying that not only did she never see any cash like physical cash throughout the whole trip, but also she never saw any credit cards either. And this came to the head when she tried to pay for it. She went out for lunch with her brother and she got her wallet out and she'd got her physical credit card out and her brother started laughing at her and she, and she was like, why are you laughing? You may and he lifted up the tablecloth on the table and other than this tablecloth under the glass tabletop was a QR code and he'd already paid the bill by scanning the QR code on the tabletop with the, with WeChat, which is the dominant app in China. And so in China it's, it's incredibly rare to leave the house with any form of wallet or credit card and certainly with any cash now this changes many things. Ben Hammersley:            17:38                     It changes fashion, right? Because you only need one pocket, which is the pocket for your phone. You don't really need a handbag apart from other things. Right. But you don't need a purse, you don't need things for carrying money cause it's all on your phone and everybody from market store holders to beggars in the street to the Chanel boutique, take the same payment platform, which is through your phone. That's one possible future. Okay. Yeah. And in some places I can see that becoming, you know, 100% in China and some bits of the U S I can see that being 95% of your day at this if not we chat. But something like Apple pay and contact lists, you know from my, I bought loads of things this morning and bought it with my watch, you know, of through Venmo. Exactly. All of those go out. You just pay each other that way. Ben Hammersley:            18:25                     Precisely. And you and you know, and certainly in the UK where I'm originally from contact lists, Apple pay, whatever you want to call it, is pretty much universal everywhere. However, you know, I live in Brooklyn and or on planes or in hotels or in corporate headquarters. And for me to live my life cashless solely through, you know, Apple pay and or my sort of platinum Amex or something is totally doable and perfectly, perfectly understandable future. But whilst my assistant was on holiday, I was moving house from Los Angeles to Brooklyn and I drove across the U S and I drove through the Southern States of the U S and certainly that pigeon forge Tennessee goes cashless will be a good 10 years after Brooklyn, New York or Venice beach, California where I'm sure, and so when you have a conference like, like this for example, which where the audiences are bankers but they're, but they like regional and local bankers as well as like your, the mental image you have, when I say the word bankers, right? Ben Hammersley:            19:30                     Those guys, their version of innovation around something like cash or payments or something is going to be different and will be just as innovative, but it won't be the grand myth of a capitalist society that say the cashless society vendors are putting forward. Yeah, right. Yeah. But it will be a bit, it'll be the dominant thing in their region that they correctly work for that work for that thing. Micro society. That's right. Yeah. And then Mike, Chris is, it might be 10 million people. It might be 100 million pieces. Okay, that's fine. And so we'll see. And this is, this has been the same everywhere. You know, if you look at M-Pesa, for example in Kenya, that's been a mobile cash solution that's been there for 1520 years and has been as a major part of their economy. And then you have things like local cash systems where we, a friend of mine again lives in Kenya and is currently doing it, setting up her own currency for a local, for a region. Ben Hammersley:            20:26                     Oh wow. And there's quite a few of these around the world where it's physical cash, you know, it's real, the real bank notes, you know, and they're only accepted within that community. And so it keeps economic flow going around the community. And so they're not dollar rich or shillings rich or whatever, you know the Kenyan currency is, but the rich and the local, you know the economic movement hat. Yup. Yup. And again, that's now that's also a solution to the question about what, what does society, what does cash look like? Because that invites you to ask the question of what is cash in the first place and why do we have cash and what is it for and what is the definition of a, of a healthy economy in T? Is it the number on a spreadsheet or is it the movement of money? Is it the fluidity of money rather than this rather than a, a stock somewhere living in a bank account or not moving. Ben Hammersley:            21:19                     And any economist who's gotten past the first year will tell you that that is the flow of money. That's the important thing, not the stock of money. And so cash is a pretty good thing to flow around. And so again, the reason I'm being like giving you five different answers, the question is because there are a million different answers to that question or around that every different context and the why is organizations will look at their context of their marketplaces and if they're small organizations will go well here in this place with this group. And when I've spoken to my customers, they've expressed what they want to do and I'm providing them the solution to the thing they want to do. And it turns out the best solution, the thing we want to do is QR codes or the best solution is our own local currency or the best solution is more ITMs. Ben Hammersley:            22:06                     And again, this taps into is not a technological thing. It's always a social thing. So having moved from the UK to the U S five years ago, the instant thing that I noticed is the 3% on a bad day, 1% on a good day, you know, surcharge to all ATM withdrawals, right? That's illegal in Europe. Literally illegal. Right? And so one of the features of cash will be, it won't cost anything for me to get cash, for example, because that's because that's a 3% tax on being poor. And in terms of social inequality, that's unacceptable actually. You know what I mean? Spot-on. So, so will you, do you only get to that realization when you start to question actually what is this for? Right. The same thing for, for contact lists, I have the, the Apple cart from Apple and from a product design point of view, the whole process of applying for receiving, activating, using the Apple card, both a digital thing on my watch and on my phone and as a physical artifact when they shipped me the actual metal card, the product design of that, the service designer that is in is astounding. It's, it's a good 10 years ahead of everybody else, right? In the U S beautiful. There's a process, and I've used it a lot today to buy coffee and things, but that's not the future of payments because the future of payments cannot depend on somebody owning a thousand dollar device in their pocket. Right. The future of payments has to include like my five-year-old you turned five two days ago and is now getting an allowance. She gets 50 cents a week because my wife is stingy. Ben Hammersley:            23:52                     Earn that 50 well yes, and she has chores to do it. Exactly, but she's not going to have a cashless. If I went to her and said like, yes, I'm going to, I'm going to credit your contact list. You know I'm credit. You're in contact with that physicality, right? Yeah. And she can't park. There are no gumball machines that we'll take. We'll take like Apple pay and gumball machines. That's right. And gumball machines is her big thing right now. And so she's obsessed. And so like for her the best payment solutions is coins, whereas for the nation, the penny makes no sense. Right. For example. Right. And for the user, the U S bank notes are a disaster. They're all the same size and color. Somebody used to redesign those, but now, and I think we're good there [inaudible] it's like it's an impossible question, right. Ben Hammersley:            24:50                     Which is why I sort of blooded a path it for what photo booth but to come to this solution. But to answer that question, you have to answer it as an individual and the [inaudible] for an individual and for the companies that services individuals, you can come through, you can come to an answer. It won't be the same as the guy down the street or the person in the one state along. And certainly it won't be one person's four States along any other direction. But for your 100 million people it will be perfect. I think this is a good place. Ben Hammersley:            25:18                     Do we have any other impossible solutions? Disposable problems? No. Unless you've got something else up your sleeve, you think fun there. No, I mean, well other than I think this can be an interest. One of the interesting questions as well, once you start these new technologies come along, they do invite people to rethink the fundamental nature of the transaction. Yeah. And once you start to rethink the fundamental nature of the transaction, you then start thinking, well, why am I doing this transaction with this company? And so there are organizations out there and I think the Apple card is the obvious first one of these where if I was a bank I will be terrified that organization deciding to offer those services and this is what we saw in China with WeChat and the other equivalents, but not necessarily with cash accounts like you know consumer banking. Ben Hammersley:            26:10                     But something like insurance. Amazon knows everything I have in my house because I basically bought most of it from Amazon. So why I don't have my rental insurance around Amazon is literally a thing that puzzles me on a weekly basis because they could offer it to me immediately. They know, you know, they know where I live, they know about your other thing, right. They know the value of my stuff. They know the end and they also know from that they know all the demographic information they have. I have a 1516 year purchase history with them internationally. I have all of my banking details like they know the risk and everything from all the demographics or there's this thing they could underwrite that trivially will be easy for them. Amazon doing household insurance. I know Facebook has a banking license in Europe. I think the next big thing coming along down the line will be people just going, well I gave all my money to Apple anyway or to to T mode or bottle. Ben Hammersley:            27:06                     I don't have that much savings. You know I only have a few hundred dollars in like in the cotton account, you know my checking account anyway, I never write checks. I'll just hold a positive balance with T mobile and I'll just close down my bank of America account, something like that. And it's from an individual person point of view for the vast majority of people will make no difference whatsoever. That's really, I think any of my true regulatory approval because of that. It might not happen here, but it will certainly happen in other places as it has as it does in China. Amy Lombardo:                27:36                     Cool. Well thank you for sitting down with me today. This was fun. I feel like I could talk to you for hours. You want to do one more plug for me for COMMERCE NOW. Oh beautiful. Alright, follow him at, @Ben Hammersley and stay tuned for more episodes on COMMERCE NOW.  

With $48b in assets, Banco Popular is the largest financial institution in assets and deposits in Puerto Rico. In this podcast, you will hear from Moisés Pena Reyes, VP, Digital Banking for the bank. Moisés is responsible for driving and managing the ongoing evolution, innovation, and strategic direction of Banco Popular’s digital banking platforms by meticulously managing their customers’ journeys via mobile, online and ATM. Hear how his unique “digital-first” approach to their transformation journey has allowed the bank to have more active devices in use to engage with the bank, than actual customers.   Resources: Banco Popular Website Moises Pena Reyes LinkedIn Profile Diebold Nixdorf Website Transcription:    Amy Lombardo:                00:15                     Hello again, this is Amy Lombardo and I'm your host for this episode of COMMERCE NOW. We're coming hot off of the stage from our last keynote presentation at DN Intersect, where Moisés Pena Reyes, from Banco Popular, hope I said that right and did you justice, Moisés . He presented the bank's digital transformation strategy. And so I'm lucky enough to be able to pull him aside for a few minutes here, and be able to share with our podcast universe, your story. It was fantastic for the group that was here, but I couldn't let you get away without getting in my hot seat here to talk to me. Moisés Peña:                     00:54                     Let's do this. Amy Lombardo:                00:55                     Moisés is responsible for driving and managing the ongoing evolution, innovation, and strategic direction of Banco Popular's digital banking platforms. So that's enough from me and let's hear it directly from him. So, welcome Moisés . Moisés Peña:                     01:10                     Thank you, thank you. I'm excited to be here sharing one of my passions with you. Amy Lombardo:                01:15                   So what I learned is you have 17 years at the bank, and 2008 was really when you started on this digital journey. So talk to me a little bit about how you came to this realization and what were the factors that led you to realize that digital is really the place to be for the bank. Moisés Peña:                     01:36                     Yes, I think that ... 2008 was the year that I arrived at the Internet strategy team, and our customers loved to online banking, and we measured that. And seeing how the volume of transactions were literally making a dent in their behavior and monitoring the tendencies and the new stuff that was coming out, for me was truly engaging to embark on that journey. In the beginning we were just a small group, that admires an alternate channel but we persisted and continue to challenge the way things were done. And day by day, we started to launch new services, transform experiences to the place that we are today, with over a hundred people actually looking out for the top strategy in the bank. Amy Lombardo:                02:37                     And you said something that was interesting because you said channels, but really you don't want to think in channels, that word isn't even in your vocabulary. Right? Moisés Peña:                     02:47                     Imagine that. Alternate channels, no, it's our experiences, our customers and their expectations are the ones that are going to choose where and when they want to do banking. Amy Lombardo:                03:02                     Right, right. Because customers say, "I need a bank." Moisés Peña:                     03:05                     Yeah. Amy Lombardo:                03:05                     They don't care. They're not going to say, "I need to go digitally pay my bill." It's just the experience. Moisés Peña:                     03:12                     Experience and context, it is all about the context of the journey that our customer is going to embark. Amy Lombardo:                03:18                     Right. Moisés Peña:                     03:18                     Yeah. Amy Lombardo:                03:19                     Right. All right. Moisés , so you talked a little bit about the journey itself, but can you share some of the innovations that the bank actually deployed? Moisés Peña:                     03:27                     Yes. We run on a custom core and everything that we want to build, we literally have to build it. So that's a great opportunity for us. We have been at the forefront of iterating our new services. For example, we were between the top five banks in the U.S. to launch Apple watch support. So is really through the different skill sets that we have and do an innovation with them. And in a couple of weeks, we had our mobile app tailor for the Apple watch. Balances, transfers, transactions, payments, and we were in the first five banks in do that. Our cardless cash service, it has been truly revolutionary because of the way that we offer the service to the non-customer. So we did it also ourselves also with the help of our technology partner. And the beauty of it, is that our customers can send money to anyone, even if that person doesn't have a bank account. But we did it the way of making them interact with our app. So they will enroll in our app and get access to their cash but I can truly offer them new experiences via that app because they allow me to send them promotions and cross sell opportunities are beautiful. Amy Lombardo:                04:48                     Right. Moisés Peña:                     04:48                     Yeah. Amy Lombardo:                04:49                     So you mentioned something interesting in terms of, okay, "We were one of the first banks to do this," but sometimes that can have the reverse effect because consumers aren't ready or they're not trained, they can't adopt the technology. So how receptive was your customer base to the different phases of this digital transformation? Moisés Peña:                     05:10                     Yep. I live by the principle that our customers don't wake up in the morning saying, "I want to do banking today." Amy Lombardo:                05:20                     Right. Moisés Peña:                     05:20                     Right. Amy Lombardo:                05:21                     Unless of course you win the lottery. Moisés Peña:                     05:23                     Yeah. But we are competing not with other banks. We are competing with what their expectations are with the ecosystem of applications that they interact with day in, day out right? So in our case, digital adoption is robust. Over 90% of our customer base is enroll in digital banking. So our customers are great in that they are fast adopters, right? So we will try stuff, for example, the Apple watch example, it has a low usage and we learn from that. We did experiment, we [inaudible 00:06:00] the teams collaborated and we monitor their performance and the usage. And we saw that, "Hey, people will still wants to use their phone to do it not the Apple watch." Amy Lombardo:                06:12                     I'm going to throw you a little bit of a curve ball here, is there anything that scares you about the pace of change? Moisés Peña:                     06:21                     Oh yeah, totally. And because of that ... because we are not competing with other banks anymore and we are a big bank on ... honestly, I want to move faster. But obviously Google, Amazon, Apple had a lot of more resources than we [inaudible 00:06:42] and a huge customer base. So what scares me is that we don't move fast enough to be part of that journey for our customers and lose business because a bigger player did it fast than us. So yeah, we keep pounding the rock and iterating and listen to our customers. That important thing. Amy Lombardo:                07:06                     So maybe the goal we'll have here is, you know, we hear all about the Amazon effect or you know, you say you Google something, Google became a verb and maybe we'll have the Banco Popular factor right? And people will think about it that way. Moisés Peña:                     07:21                     Exactly. Amy Lombardo:                07:21                     Yes. Okay. You mentioned Google and in your keynote presentation you said that you are embedding Google analytics into your ATM. I almost fell out of my chair because I have not heard a single banker ever say that. So how'd you come to that? Moisés Peña:                     07:41                     We love to experiment. We do a lot of proof of concepts. We have our own ATM lab in our building and being a group that they're ... our lives has ... have been helping the bank transition that digital transformation. When we started to HTML the hell out of those ATM screens, my senior web developer and on the team is like, "Hmm. HTML, CSS let's embed that we [inaudible 00:08:11] go there and start tracking the journey, the different touch points and," ... and that's the beauty of making your teams collaborate and expanding their skill sets, right? Because the idea came out of the team that didn't have anything to do with the ATM. Amy Lombardo:                08:30                     Right. Moisés Peña:                     08:31                     And that's how it came to be and we implemented it, we tested it. We even have the dashboard seeing it now in ... in a couple of machines and for us that we believe in design and interaction design that help us to understand their conversion funnel at the ATM because it is a transaction and ... and understand the pain points, why a customer it's spending this amount of time in this screen versus the other one and how can I enhance that pain point. Amy Lombardo:                09:04                     Yep. So Moisés , you're ... sounds like you're bringing things faster to your team than they can possibly handle your wacky ideas. So how do you keep those folks motivated? Moisés Peña:                     09:16                     They are part of what we are doing. I approach this in a very open way. I have conversations with them day in, day out. But the important thing is that you have to empower them to actually ... once you share the vision, I don't want to be the one that made that ... that vision a reality because it is impossible for one person to do that. So once I have those crazy ideas, I run the ideas by them and I empower them to make decisions and let them experiment and make suggestions. And that's how it ... it's truly a better conversation. And for example, for this keynote, I run the presentation with them two times. Amy Lombardo:                10:01                     Oh, that's great. Moisés Peña:                     10:02                     And I let them critique me and give me pointers and made changes to the slides. So it is not Moisés' presentation is my team's presentation, right? Because it is not only my vision, we are in this together. That's the model that we use every day, day in, day out. We are in this together. Amy Lombardo:                10:21                     If we talk a lot about the intersection of physical and digital, I mean we're here at our newest flagship event, it's called 'Intersect'. But I think I had this aha moment when you were talking because I was thinking, it's really not the intersection of physical and digital, but it's also this third leg of the stool. It's that human element, right? Moisés Peña:                     10:47                     Yep. It's ... I truly believe that this is not a technology problem. It is a human one. And once you break the silos and you empower your teams and help them get new skills, right. And encouraged them to, "I want you to collaborate with my interaction design," and run by him the idea that you have for that service, and that's when it truly became a richer product in the end is your teams the ones that make or break the customer experience. Amy Lombardo:                11:25                     Yep. Moisés Peña:                     11:26                     Yep. Amy Lombardo:                11:27                     Okay. So last question. Can you give us any hints at ... at what's next? Moisés Peña:                     11:32                     Hmm? Amy Lombardo:                11:33                     For the bank? Moisés Peña:                     11:34                     Well we are ... I think that for me a huge realization was that for the first time all these teams are in the same building. Digital retail, cyber fraud and technology operations, we are on there going our transformation of ... on how we collaborate. So for me, next things is that it's super exciting to see how the ATM structure now is going to reflect the reality that when we merge all these wonderful people and visions, the ... the point of view of what we do explodes service wise. I am super excited on what we are doing with taking our mobile experience and adapting it to the ATM. So my customer would see the same payment flow that he sees in the mobile app. He will see the same flow adapted to a tablet in the ATM. So that truly motivates me and we are doing some interesting stuff with the analytics. Also, we are doing predictive models for cash replenishment also in house with machine learning. Amy Lombardo:                12:51                     Okay, okay. Moisés Peña:                     12:52                     I always says that machine learning, artificial intelligence and cash recyclers, you have the opportunity to have a self sustaining cash replenishment operation. And we're doing interesting stuff with personalization and new services for our commercial customers. Yeah, I love what I do. Amy Lombardo:                13:09                     You do. Moisés Peña:                     13:09                     Interesting times. Amy Lombardo:                13:10                     That passion is recognized. And I thank you for sharing- Moisés Peña:                     13:15                     Thank you. Amy Lombardo:                13:15                     This story with our listeners. So for those of you out there, keep checking back for more episodes from COMMERCE NOW and of course you can always subscribe on iTunes or your favorite podcast listening channel.  

Summary: Retailers and grocers want to streamline the in-store checkout experience and increase conversions. Diebold Nixdorf’s Carl von Sydow tells Karen Webster from Pymnts.com transaction data can help firms find the optimal checkout footprint that fits, on a case by case basis.  Resources: Blogs: Relevant Retail - the New Norm Retail Self-Service: Today, it's WAY More than Self-Checkout Website: Diebold Nixdorf Previous Carl Von Sydow Podcast: Empower Your Retail Customers Transcription:  Karen Webster:                00:12                     Hey Carl, thanks for joining me today. I'm looking forward to having a conversation about data, in-store point of sale, and the insights that retailers can glean from that data. So thanks for making the time. Carl von Sydow:                00:29                     You're welcome, no problem. I'm happy to be here. Karen Webster:                00:31                     So, there's been so much written and discussed about improving the checkout experience in the physical store, and of course we're all familiar with the efforts that a number of players, obviously Amazon at the top of that list, have pioneered to really improve that experience. I'm curious to get your take on, first of all, the the landscape around, then the appetite for, using the point of sale experience, reinventing it and making it a more streamlined experience for the customer. Carl von Sydow:                01:10                     Yeah. Well first of all, retail and grocery retail and all the other verticals, are going through big changes now in in the checkout process. As you just mentioned, Amazon is one example and we have click and collect, we have all different kinds of self-service solutions or other solutions. Customers has options when they go shopping. But we have a great number of stores and retailers that are still working with traditional retail, and the Amazon idea is good for some locations, but there are a lot of retailers they're still expecting, or looking, for solutions that are, perhaps, not reinventing everything but using what they already have and improving the shopping experience for the customer, with not investing in a lot of technology like the Amazon solution. Karen Webster:                02:03                     Yeah, yeah. That is clearly, as you said, for a different kind of a store; smaller format, limited selection and so forth. But your point is a good one, which is stores want to make the experience better. No one wants to see long lines and there are lots of efficiencies that can be delivered within the existing store format today. What are some of the innovations that are helping drive that forward? Carl von Sydow:                02:31                     Well, first of all, when we usually try to help a retailer improve their shopping experience in the checkout area and the efficiency and throughput and all that, we start with looking at the store data, what they already have within retail. One store location can be very different from another one. The customer demographies is different from one side of the town to the other. So by looking at the actual store data for a particular store, you can learn quite a lot about how and where you can improve the shopping experience in that particular store. And the T-log data, the transaction data, that will help us to analyze the customer work, or customer shopping journey, the customer journey.                                                                                 And through the store data that we can extract information, like for instance, the average basket sizes, the different payments options that they are using, cash or card payments, coupons, et cetera. How many transactions are used with age restricted items? That will have an impact on the different solutions for self-service that you can implement, of course. But looking at the data, the actual store data, you can get a long way of analyzing and simulating how you can improve that store without spending too much money. Karen Webster:                03:52                     So what are some of the the insights? I was listening to you talk, I was reminded of an experience a couple of weeks back in a grocery store on a Saturday, and they didn't have that many items so I decided to do self-checkout. And the lines were actually, in the self-checkout lanes, deeper than I had seen them. So a lot of people are opting in. I happened to get into the line where a woman had a pile of coupons. That was painful because scanning those coupons and putting them in the little holder, I was like, is she ever going to finish? But you mentioned that as an example of a behavior that helps stores make decisions about throughput. What kind of insights, and therefore actions, does that one example provide a retailer in how to think about throughput and efficiencies at checkout? Carl von Sydow:                04:42                     By analyzing their own transaction log data, their own facts in a good way. The retailer can optimize the different checkout options for that particular location, for that particular customer demography that they have. Or, like options ... You mentioned coupons, if we look 10, 15 years back in time, we have seen more or less only one type of self-checkout, which is the traditional basket-to-bag self-checkout, as we call it. With a large bagging area, with or without cash, pretty big units. And they accept cash, they accept coupons, et cetera, et cetera. If you look at the T-log data, just as you mentioned, customers with small baskets, typically self-service is very attractive for small baskets, obviously. But today what you can see in stores is that the self-checkouts are for all customers. You can go there and have a customer with 50 items and they are building mountains on the bagging area. And do you just want to go through with three items.                                                                                 So our idea is to look at the T-log data, analyze the different groups of customers that they have in that particular store, and then identify what different self-service solutions, or options, can you add to this checkout area to meet the different customer demands? So the customers with small baskets that just want to go through fast, they pay with credit card, they don't want to wait for someone paying with cash, et cetera. So you should have like a mix of different self-service solutions to meet your customer demands, and that's what the store data can help you to analyze and simulate. Karen Webster:                06:25                     Is that, Carl, something that retailers are starting to wrap their heads around? I mean, this particular store, I won't name the brand, but it's pretty pretty big chain and it was interesting that all of the checkout lanes, self-checkout lanes, were identical. You could use cash in addition to cards, as you described. Any number of items could be moved down the conveyor belt, and of course those coupon things, which I found very annoying because she had a lot of them. So are retailers starting to adopt these new ways of thinking about narrowing the options for self-service in some lanes? Carl von Sydow:                07:09                     Yeah, I would say more and more retailers are doing that. For quite a while the retailers have been working through the thinking about averages, and one-size-fits-all kind of mentality, and that's what we see on the markets today. And now they're slowly realizing that that is not necessarily what the customers want. There is no one-size-fits-all in self-service anymore. And the customers, they are learning and they are developing and they're doing ... They're fast. They are expecting retailers to offer continuous improvements also in in the checkout area. We have seen quite ... Hasn't been so many different developments for the traditional basket-to-bag self-checkout. It looks more or less the same today like 15 years ago.                                                                                 And the customers, they're trying to ... They are expecting something different now and the retailers are realizing that, but they don't really know how and to which extent they would add like fast lanes or express lanes. And then especially in the United States to go card only. It's a pretty bold decision and a lot of retailers are afraid of that. But if you look at the store data, you can easily see that there is a market, if you like, internally, for that store to actually have card only self-service solutions to meet those customer's demands. Karen Webster:                08:33                     What are some of the more innovative options that retailers are embracing who are looking at this data, recognizing that averages don't cut it, and they really do need to be more thoughtful about about checkout options? Carl von Sydow:                08:54                     What different self-service alternatives there is, or what do you mean? Karen Webster:                08:56                     So, when you think about self-service alternatives, and just looking at checkout holistically, what are some of the more innovative retailers doing to try to make that experience better? Carl von Sydow:                09:07                     Yeah, well, what they are doing, they're mixing different checkout solutions in the same store. Some stores, already, still today, only have normal lanes. Then, a lot of stores, they have a mix of normal lanes and traditional basket-to-bag self-checkout. And now we have seen, like Giant Eagle, Kroger, Walmart did some tests, and now Sam's Club is doing, to also add personal self-scanning. Where you have this handheld device that you go shopping with through the store. We have retailers adding smaller kiosk-like fast lanes without cash, and very few items. So some of the more aggressive retailers, they are mixing different self-checkout, or self-service solutions, within the same store. And that is coming more and more, but it goes a little bit slow but I think we will see a big change coming, you know, two years. A lot of the interests that we see right now from retailers on almost any market in the world is particularly towards the smaller self-checkouts, the fast lane type of checkout. Karen Webster:                10:21                     Yep. Yeah. You know, it is also just a wholesale shift right? From from checkout being something that is in the lane, as you call it basket-to-bag, being handled by store personnel to, for the sake of efficiency and convenience, the consumer is willing to take that responsibility on themselves. I mean, and including order ahead and pick up curbside where everything now is being driven by convenience and efficiency. So I can see mixing the format. But you know, most people when they're in the store, they want to get in and they want to get out. And they look for the lines that have the fewest people in it. Sometimes regardless of whether that's self-checkout or not. Carl von Sydow:                11:08                     Yeah, I mean we, when we talk about conversion rates for instance, which means the customers that are buying stuff versus customers leaving the store empty handed due to long waiting lines. So the conversion rates, the retailer wants a high conversion rate, which means that all customers that go into the store should buy something. But if the lines are long, then they will leave the store without buying anything. And to add the opportunity of different checkout options, you will have a higher throughput per hour, or per time. And you will increase your conversion rate. Definitely. I think we have some interesting examples from projects that we have done. One, for instance, we had a project where we implemented a self-checkout, these fast lanes self-checkout, and we had a terrible estimation of 30% adoption rate in the project. After just a couple of weeks we were up to 37%, and now a couple of months in, we are up at 44%. Karen Webster:                12:21                     Wow. Carl von Sydow:                12:22                     So the adoption rate is high. What we have seen at the same time, in that store, is that the conversion rate has gone up, of course, but the average basket size went down. And that, for a retailer, is like a red alarm bell because they want the average basket size, of course, to increase, not decrease. But when we looked at the store data, we saw that, well since the conversion rates increased, but we saw that the customers with few items had increased dramatically because of the faster throughput through the checkout area. So since this store then had more customers with fewer items, the average basket size went down. So actually it was a good sign, but it was an alarm bell that no one really expected. Karen Webster:                13:08                     Well, I would imagine that, you know, one of the explanations, who's to know for sure, is that people are shopping more frequently. So going to the store a couple of times a week rather than once a week with smaller basket sizes to get in and out. So I mean that could be one explanation. But I mean, I'm curious about, in that example, adoption rates going up; what does that say about the inefficiencies of the store overall? I mean, if I'm that particular retailer, I'm thinking, wow, more people are using self-service, that must mean that the traditional checkout it's pretty friction laden for consumers. Carl von Sydow:                13:47                     Yeah, but I think, again, if you look at the customers in any store, they have different customer journeys. A customer with a large basket, with coupons, paying with checks, paying with cash, they look for [inaudible 00:14:01]. Interaction with people, they like to go through the normal lane. But then you have the efficient customer that just wants to go in and out as fast as possible, pay with credit card, no coupons, and they do like the social interaction with people, but the speed through the store is more important for them. And when they go, when they come to the checkout, that's also important to remember, when the customer comes to the checkout, basically the customer journey is over.                                                                                 The only thing they want to do is to pay us as fast as possible and get out of there and go home or wherever they are going. So the whole shopping experience ends at the checkout area. And by offering different options for that, you will make more customers happy. And if you have coupons, if you have checks, if you have cash, then you can go to the manned lanes and go through that part of the checkout area. But if you don't, you want to be able to find a way to leave the store without waiting for people with tons of coupons in their bag. Karen Webster:                15:07                     Carl, I'm curious to get your thoughts on how self-checkout and the opportunity to further, I guess, curate that experience ties to loyalty programs that stores may have. I mean, one of the things that's interesting about the Amazon Go stores is that you have to be a member of Amazon Prime in order to do that. I mean, that's just sort of the Amazon model. But but grocery stores have loyalty programs that most people participate in, and I'm curious to know whether that's been ever considered, or even appropriate, to think about. Certain lanes are available for loyalty club members, or certain experiences are, et cetera. Carl von Sydow:                15:54                     That's a very good question. One of the reasons why we have been stuck with the traditional basket-to-bag self-checkout is that it has built-in security. You have the weighing scale bagging area where the self-checkout will always verify the weight of the item with the weight database that you have. And you can trick everything, of course, but there is a security feature in this traditional self-checkout. However, it makes the whole checkout experience a little bit annoying, especially if you have these unintentional blocks, the weight it doesn't always fit, and you have waiting times for this and that. So the throughput is definitely affected by that.                                                                                 If you leave the security features outside, then typically a lot of the retailers, they want to have some means to identify the customer, and the loyalty program is an ideal way of doing that. So a lot of the retailers that take away security features from the self-checkout, like these fast lane self-checkouts without weight security, they want to add the loyalty program to that so they at least can identify the customer. And the customer will feel, well, the retailer knows who I am, I have scanned my card and then I can use this VIP lane for self-service. Especially handheld, the personal self scanning solutions, are very much focused around loyalty programs for security. Karen Webster:                17:24                     Yep. Yep. Interesting. Well there's certainly a lot of opportunity to innovate. It is something that consumers, in particular the grocery shopping experience, is something people do in the physical store and making that more efficient in any possible way is a welcome experience., Particularly since people do it on Saturdays and they don't really want to be doing it ... spending their Saturday mornings going to the grocery store. So it's a, and maybe I'm speaking from personal experience, Carl, I don't know. It's not my favorite thing to do on Saturday morning. Carl von Sydow:                17:58                     Yeah we will, I think we will see a big increase in self-service solutions in retail, and not only in grocery, we will see it in DIY stores, convenience stores, pharmacists because it is a very convenient and fast way to go through the checkout area. And the customers have said before, the customers are learning, they are expecting self-service nowadays. The adoption rates are really high from the get-go nowadays. 10 15 years ago, it took much longer to reach a good level of adoption with self-checkout. Now it goes, as I said before, really, really fast because customers are used to self-service in so many instances right now. But you have to, it's not one-size-fits-all. That's the main thing.                                                                                 And to do the best implementation of self-service, you should look at the store data, to look at what different types of customer groups, what's the demography in this store? And then simulate different scenarios and build a paper pilot with actual store data. How would it look like if I do this? If I implement this solution in this store? And that's typically what the project looks like today for us. A lot of analysis of data and different alternatives, and then we have a discussion with the retailer. How bold do you want to be with self-checkout, or self-service? How many different alternatives you want to offer your customers? And we are going definitely in that direction. That's my impression. Karen Webster:                19:30                     Well Carl, thanks so much for your time and for the insights about the future of self-service and retail. Obviously grocery being just one, obvious an important use case, but certainly others as you pointed out as well. Thanks again for your time. Carl von Sydow:                19:45                     You're welcome, happy to join. Amy Lombardo:                19:46                     Thanks to our listeners for tuning into this episode of COMMERCE NOW. To find out more about the future of retail, go to dieboldnixdorf.com or click on the link in the podcast show notes. Until next time, keep checking back on iTunes for new topics from COMMERCE NOW.  

Summary: In this episode of COMMERCE NOW, we are joined by Steve Gotz of Silicon Foundry, and we discuss how banks are increasingly creating new environments and structures to pursue innovative ideas and build new capabilities.  We explore one specific kind of innovation structure: the Venture Studio (also known as a Company Builder). Resources: Silicon Foundry LinkedIn: Steve Gotz Twitter: @stevegotz Blog: The Rise of the Venture Studio Transcription: Amy Lombardo:                Hello again to our listeners. This is Amy Lombardo, your host for this episode of Commerce now. Today I am joined once again by Steve Gotz, of Silicon Foundry, who is a known expert at helping organizations navigate the complex world. Amy Lombardo:                So today we're going to discuss how banks continue to increase and create new environments and structures to pursue innovative ideas and build new capabilities. Amy Lombardo:                So Steve, welcome back to COMMERCE NOW. Steve Gotz:                        Hey thanks Amy, excited to be here. Amy Lombardo:                Great. So it's been couple months here since we spoke last. So what have you been up to here lately? Steve Gotz:                        So, just quick refresher for everybody, my background. I spent a long time launching new ventures for corporations. I've done that as an investor, an entrepreneur, university researcher, and a corporate executive. And most recently I was co-founder and COO of Pivotus Ventures, which was a venture studio I created with Ray Davis at Umpqua Bank. And coincidentally was acquired by Kony recently. Steve Gotz:                        Currently a partner at Silicon Foundry, where I advise large corporations on their new venture strategies. In that role that we're talking about some of the ideas today. Amy Lombardo:                Got it. Okay. So in our last podcast we focused more on transformation strategies. We gave examples, both from banks and even other industries on when they kind of when they hit that wall, that roadblock, and how they partnered with new and other types of organizations [00:01:30] to think about what's next. Steve Gotz:                        Yeah. Amy Lombardo:                So let's shift our conversation here and talk about what an organization knows they need to transform. Kind of this idea of migrating to a new business model, a new environment, and really the intent of Venture Studios. Amy Lombardo:                So maybe we can start with discussing the evolution of this idea of like the Accelerator Business Model. Steve Gotz:                        I think Accelerators is an interesting place to start. So Accelerators, as we know them [00:02:00] today, have been around for about a decade. And they were started during this rich period of famense, right? So it was 2005, a couple years after the dot com bubble. And in many ways, the Accelerators that started back then, and that was Y Combinator, Techstars, would be great examples, they laid the foundation of what's to come today, right? Steve Gotz:                        And Y Combinator recognized that there were some economies of scale to be had by launching start-ups in a different way. And the Accelerator Model [00:02:30] is young teams, lots of bets, and a little bit of money. And when you do that well, you get really interesting companies. Steve Gotz:                        And that's what we've had for the last decade but I think what we're seeing now, is things are starting to change. Technology is starting to change. Corporate strategy is starting to change, which is why now we're starting now to talk about the rise of Venture Studio. Which is a new forum that organizations are using to build new things. Amy Lombardo:                Mm-hmm (affirmative). So does the Accelerator Business Model, does it kind of [00:03:00] compliment the Crowd Storming Idea? Steve Gotz:                        Yeah. So, Accelerators as they started a decade ago, really about bringing young teams together to pursue big opportunities. And at that point if you think about it, right after the dot com burst there was a lot of opportunities so there was a lot of opportunities that the infrastructure had been laid to build things in a cost-effective way. So companies are using Accelerators as part of their innovation strategies. Steve Gotz:                        Now what's happened in the last decade is [00:03:30] a lot of that low-hanging fruit has gone away. The ability to launch a business to scale quickly. The dynamics are slightly different in the current day and age. Because startups need data, they need distribution, they need access to capital. So what we're seeing is that traditional Accelerator Model evolved into the Studio Model. And Studios are different in a couple new ways that we can talk about them but we're entering this period of change when it comes to innovation strategies. And the Studio is just one manifestation [00:04:00] of the change we're seeing. Amy Lombardo:                So talk to me a little bit about this change. Dive into that for me and just kind of talk to me about why and how. Steve Gotz:                        So I think, in Silicon Valley, the era of "Move Fast and Break Things," is over. I think what we're starting to see are more diverse teams, in a broader sense, gender, age, background. I think there's a recognition that launching new ventures requires a diverse skillset. And it needs new kinds [00:04:30] of partnerships. Steve Gotz:                        Launching a start-up by itself as an Accelerator doesn't work as efficiently as it could. Launching a new start-up in collaboration with a corporate that gives you data, that gives you distribution, that helps you access customers. That's really powerful. Steve Gotz:                        So what we're seeing is more and more start-ups. More and more entrepreneurial teams and Venture Studio is coming together, launching new ventures in collaboration with corporates. And that's a really interesting dynamic that we're starting to [00:05:00] observe. Amy Lombardo:                So is it still in these high-tech areas like Silicon Valley? Or where is the Venture Studios? Where are you having the most luck? Steve Gotz:                        Hmm. So this is what's really interesting, right? So Accelerators largely, when they started, were concentrated in Silicon Valley, right? Y Combinator, in the Valley, Techstars in Colorado. What we're seeing with Studios is a dispersion, right? We're seeing Venture Studios crop up [00:05:30] across the country, across the globe. And oftentimes they're locating themselves close to large corporations. Steve Gotz:                        So, High Alpha, one Venture Studio, and they're located in the Midwest. Primarily because the companies that they're building new ventures with are in the Midwest as well. There's another studio in Seattle called Pioneer Square Labs and they're up there and they're looking at really interesting consumer ventures, direct consumer ventures. Steve Gotz:                        [00:06:00] So I think you're seeing the capabilities moving to the most natural place. And that may not be Silicon Valley. That may be somewhere else across the globe. Amy Lombardo:                So even though these corporations might be in these major metropolitan areas, is the talent there as well? Or are these innovators being found then all over the world based on what the need there is? Steve Gotz:                        Yeah, so, it's across [00:06:30] the world, right? Amy Lombardo:                Okay. Steve Gotz:                        It's where is the need? Amy Lombardo:                Right. Steve Gotz:                        And it's launching ventures as close to the need as possible, right? Steve Gotz:                        So a good example would be Heidelberg Cement. So, Heidelberg is one of the World's largest cement companies. They have operations in virtually every continent. And they're launching a Venture Studio and what they're doing is really smart. They're building new ventures in country. Steve Gotz:                        So the problems that you have with cement distribution, say, in Latin America and Brazil, [00:07:00] are fundamentally different than some of the challenges you have in a place like California. So it's natural to take your best people and put them at the edge. Put them close to those problems and say, "solve these problems and do it different ways." Amy Lombardo:                Right. So clearly I know nothing about cement, so I can't even think of the next question. Steve Gotz:                        Nor do I. Steve Gotz:                        But think about this, right. Because there's a lot of similarities between the cement business and the banking business. [00:07:30] Right? Amy Lombardo:                Oh both are important, here we go. Let's get what you're going to say here. Steve Gotz:                        So look. These are both largely commodity businesses, and they're easily swappable, right? You could get a bank account from Wells Fargo, B of A, or any one of the 7,000 or 8,000 banks in America. And largely the product is the product. What can you do with that? Steve Gotz:                        You can innovate around that experience. That's what Heidelberg is doing and that's what most banks are doing today. They're innovating around the experience. [00:08:00] And to innovate around the experience you need to be close to your customers, right? Steve Gotz:                        So creating a banking experience, or a cement experience, in Brasil, is fundamentally different than the kind of banking, or cement experience you want to create in California, right? Did that work? Amy Lombardo:                Wow, wow. Okay. I'm a believer. Because if you were going to go down some path of like brick and motor cement shops closing, I was going to be like, "we're going to be [crosstalk 00:08:28] now because we're not even [inaudible 00:08:33] here." Steve Gotz:                        [00:08:30] And this is why I think banking executives can learn a lot by expanding the aperture and looking outside of the industry for best practices. And it just so happens that what I'm setting is in cement, but we also see interesting things happening in food, interesting things happening in agriculture, right? Steve Gotz:                        So I think there's more that we can learn like breaking down some of the silence and sharing ideas. Amy Lombardo:                Okay so let's go to some examples. [00:09:00] Let's jump ahead there. Steve Gotz:                        Hmm. Amy Lombardo:                You know for people unsure of our business model is, we're working with banks and retailers, can you give me any specific examples of Venture Studios working with banks and retailers? Steve Gotz:                        Yep. Yeah so there's a couple of really interesting examples. So, yeah, one of the ones you know, springs to the top of my mind is what BBVA has done with Dennison. So, three years ago BBVA hired an entrepreneur and said, "we want to build a new business." Steve Gotz:                        They didn't tell them [00:09:30] where he should build a business, they just gave him the free reign to do that. And fast forward three years, and what we have today is Dennison. Which is global bank for expats. So in three minutes or less, as an expat, I can open up a local currency account of one in 20 countries. And if you think about what Dennison has done is they've innovated the customer experience. And that allows them to do really interesting things with global remittances, global payments, currency transfers. Steve Gotz:                        So [00:10:00] a really interesting example of a big, incumbent corporation, like BBVA, saying, we're going to create new ventures, we're going to put structures in place to allow us to build things that probably wouldn't be possible inside of the normal organizational structures. So that's BBVA. Steve Gotz:                        Standard Chartered Bank is doing something similar in Hong Kong with their digital bank there. They just recently received their digital banking license from the regulator, so that's an interesting experiment. Steve Gotz:                        [00:10:30] In the UK, RBS has done really interesting things with S&Me, which is their small business lending platform. So there's a lot of examples and I think what's at the center of all of these examples is corporations coming together with partners to launch new things. Steve Gotz:                        And I think the opportunity for dVault and dVaults customers is to come together and say, "how do we create new experiences, right? How do we take a few bits of the interesting capabilities that dVault has, sprinkle [00:11:00] in a few bits of the interesting relationships that your banking clients have, to create a new kind of customer experience? That delivers value." Amy Lombardo:                Right and you know we think it's always about the touchpoints that a consumer has within a day. And if you think about just financial transactions, it isn't just this one-to-one, I'm going to a bank, I'm taking out cash, I'm depositing checks. Whatever it might be. Amy Lombardo:                It's that you touch [00:11:30] transactions in so many different sets through a day, so how is it that bank can complement that. Steve Gotz:                        Yes. Amy Lombardo:                And provide you with a seamless experience. And those examples that you gave are spot on to that. I love the one about the expat because that could be something that's so laborious, challenging for a consumer, but the bank is adding value there. Steve Gotz:                        Yeah, absolutely. Right. And if we step back a little bit and kind [00:12:00] of think about what's happening here, it's the replatformification of the bank, right? We're creating new ways for the bank to be consumed by customers. Amy Lombardo:                Right. Steve Gotz:                        At a fundamental level, fluctuation doesn't matter for the customer. The customer doesn't really care if you're using distribute ledger or cryptocurrencies to clear the transactions on the back end. They care about what's the experience. And are you making my life easier. Steve Gotz:                        And I think Dennison's a really good example of solving a very complex problem [00:12:30] in an elegant way. Amy Lombardo:                Exactly. Can I get an immediate access to cash? Can I get an immediate access or, you know, what I need to live my life, right? Steve Gotz:                        Yeah. Yeah. And what's really... What I find interesting about Dennison is everybody talks about the unbundling of the bank, right? And transfer-wise, it's often one of those perfect examples that people cite, that you've basically decoupled international payments of remittances from the bank. Steve Gotz:                        [00:13:00] What we're starting to see with Dennison is a replatformification, we're rebundling the bank in new ways that the consumer can then consume. Amy Lombardo:                Got you. Touching on that, unbundling, almost like a macro, [inaudible 00:13:14] talked about it so much in our business models. Steve Gotz:                        Yeah. I think this is a good/. it's good area for you guys. Amy Lombardo:                Okay, so let's say, I'm Mr. Banking Executive and I'm sitting here, and I'm scratching my head saying, "gosh, I [00:13:30] don't know where I need to breakthrough and transform my business. I'm stuck," and I go to you, Steve, or you know the partners that you work with. Amy Lombardo:                How do they begin this process? Steve Gotz:                        So I think there's a couple of points I'd like to make. And so I think the first one is so a general observation, and this isn't restricted to the banking industry, but corporations in general, have a hard time knowing what they have and knowing what the opportunities are. And that's not because [00:14:00] they're deficient, it's just the nature of human biases. Right? Amy Lombardo:                Mm-hmm (affirmative). Steve Gotz:                        When you work at the same place, in the same industry, for a long time, you start to see things in a certain way. The way you break out of those biases is to bring in people with new perspective. Bring in organizations with new perspective. Steve Gotz:                        So I think the first place to start is increase the aperture of your conversations, right? Don't spend time with your peers. Spend time with organizations and executives [00:14:30] that are different from you, right? Steve Gotz:                        So we spoke about cement and banking, there's a lot that can be learned there. So the first thing I would encourage executives and your listeners to do is increase the aperture. Look beyond banking for opportunities to be innovative. Look what's happening in the retail space. Look what's happening in the food and beverages space. Because I think there are things to be learned there. So that's the first thing. Amy Lombardo:                Right. Steve Gotz:                        The second point I'd make in terms of [00:15:00] how to get started is really related to where does innovation live within the corporation? So there was an interesting study a couple years ago where they looked at risk among banks. And what they found was, after a bank appoints a Chief Of Risk Officer, the organization tends to take more risks. And the observation there is, when a job becomes somebody's [00:15:30] function, somebody's role, responsibility now lives with that person. Right? So we now have a Chief Risk Officer, so they're going to manage all of the risk so the organization tends to adopt slightly riskier behaviors. Steve Gotz:                        Now, where this is interesting is with innovation because innovation is everybody's responsibility. Including the CEO. So I think an important take away from this is everybody from the top down and bottom up in the organization [00:16:00] is responsible for doing new things. Steve Gotz:                        Now the nature and scope of what those innovative things may change, may look different, but everybody needs to have a hand in how do we think about doing new things and creating new experiences. Particularly the CEO and the board. Especially when it comes to new things that are potentially really big and disruptive. Amy Lombardo:                I love that thought. So, I'm taking away from this, look outside your industry and everyone is an innovator. Steve Gotz:                        [00:16:30] Yeah, exactly. Exactly. Innovators just don't live in Silicon Valley. Amy Lombardo:                Right. Steve Gotz:                        They live everywhere. Encourage them. Amy Lombardo:                Right. I think this is a good place to wrap up the discussion. Steve, it's a pleasure to have you on and join us on Commerce Now. Steve Gotz:                        Thanks Amy. Amy Lombardo:                And thank our listeners for joining. Amy Lombardo:                So if you've got questions, feel free to reach out to Steve. Either via LinkedIn or via Twitter at @SteveGotz. Keep checking in on iTunes or however you listen to your podcasts for new topics [00:17:00] on COMMERCE NOW.

Hello and welcome!Today’s episode is called: Brilliance: Clear Your Inner Obstacles & Let Your Authenticity ShineA few questions for you:· What would it look like for you to live really authentically and be absolutely brilliant in whatever way you desire?· Do you feel disconnected at all from this potential, this brilliance?· What inner obstacles are blocking you?· What would it meant to clear those blocks and let your authenticity shine?I have a special guest interviewee today, and we’re going to talk about all of these things.Amy Lombardo is an author, an expert in personal growth curriculum development and a life coach. In her work, Amy specializes in blending ancient wisdom with modern coaching techniques to deliver programs – and results - that are heart-centered and powerfully practical.In 2016, Amy created the Brilliance Academy for Personal Transformation and Social Change to train and certify aspiring coaches in her integrative approach to empowerment.Her debut book, Brilliance: A Coaching Guide to Clearing Inner Obstacles and Letting Your Authenticity Shine, is in stores on March 26, 2019 and is available on Amazon.Enjoy this conversation that rolls around topics like:- the benefits of deep inner transformational work why it is worth moving through any initial discomfort to do it.- Amy’s guidance about what to do if you feel disconnected, or like you are “ticking over” in life and that the idea of “brilliance” is for other people.- What do to if you feel like you have a message you want to share in life, but feel anxious about promoting or marketing yourself or your work.- How to approach making a difference in life in a world that can seem so big and when it can feel like we are each “just one person”.You can find out more about Amy and her amazing work at http://www.amylombardo.com.Amy’s book “Brilliance: A Coaching Guide to Clearing Inner Obstacles and Letting Your Authenticity Shine, is due out in stores on March 26, 2019 and is currently available for pre-order on Amazon. (https://www.amazon.com/Brilliance-Coaching-Clearing-Obstacles-Authenticity/dp/1928055478/ref=sr_1_1?ie=UTF8&qid=1543184721&sr=8-1&keywords=brilliance+amy+lombardo)Thank you so much for being here and for watching/reading/listening.*********Want to write a non-fiction or self help book? I’ve got a gift for you! A FREE writing course designed to help you do just that!You can get that here: http://www.mymessageislove.com/free-writing-courseIf you’d prefer to work with me 1:1 on your writing you can find out more about that here: http://www.mymessageislove.com/work-with-meFor any other enquiries, email me at: copy@mymessageislove.comAoifeMY MESSAGE IS LOVE*********Note:You might like these episodes too:#30 – What Is Book Coaching Anyway?#28 – Want To Write A Self-Help Book? Start Here…#7 – 7 Reasons To Write Your Book*********

Summary: Banks’ investments are leaning heavily toward technology upgrades – especially those that make self-service, digital banking easier for customers, as Karen Webster with Pymnts.com discussed in a recent conversation with Diebold Nixdorf Vice President of North America Solutions Heather Gibbins. Resources: Pymnts.com Article: Diebold Nixdorf: Why Bank Branches Need to Move Beyond the Transaction Blog: Is Your Bank Embracing These Key Mega Trends  Why Digital Is Important Right Now The Future of Payments is Fast Evolving, but the Direction Might Surprise You How Innovative is Your Banks Culture? COMMERCE NOW (Diebold Nixdorf Podcast)   Diebold Nixdorf Website   Transcription: Amy Lombardo:                00:00                     Hello, and welcome to COMMERCE NOW, your source for emerging trends in the banking and retail industries. Karen Webster:                00:14                     Heather. Thanks for joining me today. I'm looking forward to our conversation about branch automation, migrating transactions, and the role of technology in making all of that smooth. Thanks, again, for making the time. Heather Gibbins:              00:28                     Oh, thanks for having me. Karen Webster:                00:29                     So, Heather, I want to start with an interesting proposition. So, it's clear that financial institutions are using data, they're using new tech to keep pace with expectations that their customers have about going digital. Yet, so many studies that we've done of consumers and their preferences for financial services say how much they really love the branch, and how important the branch is to those consumers in making decisions about who they actually want to bank with. Karen Webster:                01:12                     Why do you think there is such a dichotomy between wanting technology to help consumers be more effective, yet the role of the branch in helping them navigate their financial situation? Heather Gibbins:              01:27                     So, I'd probably say a couple things with this. One, when we hear about branch automation, itself, what we're definitely hearing and seeing is that it means different things to different financial institutions, and then what that effect actually has on consumers, itself. I would say in general, the role of branch is transitioning to be less based on transaction, with more of an emphasis on becoming a trusted advisor. And, I think that's where some of the study and research and information that you come back to kind of shows this dichotomy between the two items. Heather Gibbins:              02:03                     So, you have financial institutions that are saying like, "Listen, let's migrate these transactions over to more of a self-service platform." Customers like technology. They're willing to use the technology, but at the same time you've got customers that are saying, "Hey, we want you to help us make better financial decisions for ourselves. Set us up for the future, think about retirement and planning, so that we can manage our finances in a better way." Heather Gibbins:              02:31                     And that's a lot of the research that we've heard and seen, as well, is consumers are looking for financial institutions to basically help guide them and make better decisions with their money moving forward. So, they no longer want them to just hold their money and keep it safe, and maybe get some sort of return on it. They want them to give them their expertise and knowledge to make a better decision moving forward. Heather Gibbins:              02:57                     And, I think that that's where you kind of sometimes have a difference between maybe the actions that are perceived actions that financial institutions are taking versus what you hear in research, but they really compliment each other. It's just really then at the end of the day what's the role of those face-to-face interactions in the branch, itself, going to be moving forward. Karen Webster:                03:18                     Yeah, it makes sense, and your point about self service, I think, is a good one. Not only are consumers comfortable with self service, but they can actually use the services on their own time, so after more traditional banking hours, weekends, holidays, et cetera. So, I agree with that. And given that, that self-service capability is creating less of a responsibility for the branches to engage in those transactions. Karen Webster:                03:49                     You're saying physical branches are really being transformed to create these more one-to-one interactions that build trust and loyalty. What specifically do you mean by that? Heather Gibbins:              04:00                     One of the things that I would say is meant by that is what we're seeing more and more is the role of the branch changing to be, one, trusted advisor, but also to be able to spend more time with what we would consider commercial customers or small business customers. But, you'll see customers like that that are coming into the branch. So, there are these small businesses that are actually getting workspace within the branch. They can conduct meetings in the branch. You've got others that are trying to use the branch space to be more of an inviting place for community members to be able to come in. And, some of them are even showing the local sports games and stuff that are on, holding after hours events there in that space. Heather Gibbins:              04:44                     So, it's becoming much more of a community space, and one that can drive more business within small business owners, itself, or small businesses in general, so that they can have strengthened relationships there and also increase in activity with those businesses moving forward. Heather Gibbins:              05:04                     So, I think that's a lot of what we're seeing when it comes to that, and when customers and financial institutions are thinking about what is that "branch of the future" really look like, those are some of the considerations that they're taking into play as they're designing what that setup looks like versus what you would have seen in the traditional branch in the past. Karen Webster:                05:25                     So, Heather, are these big banks, small banks? I mean is what you're describing, which sounds awesome by the way, something that is particularly characteristic of one type of bank versus another? Heather Gibbins:              05:36                     I think we're seeing it across the board, and some of the larger top ten banks that are out there, they've been playing with this over time, especially in the US, and have been making some headway. Heather Gibbins:              05:46                     We've also seen some that have more of like nische kind of clientele in the market that have gone and moved forward with these types of branches. Where we're seeing a lot of our activity right now, in North America specifically, is in those smaller regional and community banks because number one, they've got to keep up with what some of the others are doing; two, they're trying to figure out how do we really differentiate ourselves from what the competition is doing. Or, maybe how can we kind of get ahead of what they're doing. We are talking about really catering yourself to small business types of clientele and also the community. Heather Gibbins:              06:26                     A lot of that is a way for some of these smaller financial institutions and credit unions to be able to kind of have that personal touch that can give the type of experience in consumer or business journey that these small business owners are looking for that's beyond what maybe some of the larger financial institutions have been able to achieve. Heather Gibbins:              06:47                     And so, it gives them a way to really look at this from a differentiation and competitive advantage moving forward. Karen Webster:                06:54                     Yeah, that makes sense and I think the whole point of the smaller regional community banks is to become more a part of the community and the fabric of businesses. So I can see where that would be something they'd want to really wrap their arms around. But, as with so many things, Heather, technology which is enabling a lot of these things to happen certainly can't happen just because technology is making some of these automation ideas reality. Karen Webster:                07:32                     What are the things that people and business process need to do in order to really fully embrace the capabilities that technology can provide? Heather Gibbins:              07:43                     Yes, so I think that's probably one of the number one things that we tell all of our customers that we're talking to is, if you think that you're just going to put some technology into place and that's it, most likely you're not going to be successful. Karen Webster:                07:57                     Right. Heather Gibbins:              07:59                     A couple of the biggest things that come around that are really like the people and the processes, and probably more important than that, the training that goes along with it. So, a couple of examples, and even in just some of these branch automation or branch of the future type of concepts, a lot of what we talk about as a part of that, yes, technology comes into play there, but when you talk about having meeting spaces and the more open area, and you've got some people that are doing coffee bars and big screen TV's and all that kind of stuff, a lot of it doesn't even involve technology. Heather Gibbins:              08:33                     So, when we get into this more consulting and advisory services, a lot of times they're taking what you consider your tellers and they're becoming more sellers, right? Or, advisory consultants. The thing with that is they must have information at their fingertips when someone walks through the door to be able to enable them to be successful. So, a big part of that that comes into play from a technology side, but maybe less than from what you would traditionally consider is really data. You have to be able to share data from all of your different systems in order to enable what you want your people to be able to do moving forward. Heather Gibbins:              09:10                     The other thing you have to really think about is the training aspect of that of how you want them to interact with customers, how you want them to greet customers, how you want them to take them around, what your new branch looks like. But, also to make sure that they feel comfortable using the technology that you now have into play. I can guarantee you that if you walk into a lot of financial institutions, credit unions today and someone comes in and wants to do just a check deposit, that teller's going to take the check and do the deposit just like they do every day. Heather Gibbins:              09:43                     More than likely, what a lot of executives are probably wanting those tellers to do is to actually either: a) show them how to do it on the ATM so that they can do it themselves, or open up a mobile banking device, show them how to download the app and show them how quick and easy it is to be able to do that transaction at home. And there's so many customers out there today, and consumers out there today that don't even know that their financial institutions have that as an option. Heather Gibbins:              10:13                     A personal story, we had a friend and she made mention that she owns a couple small businesses and she couldn't go to the bank to deposit some checks because they weren't open. It was a Sunday, and I just kind of looked at her and said, "Who do you bank with? I'm sure that you can do it on your phone." And she literally, I walked her through how to do it, not even a member of that bank or anything like that, and she said, "Heather, this is like life changing." Karen Webster:                10:36                     I was just going to say you changed her life. Heather Gibbins:              10:39                     Yes. Exactly. So, it's just those simple things that sometimes some of the financial institutions need to think about, like hey, how do we make sure we're training our people to get the expected behavior we want from consumers, but also makes it a better experience and more convenient for them? Karen Webster:                10:58                     So, you mentioned two things. Tellers as sellers, I thought that was awesome. And there's a training process around that, and that is just any other change management training process, it takes time and it will eventually be successful. But, data sharing strikes me as something that could be a bit more problematic. Karen Webster:                11:19                     How are the financial institutions you deal with addressing that, and getting the right data in the hands of the right people so that all the things we talked about are possible? Heather Gibbins:              11:31                     Yeah, so I think it can go in various stages or phases. Just to give you a real quick example, too. At one point I needed to get pre-approved for a loan. We were going to buy a new house, and I was shopping around from different providers and I decided to take one of my local financial institutions, and go online and fill out the form. And a few days later I had realized I still had not gotten any information back, and I thought oh my gosh, did I just give all my information to someone and I have this security problem now. Heather Gibbins:              12:06                     So, I picked up the phone and I called the call center, and when I called that call center they were like, "Heather, we don't have any information that says that you did this." They said, "Did you fill it out online?" And I said, "I did." And they're like, "Oh, well yeah if you fill it out online, we're not connected to that system. It's a completely different group and so we can't help you. You need to email the person and maybe they'll help you." Karen Webster:                12:30                     What?! Heather Gibbins:              12:30                     So, again, my consumer's journey was not the greatest. I ultimately did not go to that financial institution. But, I think that this is very common. Karen Webster:                12:40                     Right. Heather Gibbins:              12:40                     I don't think it was specific to this one financial institution. So, some of this is just behind the scenes, if that teller can go on and be able to log into the system to see information. Some of that is just a very simple sharing of data. It's not the best use case, but they need to be able to have access into systems to see information. Heather Gibbins:              13:01                     We've got other financial institutions that are saying, "Okay, we want to have full, let's say CRN integration", so when someone walks into the branch, if they go to the ATM, I can see on my tablet exactly who's at that ATM, if there's maybe some sort of value add service that I could offer them, to be able to disclose to them. If they have a CD that's coming up for expiration, and I might be able to go help them renew that. That it gives them the information they need to help. Heather Gibbins:              13:31                     So, we've got many that are saying, "Okay, let's figure out what's the role of these tellers moving forward?" In many cases they're calling them something else, maybe they're a concierge or that type of thing, and giving them a tablet that can help them have better interactions moving forward. Karen Webster:                13:47                     Is part of this, too, training consumers and small businesses that this is just as effective as walking into the bank? I know that sometimes people think that if they go to the bank, somehow service is expedited or availability of funds is faster than if they did something electronically. Is there some of that that needs to be dispelled, too? Heather Gibbins:              14:13                     I think there's some of it in some cases, but at the end of the day when you look at consumer behavior today and think about who are some of the strongest ... And I go to retailers when I think about this, too, and I talk to customers about it because the interactions that consumers are having with retailers, whether it be people like Amazon or even mobile applications that they're using, like Uber, or walking into the Apple store, they're comparing you to that on a daily basis. Karen Webster:                14:45                     Right. Heather Gibbins:              14:45                     Right? And in many of those cases, they're not interacting with someone face to face, right? Yeah, I would tell you I've never interacted with someone face to face at Amazon, yet I would say I have a very strong relationship with Amazon, right? Karen Webster:                14:59                     Yep. Heather Gibbins:              14:59                     Probably the number one thing that I use on a daily basis. Karen Webster:                15:04                     Yep. Heather Gibbins:              15:04                     And my loyalty and trust factor and everything with them is just as strong, if not stronger, than other places that I go face to face. So, I think that's also another thing that these financial institutions need to look at, kind of like you said with the research that you've seen that people want to do things face to face. Sometimes they're doing things face to face, not because they really want to, but maybe because that's the way they: a) have to do it. Karen Webster:                15:30                     Right, right. Heather Gibbins:              15:30                     For some reason it's easier that way or more convenient than another method. And one example I would use is, you go to the grocery store and see the self checkout lane. I'm the type of person that I'm going to go to the self checkout lane. But, I don't go to the self checkout lane if I have a huge cart of things, because I know that that scanner's going to yell at me all day long because it won't all fit in the little spot I have to bag it. Or, I know I have bananas today and I have no idea how to weigh them. Or, I'm getting a gift card and I can't get it activated. So, that's what then moves me back over to face to face. It's no longer easy or convenient. It's kind of the way I have to go, to go to the person at the cashier. Karen Webster:                16:11                     Yeah, some of it is just, as I said, force of habit or a misperception about funds availability and things which are easily remedied through education. You talked about mobile, and the first part of our conversation was about shifting from face to face to self service and adding face to face in a different, more value-added capacity. And now mobile is just another layer on top of that. Karen Webster:                16:46                     What are you seeing, the FI's you're working with, how are you seeing them incorporating mobile into the mix? Heather Gibbins:              16:54                     So, I think mobile is probably becoming one of the most widely asked items when it comes to putting it in the mix. So, we've got some financial institutions that are saying, "Okay, how can we integrate the mobile device with the ATM itself." Right? So, how can I pre-stage transactions? Heather Gibbins:              17:16                     One of the things that also comes up is how do you start using your mobile device maybe to not only pre-stage the transaction, but as an authentication method at the terminal itself, as well. Heather Gibbins:              17:29                     The other thing we have people looking at with mobile is thinking about how do I add other services into that mobile application and that can speak and talk back and forth with the other channels that we have? So, we have a lot of customers that have talked to us, and in my 12 years that I've been here we've always talked about Omnichannel. So, with Omnichannel, how do you get all the different channels that the financial institution owns? So that could be mobile banking, online banking, the ATM channel, the call center, the branch, all working together and kind of sharing information and playing off of it. Heather Gibbins:              18:06                     That could be as simple as if you have online banking and you set up bill pay, and you're paying your bills on there on a regular basis. Then if I go to the ATM, it could say, "Heather, are you sure you really want to take that $300 out? You have these bills that are scheduled to be paid in the next two days, and you're not going to have enough money in your account if you do that." Right? So, again, it's the financial institution advising me through digital, do I really want to do that and if so, oh yeah, send me a text reminder that I need to make a transfer, or I need to think about what I'm going to do. So, it's really getting mobile involved and digital in general coming together with the physical location. Karen Webster:                18:48                     So, when we talk about smart ATM's and introducing mobile and authentication through biometrics, is that what you're talking about? Heather Gibbins:              18:57                     Yeah, that's a big part of it. I mean, what we've seen over time, and if we look globally at some of the global markets, biometric ID verification has been going on for many, many years over there. In the US market, we haven't seen as much adoption, especially around the banking or financial industry, itself. And we've always said, "Oh, it's not widely accepted here in the US like it is in other regions." Heather Gibbins:              19:25                     However, probably anyone that's listening to this, if I were to ask them, "Okay, can you go check your email real quick." They're going to go to their phone and they're going to use their thumbprint to access their phone. Right? Karen Webster:                19:38                     Yep. Heather Gibbins:              19:38                     And this thing, I took my kids to the orthodontist last week. They walked in, they did their thumbprint, and we moved on. I never even had to do anything. So, now it's becoming, okay, it is more widely adopted. Karen Webster:                19:51                     Right. Heather Gibbins:              19:51                     How do we start to transition that adoption into the financial industry. I mean, I'm sure like me, when I go to log into apps on my phone, I'm really annoyed if I have to try to remember my password for these different applications if I can't just use my thumbprint. Karen Webster:                20:08                     Yep. Yeah, no it's friction, friction, friction, friction. It's a mess, and we're all trying to get rid of that. Karen Webster:                20:15                     You know, one thing that we haven't touched on, and I'd like to spend just a minute on is the landscape of risk associated with now having so much of a digital mobile presence within the banking channels. What are you seeing there and how are you helping financial institutions balance digital with managing those risks? Heather Gibbins:              20:38                     I think that one of the biggest things here is I had come across some research not too long ago, and it basically asked consumers, "Who do you trust most with your financial needs?" And the first answer that they trusted the absolute most was who they bank with on a daily basis. Karen Webster:                20:58                     Right. Heather Gibbins:              20:59                     The second item outside of that was other banks and credit unions. And then the third started to get into people like Paypal and Amazon and other spintec corporations. And that's really kind of thinking about ... You start to talk about who are these other entrants coming into the financial space, and a lot of times you're getting into these spintecs. Heather Gibbins:              21:22                     But, I think this is really important information, because for financial institutions consumers are saying, "Hey, we trust you the most." which means, when you start to look at risk and security, they have to stay at the forefront and the top and be very proactive about what they're doing as far as security measures, whether that be at the ATM or through digital and how those all plays together, especially when you start integrating with other spintec organizations in more of a connective commerce-type of ecosystem. Heather Gibbins:              21:55                     And that some financial institutions are really, when we have these conversations, is at the forefront. Everyone's talking about Windows X right now and how do you make sure that you're staying up to date and migrating all your terminals, both from a physical and logical security perspective to stay on top of it. Heather Gibbins:              22:14                     But, this has really become what I consider table stakes in the industry. It's not always the most exciting topic. And, when you go to get approval from a CEO or the CFO, it's kind of like, what is our consumer going to see, and it's not real flashy. However, if they don't do that, it's the first thing that their brand is going to take a hit with and you're going to lose trust, and that's going to open for new entrants into the financial industry stakes if they don't take care of it. Karen Webster:                22:46                     Yeah, a conversation to be had is how consumers perceive innovation within the financial services sector? Because I think, sometimes people think of innovation as what you just described. Oh, it's the flashy, flashy thing that has bells and whistles and people look at and say, "Wow, isn't that so different?" Karen Webster:                23:08                     And in financial services, getting back to the trust factor, consumers want their money to be safe. They want to have a relationship with the financial institution they trust and whom they believe are looking out for their best interests, including keeping their financial information and their money safe and secure. Karen Webster:                23:29                     So, there's definitely, you're talking about dichotomy, there's an interesting dichotomy there as well with perception and reality when it comes to what consumers are looking for and what FI's are providing. Karen Webster:                23:43                     Last question, Heather. It's been a fascinating conversation, but we've talked about a lot of things and I'm curious to get your take on what FI's are doing as they're planning for this migration between branches and automating and self service and mobile, and managing risks. How are they thinking about what I'm doing today, and what I need to be thinking about a little longer term? Heather Gibbins:              24:12                     So I think today in many cases it's the simplicity around transferring the traditional teller transactions onto the ATM itself, or other types of digital devices. In many cases, they're looking at this from a pure standpoint of how do we reduce tellers, how do we improve efficiency? In some cases, how are we expanding the types of transactions that we can offer in a self-service device, which could then allow us to extend the hours? Heather Gibbins:              24:44                     So, they are looking at ways to be able to do that and kind of lower the branch costs, and even in some cases centralize expertise. So, you start to think about how do I not need to have a loan expert at every single location? How can I have them more centralized and be able to have access to many more people in a very easy or convenient way? Heather Gibbins:              25:06                     So, I think those are kind of some of the short terms, like what are they trying to accomplish and how are they trying to do it? I think in the long term, it's a bigger play around how could this morph into something like transaction augmentation where staff can either be remote? Or, in the branch they can have awareness or context into the self service transactions, itself. Heather Gibbins:              25:31                     How can we appropriately interject into things when it makes sense? So, maybe you don't always have to have someone speaking to you face to face, or through video. But, when you do need them, it makes them easy to be there to help you, and that would be with things like exception handling, giving them advice. Again, this goes a lot back to the whole concept of being able to share data across CRN systems, tablets, and that type of thing. Heather Gibbins:              25:56                     We've also got a lot of customers that are starting to think about, okay we've gone through this kind of migration of mobile and online banking platforms, so that you have more one, single digital platform. At least that's the goal for many institutions. Now you have more and more teller transactions moving over to the ATM, but what they're starting to think about is, okay, so what do we do with this teller platform, itself, and how do we bring it up to the 21st century here? And this is where we think there's a big opportunity to leverage the same infrastructure ecosystem between the teller line and the ATM's, itself. To be much more digitized and have a much more fluid consumer interaction moving forward, and make it easier for tellers. Heather Gibbins:              26:43                     So, tellers have traditionally stood behind the teller line and had a PC. Well, in this new kind of branch for the future, all that really should pretty much go away, and it's much more about tablet. Well, how can you just end up using the same platform either across some of your digital channels, or also your ATM and teller platforms and how do those interplay more and more together? Heather Gibbins:              27:07                     So, I think you're going to see also digitization and a collapse of having all of these multiple platforms on all these multiple channels that are siloed, coming together and reducing, which in the end is going to reduce cost for the financial institution, itself, as well. Karen Webster:                27:27                     Well, and they make for a better customer experience. The experience that you, yourself, encountered will be an ancient anecdote when that happens. And certainly from a consumer perspective it can't happen soon enough. Karen Webster:                27:42                     Well, Heather, it's been a real pleasure having this conversation today. I enjoyed it. I hope you did, too, and I appreciate your time. Heather Gibbins:              27:48                     I did. Thank you so much. Karen Webster:                27:49                     Thanks, Heather. Bye-bye now. Amy Lombardo:                27:51                     Until next time, keep checking back on iTunes for new topics from COMMERCE NOW.    

Summary: In today's topic we're going to discuss the very interesting year of 2018 in the retail industry and we'll talk about what's to come in the new year. Resources: Blog: How Self-Service is transforming Fast Fashion and In-Store Retail Experiences Our Mobile Shopping Innovations are headed to EuroCIS COMMERCE NOW (Diebold Nixdorf Podcast)   Diebold Nixdorf Website Transcription: Amy Lombardo:                00:00                     Hello and welcome to COMMERCE NOW, your source for emerging trends in the banking and retail industries. I'm your host Amy Lombardo, and in today's topic we're going to discuss the very interesting year of 2018 in the retail industry and we'll talk about what's to come in the new year. I've got a special guest joining me today. It's Andrew Busby, one of the UK's most influential retail analysts. Hey Andrew, thanks for joining us. Andrew Busby:                 00:27                     Hi, Amy. It's great to be here. Amy Lombardo:                00:29                     Good. Let's talk a little bit about your background first. You have a 20 year plus career in the retail space. How did you get started? And talk to us a little bit about your passion? Andrew Busby:                 00:40                     Amy, my career, I guess started about 20 years ago. I joined Kingfisher, one of the major retailers in the UK, and I was working there for a number of years. Retail I think, is really one of those things where you either love it or you're not so keen on it. And I just love the sector. It's so relevant to all of us. Unlike some of the others, we have relationships with our favorite retailers or brands that we don't necessarily have with utilities or telcos or whatever. So, they become part of our lives, and I think that for me is one of the great things about retail. And also particularly now as I'm sure we'll talk about, there are just so many things that are happening right now in retail, and lot of things which will common both in the US market and here in the UK and Europe, and I think a lot of the retailers are going through the same issues and challenges. Amy Lombardo:                01:36                     Very good. Talk to us a little bit about those challenges. 2018 was a pretty interesting year here. You saw so many different store models go digital, offering different convenience options for consumers. With that said, how would you define the 2018 year for retail? Andrew Busby:                 01:59                     I think that what we're witnessing ... and it is happening. I think this is a real watershed moment in retail that we're going to look back on. I think 2018 and going into 2019, what we're witnessing in front of our eyes is a transition from what I refer to as old retail into new retail. What I mean by that is that the old model, the more traditional retail models are quite hierarchical. They're commanded and controlled from the center, they're top down in a way that they're organized. Andrew Busby:                 02:31                     And of course they were founded long, long before the Internet was ever around, let alone this online shopping and e-commerce that we see today. They've had to adapt. And of course then you get the new retail that doesn't have all the burgage, if you like, and the old and out of-date infrastructure that old retail has. They can build their systems, which are absolutely ... and also their structures, which absolutely fit for purpose around what they want to do. I'm thinking in particular of the pure play online brands, which have a ... I guess have a sense of purpose about what they are in business to do that some of the others perhaps don't, if that makes sense. Andrew Busby:                 03:17                     I think that we're really seeing this transition, and it will continue over the next couple of years. I don't normally like to look too far than two or three years out, because I think the pace of change is so rapid that it's almost impossible to look further than three years out. We simply don't know quite what's going to happen or what's going to be adopted by the consumer. In one word, I would say that it's change, and in five words, I'd say it's change, change, change and more change. That's what we're seeing at the moment. Amy Lombardo:                03:51                     It's interesting that you say you can't predict that far out because there are so many storylines that hit the new cycle this year that you never anticipated. We have everything from smart fridges and locker concepts and then you think, "Okay, well what's possibly next?" And have we created this society that it's almost become so convenience based. Will we ever go back to a simplistic retail model? I don't know. Andrew Busby:                 04:20                     I don't think we will. I think we've got so used to the ease and convenience, which we're seeing right now. But of course the thing to remember there, which I think you were alluding to, is that that's getting even more convenience. Take payments for example, which is in some ways the most exciting part the retail landscape, but also its scenario, which is developing quite rapidly. And we'll get the point within the next few years where we'll see far more invisible payments. Whether you'd be filling your car up with gas, you'll just fill up and you'll drive off because it's automatically been ... payment's been taken. Andrew Busby:                 04:57                     We're seeing far more frictionless experiences. Of course there's Amazon Go, which we know about, and we'll see more of that. I think ease and convenience in whatever way and forms that it takes is going to continue. And of course online and having deliveries to not just at home but to wherever we want, that will rapidly become the norm. And I think for ... one of the biggest challenges for retailers is having the supply chain and logistics capability to deliver very, very quickly to pretty much ... and by very, very quickly, I mean almost within the hour to almost any location. Andrew Busby:                 05:36                     In order to be able to do that, they have to have in real time 100 percent, or as near to that visibility of their inventory, which almost without exception, none of them currently do. Some may come reasonably close to that, but ... so I think that's an area that we're going to see a lot of development going into. Amy Lombardo:                05:55                     It's interesting, we were talking Christmas time, and I think one, two years back, whereby at the beginning of December, you get the messages that say, "Okay, if you haven't placed your order, it's not going to arrive to you by Christmas." Well, that's not the case today. You probably could still get an order on the 24th. I'm sorry for that delivery man or woman who's bringing it to you, but you can still get that delivered in time, right? Andrew Busby:                 06:22                     Absolutely. Yeah. Yeah, but actually one of the other aspects that, which we're already starting to see has come forward is ... and we don't notice it over here, but I understand that the 19th of December for the first time this year, was the national returns day where the volume of returns for the year peaks. It used to be I think one or two days into the new year. That is a reflection on the amounts of trading that happened over Black Friday, Cyber Monday and so forth. Andrew Busby:                 06:50                     But also, it's a really interesting thing for me because that sets quite an insight into us as consumers and our behavior. Returns are increasing, and that puts a huge strain on retailers. I personally happen to think that it's not a good thing, but the problem is it's a question of who blinks first. And of course nobody's going to. In other words, everybody wants ... they want to offer free returns, free shipping, et cetera, et cetera, but it is driving a level of consumer behavior which is quite alien. We're treating our own bedrooms and our living rooms as our changing rooms, and ordering ... and I've spoken to people who order quite regularly up to 20 items and they'll return 18 of them. Amy Lombardo:                07:30                     That's so fascinating that you are saying that, because I know I've adapted to that style here in my own home. I'm over buying things because I'm like, "Well, it's really easy to return it. I don't have to go to a store.", Or for Amazon, I can just drop it off here at their local UPS station." But I wonder what the facts are. Do you have any information on that? Is it more advantageous to the retailer when consumers are overbuying, or does that shipping just totally negate that overbuy? Andrew Busby:                 08:01                     For retailers, it's a complete nightmare for them because a journey of a returned item can be quite torturous, and it can go through up to seven touch points and can take not hours or days, but sometimes weeks to get back to where it should be, if you like, depending on how it's returned. And that volume, that peak that I referred to from my understanding, in the US I think it was 1.5 million parcels were expected to be returned, and during December, a million per day, which is huge. Andrew Busby:                 08:32                     And as I say, for retailers what it means is that their inventory is all over the place, but they're still expected to be able to know where that inventory is to be able to make those commitments to next day delivery when people are purchasing. It becomes a vicious circle for them. But you think of it as a roundabout, and it's spinning ever faster. But it's going too quickly now for anybody to jump off. So yeah, you just got to hang on. It's an interesting one. Andrew Busby:                 09:01                     And as you said from your own experience, yes, it is far too easy, too many ways to return because that's being seen as part of the overall customer experience. It has to be easy to return. You mentioned Amazon. In the summer, they launched their Prime Wardrobe, so you order three or more items and it's delivered free, and it comes in a box, and it comes with a returns delivery label already there. You try on, and you keep what you want at, then you pay for it, and you return what you don't and you just leave the box outside your front door. So yeah, very easy, very convenient. And that's what people expect. Amy Lombardo:                09:37                     Right. One of my favorite case studies right now is Rent the Runway. Because if you think about things, "Okay, I've got to then dryclean an outfit", or "Oh, now I have to think about return timeframes and such." This is an all-in-one experience of pick the clothes, pick the style, look at the reviews, and your purchase includes everything. It comes to you clean, you're sending it back clean, you have a certain timeframe to do it. It's such an easy, frictionless, seamless experience. That buzzword that we said earlier. Amy Lombardo:                10:09                     That's where I want to dive a little deeper into here, because frictionless, seamless, moving transactions into meaningful connections. Those have been such some strong words that retailers and even vendor partners have been using over the last year. Can you give some recommendations here on how a retailer can still maintain that customer, that consumer experience, but still introduce these types of digital and frictionless transaction sets? Andrew Busby:                 10:44                     It's interesting because just a word on frictionless. I think the majority of transactions, we welcome that, and particularly the type of transaction. In other words, there'll be certain types. For example, throwing a dinner party, but you haven't got one particular item, whatever. Dash out, because you need it there and then, to the grocery store. You want that to be as frictionless as possible. You want to get in and get out as quickly as possible because you've got a deadline of when your guests arriving and that sort of thing. Andrew Busby:                 11:12                     Then there'll be other transactions. Let's say that you're buying ... I don't know, a watch or jewelry or something like that, where you actually welcome an element of friction in ... and I mean friction by fact that the whole transaction can be slowed down. You're wanting, you're expecting to have more engagement with the store associates, those sorts of things. But from an experience point of view, it's interesting. What I would say in answer to your question, my recommendation so forth is don't let the technology lead in itself because we're all human and we're all driven by emotion, and we make because we are able to have emotions. Andrew Busby:                 11:56                     What I say to people is first of all, think about and understand your brand and what it stands for and what are the brand values, if you like. Once that's very, very, very clear, then and only then when it's understood, can you then make the sorts of decisions you want about what technology you want to deploy, and what perhaps isn't quite so appropriate for your brand. Because there'll be some which would be absolutely lend themselves perhaps to augmented reality, virtual, mobile and so on and so forth, but there may be others which lend themselves more to much more of a human interaction. Andrew Busby:                 12:34                     But having said that, I think that ultimately, as I said, we're all human. We all want to have a relationship with retail brands on an emotional level, which is why I said at the beginning that retail is an exciting sector to work in. I would say always human first, technology second. Amy Lombardo:                12:53                     Right. It's such an interesting way to position it. The emotion and the relationship side of a retail purchase, or say your favorite store closes in your neighborhood. That is such a letdown because it becomes part of your norm. And yeah, I just think that's a fascinating concept to think about. The emotion tied to it. Andrew Busby:                 13:12                     I think so, because in some ways we're creatures of habit, but in other ways we're not. We're not as loyal as our parents' generations that have gone before us. We do behave for more promiscuously when we're shopping. We jump from brand to brand. But at the same time ... I know it myself. I probably navigate the supermarket when I do my shopping in pretty much an identical fashion every time I go in, and I will go for the same brands of whether it be ... I don't know, shampoo or washing powder or whatever. I'll go to the same, and I wouldn't be drawn to other ones. Andrew Busby:                 13:49                     With a store closing down, you suddenly then are taking away parts of our lives, and we might have to travel a bit further, or we don't go to that particular retailer any longer. So yeah, it is an emotion driven sector in that way. Amy Lombardo:                14:05                     With the traditional brick and mortar branch and that style changing, whether it's hybrid type locations, smaller footprints, specialty shops. Are there opportunities then when retailers can actually partner with other verticals within retail to be able to offer this ultimate consumer experience? Like, "Hey, you can get the two in one now. I can offer you this and that." Are you seeing that there over in the UK? Andrew Busby:                 14:35                     Yeah. I do get what you're saying, and I think that we could well start to see that. But what I am starting to see evidence of is people are starting ... and this is talking about the in-store experience and the role of the store. We know there's all the pressure from online, and that the percentage of their sales is only getting greater and greater. None of us really know where it will plateau out, but we do know that it's continuing to grow at the moment. The role of the store is under the fiercest scrutiny. But what I am starting to detect is that people are rethinking the role. Andrew Busby:                 15:09                     In other words, the traditional role of the store is very obvious. You've got a building and you fill it with stock, put products on the shelves et cetera, et cetera. And you expect people to walk in and buy stuff, and that's the role of the store. We've refined that, but that's basically how it is. They're beginning to have some examples where people actually don't think of a store as selling first. It's a place for people to commune, to socialize. Andrew Busby:                 15:36                     I quite often use the example of Selfridges because as we know, that was ... Harry Selfridge in 1909 opened that store on Oxford Street in London. Of course Harry Selfridge was an american who came over here. But if you read some of his quotes and some of his writing, he was incredibly so far ahead of his time because he could come out with those ... you can quote him now, and it is incredibly relevant. That's exactly what he wanted Selfridges to be. He wanted it to be somewhere where people could gather. If they bought something, so much the better. Andrew Busby:                 16:12                     An example of that is ... and we've seen this more in some of these specialty retailers. Rapha is an up market chain. Not too many of them, but they refer to their stores as clubhouses, and they'll all have a coffee bar, and they just encourage their ... I don't think they refer to them as members. Some people refer to their customers as guests, so it's a reimagining or rethinking if you like, of the relationship. They encourage people to go in and if they want to buy on that particular occasion, okay, that's fine, that's great, but if they don't, it doesn't matter. Andrew Busby:                 16:44                     Lululemon, the yoga and gym gear and so forth, they have yoga classes in store, and they organize events where like minded people can come along, and if they're into yoga classes, if they're into running or as I said with Rapha it's cycling ... it's a completely different approach to the role of a store, and I think that we're going to see a lot more of that, which is really exciting because it will mean we view them in a completely different way, where we gather there, we can exchange views and ideas, we socialize and that's an incredibly exciting development that we're just seeing. Amy Lombardo:                17:20                     Yeah. Alright. Let's look ahead now. Pretend you're holding your magic eight ball, you're shaking it up, what's it going to say for the changes that we're going to see for 2019? Andrew Busby:                 17:31                     To sum it up in a word, well, we're going to continue to see change. That's the first. But then to expand on that, for a lot it's going to be quite troubled and challenging. There are lots of pressures. Obviously we've over here decided to implode ourselves. We've decided to get out of the EU, which hasn't really added too much to anything. But it is having quite an impact now because what it's doing is affecting consumer confidence, and that will go well into 2019, so that's that backdrop. Andrew Busby:                 18:01                     But I think what we're going to see is that retailers are going to develop and cultivate relationships with their customers far more. They are going to understand more about us. They're going to deploy artificial intelligence and machine learning so that they can deliver far more personalized experiences. That's going to be one major trend that we're going to see. Hyper personalization in 2019. Because at the moment, most personalization is fairly basic and fairly crude. It's usually retrospective. It is not in the moment, and it's not relevant to us because we've perhaps already made that purchase. Andrew Busby:                 18:37                     We're going to see that develop, which again, is incredibly exciting because I think that once people get over the feeling of intrusiveness, and when brands deliver real value to them, then I think we're going to welcome them. We'll welcome them into our lives in a far greater way than we do now. That's going to be the main trend for 2019. Another one which I touched on earlier which is going to happen is the final mile delivery. I think brands will come to be defined not by the price of their product, but their ability to deliver to us pretty much whenever and wherever. It will be quite normal that we suddenly find that we need something, maybe we're at a conference, or we're at a sports event, or we're at a music concert or whatever it happens to be and we need a particular item. We just grab our smartphone, and with a few clicks we've got something on order and it's delivered to us within the hour. Andrew Busby:                 19:29                     We'll be prepared to pay a premium for that, but that will become the expectation. Of course as soon as one person starts doing that, then all the others have to follow because it becomes the expectation. The bar is continually being set higher and higher. Another one I think will be the internet of things. Everything is going to be connected to everything, which again is going to lead to more convenience. And all those utility items that we purchase, that will all just be automated as well. I think we're going to start to see that in 2019. Amy Lombardo:                20:03                     That was a lot of answer there. That was a big magic eight ball you were shaking there. Alright. My final question for you today, Andrew is, based on those trends, those predictions, the idea of the hyper personalization, the last mile, execution, the internet of things. Say you're sitting in front of a retailer and they come to you and they say, "Andrew, where do I start here on my transformation? Give me some pointers on at least how to create my roadmap here." Where would you tell them to begin? Andrew Busby:                 20:34                     Depends on the challenges that they're facing, but I think that ... the way that I look at it is every retailer is on the same journey, but they're all at different parts of that journey. I would say that if they haven't ... if it's not on their roadmap already, they need to put artificial intelligence on there, and do that as quickly as they possibly can because all the while that they're not, they're missing out. They will never catch up to their competition. From a technology perspective, that would be one where ... possibly to contradict what I said earlier, but the reason for that is that that drives ... without that, you cannot drive the personalization that I referred to. That's just one point. Andrew Busby:                 21:18                     The other point I think is that as we know, is most retail brands have well over spaced. They got far too many stores. I would say to them, ask yourselves, "What do I want to be famous for?" Is it having a huge store estate? I know that a lot would like to reduce that, but they simply can't because they're locked into long term leases and so forth. But I would say be famous for something. Going a little bit back to what I said about brands and understanding your brand, understand what you want to be famous for, what do you want to be known for. Andrew Busby:                 21:54                     I've mentioned a couple of brands, Rapha and Lululemon, and they're very clear about what they want to be famous for. Another one that's a different end of the spectrum if you like, is fashion retailer Primark, and they're famous for having much, much lower cost items, but offering real, real value to people. And so everybody knows, they understand when you mention that brands to them, that they know what they stand for. I think that applies to all, whether it'd be much, much smaller artists and retailers or far larger. Everybody knows what you mean when you talk about Amazon. You know what that brand stands for. That will be the start point. Understand what you want to be famous for and build from there. Amy Lombardo:                22:33                     Got it. Well, I think that's a good way to close the discussion here, Andrew. It was a pleasure having you join us here as a guest, and thanks to our listeners for tuning into this episode of Commerce Now. To find out more about the future of retail, go to dieboldnixdorf.com, or click on the link in the podcast show notes. Until next time, keep checking back on iTunes for new topics from COMMERCE NOW.  

Summary: In this episode we'll discuss how organizations can keep up, and what is expected in order to stay ahead of their competition.     Resources:   Blog: Services for a Connected World  Silicon Foundry LinkedIn: Steve Gotz Twitter: @stevegotz   COMMERCE NOW (Diebold Nixdorf Podcast)   Diebold Nixdorf Website   Transcription:   Amy Lombardo:                00:00                     Hello again. This is Amy Lombardo, your host for this episode of COMMERCE NOW. This year we've seen some significant technology trends, and we know the knowing your audience and increasing the level of personalization is key to the success to this ever changing digital world. But this can be easier said than done, right? So, in this episode we'll discuss how organizations can keep up, and what is expected in order to stay ahead of their competition. So, listeners I've got a real treat for you today. I'm joined by Steve Gotz who is an expert in working with executives to create impactful corporate innovation strategies. He has over a 20 year background working with a range of global organizations such as AT&T, General Electric, and Symantec, and one thing that you'll be most interested in is his recent work with Umpqua Bank, which we'll touch on a little bit in this discussion. So Steve, thanks for joining me today. Steve Gotz:                        00:49                     Thank you. I'm glad to be here. Amy Lombardo:                00:50                     Wonderful. So let's start a little bit with your background, and just really what keeps you up at night. Steve Gotz:                        00:57                     I think what keeps me up at night is relevance. So, my background. Quick intro. So, 20 years working with big companies like you said in industries that are undergoing change, and a really interesting thing is it doesn't matter what the industry is. Corporations are really in a race for relevance, and whether you're an entertainment company, whether you're a movie studio, whether you're a bank you have to think about ways to be relevant to your customers today and into the future. Amy Lombardo:                01:23                     So, that's an interesting comment. Okay. Race for relevance. Could you dive into that just a little bit more for me, or maybe give me an example of some recent work you've seen on how someone has caught up or stayed ahead maybe of the race for relevance? Steve Gotz:                        01:35                     Yeah. So, I think a really interesting one that I can point to is AAA. The automobile club, right? So AAA is an American institution, and their business model up until now has been predicated on your car breaking down on the side of the road, you're picking up the phone, you're calling them, and them sending somebody there to help you. Now, a couple of years ago they recognized that they're sitting on a dinosaur. That business model isn't going to exist 10, 20, 30 years from now. We have autonomous vehicles, when we have cars that don't break down with us behind the wheel, their business model needs to change. Steve Gotz:                        02:11                     So, what I think they've done is really interesting, right? So they're investing in infrastructure and thinking about how can AAA be relevant inside of the home, and I think that's a great example of an incumbent corporation that's saying, "You know what? We're going to face this head on, and we're going to drive this change. We're going to drive this disruption rather than waiting for us to be disrupted by the market." Amy Lombardo:                02:32                     That's such a great example because AAA is something that I just rely on so heavily in my own life, but I haven't thought about yeah what would be next for a business like that, or thinking back to the stories of like Kodak or Blockbuster or something. Why it did or did not work for them because their business models needed to change with the rate of pace of change here. Steve Gotz:                        02:53                     Yeah. So, the last couple of months for me I've spoken to maybe 200 executives. So these are CEOs, Chief Digital Officers, Chief Technology Officers, entrepreneurs about what's changing in their business, and what's really interesting is we've kind of gotten through this first era of innovation. So, every corporation talks about innovation being one of the most five, one of the most 10 important things that they're focused on. But if you look at the number of ideas that have come from an innovation lab that have found their way to production inside of big corporate, that number is pretty small. But I see happening now and with people are talking about is this second wave of innovation. This more impactful, this more intentional strategy to say, "We are going to build things that are going to change our business." Steve Gotz:                        03:41                     And change our business in a way that is going to make us relevant into and beyond the 21st century, and this is different, right? So I think you said at the beginning. When I started my career, I started at AT&T labs in the music industry, and this was at the beginning of the rise of digital distribution before we had iTunes. When we took this, basically AT&T invented something underlying technology to iTunes, right? Secure digital distribution. And when we took it to the labels, the music labels at that point, their response was really telling. The response was, "We're not interested in this. We sell things. We sell things that spin. We're never going to sell our music over the internet." Steve Gotz:                        04:20                     So, this was in the late 90s, and that was your classic Kodak response from an incumbent. Fast forward 20 years, and when I talked to bank CEO's, they don't talk like that anymore. What they talk about is, "Yes, absolutely. We need to change. We need to create new experiences, and here's how we're going to do that, and here's where we are doing it." Right? So, this idea that the banking industry is facing a Kodak moment, I'm not an advocate of that line of thinking, right? I think the banking industry is responding very differently than some of those other traditional industries that have been disrupted. Amy Lombardo:                04:54                     Right, okay. No, that makes sense. So, in some of my research on you, the work you've done, you've talked about this idea of the innovation theater, and is that what you were speaking to earlier, which is kind of this innovation 2.0? Steve Gotz:                        05:08                     Yeah, that's exactly it. So, if you look at kind of the last 10 to 15 years of innovation, it's very clear that companies are recognized they need to be more innovative. However, the tools, methodologies, and frameworks they've deployed, they resulted in what some people call innovation theater, right? It's really pretty, you go into the innovation lab, you see an interesting application. But then when you pull back the curtain to say, "Well, what's the path to production?" Right? How many customers are using this? That's where you tend to realize there's not much substance there. I think a lot of people have recognized that, and now they're thinking about, "All right. How do we do that?" Steve Gotz:                        05:45                     Right? So, we're seeing this kind of growing kind of drive. An increasing number of corporations that are sending out new company builders, new organizations designed to create things, and scale things up, right? Don't just show me something in the lab, show me how you take what's in the lab, and get it in front of all of our customers, and make us more relevant. Amy Lombardo:                06:08                     Right, right. So, the example Steve you're giving about this innovation theater, almost like the innovation smoke and mirrors, I'm also kind of thinking in banking terms now of what Chase has done with the everyday express branch, and Capital One with the café branch, I mean these are realistic examples of innovation- Steve Gotz:                        06:30                     Yeah. Amy Lombardo:                06:30                     That has now been brought to life, and the results and at least the studies show that consumers are gravitating quite well to these concepts. Steve Gotz:                        06:38                     Absolutely, and especially around banking. The Capital One café, it's a really interesting idea, and I think it kind of gets to this point that physical is still important, right? Being able to bridge digital experiences with physical experiences, that's kind of the next competitive battleground. And I think Capital One, Umpqua Bank, I think we ... And even Amazon with Whole Foods. I think we see an increasing number of organizations getting much more sophisticated at spanning the omni channel experience. Amy Lombardo:                07:10                     Right, right. So you mentioned Umpqua, and that is such an interesting case study here. So, tell us a little bit about the work that you did with that bank. Steve Gotz:                        07:18                     Right. So, Umpqua is really interesting. I got connected up with Ray Davis in 2015, and Ray is kind of an iconic figure in the banking world. He grew Umpqua from $100 million in assets to about $24 billion in assets, and he was really driving the industry, and created a unique customer experience, right? So, for Ray they're not called branches, they're called stores. In those stores, there's a very unique experience when you go in. A store are part of the community, a store holds coffee hours. People could use the store as a co-working space. So, Ray and Umpqua is really kind of the leading edge of the ideas that we're talking about today, and so much so the now Capital One is kind of borrowing some of the ideas that Umpqua pioneered a historic concept. Steve Gotz:                        08:04                     So, I got connected up with Ray in 2015, and in the first conversation he was like, "Look, the bank I built for the last 20 years isn't the bank that I need for the next 20 years, and I need some help to figure out what that new bank is." So, the mandate was figure out how to pivot the bank, right? Ray is a gentleman who likes to name things what they do, so it wasn't a digital adventures lab, it was Pivot us. Easier to pivot the bank. So, we started down this path, and what we got to fairly quickly was the banking relationship is a unique relationship. Money is such a loaded topic for people, for consumers, and 20 years ago the banker was your neighbor. Steve Gotz:                        08:41                     The banker knew your first name, they knew your kids, they gave them a lollipop when they walked into the store, right? There was an experience attached to that, and when we fast forwarded today, and we the state of digital he said, "It's impossible to create that really personalized digital experience right now with the technologies that were available." So, the question was how do we engineer the human in? How do we create that personalized experience through a digital channel? And that's what we set out to build from. Amy Lombardo:                09:11                     I think that's so interesting that you say that because a few years back we had this interesting study, that was how consumers could differentiate their toilet paper brand over their bank brand, and I say that. And of course, the source is escaping me, but- Steve Gotz:                        09:29                     Right. Amy Lombardo:                09:30                     But it was all around the fact that banking had become this emotionless interaction. No, really it was more the transaction. You need to move into an interaction here, and your examples here of putting the human element bank in is a perfect way for banks to be thinking about this. Can you give our listeners some specific technology examples if those are relevant and okay to [inaudible 00:10:00] out here? Steve Gotz:                        09:59                     Yeah. So, before I do that going back to your idea of kind of toilet paper brand and banks. Amy Lombardo:                10:07                     I know you didn't think that what was going to come out of my mouth. Steve Gotz:                        10:12                     If you kind of step back a little bit, and you kind of look at how the industry go to where it is today, what you see is in the pursuit of cost efficiencies, the customer experience has been lowered significantly. In the last 20 years, the industry has done what it should have done, right? Which is use technology to be more efficient. But in the active being more efficient, they've created a customer experience that's not that great, and by lowering that bar so far it's now become really easy for two kids in a garage in Palo Alto to create a new mobile banking experience that can run circles around most of the existing incumbents, right? Steve Gotz:                        10:55                     Now, the opportunity is to change that. There's no reason that two kinds in a garage in Palo Alto should be able to create a better experience. Incumbents can do that, which is where we get to this idea of, "All right. How do we create new teams? How do we create new environments to build these things?" And that's kind of really what we did at Umpqua. Ray's mandate to us was don't go give us some prototypes. It was figure out how to keep us relevant. So, that started with the customer relationship. We said, "How do we take that in-store experience that we have today that really personalized experience when you walk into the store, and create that, and then catalyze the experience in an additional channel." Steve Gotz:                        11:35                     So, when we looked at the technical landscape, what we said is, "The future of the industry is chat based. It's dialog based systems." So, let's think about how we engineer the human in, and do that at scale. Let's think about how we can deliver a chat interaction, a highly personalized chat interaction with a human. So, what we started building is eventually we started using WhatsApp, and some of the existing chat platforms. But very quickly we ended up building our own application primarily for security and privacy reasons, right? So, if you're using Facebook Messenger as a bank to service your customers, if you're using WhatsApp there are potential privacy implications that come along with that, that we were uncomfortable making. So, we ended up building our own technology stack. Steve Gotz:                        12:24                     And essentially what we did was we put a device in the hands of our employees, of our associates in the store, and said, "You now have the opportunity to chat with customers." So rather than make this a call center initiative, we pushed it out to the edge, and the response was phenomenal both from customers, and from our employees. Amy Lombardo:                12:44                     Now, was that a cross-channel application to where that chat feature was available both on mobile, and online? Steve Gotz:                        12:52                     Yeah exactly, and the idea of it. So everybody talks about getting customers to come into branches, and the question is we can't get customers to come into branches now. I don't think we're going to get them to come into the branch in the future. One interesting kind of dynamic that we observed is if the customer knows who they're going to see in the branch, who they're going to interact with, there's a higher tendency to come in. So, the idea was we can use the chat, right? We can use the online interaction with the customer to pull them into a physical experience. So, if the customer needs to have a more in-depth conversation. Maybe the retirement planning, 401k, 529 plan. Steve Gotz:                        13:30                     We can say, "All right. Maybe it makes sense just to sit down and have this conversation in the store, and we can get something scheduled." So, the human interaction becomes a really interesting way to pull people into the store for more engaged conversation. Amy Lombardo:                13:43                     I love the example you just gave me because it speaks so much to what we believe and strive to deliver to bankers, and retailers here at Diebold Nixodrf by delivering connected commerce. This idea that you have this seamless journey throughout various touchpoints that it doesn't have to seem like, "Oh, I'm only engaging in the branch. Oh I'm only engaging on my mobile phone." It's the same experience, and you're giving a perfect example of it right there. Steve Gotz:                        14:09                     Yeah, and I think the idea behind connected commerce is really powerful, right? It's the bank ... The bank almost becomes an orchestrator on the behalf of the consumer, right? The bank captures the intention, the bank understands what the consumer needs to do regardless of the channel, then it helps them do that, right? This is the core of what we saw a couple of years ago. This is what banking used to be. Now we have technology to deliver that experience in new and different ways at scale with efficiency. Amy Lombardo:                14:39                     Mm-hmm (affirmative). Okay, so you just touched efficiency, and that was this one question I was writing down here. So, I've been looking in all these reports as to what are going to be these top pain points for bankers in 2019 and beyond, and what seems to be the top three of all those lists is around creating better operation efficiencies, back end transformation, etc., etc. Can any of your line of work? Do you see that holding true? Is that something that bankers are talking to you about as well? Are there some strategies in place that you can comment on to accomplish that, but still now lose that personalization aspect? Steve Gotz:                        15:13                     Yeah, yeah. So, I think there's ... A lot of people focus on kind of consumer facing, kind of innovations and efficiencies because that tends to be where a lot of the top line growth is. So, sometimes I think back offices operations doesn't get as much attention as it should, but I think there's an equally large if not more number of opportunities in the back office to do things better, faster, and cheaper while you maintain that front office customer experience. And I think ... Again, the idea of what we're talking about here, which is companies can create structures. Companies can create new types of environments to solve our problems. We can look for places where this happened, and I think one of those places would be with Liquid Labs, and the auto group in Germany. Steve Gotz:                        15:59                     So, the auto group is one of the world's largest retail conglomerates, they own a lot of properties. Six years ago they set up an organization called Liquid Labs, which is really designed to solve hard problems for the organization, and the model there was Liquid Labs would have a budget, they would go to a business unit and say, "Oh we see you're losing $150 million." And these numbers are hypothetical. "We see you're losing $100 million dollars a year on return shipments because we've had issues with the address. We can fix that problem for you, we can fix it in a discoverative way, and if we succeed you now have a new capability that improves your efficiencies." And in fact that's exactly what Liquid Labs did for the auto group, and they drove significant efficiency improvements just with the very strategic application of technology. Steve Gotz:                        16:47                     So, banks have those kinds of opportunities in spade. When we arrived at Umpqua, the number of operational efficiencies the word technology brought to bear was substantial. So, the question is what's the right portfolio, right? What's the right portfolio mix between kind of front facing, consumer applications, and back office? Let's make this engine as efficient as we can make it. Amy Lombardo:                17:12                     So, do you have a thought on that of what is that perfect balance? Is that the next project for people to turn to you on? Steve Gotz:                        17:19                     Well yeah. This is I think why kind of proclamations are dangerous. I think this is one of those places where I think it really depends on the organization, and the state of the organization. When we got to Umpqua, they have just been through a core transition, starting to think about other projects that need to get done. So, there were some strategy decisions and said, "You know what? We're going to really focus on that customer experience while we give the organization time to figure out what's going to be the internal digital transformation strategy." So, that was the right mix for Umpqua. I think you have other organizations that are fairly sophisticated on the front end where they could use focus on the back end efficiency. So, that's a long way of saying it depends. Amy Lombardo:                18:05                     Okay. Fair enough. All right. I'm going to throw this one out to you Steve. Steve Gotz:                        18:08                     Okay. Amy Lombardo:                18:08                     So, we talk a lot about this idea of retailing banking. It's not just banking, it's retail banking, and really these two industries converge together. Would you agree with that statement? Have any thought around is banking really retail banking? Steve Gotz:                        18:23                     Absolutely, absolutely. It's retail, and in my view the bank has a role in that, right? Today and into the future. The bank is an orchestrator of commerce, the bank is at the center of that experience. That's a powerful idea that I think is just coming to. Amy Lombardo:                18:38                     Mm-hmm (affirmative). Right. In any of the work that you do, do you find executives challenged with branch closings, and just trying to find that optimal footprint here, and just some of those challenges that are keeping them up at night around branch locations, and branch size? Steve Gotz:                        18:54                     Yeah, so this is a perennial problem, right? And the problem of a branch is a catch 22. Everybody knows this. The branch density is very high in America. That's for a reason. You ask Americans kind of how they choose their bank. At least up until a year or two ago, branch location, branch convenience- Amy Lombardo:                19:12                     Okay. Yeah, exactly. Steve Gotz:                        19:14                     Was one of the top choices, right? Now what's interesting is it's often the top choice, but when you look at the stats about how often do people go to the branch, they tend not to go in. So, they say it's important, but they don't go into the branch. So, this is the catch 22. You start shutting down your branches, you start kind of reducing your branch density, you start losing those deposits because customers have a fixation with the branch. The way we thought about tackling this was, "Okay. They say they want it, but they don't really go in all the time. So, what do they really want?" And what they wanted was a lifeline. What they wanted was a safety net, a connection. Steve Gotz:                        19:54                     So, we're like, "Okay. If we can give them that same kind of feeling with a dedicated digital banker, maybe the physical doesn't matter as much. Maybe we can reduce the density of the branch network, move to a destination branch strategy, take all of that OPEX off the books while keeping the people, right? And the people are important because they're really key to creating this personalized experience of that digital channel. And if we can do that, we can start right sizing the branch network while deepening the relationship with the customer at the same time. Amy Lombardo:                20:24                     Right. Oh my gosh. I have the perfect example just in my home life. Several years ago, my husband and I, we were going through some sort of refinancing, and we had to have a check physically signed by this particular ... The institution that was through our loan. I'm looking online and I was like, "Okay, I live in Ohio, and the closest is in New Jersey." And there was no options other than take this check physically to New Jersey. Nowadays I'm like, "Well, now we have check box features, and video tellers that I could have made that work." But several years ago luckily we just ironically we have a family member that lived there, and we happen to be visiting, and we went out of our way to go to this bank branch. Amy Lombardo:                21:09                     But it was such a hassle, and just to think how technology has come and crossing those channels, that had been no problem today. But that seems like eons ago, yet it was maybe only like two, three years ago. Steve Gotz:                        21:25                     I mean we've trained consumers to kind of have this unnatural connection to the branch. Amy Lombardo:                21:31                     Right. Steve Gotz:                        21:32                     Actually, that's not entirely accurate because at a certain point it was natural. Before a lot of the digital technologies we have today, that branch network was really valuable. We're getting to this point now where it's not so valuable we can right-size it, but the burden is on the industry to weening customers off that expectation, to show customers that we can deliver you the exact same experience through our digital channel, and it doesn't matter if the branch that you normally go to around the corner isn't there anymore because you're not going into it that often anymore. Amy Lombardo:                22:02                     Right. But of course it's just finding that balance of how often do you still need that physical interaction to potential create that emotional connection versus, "I just need the quick, easy transaction here." Steve Gotz:                        22:14                     Yeah. So the idea behind Pivotus Engage, which was the platform that we've built as over time if a customer can chat with the same person over, and over again they're going to develop a relationship, right? A professional relationship, and they're going to start trusting this person. And this is important because bankers used to be trusted. Over the last decade though, that trust has waned. So we're like, "How do we get back to that?" It's the same person, same conversation, interacting with the customer over time, and at a certain point the customer is like, "Yes, I need help here. I need help there." Right? Steve Gotz:                        22:47                     You can almost see the switch flip in the relationship where the customer starts to trust the banker on the other side, and that's when magic can happen because when you're in that trust space relationship with the customer, you can then advise, you can then recommend, you can then orchestrate commerce, right? Which is what we're talking about. Amy Lombardo:                23:07                     Yeah. Steve Gotz:                        23:07                     Then you can be able to play with that relationship, and if you can get there, that's where I think exciting things happen in the industry. Amy Lombardo:                23:14                     Okay. So, Umpqua came up with this or you helped with this engagement platform, and really the idea in general around experience platforms. Of course, there's obviously the personalization aspect, but what also is necessary to enable them? Steve Gotz:                        23:32                     I think you'd be from the top down of the organization. So technology is easy, right? I mean building the underlying tools to create new experiences. That's easy. Our experience is most people that are working in the bank, they want to do more. They want to help their customers. The want to support them. I think the critical element is the will, the drive, and the impetus from the top of the organization. From the board and the CEO to say, "We're going to do this." Right? "We're going to make an investment in creating new experiences for our customers. We're going to make an investment in retrofitting our technology organization so that we can create these new experiences." Steve Gotz:                        24:11                     I think without that kind of top down commitment, you end up with what we were talking about at the beginning, which is innovation theater. Amy Lombardo:                24:19                     Yeah. Steve Gotz:                        24:19                     Because the kind of change we're talking about, it takes time, it takes commitment, it hurts sometimes, right? Because people have to change. That only happens if that commitment is there within the C-Suite. Amy Lombardo:                24:31                     Got it. So, and maybe that's a good closing point here, and just getting that buy-in from the highest level. Is there anything else maybe you'd want to share with our listeners here on ways to think about how they're transforming their business? Steve Gotz:                        24:48                      Yeah. So, I think what I would leave people with is there's this emerging zeitgeist in Silicon Valley, which is we're entering the age of the big company, right? We're entering the age where having a good idea isn't enough. To actualize that good idea you need data, you need distribution, you need customers, you have capital. All of those things live within the four walls of every company out there, every bank in America who has these things, and I think the opportunity is to find creative ways to leverage those assets in new and different ways, right? I think it's somewhat presumptuous to suggest that the banking industry is facing its Kodak moment because I don't think it is. Steve Gotz:                        25:28                     I think the banking industry has never been better positioned to control its own future, and that's what I'm excited about, and that's what your listeners should be excited about. Amy Lombardo:                25:36                     Very good. Well Steve, this was an awesome conversation. I got a lot out of it, I hope our listeners do as well, and thank you of course for taking the time to be with us, and to our listeners for tuning into this episode of COMMERCE NOW. To learn more about this topic, log onto www.dieboldnixdorf.com. Until next time, keep checking back on iTunes or your podcast listening channel for new topics on COMMERCE NOW.  

Summary: Physical and cyber attacks against ATMs receive a lot of coverage, but they are not the only ways in which criminals can empty an ATM of cash. Transaction reversal fraud is one example of a manipulation of loopholes in transaction processing rules to steal cash, but it requires little to no tampering with the terminal. This episode will cover the latest process/communication manipulation fraud methods and news, as well as how to stop these attacks.  Resources:  Blog: Changing Risk, Risking Change: Security at the ATM A look at how ATM Security has Changed....and how it hasn't Whitepaper: Managing ATM Security COMMERCE NOW (Diebold Nixdorf Podcast)   Diebold Nixdorf Website   Transcription:    Amy Lombardo:                00:00                     Physical and cyber attacks against ATMs receive a lot of coverage, but they are not the only ways in which criminals can empty an ATM of cash. Transaction reversal fraud is one example of a manipulation of loopholes in transaction processing rules to steal cash, but it requires little to no tampering with the terminal. This episode will cover the latest process and communication manipulation fraud methods and news, as well as how to stop these attacks. I'm Amy Lombardo, and this is COMMERCE NOW. Scott Harroff:                     00:43                     Hello, again. I am Scott Harroff, Chief Information Security Architect at Diebold Nixdorf and your host for this episode of COMMERCE NOW. Today, we are live from the TAG PIX event in Las Vegas. I'm joined today by a very special guest from First Data, Mr. John Campbell, Director of STAR ATM Acceptance.                                                                               Welcome, John. I hope your experience here at TAG PIX has been a good one so far? John Campbell:                 01:04                     Yes, it's always a pleasure to be here at TAG's hut. This is actually my 13th year, and I look forward to it every year to get some great information from the vendors and the clients themselves. Scott Harroff:                     01:15                     Yeah. I think I've been coming here, John, for about 15 years. I've probably bumped into you one of those first early sessions. Great seeing you here every year for all those years, year over year. Hey, before we dive into some questions on reducing ATM related fraud, tell us a little bit about your background, positions you've held. What are doing these days? John Campbell:                 01:36                     I spent about 15 years working at Virginia Credit Union. I was a longtime TAG member. In a previous life, I was an accountant who actually settled the debit networks before jumping into ATM operations back in 2005. TAG attendee for 11 years. During those times, presenter and director on the TAG board from 2010 to 2015. Back in those days, I was responsible for the ATMs and debit processing for the credit union. These days, I work for First Data in Atlanta. I'm Director of STAR ATM acceptance for the STAR network and work closely with First Data processing ATM requiring side of the business, [ISOs 00:02:09] and [FIs 00:02:12]. I am currently a member of ATMIA, US Payments Forum ATM Work Group, and the National ATM Council. Scott Harroff:                     02:17                     So what you're saying, John, is you've been around a little while and you've seen a few things when it comes to ATM fraud? John Campbell:                 02:22                     A couple. Scott Harroff:                     02:23                     All right. Having been on both the FI side and now working for a transaction processor, how would you describe the state of ATM security today? John Campbell:                 02:32                     Fluctuating, evolving, and sometimes growing. We are better at what we used to do, but so are the bad guys. When I started in ATMs in the early 2000s, the biggest scares we had were the occasional ram raid and the old webanese loop capturing cards at ATMs before DIP readers came into existence. The move from OS/2 to Windows started bringing all sorts of different degrees of cyber attacks and logical attacks on software that we had never seen. But they were still sporadic and slow. But now it seems that even after all the security enhancements we've done, EMV, encrypted hard drives, point-to-point encryption, the attacks seem almost constant and even renewed. I think some of that's also from the fact that criminals are not just attacking the ATMs logically, but they've gone back to the low-hanging fruit and ram raids and cash trapping. The cashouts that made a lot of news the last couple weeks in the FBI. A lot of it were from best practices just not being followed that had been out there for years. It's still a very fluid environment. Scott Harroff:                     03:40                     Yeah. That's about the same thing I'm seeing. When you say EMVs out there, I just got done talking to customers where they were charged back several hundred thousand dollars, because they had made the decision, "Maybe I won't implement EMV. What's the worst that could happen if I don't spend all that money to do the upgrade to EMV?" I've had quite of few of them where they didn't spend the money, and now what's happening is larger financial institutions are coming back. They're saying, "Hey, we detected this fraud. The only thing in common is your ATM, so why are getting all these non-EMV transactions from our customers that have EMV cards off your ATMs?"                                                                                 It's the same thing with TLS, John. I've watched TLS roll out. Your network was one of the early adopters of rolling out the TLS protocol. But at the same time, there was some really big FIs that are out there that still haven't turned it on. There's some big networks that haven't turned it on. It's interesting to me that some folks are really thought leaders in the industry and gets stuff done, and some others tend to be a little bit more of a laggard.                                                                                 What security risk do you see as they pertain to FIs and processors, or even processes in communication protocols? John Campbell:                 04:53                     Well, I think, first, as an industry, what's really been hampering us is the fact that we have no problem jumping on the barbarian at the gate, but then we go back to sleep behind the walls. We're seeing that over and over again with skimming and then EMV. We ramp up, a lot of the earlier adopters go, and then we seem to just get lulled back into sleep.                                                                                 I take it back to Ploutus coming out with the malware when those were rearing its head in the 2013 timeframe. Diebold and other industry leaders came out and said, "Here's best practices. This is what you need to implement to protect yourself." And it got quiet. In early 2018, suddenly a variant, Ploutus-D, comes out. It hits some ATMs in the country, and everyone's panicking. Everybody's freaking out. "What do I need to do?" And you're sitting there thinking, "The best practices that would have protected you were put out there five years ago, and you just didn't do it." And some of them were physical, of top hat security, and some of them were logical, just default passwords. Somehow, here we are in 2018, and it's still a problem. That really blows my mind and that.                                                                                 But one of the bigger steps I've seen that's actually moving the ATM industry in good spot is, as you were saying, that point-to-point encryption of the data between the ATM and the host to prevent man-in-the-middle attacks. Folks forget that, even in an EMV environment, there's still data that's visible out there. I mean, we're still in a US market that's routing by BIN tables, even though you have EMV protocol having it in the ATM. So whether it's an ISO ATM or a FI, you can still do man-in-the-middle attacks, still attack the data. So seeing MPLS communications at the routers and hosts was great, but now we need to protect those small spots where the criminals are still attacking. Because even with EMV, MFA, and tokenized PAN, there is no reason we should be sending any data in the clear anymore, and it's still happening. Those that have been, before, what you said, First Data and STAR, it's starting to pick up, but I'd like to see it pick up at a faster pace.                                                                                 The ones that's bypassing all these security protocols is account takeover. It's still a real problem, and it truly does bypass that onsite security, whether it's logical or physical. I equate it to ... It's you can have all these gates and cameras and barbed wire, but if you still, through social engineering, allow someone to steal the proverbial guard's coat, they're still getting inside the fortress. They're still getting out. You don't have to beat the technology. You're beating the human element, and that's still a big problem for us. Scott Harroff:                     07:28                     Yeah. Speaking of human elements and things that have been out there for a long time. With all the technology that everybody puts out there, I still get phone calls. I wouldn't say on a regular basis. But every month or so I get a phone call about some institution would have done a transaction reversal at the ATM. They'll be balancing their journal, and they'll be looking at their host logs. And, "Why am I out $300 of cash? It shouldn't have been gone." What do you see at the network as far as transaction reversal best practices? Because, John, in my mind, it's something that, between the ATM and the transaction processor, we should have been able to get rid of a long time ago. But I still get customers calling me on this. John Campbell:                 08:12                     Well, we still have ... In the industry, it's always been cardholder customer-centric. How do I protect the cardholder? Reg E is built all around that. And of course, that's what the criminals are manipulating. The TRF is a very low-tech scam. The criminal manipulates the ATM into thinking there's a fault while simultaneously breaching the dispenser shutter to grab the cash. But the way that the networks and the ATMs are set up, all it knows is there is a fault. "I don't think I've actually dispensed cash or I can, and, therefor, I need to reverse the transaction." So the debit is reversed, the bad guy walks away with the cash, and then can continue on with this fraud that they're probably getting at ATM and ATM.                                                                                 We've heard a lot about this from the European market more, especially in 2015, but it's creeping in again. Just like Ploutus and other sorts of attacks, they start other parts of the country, and the US continues to be the soft underbelly. So the current SOP for conducting this fraud is defined. Deployers who've gotten motorized ATMs, they are to set up for card before cash. And of course, the industry did this in response for EMV. I don't want the cardholder to leave their card, so I'm going to make sure the cardholder takes their card before I can give them their cash. I'll stage it behind the shutter. And then, as soon as they take it, I'll give them their cash. The bad guys know this. They test out ATMs. They can hear the dispenser cranking out. They can hear the money behind the shutter. Ant then, it doesn't take a whole lot for them to go manipulate the hardware and then obtain the cash. It's reversed again, as we were talking about before. And then, they run to the next ATM, or they just do the transaction multiple times. Scott Harroff:                     09:53                     Yeah. I look at the problem pretty much the same way you do, John. We've released XFS updates that would minimize the impact to the customer. I know First Data and a lot of other networks that are out there can turn on things inside the configuration and say, "If this occurs, then let's hold this for 24 hours, so we can verify whether the cash has been withdrawn back in. If it's been withdrawn back in, did we get all of it? Or did we just get a receipt that came back and looking like a piece of cash?"                                                                                 I know that we have a lot of technology. One of things I wonder about is, how can the industry as a whole, through events like TAG PIX, educate these customers on all the things about the deployers can do, as well as the networks. It would be interesting, I think, to get together a group of people that could really sit down and communicate this is a way that everybody understands the problem and everybody understands some solutions before something bad happens and they come back to us. I know what we can do as Diebold. What do you think processors might need to do differently to help prevent these kinds of attacks? John Campbell:                 10:57                     Well, I know that a lot of ATM deployers have actively monitored transactions reversals and card jams. They've put in some logic. But I relate it to what we're seeing. And fallbacks, as well. There's no consistent idea of what's the best way to combat the fraud. You have some FIs on fallbacks who go and decide, "I'm declining them all." Some, "If it's under 100." So you see the same thing with these transactional reversals. There's no unified idea of what's the best way to combat it.                                                                                 I think that these acquirers and issuers need to go back to what they were doing with skimming, which was regularly inspecting their shutters for damage, monitoring velocity of reversals. Issuers, education their issuers. Because the processors can help by, when they're implementing these ATMs, educate. I don't think they can just leave it up to the manufacturers. I don't they can leave it up to PCI. I think, we as processors, we as networks, need to be advocates. We can't just be rails that the transactions are running on. We need to actually be advocates for the issuers and acquirers to help them almost help themselves when it comes to these types of fraud. Scott Harroff:                     12:15                     Yep, I agree with you, John, 100%. We talked about a lot of different kinds of fraud events that are out there. Are there any other kinds of fraud attacks that you're seeing recently? Any other kind of things that the folks out there listening, Commerce Now, should really be thinking about? John Campbell:                 12:31                     A lot of what we're seeing now is the criminals trying to figure out, "How do I get around the security that's becoming more inherent at the ATM channels?" So they're going back to, "Let me attack lower security at certain financial institution's banking core. Let me go after mobile apps that were deployed years ago and haven't kept up with third-party authentication."                                                                                 There was an article a little ago that talked about cardless transactions and fraud. The way it worded, you almost thought that the transaction, the ATM interaction, was the problem. When you read in depth, that's not the case. It really was social engineering. Again, the human element. These accounts getting taken over. They're importing a new phone number, a new email address, and then, they don't have to get around the security. They've taken over the entity. They've taken over the person. The cardless transaction now is just a funnel for them. They don't have to beat the ATM. They don't have to beat the networks. They don't have to beat the processor. They beat the human. By doing so, they're bypassing all this wonderful security we've put into place in EMV and firewalls. They don't. They've gone back to, truly, stealing an identity. They've just done it in a cyber fashion. Scott Harroff:                     13:47                     Yeah. We spent a little bit of time talking about technology. We've spent a little bit of time talking about processes. You just spent some time talking about social engineering defeating the human element. There's another area that everybody likes to hear about. What is happening with regulatory compliance or new standards that you think might actually reduce fraud at an ATM or on an ATM network? John Campbell:                 14:11                     This industry is definitely closely watching the increasing move of state regulatory initiatives. Obviously, the constituents complain to their legislature about fraud hitting the local bank, the local credit union. They have taken it upon themselves to start introducing legislation. They feel, "Well, Federal Government's not doing enough." Or, "The industry's not doing enough. Fine. We'll put in some rules." Whether it's physical security, about cameras and vestibule locks.                                                                                 One of the ones that we've seen recently was a skimming sticker being put on ATMs, which, as soon as I saw it, being a former deployer, I just cringed to think, "We've spent a decade trying to get surcharge stickers off of ATMs, and now a state wants to have one on every ATM, fine people for it." Any ATM deployer knows issuers are not reading stickers. You can put, "Don't insert coin," on a deposit automation ATM, and I had someone tape four quarters to a piece of paper one time.                                                                                 So stickers aren't the issue or the solution. What you really want is, "Fine. You want to help us, states? Then help us do some education programs between the FIs themselves, the cardholders." We have PSAs out there. Let's educate them about fraud and skimming, but let's do it on things they're looking at, social media, out on TV. My gosh, we're a country that's glued to binging on Netflix. Let's put something on there and educate on the things to look for. Legislating it and punishing the acquirers is not the way to go. It's educating the public to be more diligent when they actually visit ATMs. Scott Harroff:                     15:50                     Yeah, I agree with you. I get all kinds of questions from about 1,300 customers around the United States that are small to medium-sized and handfuls of large ones that come back and say, "What have you heard about this?" And, "What have you heard about that?" Often, the regulations or the standards or a bill that somebody has generated is the subject of that.                                                                                 I remember a certain state where they decided to resurrect the old things of, "Well, if you're at an ATM and someone's about to hijack you, put your PIN in backwards, and that will summon law enforcement and save the day." John, have you ever seen any host actually responding to putting a PIN in backwards as an emergency signal? John Campbell:                 16:34                     Yeah, that's one of my favorite. Whether it's Facebook, Instagram, an email, I'll see this. I've actually saved on my phone a picture with a big, red X through it that has this warning. And it's always someone who's trying to do good. They're trying to inform their friends. And then, I have to go repost on Facebook or some other media of, "This is an urban myth. You cannot do this." I'll even explain the history of it. "There was a programmer in '90s. He wrote this." And I also explain, "We also had panic alarms at ATMs in the '80s, and all of law enforcement was changing around ghosts and came back."                                                                                 If you actually the 2010 Card Act, there's a line item. I think it's the last one where the government said, "We have to do a study on reverse PIN." It had gotten to the point where people believed it enough where it became a line item in a bill. They gave them 13 months. It came back. Like we all know, the industry, law enforcement, the processors, hardware, all went, "We can't do this. This doesn't make sense. You're going to hurt people." Most folks can't remember their PIN going forward if you asked them that. Much less, I have to remember in reverse when someone's pointing a gun at me. By the way, what do you do when the PIN is 1441? We have a problem there.                                                                                 It's one of those. It's a great idea. But when you put into the context of human beings, multiprocessors, multi-nodal networks, and by the way, the police still have to respond to it. It's just not the way to go. But, yes, whenever I see that, I start laughing, because it's one of those, "Okay, let me update this same post I've done every six months for the last 10 years." Scott Harroff:                     18:06                     Yeah. Thanks, John, for spending time with us here today. Thanks for all your valuable information, both as a customer and now as a ATM transaction processor. Thanks so much for being here today with us at TAG PIX.                                                                                 And thank you to the listeners for tuning in to this episode of Commerce Now. To learn more about reducing ATM fraud and how financial institutions can better protect themselves against these attacks, log in to DieboldNixdorf.com. Until next time, keep checking back on iTunes or your podcast listening channel for new topics on COMMERCE NOW.      

Overview: In this episode we will discuss how Financial Institutions can bridge the physical and digital worlds to create a convenient, unique experience for their customers. Resources:  Blog: COMMERCE NOW (Diebold Nixdorf Podcast)   Diebold Nixdorf Website Transcription: Amy Lombardo:                00:00                     Hello again, this is Amy Lombardo, your host for this episode of COMMERCE NOW. Our title is cleverly named Human Vs. Machine: How Can They Coexist? And I'm joined by Chris Gill, our Senior Director of Global Advisory Services. We are going to have a conversation all around the concept of the human interaction and how it finds that balance with the ATM. Hey, Chris. Chris Gill:                             00:00                     Hey, Amy. Amy Lombardo:                00:28                      Thanks for joining me. Chris Gill:                             00:29                     Glad to be here. Amy Lombardo:                00:30                     Before we start with our questions, let's just talk about the term "branch transformation," okay? It's been the buzzword in the financial industry for, what, 10 plus years? Chris Gill:                             00:41                     Mm-hmm (affirmative), mm-hmm (affirmative). Amy Lombardo:                00:43                     In 2018, what does branch transformation mean for bankers? Chris Gill:                             00:48                     Well, I think increasingly it really means the transformation between the physical as well as the digital channels. I mean, 10 years ago, if you thought about branch transformation, we didn't have the adoption of mobile banking back then and as much online banking, and the sophistication of what you can offer on a self-service device today. Branch transformation today means, I think, something different than it did 10 years ago. It's really about that connection of the human versus the physical channels in a branch environment, and how you transform not only the technology, but also the way you engage with customers and the experience that you provide is really part of what branch transformation is all about today. Amy Lombardo:                01:30                     Even though it means something different, it's still relevant, right? Chris Gill:                             01:35                     Yes. Amy Lombardo:                01:36                     You're still having the number of conversations that you would have had 10 years ago, it's still the same now, right? It's just bankers are asking for maybe different solutions, different recommendations? Chris Gill:                             01:48                     Well, the reason why it's still relevant is still that a significant percentage of institutions have not yet transformed their branches. Because there are a lot of legacy branches, older branches where it's not as easy to transform those as opposed to newer locations. If everyone had transformed their branches, we wouldn't be having this discussion today, but a lot of institutions still haven't made the difficult decisions to really change the way their branches operate today. Amy Lombardo:                02:17                     If they haven't made those decisions, is it because of the size, the number of locations that they have? Does that play into it as well? Chris Gill:                             02:27                     Well, for some institutions that maybe have a lot more branches, that could be a factor. I do think a lot of it is around the leadership of the organization and the strategy they want to pursue ... Amy Lombardo:                02:38                     Got it. Chris Gill:                             02:38                     ... and their willingness to make some hard decisions and move forward with a new program. There's a lot of inertia in the banking industry that just leads to the pace of change taking a long time. Also too, there are a lot of legacy systems that impact your ability to transform your branch, and making changes to those is very time consuming, so a number of different factors. Amy Lombardo:                03:00                     Got it. Okay, so you and I, we're sitting together, we're here in Las Vegas. We happen to be running this podcast live from our TAG picks event. I'm looking over some of the content of a presentation that you had given, and we're talking about an FI's having a comprehensive analysis to help understand their branch technology roadmap. You are talking about four steps in this technology roadmap. Can you walk- Chris Gill:                             03:29                     Sure. Amy Lombardo:                03:29                     ... our listeners through what those for are and what it means? Chris Gill:                             03:33                     A successful branch transformation plan really requires upfront analysis around your client segments. How do they transact with each day? How is it different from one branch to the next? Understanding your markets and the characteristics of consumers and businesses in those markets. Then from there, it's really understanding how your branches operate today, and what kinds of transactions are your customers doing in your branches? Because that will have an impact on What kind of technology you need to deploy and the kind of functionality that you offer as part of that, so understanding branch operations is important.                                                                                 Then from there, once you've done the in-depth analytics, you can really identify key opportunities to move forward with to transform your branch and digital channels, and understand which of those are higher priority to implement than others. Then the fourth step is then, develop really a multi-year roadmap on how to move forward in kind of what order. Then looking at the return on investment on the plan that you've come up. Amy Lombardo:                04:32                     All right, so let's talk a little bit about the analysis part that you mentioned, that first part. Can you review some options that FIs have when they're executing a transition to different types of branch technology? Chris Gill:                             04:45                     I think most institutions do not really understand that there are some customers that are more self-service oriented and there are others that are more branch oriented, and how that varies from one branch to the next. Because if you have a branch or in a market area where you have a high concentration of, or self-service oriented kinds of consumers, then your strategy in a market like that needs to be different than in a market where you have a lot of people that only come into the branch and don't use self-service. The kind of technology you deploy and the kind of people you want to have in those different branches needs to be different. You need to have that in-depth understanding of your customers and their transaction characteristics in order to come up with that strategy. Amy Lombardo:                05:29                     Okay. Chris Gill:                             05:30                     Because if you don't have that, then the risk you run is you're deploying new technology in a market where your customers are not ready for it. Then you don't get the adoption and return on that investment. Or you roll out one new technology in a market, but those customers at that market also use another branch that doesn't have that technology. It creates this customer confusion, and is an inconsistent experience from one location or one ATM to another. It's important to really understand how customers use different locations. Amy Lombardo:                06:08                     Right. How would you mitigate that risk then of, I would almost say, call it consumer confusion of what they need to do when they walk into a branch or they go up to an ATM? Chris Gill:                             06:20                     Well, I think the key is, number one, doing the in-depth analytics to know and understand your customers in a greater level of detail so that you have the right plan that addresses that cross- branch, cross-ATM usage. Then secondly, from an implementation point of view, you need to have the programs in place so that the people in one location are doing the same, demonstrating the same behaviors and the same processes that they do in another location. I mean, no different than walking into a fast food restaurant or chain and you have a different experience in one part of town than you do in another. That would not be a good experience. Certainly in banking, you want to have a similar experience across locations. Amy Lombardo:                07:03                     We've talked about it a little bit from the consumer side to say, "Okay, consumers have different ways to engage with the channels," but take a step back from the operational side. What are the benefits to the actual financial institution by going through a branch transformation strategy? Chris Gill:                             07:22                     Well, there are obviously several. Obviously, number one is better managing your costs. I mean, if you look at branches overall, for most institutions, the branch represents anywhere from 60 to 70% of their total operating costs. In a very competitive environment where growing revenue can be challenging, better managing the cost base is key. I think costs are one. Secondly, if by enhancing the customer experience, you're going to potentially differentiate yourself against the other institutions in the market, and that can lead to helping you acquire more customers or strengthening the relationship that you have with the customers that you have. Amy Lombardo:                07:59                     Right. Chris Gill:                             07:59                     It's a combination of those two things, and costs and the enhanced experience leading to more revenue. Amy Lombardo:                08:06                     Got it? Yep. It's interesting, with all the social media that we have out there, I'll occasionally see posts where someone says, "Boycott these kiosks. Boycott this," whatever piece of self-service technology. "It's cutting jobs."  Really, what you're talking about here is that it's an opportunity to move people around, give different roles. Because that person who may have been operating that teller line maybe could be more suited for someone who's more in a universal banker role, right? Chris Gill:                             08:34                     Right, exactly. Well, and that's a question that often comes up where the branch staff may perceive that the technology is a risk to their jobs. Amy Lombardo:                08:43                     Yes. Chris Gill:                             08:44                     Why would they tell a customer to go use an ATM, "Because then they're not going to come see me, and then therefore I'll be out of a job," but it's your job ... What you need to tell the teller or the banker is that, "Your job is going to change, and we want you to spend more time talking to customers, and more time understanding their needs so that we can become a trusted advisor for the customer and not just doing it from a transactional point of view." Amy Lombardo:                09:10                     Right. Chris Gill:                             09:10                     Because ultimately, loyalty to a financial institution is going to be much more around the relationship and the value that the institution provides in managing your finances, than it is going to be for doing a transaction and making a deposit. That's not a loyalty generating type of interaction. Amy Lombardo:                09:30                     Chris, why don't you tell me a little bit now about some of the specific technologies that banks can deploy that can enhance that experience, but also find that balance between the human and the terminal itself. Chris Gill:                             09:42                     Sure. I think there are really three technologies that institutions are looking at to really leverage technology, but with that kind of human touch, human interaction. Some institutions are moving more to this assisted service kind of model where they have in-lobby, self-service devices that provide more advanced functionality, and they have a person in the lobby who would greet a customer and then show them how to do their transaction on the self-service terminal. No different than at the airline, at the airport where at an airport, a gate agent is going to show you how to use the kiosk- Amy Lombardo:                10:20                     Use the kiosk, to check it. Yeah. Chris Gill:                             10:21                     ... Or in a fast food restaurant where they have a self-service ordering, where there's someone there to help you. Amy Lombardo:                10:26                     You know what? Sorry to interrupt you for a second, but I made that connection in my head that there are so many of these retailers, almost, they're like indirectly helping train- Chris Gill:                             10:39                     Exactly, exactly. Amy Lombardo:                10:39                     ... banking consumers, because that technology might not be as relevant or as often seen in branches, but any McDonald's you go into now you've got the kiosk. Chris Gill:                             10:52                     Well that's the thing. Like you go into any Home Depot, any Lowe's, any Giant Eagle or whatever supermarket, they have the self-service technology- Amy Lombardo:                11:00                     Scan and go. Chris Gill:                             11:01                     They've got four to six kiosks and they have someone there. If you're having a problem swiping your lettuce, they can come in and put in the code. I mean, so these other industries are really paving the way for banks and creating ways to do things differently. Amy Lombardo:                11:15                     Have you found that to help you then in your consultation services, that the bankers can make that connection to these other industry examples? Chris Gill:                             11:26                     Well, and again, I think there's all the bankers you talk to, they get that because they see that in their daily lives, but making the leap from that to changing your branch is a big chasm. Amy Lombardo:                11:39                     Right. Chris Gill:                             11:40                     Because a lot of people ... Well, that's going to require changing a lot of things. Because Sally, the teller, that's working in that branch today may not be the right person to be in that branch and, "We may have to make some personnel decisions, and we may need to remodel the branch, and change some of our policies," and so on and so forth, "Change the facilities ..." Amy Lombardo:                12:00                     That's a good point, yeah.  Chris Gill:                             12:01                     There's a lot of ... Branch transformation is not easy. It's funny though, because it just seems like, it just seems logical that we ought to do that then. Amy Lombardo:                12:08                     Or people just think, "I'll just swap this piece of technology, and then it'll work." Chris Gill:                             12:12                     Right.  Amy Lombardo:                12:13                     There's, yeah ... Chris Gill:                             12:13                     Yeah. Amy Lombardo:                12:14                     It's a fine line, It's a balance, right? Chris Gill:                             12:16                     Right, right. Yeah. Amy Lombardo:                12:17                     Okay, so you were giving me some examples. So ... Chris Gill:                             12:20                     Right, so ... Amy Lombardo:                12:21                     We went on the tangent about the kiosk. Chris Gill:                             12:23                     Right, so there are in-lobby, self-service devices that are in the lobby of a branch. Customers come in and they're greeted, and then the branch staff can walk a customer over there and show them how to do the transaction in a self-service fashion. One of the things that we've learned are, consumers like to learn from someone that they trust that can, who can enthusiastically show them how to do things a new way. If you just point someone to an ATM and say, "Oh, just do it over there," the rate of adoption is going to be much lower. If you have a well-educated, a knowledgeable, enthusiastic employee who can talk about the new way of doing things, that makes that level of adoption that much higher.                                                                                 One model you'll see in the lobby, self-service. Another would be upgrading ATMs to more advanced functionality, whether it be check imaging, so removing the envelope. Or personalized screens, so you can select your fast cash amount and not have to change that every time. There are a number of things you can do there. Then the third thing is adding a video dimension on an in-lobby or an ATM, so that you can talk to a video agent in a call center if you need help doing a transaction. Or in some cases, they can do the transaction for you. Amy Lombardo:                13:36                     Okay, so video is my like hot topic, because I had a conversation with a gentleman this morning and asked him his view on video. Now, you share with me the Chris Gill view on, to a video at the ATM. Is it here to stay? Is it ... What's our value prop there? Chris Gill:                             13:58                     The most successful institutions with video to date, video has been a key component and it's been well integrated into their overall delivery strategy. There's one institution that basically eliminated tellers at all of their locations and replaced them with video, and that was a key part of their strategy. What doesn't work is what I would call "lemming behavior," where just because another institution in the market has video means you need to add video. That is not a recipe for success. Again, going back to the beginning of the podcast where we talked about having a strategy and figuring out what makes the most sense for your network based upon your customers and the markets and your branches, you have to do the same thing when you're thinking about video. Amy Lombardo:                14:45                     Got it. Chris Gill:                             14:45                     Because if you have, if you operate in a market where you have a high concentration of younger consumers that are more likely to be amenable to video, as opposed to an area with a lot of older consumers that are the least likely to want to use video, then you need to know that going in, rather than just making ... Video is not a one size fits all, do it everywhere kind of solution. Amy Lombardo:                15:09                     Got it. Chris Gill:                             15:10                     Okay. Then, so there are some specific use cases that we think are more relevant. For example, video in the drive-up. Converting all the video or all the pneumatic tubes to video lanes, and you'll have a consistent video transactional experience in their drive-through can help improve efficiency and reduce the costs. Or if you are building a newer branch and you don't want to have five staff there, you could have video terminals doing the transactions, and you have two or three staff there that are there for account opening and the like. There are different use cases for it, but we would argue that there are other enhancements in self-service that would drive a better return. Things like denomination selection, in core integration and personalization. Enabling check cashing, tablet integration, that would enable other transactions like over the limit withdrawals and such. If we're looking at it from an ROI basis, we would suggest there are other options that would drive a better return than video, in most cases. Amy Lombardo:                16:17                     Got it. Had to ask you on the video. All the technologies that you've talked about here, you've worked with the institution, they've defined some of these steps and they're going into the actual implementation. Talk a little bit about the staff side of it now, and how you kind of define that ideal experience then. Chris Gill:                             16:40                     Well, when you're deploying new self-service technology, there a number of key factors that you need to be thinking about. One is really around the whole experience you want to provide in a branch that's got different self-service elements, and defining the experience, defining the customer journeys, and then creating the appropriate lobby management strategies so you're engaging customers when they walk in. There's a whole experience in process element. Secondly, is really around preparing the employees for that new environment. The third is around where you place the technology, and what kind of functionality is available on those devices.                                                                                 Just speaking about the employing readiness specifically, what we have found is that way more often than not, branch staff do not use the technologies that the financial institution actually offers, whether it be using the ATM for depositing, or making a mobile deposit, or doing person-to-person payment. Amy Lombardo:                17:35                     Really? Chris Gill:                             17:35                     It is shockingly low, the incidence of branch staff actually using those technologies. My team, we've actually done surveys, starting a project to branch staff, and we found like 80 to 90% of branch staff have never made a deposit on an ATM. Amy Lombardo:                17:52                     Wow. Chris Gill:                             17:54                     Yet, this institution is rolling out- Amy Lombardo:                17:56                     They're trying to introduce this. Chris Gill:                             17:58                     They've already rolled it out- Amy Lombardo:                17:59                     Oh, boy. Chris Gill:                             17:59                     ... and their staff still 80 to 90% don't use it. Or there's another bank that we work with that told us that only 1% of their branch staff ever made a deposit on the mobile phone, on their bank's app. Again, the branch staff are the biggest drivers of customer adoption of your new solutions. If they can't, they don't use it and can't explain it, then how are they going to talk to a customer about it? Amy Lombardo:                18:25                     It's like putting a fancy stand mixer in your home, but you've never made cookies before. Chris Gill:                             18:30                     Right. Amy Lombardo:                18:30                     Right? Chris Gill:                             18:30                     Right. Exactly, exactly. Multiple things to consider here. Number one is, how do you use, how do you do the transaction? What's the Screen flow? First you put the check in, then it's going to give you an image on the screen. You confirm, so on and so forth. You have to understand that. The other thing is you need to understand, what if there's a problem? Like what if the check were to jam or the cash jams, what happens there? Because if the branch staff are uncomfortable in how to resolve the issue, then they may not be comfortable talking about it at all. They need to be comfortable with both the functionality, the troubleshooting and then also importantly, they need to understand you can't talk about technology in the same way to a millennial that you talk about it to a 70-year-old person. Amy Lombardo:                18:30                     Yes. Chris Gill:                             19:16                     You need to have a different way of explaining the technology. A lot of these branch staff that are more millennials, they can't talk to you about the technology in the same way they would talk about it with one of their parents. Again, I think it's imperative that number one, you train the branch staff on how to engage with customers. How to leverage the technology and how to deliver it in such a way that you're not forcing them to use the technology, but you're providing a value add so that the customer feels like you're adding value to their relationship. Beyond that, it's also important, you want to make sure you have the right people in the branch with the right skillset. Right? Amy Lombardo:                19:59                     Yes. Chris Gill:                             20:01                     One of the things we advise our clients is that ... One of the key job requirements in a job description needs to be, "Must be knowledgeable in ATM, online and mobile banking." You'd be surprised at how few job descriptions we come across actually have that as a job requirement. Amy Lombardo:                20:16                     Oh, that's a good point. Chris Gill:                             20:17                     Right? Amy Lombardo:                20:17                     Right? Chris Gill:                             20:18                     Yeah. Amy Lombardo:                20:19                     Or, likes to talk to people. Chris Gill:                             20:21                     Right, right. Then just another side note, interesting. As a leader of the bank and the credit union challenge the leaders to actually ask their staff, "To what extent do you use ..." The leaders on their team, "To what extent do you use these technologies?" Because we've heard stories of the head of retail banking asking his direct reports to show their mobile bank's mobile app and most of them could not do that. Amy Lombardo:                20:47                     Oh, ouch. Chris Gill:                             20:48                     If the leadership don't use your app then- Amy Lombardo:                20:51                     Yeah, sure. Leads by example, right? Chris Gill:                             20:52                     ... It's not sending a message, an example for the rest of the organization. Amy Lombardo:                20:55                     Right. Chris Gill:                             20:56                     I also think we need to be thinking about customer journeys. It's one thing to talk about delivering a great experience, but what does a great, what does a customer journey look like? It's one thing to talk about customer experience at a high level, but it's important to really think through like, "What are some of the more important journeys that your customers engage with you on?" Coming into the branch, make a check deposit, and what does that journey look like from the time they enter, to the time they do the transaction, to the time they leave? What does that look like today versus what would you like that to look like in the future? Then, what are the people, process, design and technology requirements to deliver that journey? It's important to really map that out. Amy Lombardo:                21:35                     I think that's probably a good way to close this conversation. The people, the process, the technology .... I lost the fourth one. Chris Gill:                             21:35                     Design. Amy Lombardo:                21:42                     There we go, design. That you really need to consider all those components here when when you're looking to engage on a branch transformation project. Chris Gill:                             21:51                     Exactly. Amy Lombardo:                21:51                     Thank you, Chris, for joining me. Happy birthday to you. Chris Gill:                             21:51                     I thank you, thank you. Amy Lombardo:                21:55                     I just learned that as people are walking by. They're wishing you a happy birthday, so you're in Vegas. You can go live it up tonight. For more information on branch transformation, go to DieboldNixdorf.com, and keep checking in for next episodes of COMMERCE NOW.  

Overview:  As the tax against self service endpoints evolve to be more complex, and many financial institutions struggle to keep up, there's a growing demand for security management services in the industry. In this podcast, you will hear about this trend and what it means for financial institutions.  Resources:  Blog: A look at how ATM security has changed … and how it hasn’t ATM Security Management: Know Your Options COMMERCE NOW (Diebold Nixdorf Podcast)   Diebold Nixdorf Website Transcription: Amy Lombardo:                00:00                     Hello again, and thank you for joining us on this episode of Commerce Now. As the tax against self service endpoints evolve to be more complex, and many financial institutions struggle to keep up, there's a growing demand for security management services in the industry. Today I have the pleasure of being joined by Julie Osborne, our Global Vice President of Diebold Nixdorf's Service Portfolio, and Martin Nearhos, Principal Security Architect for the Global Services Portfolio Division as well. We're going to hear about this trend and what it means for financial institutions. So, hello Julie and Martin. Thanks for being with me here today. Julie Osborne:                   00:38                     Thanks Amy, it's a pleasure. Thanks for having me. Martin Nearhos:               00:41                     Yeah, thanks Amy. Happy to be here. Amy Lombardo:                00:44                     Okay. I'm really excited here, because I'm based here in the US, but I'm talking to two subject matter experts who are in our Singapore office. It's great to just have this global view on this security topic. So, let's dive in here. Let's start with just a high level question on why do you think financial institutions are having difficulty managing their self service security? Martin Nearhos:               01:10                     That's a good question. Maintaining the security of the customers' assets and information has always been a high priority for the industry, but threats against the self service banking channel have evolved. It's now much harder to keep up. A tax against ATMs have traditionally been isolated to geographic regions, and slow moving out of those regions, but this is no longer the case. We're now seeing increasingly complex attacks, such as various forms of jackpotting, taking place across the globe, and at the same time the threat of traditional physical attacks hasn't really gone away. It's a lot to combat. Julie Osborne:                   01:47                     If I might just add to what Martin said, financial institutions usually don't have the time or in-house expertise to keep security measures up to date. As retail banking paradigms shift, banks and credit unions are under a lot of pressure to do more with less, and even if financial institutions wanted to hire in-house security specialists, as businesses and governments fight cyber security threats, these resources tend to be really expensive and in high demand. Also, as we all know, this constant pressure to stay compliant with security regulations and industry standards, ATM security service providers can help relieve the burden of staying on top of changes and staying protected against attacks. Amy Lombardo:                02:28                     Okay. Got it. Martin, if I can ask this to you before we jump into this whole idea of doing more with less, since you're located in the Asia Pacific region, are there certain types of attacks that you're seeing on the rise today? We talked a lot about jackpotting in the Americas, but could you give us an idea of maybe what you're seeing over in your region? Martin Nearhos:               02:51                     The Asia Pacific region is quite diverse. You've got many different markets at many levels of maturity, so it varies. Locally you won't get, say Singapore, there's a certain limit to attacks, whereas in other countries very close by, you've got a much broader range of attacks. It's complex and it doesn't move. Amy Lombardo:                03:15                     Got it. Yeah. It sounds like no matter where you are, just keeping on top of that security is always going to be top of mind here. Martin Nearhos:               03:22                     Yep. Amy Lombardo:                03:23                     Okay. Let's talk about this idea of doing a little more with less. When we're looking at it from a financial institution standpoint, can we talk a little bit about why they should be looking into outsourcing their ATM service and management? Julie Osborne:                   03:37                     Oh, absolutely Amy. I might take that one. It's becoming increasingly popular for FIs to work with organizations that have intimate knowledge of the ATM channel, and offer specialized security services as part of ATM fleet management arrangements. They will want someone who can offer 24/7 secure operation centers for monitoring, and who can also take care of all necessary maintenance, hardware and software upgrades, and updates for them. Some FIs don't have the capability in house to reliably maintain secure ATM environments, and others would just simply rather have someone else handle it because it is a specialist capability, as I said. So, if FIs are looking to take the burden off themselves and effectively manage the security services of the ATM  fleet, with an ATM security service provider such as Diebold Nixdorf, they should look for a provider who can deliver the following three things.                                                                                 First, you'd want optimized security through 24/7 monitoring, proactive threat elimination, and an in depth understanding of emerging threats, to try and protect against attackers. Second, you'd want increased efficiency, freeing the FI from day to day ATM security management responsibilities, or streamlining processes. Third, you want a service that will effectively manage operational risk, to provide real time threat insights, and offer remote troubleshooting, and has a deep understanding of the industry requirements. Ultimately, I think the best approach is a multilayered security protection approach that offers real time information to ensure ATM networks are protected and available, whilst also providing the information FIs need for a [inaudible 00:05:17] ATM security audits. Amy Lombardo:                05:19                     Okay, got it. Those three points were really helpful here, especially in looking to determine your outsourcing, your Managed Security Services, but what does an engagement actually look like for an financial institution? What are some of the specific options, and what would it take to get a program like this up and running? Martin Nearhos:               05:41                     I can take that. If you're an existing customer, and you're already ready using sort of self service fleet management, which is just a suite of services designed to run multi-vendor self service devices cost effectively, the customer can sort of decide what level of protection makes sense for their organization, based on their risk profile and their operational risk. If you're a new customer, we'd look at all the fleet details that required. The ATM make, the model, physical location, that would all be analyzed. Then the customer would select the appropriate security service, and again, it's based on their business and operational risk. We suggest that whatever FIs choose is a core security service. The services offered should, at the very least, provide everything needed to comply with industry standards and requirements such as those developed by the Payment Card Industry Security Standards Council.                                                                                 It should also include the hardening of various aspects of the ATM with remote monitoring and software patch deployment. It would also include things like device monitoring, secure connectivity, managed firewall, peripheral device control, anti malware, antivirus, and of course intrusion detection and prevention. Then the FI can have the option to build upon that basic level of services for such things as protection against complex logical system attacks. Although I would recommend this sort of protection to everyone, we know that financial institutions want to prioritize their investments in advanced security, and they just can't do it all at once. With these types of services, FIs can then rely on the security service provider to proactively monitor the ATM for suspicious activity, protecting terminals more effectively in real time, responding quickly when attacks are detected, and engage with customers to resolve the incident, and take the burden of managing the self service fleet off the FI, who, as we've already said, may be stretched pretty thin on resources. Amy Lombardo:                07:42                     So Martin, if I can ask you a question here just based off of the compliance portion, the regulation portion of what you mentioned, I would think that's pretty important, almost as a value added services as well, that your security partner could provide you almost with the consultation, the education, on what all these requirements might mean for your institution. Am I thinking about that the right way? Martin Nearhos:               08:11                     You are. There's some industry standards that, across everywhere, but what happens is you get into regional areas. Some have slightly different requirements, so as a global offering, it's quite difficult, but we have specialists in all the major regions that could offer that service. Amy Lombardo:                08:29                     Okay. Thank you. Okay, so to close out this topic, have you heard how customers are responding to these types of Managed Security Services in the industry today? Are they able to focus more on their customers without the burden of managing their own ATM security services then internally? Julie, how about you take that one? Julie Osborne:                   08:51                     Thanks Amy. Actually we have. We've seen some very positive results from the financial industry. Threats against the self service channel aren't going away anytime soon, but with Managed Security Services, financial institutions can spend less time trying to prevent attacks, and spend more time with their customers growing their businesses, and ultimately that's where we want them to be. Martin Nearhos:               09:11                     And, just as the FI is focusing on on their customer, the security service provider, but it's got to focus on continuing to evolve and develop, because the expectations will continue to rise, and FIs will expect to be offered more value in the future as well. Amy Lombardo:                09:29                     Well great. This sounds like a no-brainer to me. I would want to stay protected and just not have that burden internally. Thanks Julia and Martin for being with me here today, and to our listeners for tuning into this episode of Commerce Now to learn more about Managed Security Services, and how FIs can better protect themselves. Log Onto DieboldNixdorf.com. Until next time, keep checking back on iTunes or your favorite podcast listening channel for new topics on Commerce Now.    

Overview: Self-service checkout technology is transforming the way Americans think about customer service. Not long ago, good customer service meant properly training sales associates to assist shoppers in need. Now, more and more companies are shifting to tech-based customer service. As of Q2 2018, 95 percent of American consumers had encountered at least one form of self-service retail and 49 percent used them on a weekly basis at the supermarket. In this episode, PYMNTS in collaboration with Diebold Nixdorf, examine survey data collected from 2,170 American shoppers on their experiences with and impressions of self-service retail checkout options.   Resources:   Link to Self-Service Report   Blogs:  From Self-Checkout to Self-Service: The Retail Evolution:  https://blog.dieboldnixdorf.com/from-self-checkout-to-self-service- the-retail-evolution/#.W4Vn5DYY7IU Q&A with Frank Natoli, Executive Vice President, Self-Service Technology: https://blog.dieboldnixdorf.com/qa-with-frank-natoli-evp-self-service-technology/#.W4Vod-hKiUk   DN website: www.dieboldnixdorf.com COMMERCE NOW website: www.commercenow.libsyn.com Transcription:  PYMNTS Representative:                             00:00                     The early days of self-service were a bit bumpy in terms of functionality and obvious usefulness. Diebold Nixdorf's VP of Retail Strategy, Arvin Jawa, told Karen Webster. "That," he noted, "is getting better. The technology is becoming cheaper and easier to operate and consumers are getting more enthused for it by the moment." But he says, "In order to get all the way there, retailers need to think less about self-service as a new series of consumer touchpoints, and more about how to use it to reset the customer retail journey entirely." Amy Lombardo:                00:32                     This is "COMMERCE NOW."                                                                                 Hi, it's Karen Webster and our topic today is self-service retail checkout. With me to have the conversation is Arvin Jawa, VP Retail Strategy at Diebold Nixdorf. Arvin, thanks for joining me today. Arvin Jawa:                         00:59                     Hey, happy to be here Karen. Thanks again. Karen Webster:                01:02                     This is to take a little bit of a deep dive to go under the hood with the data from the survey that we collaborated on, to get to know what consumers think about self-service checkout, how they use it, and what they'd like to see more of. So shall we dig in? Arvin Jawa:                         01:23                     Sounds great. Looking forward to it. Karen Webster:                01:24                     All right. So here we go. Interesting, perhaps not surprising, 82% of consumers have used self-service checkout at least once in the last year. And people like it. In fact, 80% of people said they'd frequent a merchant if they could use self-service checkout. Why do you think that is? Arvin Jawa:                         01:48                     Oh yeah. We see this as a really great trend. Of course, we have a favorable view of self-service technologies of course and we agree that generally, consumers also have a favorable view of self-service technology. Clearly, there's a movement towards more adoption of these solutions in the recent years, attributable to some really big implementations.                                                                                 You've probably heard of Amazon Go. I'm sure everyone has heard of Amazon Go. Everybody knows Macy's in the US and Macy's has announced a recent deployment of self-service mobile application where they're allowing their consumers to scan-and-go within the store. And of course, everyone's favorite place to go and grab burgers and fries, McDonald's. A company we're very fond of. They've got a great deployment coming out here with self-order kiosks within their stores. So there's really a great buzz in the US around new self-service technology. Karen Webster:                02:48                     Is that because of the convenience that consumers get in order to basically be self-serving themselves in terms of getting in and out of the store quickly without having to wait for someone to check them out personally? Arvin Jawa:                         03:05                     You know, it's a great question and it was something that I found really compelling within the research. You see that there are lots of reasons for why consumers like self-service technologies. But ultimately, it comes down to creating value for the consumer. Consumers really enjoy either saving time, saving money, or really, really enriching their shopping experience. Retailers who have determined how to create that kind of value for consumers through self-service technologies have figured out how to actually have really good deployments.                                                                                 McDonald's is a perfect example of that, right? As I mentioned, they're implementing self-service kiosks and in order to figure out where they could create value for their consumers, they started looking at the journey, they started looking at where are the ways that consumers can actually order with us? For a long time, there were only two ways to do that: you either had to go to the counter and speak to somebody and place an order, or you had to drive and go to the drive-thru and speak to a machine with a person on the other side of it.                                                                                 They really reevaluated their journeys and how to reshape those beyond those two traditional ways of ordering. Where they were able to then give their consumers more choice in the ordering options, a way to actually create some sort of customization mechanism for the order they're making. Do I want lettuce on this Big Mac or not? The kiosks allow for a self-guided customization, but also self-enablement on the payment choice as well. Now the consumer has various options on how they want to pay: cash, credit, debit, or new fangled mobile technology payments.                                                                                 But then beyond that, they could take it another step further and say, "Hey, we're going to actually allow you to go seat yourself. Just go over to a table, take a tent card, and we're going to bring your food out to you." So they really reshaped the journey in a way that made it faster, more compelling, and more enriching for the consumer.                                                                                 When you look at those value elements, that's the type of thing that helps consumers really start to adopt usage of self-service technology. Karen Webster:                05:22                     And I think the technology has also improved the reliability and accuracy of the experience too. We'll talk in a little bit about self-service at supermarkets and drugstores, but it's now more efficient and faster to use these self-service checkout devices than, perhaps, they've been in the past. Arvin Jawa:                         05:43                     Absolutely. You know, I think there were a lot of earlier generation type of self-service implementations.                                                                                 The early self-checkout systems within grocery stores or do-it-yourself retailers, they were really clunky and not very user-friendly. In fact, they were probably the antithesis of self-checkout because you would always find a need to intervene a transaction because, well, you couldn't get past the age verification on an alcohol purchase. "I want to buy my wine, but I still needed someone to validate my driver's license," or, "I couldn't scan this item properly and so I needed some assistance," or, "The weight scale didn't necessarily integrate well with my purchase." So the reality is they were far from convenient. They had lots of issues in the user interaction.                                                                                 Same thing happened with kiosks and also a number of mobile apps that were early renditions of today's mobile and self-checkout solutions. Probably because the technology was sort of leading. It was almost the hammer looking for the nail, as opposed to, "Let's see what the journey is that we can improve and figure out how we can then deploy technology to eliminate the friction or reduce the time in the process." Karen Webster:                07:09                     It was interesting that those who don't use self-service options don't use them because they're not available at the places they shop. What is it that retailers need to do in order to implement a self-service technology? You talked about McDonald's, and the journey, and the flow. Is that what's getting in the way of retailers embracing this trend? Arvin Jawa:                         07:36                     There are a couple things and I mentioned a few issues around consumer adoption, which I think is one-half of the equation in the obstacles, in the barriers. Early generation technology wasn't necessarily great. But the second-half is probably even more of the reason for why there hasn't been wide scale adoption. On the retailer side of things, frankly, things are complicated. If you think about retailers having investments and legacy software platforms, they have to maintain these, and they have to integrate these. Point of sales software is a perfect example, right? Now, all of a sudden you want to implement a self-service checkout system or a kiosk system nearby the storefront. What happens is we have to then, retailers have to find a new way to integrate these new touchpoints because they would typically run on their own software, or they had their own software stack. This all costs money. It's expensive. It requires new integration and new certifications.                                                                                 The other thing is that retailers didn't have a lot of options. The vendors who were the first generation of solution providers for self-checkout technologies, they were very costly and they weren't the best solution providers. Now, I think there's greater choice and they have more options.                                                                                 But the other thing is, as I said before, retailers weren't necessarily looking at self-service as anything more than another touchpoint in the store. What we've found in our retail implementations of self-service technologies is that when retailers shift their mindset to thinking about self-service as a business transformation through the implementation of self-service technologies, then they really start to realize real benefit. The benefits case for deploying these solutions are amazing. They start to say and realize, "Hm, we can actually improve throughput and reduce the checkout area size within the store." In other words, "We can optimize the real estate."                                                                                 Second, "We actually improve overall customer satisfaction or net promoter scores because we're more judicious in where and how we allocate our store associates' time." In other words, "It's disproportionately geared towards helping customers who need help, as opposed to spreading ourselves in a peanut butter-like fashion across every customer. We can focus our customer service on those who need it most and that optimizes our payroll investment. So now, when we improve throughput in a smaller checkout space and optimize the real estate footprint, and we do that with better customer support, we can actually start to see that we're increasing sales because we're allocating or reallocating our staff time towards upselling and cross-selling."                                                                                 That's why we see success with self-service technologies without customers. We start with designing and enabling the journeys that our retailers want for their consumers. We don't start with the technology, but we instead start with addressing the pain points and the friction inside those journeys that the consumers experience, and then we design the optimal journeys that our retail clients want for their consumers. We call this Storevolution is the term we use. It's where we put the consumer at the center of the journey and we make the physical store a digitally enriched or enhanced experience that's always on and always secure. Karen Webster:                11:11                     It's interesting. I'll not share the name, but a QSR where I go every morning to get my coffee and breakfast sandwich implemented kiosks, but they were so cumbersome to use that the only people who use them now are the people behind the counter, which of course, defeats the whole purpose of having a self-service kiosk in the store. I thought that was kind of the craziest thing I'd ever seen. Arvin Jawa:                         11:40                     Yeah, yeah. No, I totally understand. And quick service is a really great place or a great space for self-service technologies to be utilized in. You know, I will name names. I love to go to Chipotle. I love to go to Starbucks. I love to go to Chick-fil-A. These are my favorites, partly because of kids, but also because I have a caffeine addiction. These are retailers who implemented self-service technologies. Some did it really well, some didn't do it so well, and some have learned along the way.                                                                                 I love eating at Chipotle, but I was really, really ... I wasn't happy with their initial outlay of their mobile self-ordering app because I could never find the way to maximize or optimize my time. I could never time up when I would place my order to when I would get it in the store and pick it up at the counter. There was always a synchronization of that process. They figured it out. They allowed me to then select the time that I want to come and pick up my order, which makes it a lot easier.                                                                                 Chick-fil-A did something really interesting. They don't want you to walk away with food that's cold or not fresh. And so you can place your order, but they won't actually start to make your order until you "check-in," which is basically geo located to some fence around the store location. So when you're within 100 feet of that location, you can then check in and say, "I'm here" and they'll start your order. The proximity to the store is an added feature to their mobile self-ordering application.                                                                                 But I still say the gold standard is Starbucks. They did a full-on business model change, right? This wasn't just about self-service technology; they started off as a digital gift card, really, is what they're mobile app was, and then they found a way to allow me to top up my store value amount on a regular basis. When it dropped below a certain level, I would always get topped up. But then, they took that to another level and said, "Hey, we're going to let you order from this app, therefore you can skip the line." So not only did I have my payment vehicle already in my hand and on my phone, but now I had an ordering capability.                                                                                 Then they integrated the loyalty points program, the stars, the rewards. And better yet, they encouraged me by changing my behavior or suggesting that, "Hey, you're going to gain more points if you actually use the mobile ordering app." That's when true adoption occurred. I don't have statistics at hand, but I think everybody that's in the industry understands that Starbucks has done a bang up job on deploying their self-ordering or mobile ordering ahead technology. Karen Webster:                14:41                     Oh, for sure. Arvin Jawa:                         14:42                     Their program is fantastic. They can use the data now to determine how to readdress or reassess their store footprint. How much are they going to serve by mobile ordering? How much are they going to serve by in-store ordering? How much are they going to do through drive-thru ordering? They can then re-staff or redeploy their staff accordingly. So fantastic business model change. Karen Webster:                15:04                     So they report earnings later in the week, so we'll be able to know exactly, quarter-by-quarter, what their progress has been. I agree with you. Arvin Jawa:                         15:04                     Exactly. Karen Webster:                15:12                     And it sounds like to do it well, what retailers need to understand is how to engage the consumer by addressing the pain points for which they want to use mobile order ahead to begin with. When I've used it in places where it's relatively new, there's always been that friction of cold food or there's been a mismatch in when I want to pick it up and when it's actually ready. So I know that it takes a little bit of trial and error, but it's like the kiosk experience; you have to be prepared to onboard the consumer at the same time the retailer's trying to onboard the technology, and those two things have to sync pretty quickly and pretty well. Arvin Jawa:                         15:58                     Yes, completely agree. I think retailers really need to convince themselves that they think it's good for their business, and once they've done that, they have to convince the consumer that it's a matter of demonstrating a value. What value is going to be provided to the consumer? Is that going to come in the time savings or is it going to come in the enrichment of the shopping process? If they can do that, they can create a value on both sides, for them and for the consumer. Karen Webster:                16:26                     So supermarket was probably one of, at least as I remember, one of the early adopters of self-service checkout. I found it to be useful for small numbers of items. For a full grocery order, boy, that was pretty tedious. And of course, with Amazon Go, they've taken that concept even further. Consumers like that. They like the option of being able to go in and go out. And almost more than a quarter, approaching 30% of consumers, say they'd visit those merchants more if they gave them self-service options to check out.                                                                                 Again, it goes back to, in this case, it seems like a pretty straightforward implementation. Why aren't more grocery stores looking at that as an option? Arvin Jawa:                         17:19                     Yeah. It's a great question. I ask myself that when I go to my favorite local grocery store. They're fantastic. It's the best produce around. They're the nicest people around. Maybe that's why they won't do it because they love the interaction that they are able to give with their consumers from their store staff, but there are time where it's just not convenient for me to stand in line. You have a couple, you have a small basket, or the lines are long because it's a very popular grocery store. I'm not the only one around that likes the local grocer.                                                                                 But again, it comes back to retailers determining the journeys for consumers. If they continue to just try to improve only those journeys that they have that are based upon a manned checkout station, then they lose the opportunity to create value for the consumer in different ways. If I can save or at least perceive that I save an extra few minutes in this particular shopping event because I could go and check myself out either through a self-checkout station, or through a scanning app on my phone, or through a personal self-scanning device that they may hand to me when I walk in the door, if any of these solutions can save me that extra few minutes, I'm more likely to come back to that store. Right? Karen Webster:                17:19                     Mm-hmm (affirmative). Arvin Jawa:                         18:52                     And so they have to recognize that the value proposition that's created through time savings or the value proposition that's created through perhaps an app that suggests to me that when I buy this kind of rice, I should buy these beans, these are the types of added value that consumers prefer and these are the things that create loyalty amongst consumers and the retailers or brands that they shop. Karen Webster:                19:22                     Well, I would think that in certain segments, and not to stick with grocery, but let's, the opportunity to bring people into the store is now, perhaps, more important than it's ever been. And creating those efficiencies in the physical footprint called the store would be things that, if I were running a supermarket, I'd certainly want to investigate pretty heavily. Arvin Jawa:                         19:47                     Yes, definitely. If you think about the space a retailer uses for a grocery store, it's massive. The real estate investment is incredible. So the staff has to be appropriately allocated to the things that are the highest value added activities. Frankly. Being stuck behind a cash register isn't always the most highest value activity at any given point in time. Sure, during peak periods, it's always necessary to have the right amount of staff. No doubt. But there are also times where that staff can be redeployed into helping stock shelves, helping serve consumers, helping in different ways within the store.                                                                                 And so retailers have to think about how to leverage that physical asset. We think physical is a very, very important part of the retailing future. It's definitely not dead, as a lot of people tend to say, but instead, their physical space is evolving to be a more purposeful and useful arrow in the retailer's quiver, especially an multichannel or an omnichannel retailer. And digital isn't just a channel; it's as much an enabler or a fabric that binds the consumer journey, whether they're at home, or at work, or at the café, or the restaurant, or in the grocery store, or on their phone shopping.                                                                                 What we see is that a consumer-centric design of digitally integrated or digitally enabled consumer journeys within the physical environment that are free of friction is what retailers really, really need to think about. And so if self-service is a component of that journey, we really think that retailers are going to win. Karen Webster:                21:37                     I also think that what you've said all along is that it's not a one size fits all, so it is about that customer journey, and then adapting the self-service technologies accordingly. So I don't know, do you think that retailers have this mental picture of what it means to have self-service, and in their environments, they think that either won't work because of store format or the type of store, and they're not opening their minds to think about things like scan-and-go in department stores or the Amazon Go experience in smaller formats? Arvin Jawa:                         22:15                     Yeah, that's a great, great question and a great observation Karen. I think it's frankly, it was at the heart of what we ourselves were looking to understand about the US market. What is it that's holding back consumers in adopting or more importantly, retailers, in deploying self-service technologies in the US at clearly what's a lower rate than the rest of the world? We're a global organization. We see what's happening in Europe, we see what's happening in Asia, and those parts of the world are definitely much more advanced in their adoption of self-service technologies.                                                                                 Some of the stats you've mentioned and some of the stats that are within the study are about consumers not being compelled to increase their frequency within a given retailer, even if self-service technology is available because they just don't see the value. I think you might be right in that retailers probably have a preconceived notion that, "Self-checkout is this and it must be this."                                                                                 When we look at it from the perspective of the journey, then the technology falls to the background and it becomes only the enabler of the journey that we want to create. And so I think your point is great. What we see in Europe, for example, we have some data from our own implementations that European customers, 53% of consumers prefer to use self-checkout in stores and 21% of retailers plan to actually increase the density of their self-checkout deployments. In other words, they already see the value. It's more than just self-checkout in a grocery store kind of solution. These are personal self-scanning, they're scan-and-go with the mobile device, they're kiosk solutions.                                                                                 So I think if you open up or reframe the mind to say, "I really want the consumer to have the best experience possible and that experience can be this or that," that's when you start to see retailers looking at this as a really positive way for their consumers to shop. Karen Webster:                24:34                     I would agree. And in some of the other studies that we've done, particularly in retail environments, apparel and accessories stores, consumers want the ability to scan-and-go because stores don't have has many people wandering around for help, and consumers are always time pressured. What they want is to be able to buy what they want when they see it. Certainly retailers, particularly now, should be thinking about how to enable that efficiently so that consumers walk out with something in a bag rather than walking out without having purchased anything at all. Arvin Jawa:                         25:12                     Absolutely, absolutely. I've spent a lot of time in the apparel and accessories field and actually, I think there's a really fascinating use case around self-service technology with a company, I'm sure you've heard of it, Rent the Runway. Internet pure play, right? Karen Webster:                25:12                     Yup. Arvin Jawa:                         25:27                     A subscription retailer who's really banking on the sharing economy. Fantastic business and interesting model. They've opened up, I think, about five stores in the US and recently deployed a scan-and-go solution in their stores. Karen Webster:                25:44                     Interesting. Arvin Jawa:                         25:44                     You'd say, "Five stores? Can't be that big. Do we really need self-service technology?" Well, the fascinating thing is that they looked at the journeys that the women who were shopping their stores or who were part of their club, they found that women were actually coming in before work, perhaps on the way from the gym or the way to the gym, and using that time period to trade out the clothes that they had gotten the week before and that they wanted to actually trade out today, so that they could wear something new to the office on that very day. Karen Webster:                25:44                     Oh really? Interesting. Arvin Jawa:                         26:25                     And so as a result, they were time pressed in their journey into the store location.                                                                                 They found that by creating some very, very simple self-service kiosks that had a scan-and-go type technology that was integrated to the mobile app, it allowed these consumers to very quickly help themselves, be able to return the items that they were bringing back, and take the number of items they were going to take on that day, and get on right away without ever interfacing with any of the store associates. So really, really fantastic utilization.                                                                                 Perhaps it's the mindset of having been a digital player before a physical player, but it really speaks to the idea of looking at what it is your consumer is trying to do in their daily life and specifically, in their journey with you as a retailer or as a brand, and trying to improve that in a way that gives them some perceived value. In this case, time saving. Karen Webster:                27:30                     That's great. Before we wrap, what was the one thing or one observation from this study that surprised you? Was there something that you sat back in your chair and said, "Huh, I didn't expect to see that"? Arvin Jawa:                         27:49                     Yeah, you know, I would say that this is both something I didn't expect and something that I did expect. There was a portion of the study which was related to the payment method, the various payment method would drive user satisfaction or frequency were most utilized by the members of the surveyed audience. I was not surprised by the utilization of debit, credit, and cash, especially in the US economy. You expect that. We tend to be a more credit and cash-driven society in retail.                                                                                 But I was really surprised by the very, very low utilization of tools like Google Pay or Apple Pay. That was something that was really, really fascinating to me. I would have expected, especially for consumers who were using more, what I would like to say more advanced technologies like self-service, either mobile ordering or scan-and-go or self-scanning or a self-checkout, that they would have a higher propensity to utilize newer digital payment mechanisms. But in fact, we see the opposite.                                                                                 I couldn't really explain it, but it was definitely an ah-ha. But I guess it mimics a lot of what we see in the rest of the world. We definitely see that in Asia, where digital payment is more highly utilize than in markets like, say, Germany or in the US which tend to be more cash or credit- driven, we see that the self-service technologies in Asia are also dominated by the utilization of WeChat or Alipay as the preferred mechanism. So perhaps this is more aligned towards the cultural norms than it is to the technology deployment. Karen Webster:                29:50                     Yeah, I think it also has a lot to do with acceptance, right? Consumers, if they're not sure and they're time pressed, are going to use a payment method that is reliable, maybe even on file in their app, and that isn't necessarily one of the alterative players, at least today. Arvin Jawa:                         30:09                     Agreed, agreed. Karen Webster:                30:12                     Interesting. Well Arvin, thanks so much for your time. Great conversation, great insights on an area where there's certainly a lot of familiarity from both consumers and retailers on the value, but perhaps an opportunity to rethink in the context of the customer journey and what new technologies exist at the intersection of self-service and mobile to make that journey more favorable and enriching for both parties.                                                                                 I really enjoyed it, the conversation. Thanks again. Arvin Jawa:                         30:43                     I did as well. Thank you Karen. Great to speak with you. Karen Webster:                30:46                     Thank you. Buh-bye now. Amy Lombardo:                30:47                     Find other episodes of "COMMERCE NOW" on iTunes or your favorite listening channel. Until next time.        

Podcast Summary: No other crime is more romanticized by pop culture than the bank robbery, and no type of criminal more than the thief. Think Bonnie and Clyde, John Dillinger, the Sundance Kid and Butch Cassidy. What comes to mind? Tunneling under the bank, cracking safes, elaborate escapes, and adrenaline-filled action. However you feel about them, one thing is certain; those type of heists, no matter how notorious and exciting, are slipping in to antiquity. We’ll probably never have another fated criminal couple like Bonnie and Clyde, or another escape artist and thief like John Dillinger, for the simple fact that their methods are outdated. Today’s criminal is more apt to attack from their home computer than at the teller window. They crack codes, not safes, and the only mining they’re doing involves data. In this episode, Scott Harroff and Dave Phister talk about cyber security, cyber criminals, and how industries can protect their data, their software, and overall – their cash. Resources: Blog: https://blog.dieboldnixdorf.com/our-commitment-to-you-as-your-security-partner/.  DN website: www.dieboldnixdorf.com COMMERCE NOW website: www.commercenow.libsyn.com Transcription:  Amy Lombardo:                00:00                     No other crime is more romanticized by pop culture than the bank robbery, and no type of criminal, more than the thief. Think Bonnie and Clyde, John Dillinger, the Sundance Kid, and Butch Cassidy. What comes to mind? Tunneling under the bank, cracking safes, elaborate escapes, and adrenaline filled action. However you feel about them, one thing is certain: those types of heists, no matter how notorious and exciting, are slipping into antiquity. We'll probably never have another fated criminal couple like Bonnie and Clyde, or another escape artist and thief like John Dillinger, for the simple fact that their methods are outdated. Today's criminal is more apt to attack from their home computer than at the teller window. They crack codes, not safes, and the only mining they're doing involves data.                                                                                 In this episode Scott Harroff and Dave Phister talk about cyber security, cyber criminals, and how industries can protect their data, their software, and overall, their cash. I'm Amy Lombardo, and this is COMMERCE NOW. Scott Harroff:                     01:19                     Hello again. This is Scott Harroff, your host for this episode of Commerce Now. The last time I was on this podcast I spoke with Bernd Redecker on what jackpotting could teach us. You'll find that episode on www.commercenow.libsyn.com iTunes or however else you listen to your podcasts. Today, I'm joined by Dave Phister, Director and product manager responsible for security at Diebold Nixdorf. Today we're going to talk about cyber security and touch on exactly what cyber security is from our perspective and how criminals are turning to digital means to acquire things like money and data.                                                                                 Hello, Dave, and welcome. Thanks for joining today. Dave Phister:                     01:56                     It's a pleasure, Scott. Thanks for having me. I've been honored here since you're becoming a bit of a podcast regular, for you. Scott Harroff:                     02:04                     Well, thank you very much. I never knew being a podcast star was in my history, but I'm happy to roll with it. As I said, today our focus is on cyber security, and when you and I hear this term, we have a pretty good understanding of what it means between you and I, but a lot of times people think that it's all about foreign hackers stealing secrets. Can you give a little bit of color around our definition of cyber security. Dave Phister:                     02:29                     Yeah, I sure can. It's a great question, Scott, and a great point. I think simply stated, cyber is anything related to computers or computer networks. That could of course, include the internet, so then cyber security would be the measures taken to protect the computer or computer system against unauthorized access or attack. In our industry, that's typically been referred to as logical attacks, but they're really just attacks on the digital components of the ATM. As you know, the ATM contains a computer, a hard drive, uses a Windows operating system, has USB ports. It's a, amongst other things, a computer client hanging off of a network, much like a desktop computer at work. It just happens to be controlling a safe full of cash.                                                                                 Strictly from a computing standpoint, the security controls required to defend the computing aspect are really no different than any other network, whether it's a national security system protecting those secrets, or essential server in a fortune 500 retail data center. The tools, tactics, techniques, and procedures to compromise, or hack, the components, are the same everywhere we look. So additional to a firewall, it needs other cyber security like encrypted hard drives, digital signatures, access controls, proper patch management.                                                                                 I think this is where the industry has let down their defenses a bit. OEMs and financial institutions haven't taken enough care to maintain current technology and protect the software and computing assets of the ATM. In addition to protecting the cash, as you mentioned, data must be equally protected, specifically the computing components that process that data, else compromise is a matter of when, not if. I think one perception is that cyber security defends against a hack originating from cyber space, which would mean something remote. Though ATM networks are not connected to the internet, they still connect to a bank network somewhere, and I would remind our listeners that as recently as 2016, we witnessed an ATM attack. It was launched solely from a remote network, in this case the voice recording network was breached in Europe, the hackers navigated their way to the ATM segment, pushed malware down to the ATMs, and the mules were waiting for cash to dispense. Anything is possible as commerce, payments, and channels connect, Scott. More and more every day. Scott Harroff:                     04:40                     Great. Now that our listeners understand what cyber security is when we use that word, what sort of cyber security threats do our customers face, and what do you think the biggest risks are? Dave Phister:                     04:50                     As you discussed, Scott, with our colleague Bernd Redecker in the previous podcast, the jackpotting attacks we've seen recently in the Americas, they can all be categorized as cyber attacks. The January jackpot attack where they removed the hard disk, loaded malware, and replaced it was possible because the customer didn't employ hard disk encryption. It's a fundamental cyber control. Earlier attack took advantage of a weakness in a very old USB security protocol and would have not have been possible had the customer deployed the latest AAES USB security encryption.                                                                                 Then as I mentioned, 2016 attack in the AP regions clearly executed remotely. There was no behavioral monitoring software installed, like a McAfee or Symantec or Bit 9, Binamic, so finally, one point here, Scott, financial institutions are continuing to see cyber attacks in the internet and the mobile arena as well. The mobile device is now a connected component to the ATM and now we're seeing financial institutions have cyber attacks against the mobile wallets in the internet banking services. Though the fraud redemption's occurring at the ATM, there's nothing the ATM can do to prevent it. It looks like a valid mobile EMV NFC connection, but the transaction is actually fraudulent.                                                                                 What are the risks? Systems mostly in unattended operating environments. Systems that don't improve their top hat security with better locks, intrusion sensors. Anything with outdated hardware and software, old unpatched operating systems are the biggest risks. The example I like to give is there are so many ATMs out there running Windows XP. That's a very old, outdated operating system. Systems with no sign or encrypted software, or hard disk encryption, or just encryption in general. Anything that lacks access control and authentication enabled to protect the internal computing system. Lastly, as Bernd mentioned in the previous conversation you had with him, Scott, behavioral monitoring software. If it's not on systems today, systems certainly can be at risk. I think, Scott, you'd agree that a branch lobby system that's mostly attended may not need the same protections as a lesser attended system at convenience store, but on average we're simply not making it hard enough on the criminals, regardless. Scott Harroff:                     06:59                     Yeah, I completely agree with you on the thought of a lobby ATM being different than an ATM on a remote location, and since financial institutions don't have unlimited funds, the idea of I have to do all my security the same everywhere on every ATM is probably not the right approach. There's probably ways to do a better job of allocating resources. You've talked a lot about ATMs and ATM security, but at the same time, I look at it more of an ecosystem where the ATM is interacting with other things, especially as we move into the world of ATMs connecting into not only the ATM transaction processing system, but now they're connecting into cores and they're connecting into web servers and interacting with databases on a customer's network, and just as recently as last week I saw an alert coming out from the FBI where they're talking about now there's cyber attacks against financial institutions where the hackers are not really attacking the ATM in any way, shape or form. They're going in, they're attacking the core system, they're changing account balances, they're changing daily withdraw limits, and they're just using the ATM as a mechanism to get the cash out.                                                                                 That's a cyber attack against something completely different that impacts the ATM, so I'm kind of wondering about your thoughts on how do you protect the end to end channel? Dave Phister:                     08:18                     Yeah. It's a great question. Certainly, as you indicated, there are many end points, or there are many attack points in the chain of the transaction sequence. You really have to identify the critical components, categorize those assets, and identify the risks, and then deploy the appropriate controls. Ideally, end to end security would protect the connection from the host all the way down to the ATM, as you know Scott, end to end security is certainly complex in itself. Requires additional support and resources from not only the ATM but from the host itself in the way of key management. I think ideally, in that world, we'll get to one day, but right now I think we have to focus on setting controls on the operating system, setting controls on the system software, setting application security software, setting the firewalls, and doing all the fundamental components at the ATM to protect the endpoint as we then focus on how the network now begins to converge into this world of connected commerce introducing mobile devices and other components in the ecosystem. Scott Harroff:                     09:32                     Completely agree with you, Dave. I think one of the other things that a lot of customers should look at, is not only their protective controls, and not only their detective controls, but what do I do when something does happen? What's my instant response plan. I've talked to a lot of customers in the last couple weeks where they're relying on something to protect them, but when they notice something bad going on, and I say, "Well, what's your instant response plan? How are you going to turn that account off? Who's going to do it at two in the morning? How quickly can you turn it off?"                                                                                 All of a sudden I'm getting customers that are saying, "Wow, I really haven't thought about how we're going to handle everything after the event starts." I think having an instant response plan is also a really important part of this. Now that we now what the threats are facing our customers, let's touch on how FIs can combat those risks over all. Can you expand a little bit on this and talk about how FIs should be protecting them against physical, cyber, and fraud threats this year and next? Dave Phister:                     10:29                     Yeah, absolutely. I think certainly the comments you just offered with regard to having an incident response plan in place is certainly critical, by every stretch of the imagination. FIs certainly need to be focusing on that in the ATM space. At it's highest level, I think it starts in the boardroom, Scott. Security is a foundational part of the customer's user experience, and the trust in the brand, so an investment strategy must include security [inaudible 00:10:59] component. On average, that hasn't necessarily been the strategy. Don't get me wrong. We have plenty of customers, as you know, that do have progressive security investment strategies, but they're the minority by far, so it has to become a recurring percentage of revenue operation.                                                                                 Second, technology refresh, it must become a normal recurring commitment. It changes to rapidly. We have to do a better job of deploying the latest software and hardware, because it's this software and hardware that enables the latest security features with the latest technology that the hackers, as you know, are definitely taking advantage of the latest technology, so we have to put ourselves in a position to defend against that pace. I think we need to recognize that from a funding and a budget perspective, criminals do have access to the funds, so we can no longer make that argument. We have to provide the funds and we have to maintain configurations in a current fashion.                                                                                 Third, customers need to embrace a zero trust model and deploy layers of security. Prevent physical access to the top hat with proper intrusion prevention. That's layer one. Then deploy access controls to reduce privileges and force authentication. Layer two. Then encrypt communications and data that's flowing within the system. Then finally, as Bernd suggested, start deploying behavioral based security software that could detect abnormal behavior and respond appropriately in the event that one of those three earlier layers was circumvented and malware may be running on the machine.                                                                                 I think in the end, these three components are how we can get the customers to improve their protections in the future, Scott. Scott Harroff:                     12:50                     Yeah. I agree completely. That's a lot of great information on how the financial institutions can protect themselves from attack. To wrap up our conversation Dave, let's talk about what's next. What developments have you excited on the security front? Dave Phister:                     13:05                     I believe there is an emphasis now on analytics in the industry. I think it's a long time coming. I think financial institutions can harness this ATM data sensing and respond to not only operational aspects of the ATM, but security risks as well. I think this working in accommodation with an ATM behavioral monitoring capability as an example, could certainly transform security at the ATM.                                                                                 There's a movement on the mobile security front. We talk a lot about mobile interaction with the ATM. This is the next big user interface and the component to the ATM, certainly PCI has posted guidance, and deployments using mobile devices are happening today. We're seeing a lot of that usage increase, so we certainly need to focus on security around mobile devices. Then, the standards bodies are doing work as well, which I think is important. PCI is pressing for stronger cryptography to be used, like TLS instead of SSL, AES instead of Triple DES. I think maintaining current cryptography certainly will help defend the systems of the future, certainly when we consider that the attackers have access to the technology that could be used against it.                                                                                 Biometrics is slowly making it's way to the conversation. I think we expect more in that space in the future, especially as it pertains to data privacy controls, so again, a lot of areas where I'm excited with regard to the industry, and then areas where security is a vital component in the industry as well. Scott Harroff:                     14:47                     Yeah, I agree, and I look forward to a time when the security controls and mechanisms are widely supported across all the platforms. Some of the networks that we work with are outstanding at security, and they have TLS implemented, and they have great fraud systems, and some of the others aren't quite there yet. I look forward to having a nice common platform where everybody's really on the same playing field and everybody's working together against fraud versus maybe institutions one, two, and three are doing their own thing, institutions four, five and six are doing something different. That's one of the things I look forward to seeing.                                                                                 Is there anything else that our listeners should take away with today, regarding our conversation? Dave Phister:                     15:28                     Yeah, a couple final thoughts, Scott. First and foremost is communicate and share. We're in a global fight against crime, whether it's communication with PCI, East, ATMIA, secret service or the FBI, certainly we can talk about the latest FBI alert that we've seen in the news here in the last week or so. I think that's just another indication of sharing from the government side to the private side. This information, if shared, can be used in the global fight against fraud.                                                                                 Then, secondly, I'm a big fan of the National Institutes of Standards and Technology. Many believe work like the NIST risk management framework applies only to federal systems, but that's not true. This work translates into the critical infrastructure in the banking industry, and their cyber security framework is the policy framework of computer security guidance for how private sector can asses and improve their abilities to prevent, detect and respond to cyber attacks.                                                                                 Again, there's a lot of great work being done that can be embraced in the private industry by financial institutions. Then, I also encourage our listeners to visit the East security page and take a look at the cyber attack mitigation link. Very insightful information and guidance on cyber security beyond just the firewalls. Scott Harroff:                     16:51                     Again, thank you Dave for being here today, and to our listeners for tuning in to this episode of COMMERCE NOW. To learn more about cyber security and how financial institutions can protect themselves against these types of attacks on digital systems, log into DieboldNixdorf.com.                                                                                 Until next time, keep checking back on iTunes or your podcast listening channel, for new topics on COMMERCE NOW.  

Podcast Summary: Black box attacks. Cyber attacks. Malware. Manipulation of the hard drive. There are so many factors and variations when it comes to jackpotting attacks that it can make your head spin. These attacks are constantly evolving in their sophistication, but that doesn’t mean you should give up the security ghost. Every attack teaches us something new – from the preferred ATM target to the preferred type of malware. Studying these attacks and closely scrutinizing every aspect of a jackpotting attempt allows us to get ahead of the attacks and become proactive instead of reactive. In this episode, our security gurus Scott Harroff and Bernd Redecker will discuss the lessons and takeaways banks can learn from jackpotting and security, and how they can get ahead of the problem BEFORE it costs them. Resources: Blog:  https://blog.dieboldnixdorf.com/what-recent-jackpotting-attacks-can-teach-us/ Sign-up for Security Alerts: http://pages.e.dieboldnixdorf.com/ATM-Alert-Subscription?_ga=2.241321483.882907520.1533304320-1846737074.1524590636 DN website: www.dieboldnixdorf.com COMMERCE NOW website: www.commercenow.libsyn.com Transcription: Amy Lombardo:                00:01                     Black box attacks, cyber-attacks, malware, manipulation of the hard drive, there are so many factors and variations when it comes to jackpotting attacks that can make your head spin. These attacks are constantly evolving in their sophistication. But that doesn't mean you should give up the security ghost. Every attack teaches us something new, from the preferred ATM target to the preferred type of malware. Studying these attacks and closely scrutinizing every aspect of a jackpotting attempt allows us to get ahead of the attacks and become proactive instead of being reactive. In this episode, you'll hear from two security gurus, Scott Harroff and Bernd Redecker. They'll discuss the lessons and takeaways banks can learn from jackpotting and how they can get ahead of the problem. I am Amy Lombardo and this is COMMERCE NOW. Scott Harroff:                     01:05                     Hello again, and I'm Scott Harroff, your host for this episode of COMMERCE NOW. If you recall, Amy Lombardo and I had a great conversation on jackpotting a few weeks ago. And today I'm joined by Bernd Redecker, Diebold Nixdorf's Director of Corporate Product and Solution Security, and we will take a deeper dive into what recent jackpotting attacks can teach all of us and the best ways to protect against them. Thanks for joining me today Bernd. Bernd Redecker:              01:29                     Scott, it's a pleasure to be here. And thanks for the opportunity. Scott Harroff:                     01:32                     Okay, so let's recap a little from the last jackpotting podcast. First, we've seen an expansion of jackpotting attacks in 2018, especially in the Americas. Secondly, while these attacks don't feature brut force, they combine aspects of physical and logical manipulation of ATMs. And then looking back at four ATM security alerts from this year, it's clear that protecting yourself requires a holistic security approach. So, diving right in Bernd, can you remind our audience that although there is no one type of jackpotting attack, what are some of the major types of jackpotting that can occur. Bernd Redecker:              02:07                     Scott, thank you very much. The term jackpotting, first of all, basically refers to getting money out of an ATM. And jackpotting is coming from the gambling machines, basically you win the jackpot. Jackpotting as such, the term has been defined or it has been created already some years ago. There is a general distinction between different verines. One is called a black box jackpotting and black box simply means that the attacker brings his own electronics. As you already said, jackpotting is always a combination of a physical and a logical breach. When this is done on-sight, like with a black box, the attacker has to open the machine, he brings his own processor, his own CPU, connects the cash hunting device of the ATM with his box and then has the machine paying out money. Of course it's not as easy as it sounds at the moment. They will have to circle then security measurements. They will have to break security measures which are there, which are in place or which should better be in place. But I guess we'll talk about that a little bit later.                                                                                 There's another attack vector. And that comes with all the equipment which is already present at the machine. So the second one would be attacking the hard disk drive of the existing CPU in the ATM. We see several cases where they rip off the disk of the ATM, take it back to their car, infect it with malicious software, put it back in again and then jackpot the machine. And that, again, has different verines. Some of them have malware, some of them have even modified legal applications. And we can go through that as we touch the different alerts. And especially this year we have seen a [inaudible 00:04:04] of that. I guess we are going to touch now, right? Scott Harroff:                     04:08                     Yeah. And these attacks are really only across the four alerts that we just talked about. And I know there's other types of jackpotting. And as we've seen recently, these attacks continue to evolve very quickly. So it really is crucial to stay up to date and know what's going on. Can you talk about the January 25 alert and give us some specific takeaways? Bernd Redecker:              04:29                     Yeah, the January 25 alert ... And by the way, if you would like to, please register for our security alerts, can find them on our home page. Alert from January 25th refers to, again, a combination of both attacks. It was HD a replacement attack. However, it was also using physical manipulation in the ATM, which means they did a combination of both to be able to get to the cash. And the challenge here is looking at outdated stuff, looking at outdated protections may open potential attack factor which the attackers then exploit, which means we definitely have to take care that protection is checked and verified over the time, machines are updated in a timely manner, and policies which are on the machine get updated. Scott Harroff:                     05:22                     Yeah. And I'll tell you, as I keep looking at what goes on, our original alerts on the Diebold side having XFS 4139 and then 4141, then 4146 and 4148, it just seems like these guys ... You close one door and turn the lock so they can't open it, and they turn right around and they start looking for the next door as soon as you finish turning the lock on the first door. So help us understand a little bit about how the May alert is different than the January alert. Bernd Redecker:              05:53                     In that case, the attackers brought their own laptop. So the difference there is January it was disk infected, in May they brought their own computer in case it was infected. It was a small notebook. They disconnected the original PC, which means all of a sudden all logical countermeasures are completely obsolete, they can't help any longer. They connected directly to the dispenser and then they have been using physical measurements to trick the whole machine into communicating with a second notebook. That's the bad thing about it, we are seeing these combinations of physical and logical attacks more and more, taking advantage of processes.                                                                                 The bad thing is it doesn't help any longer to build another fence, to build another protection mechanism, which they are then starting to re-engineer. We have to change completely the way we protect the machines. And what has shown good progress is going to a model where we have more behavioral situation. And basically that's what we did in the May topic. However, please keep in mind, of course you will have to update the machines. We have machines out there, we just have been involved in an investigation with a customer with the average age of the machine, was 17 years unpatched, never updated. These machines are liable for attacks or can fall into attacks just because they are that old and that outdated. If we update them regularly, if we maintain them regularly, on a regular base, we can protect them. But of course the attackers, as soon as we close a door, are going to try and find another one. Scott Harroff:                     07:45                     Yeah, and there's something I really want to drill in on there a little bit, Bernd, because I'm in front of a lot of customers here in the US and I get this perception, especially from some of our larger financial institutions, that they've got the opinion that I'm running, I won't mention product names, but I'm running Vendor X antivirus product or I'm running Vendor Y whitelisting product or I'm running Vendor Z super security product on my hard drive, and because I've got all these products protecting me from a security standpoint, from the yellow vendor and the red vendor and the blue vendor and everybody else, because I've got all this security on my hard drive I don't need to do software updates. And what I think I just heard you clearly say is that's not the case. If you've got the greatest security running on your hard drive but you're missing this firmware update, you're vulnerable, right? Bernd Redecker:              08:42                     It depends. Of course it depends. You are right, there is no silver bullet. There is no bulletproof solution. What we have to take into consideration is protection on let's call it three layers, interconnected layers or interconnected levels. One is against what we would refer to as IT or cyber attacks, like malware trying to reach the ATM PC or we have to provide protection against malicious users and we have to think about protection when the machine is being switched off. That is very often forgotten. That would cover attacks directly against the devices. There is no difference, from a logical point of view there is no difference, whether I switch off the machine, the PC, or whether I directly connect to the dispenser. But if we do not offer protection or if we do not consider protection on all of these layers, then there is room for attacks. If there is a gap somewhere, there is room for attacks. If we don't encompass, and that's what I see as upcoming attacks, processes, there is room for attacks.                                                                                 What is also a little bit misleading, and again, like you Scott, I don't want to talk about product X, Y or Zed, the ATM in most cases is running a little bit specialized but more or less standard PC, which means we are looking at a standard operating system which you know from your office environment. So why the heck don't we deploy office protection tools? The biggest difference is, think about your computer, when you switch it on, well maybe not in your home environment but definitely in your office environment, the first thing you will have to do is you will have to enter a password, even before the operating system starts. Well, here, with ATMs or with POS systems, we are looking at machines, and especially with ATMs, we are looking at machines which are out in the wild 24/7, there is no dedicated user on it who would be able to put in a password when you boot it, which means you will need dedicated security measurements for exactly these environments.                                                                                 If you start deploying standard office environments to these areas, you can think about that, in reality from my experience it has never been a very good solution because there has to be a trade off. When you look at standard antivirus, for instance, your machines or your pattern on your home PC gets updated, well at least hourly. You can't do that with an ATM. It will spoil the bandwidth, it will spoil potentially availability of the machine. So you have to think about other measurements dedicated for self-service machines, dedicated for 24/7, machines running unattended. So we have to take a different perspective on this to be able to offer protection. Scott Harroff:                     11:46                     Yeah, I agree. I think that when you look at an ATM environment there's a lot of different aspects that you need to look at relative to jackpotting. If you've got an ATM that's sitting in the middle of your lobby, maybe you haven't updated the software for 17 years. With it sitting in the middle of your lobby and the doors are only open from eight in the morning until five at night and people are paying attention to what's happening at the ATM, you've got a lot of vulnerabilities on that ATM possibly but what's the likelihood, if you will, of somebody walking into that branch and opening up the ATM and standing there for the next hour taking notes out of the front of the machine and putting it into a great big bag they have on the floor? It's just not likely to happen. It could. But it's just not really likely. And then you move from there and do a drive-up lane, and depending on how it's configured you got a little bit more risk. It's out there 27 by 7 and maybe the lighting's not as great as it could be. And then you go to the other extreme, maybe I've got an ATM at a gas station or an off-site government building or in a college campus and now you've got an ATM that from a physical standpoint's very exposed. Your likelihood goes up.                                                                                 So I think the other thing, in addition to the tools running on the ATM itself, I think customers really need to look at the physical environment and the risk factors around each ATM and use that as a way to help model what their total exposure is and figure out what to do there and not overlook physical security. I can't tell you the number of customers I've talked to where all their remote ATMs have exactly the same key that they were shipped with from the factory and they have no alarms on the top hat and no one's monitoring to see if the ATMs up or down. So I really agree with you, it's a comprehensive solution that really you've got to look at everything together all at once. Bernd Redecker:              13:33                     Like you said, having something like the same key in all machines is never a good solution. Normally security does not come from obscurity, it comes from secrets you have and you possess and you can use in the field, but not from having just something which you think the other one doesn't have. That's impossible. Just one comment on the environment. You're absolutely right, especially when we look at not only the logical attacks, when we look at attacks in total, there are different areas, there are different regions where attacks, some kind of attacks, are more likely than others. Unfortunately, this also applies vice versa. And just because your ATM is in a lobby may help if you think about a bank environment, may help when you're, for instance, in Europe or in North America. We have also seen attacks especially in Latin America where it's not especially a lobby but it's supermarket scenarios where there are ATMs and they have been jackpotted while the store was open.                                                                                 So the crooks have developed patterns where they really don't care who's looking at them, again, depending on the region, depending on the environment, where they simply don't care whether they are being seen, where they try to disguise. We have seen full operations where they even come with their own protection, not armored but in terms of distracting anybody who goes out there and tries to talk with the one who's currently jackpotting the machine. And of course it never looks like what you would expect jackpotting. It's not cloak and daggers, it's not people with raincoats and black hats. It's always people looking absolutely, in these scenarios, it's always people looking absolutely normal, pretending to do normal transactions. And you can tell from the lock files of the ATM and you can tell from the videos that in fact they were cashing out money instead of really doing a normal withdrawal. Scott Harroff:                     15:29                     Yeah, and we've seen the same thing here in the US. We've had big box retailers with ATMs very close to the main entrances and you've got all those people walking in and out of the big box retailer and your point of sale line is right over there. And of course you've got all those surveillance cameras. And right there in the middle of it for an hour they're jackpotting. Hey, let's talk a little bit about the difference between the May alert and the July alert. So they're both black box attacks. Why don't you give our audience a little bit of information around the differences between the July and May alert just to clarify that. Bernd Redecker:              16:06                     Well, the main reason we published another alert on jackpotting and black boxing in July was, first of all it was a wave over here in Germany and with also seeing something similar happening in Latin, but what was really astonishing and what was new at that point and time was a way of organization. So we know that the majority of the jackpotting cases, we do have organized crime, we do have organizations in place who do the jackpotting. In that case the biggest difference was that the guys who were in front of the machines, the guys who did the transport, had absolutely no idea what they were doing. They have been hired completely, well, underground style. So they had no clue why they were transporting a notebook from one country to another one.                                                                                 They didn't have a clue what to do with that in front of the machine other than the description, "Okay, open the machine or break the machine here, there and there. Connect this and then here you go". So that was basically the biggest difference we saw in that. And that it hit in two regions in parallel led us to issue this warning. Again, if the machines are properly updated this should have not been possible. And we have also seen attacks which were unsuccessful due to full protection, at least against known attack vectors. So this proves to help. In this case, the machines were not upgraded. But the main reason for this was the organization grate behind that. Scott Harroff:                     17:48                     When we look at these attacks, sometimes when we do our forensics it's a very complicated multi-step process that requires ... You have this version of this and this version of that and you're missing this countermeasure and you're missing that countermeasure. And it's really perfect storm of all these things coming together in conjunction with a technical person at the ATM that's really, really smart. What I think I just heard you say is we can go all the way to the other extreme of you have a not sophisticated person that sort of, kind of just pulls out a hard drive and you're missing a patch and they use that as a way to impact the hard drive and put it back in. That's kind of what happened in the July alert, right? Could you elaborate on that a little bit? Bernd Redecker:              18:36                     Basically, the guys who are in front of the machine, in that case, are not really aware of that there is a missing patch. What they have is they have typically a device or an instruction or a USB stick or whatever it is for this given attack plus a description. Again, breaks machine here, unlocks a hook there, plugs this in there, and then press a button. And that's all they know and all they need to do. They have no clue that a Microsoft patch was missing or the firmware wasn't on the latest release whatsoever. And that's the world we are moving into where the money mules have absolutely no idea on why they are doing what they are doing. They just know it works.                                                                                 You can also tell that from the controls which are getting embedded into the malware, which is used either in the disk replacement scenarios or in notebooks if we get into re-engineering of them, most of them if we talk about notebooks, most of them have remote connection. If we talk about software and substitution, there is a control embedded where these guys are remotely controlled in terms of the brain who gave them the notebook knows exactly, knows later on exactly how much money is in the machine and how much the mule would have to deliver. But the person on-site does not know that there is a, again, a patch missing. He's not the brains. And they simply hire them and they have reached a level now where they hire them completely anonymously. Scott Harroff:                     20:13                     Well, I think the good news here and the bad news here are all wrapped up in the same sentence. We build ATMs to last. They are not something that you put out there and in a year or two or three you replace with a brand new ATM. There's ATMs that have been out there for 10, 20 plus years. And, at the same time, that's a good thing because the customer has a piece of hardware that is very reliable and it's out there running. But on the other side of the coin, a lot of these older ATMs are in an environment where the customer really hasn't done the things that you talked about, Bernd, to keep it up to date. They haven't kept the operating system up to date, they don't have signatures up to date, they don't have whitelisting in place, they don't have encryption in place. They might not have the physical security around the ATM. So you've got a combination of older units with not enough security being one of the main drivers of why organized crime has focused in on that.                                                                                 These attacks, also they're evolving really, really quickly. So you can't just take the defenses that you've got today and make the assumption that those same exact defenses are going to be perfect for protecting you tomorrow. You've got to keep up on top of this stuff, you've got to keep up with updates and upgrades. And if you don't, then the criminals will find a vulnerability somewhere in a platform and try to target it.                                                                                 Bernd, is there anything else you want our listeners to take away with today regarding our conversation? Bernd Redecker:              21:34                     Yeah, just perfect statement, Scott, just to emphasize on that. Even if the customers don't get attacked, leaving the machine on the old state makes it even more difficult to upgrade them if something happens. So maintenance is nothing you should do only when something happens, you should do it on a regular base. And you can even do that for the old machines. Of course there is an end of life at some time, but until then ... Typical lifespan, when we look at life cycles of machines of software, that is clearly above seven years to some extent. So that shouldn't be a problem to patch and update them over the lifetime.                                                                                 The other thing I would like to point out or I would like to hint to is we've been talking a little bit about physical protection, we've been talking a lot about logical protection. As we mentioned one or two times, the attacks we are seeing at the moment are also a combination of logical and physical. And what we are seeing, and again on a global scale, it simply doesn't matter where you're looking, to which geography you're looking to. Some are more advanced in the negative way than other regions. But, nevertheless, what we are seeing is that the crooks are also starting to take advantage of banks processes. There is an attack called transaction reversal. There are other attacks where the crooks know exactly that the bank will, in one or the other case for instance, refund cash. And while this is not literally jackpotting but the result is the same, they trick the whole process in a way where it refunds any withdrawals immediately meaning they can withdraw until the machine is empty. And the result of that is very near to a jackpotting again. So if we think about protecting the machines, it is the physical protection, it's the logical protection, protection when the machine is switched off, we have to consider processes. And of course, if we do all these things, we also have to properly monitor the machines. Because it doesn't help at all if the machine sits out there, and again 24/7, lobby, drive-ups, remote locations, whatever we have, it doesn't make any sense if the machine sits out there, it's protected to some effect, knows that it's currently being attacked, cries for help and nobody's listening. Scott Harroff:                     24:06                     Yeah, that's a great example Bernd. We're talking about jackpotting and so many times you think about it, and to your point of the outcome is all the cash is gone and the method had nothing to do with a black box or malware, it was just that reversal attack that just kept right on going. So I think one of the things that a lot of our financial institutions should do is really sit down with an expert on security and really walk through all the different things that you and I talked about today and really put a plan together for where are we today, ideally where do we want to be, and what are all the steps that we need to put in place to go from where we are to where we need to be, and then how do we keep up to date once we get to where we want to be?                                                                                 So Bernd, thanks so much for being here today. It's always great to have someone of your level of expertise and knowledge available to talk to the financial institutions about what's going on in the channel. I want to thank the listeners today for tuning into this episode of Commerce Now. To learn more about jackpotting and how you can better defend your ATM fleet against these evolving attacks, please log on to dieboldnixdorf.com. And, until next time, keep checking back on iTunes or your podcast listening channel for new topics on COMMERCE NOW. And thank you very much again for everybody's attendance today.

Podcast Summary: In January of this year, Amazon shook up the retail space by introducing their own brick-and-mortar retail space, but they added a twist. The entire store is checkout-free. Customers walk in, grab their products, and go. With the use of an app, a combination of sensors and cameras, the store tracks a consumer’s purchases and charges their Amazon card when they walk out. It’s the epitome of quick and convenient, and it’s got a lot of traditional retailers on edge. But with every new innovation, there are other companies who are quick to redesign the reinvented wheel. Now, Microsoft is designing a rebuttal to Amazon Go. While Microsoft has no interest in creating its own ecommerce platform or running a retail store, the tech giant is investing in creating cashier-less shopping technology and expanding its commercial cloud services to more retailers and businesses. Microsoft isn’t the only company that’s hopping on the Amazon bandwagon. Retailers across the globe are trying to implement Amazon-like qualities into their digital and physical marketplaces. But should they? In today’s episode, I’ll once again be joined by Dave Kuchenski and we’ll discuss how the Amazon Effect has feverishly gripped retailers, and whether or not that’s a good thing. Resources: Blog: https://blog.dieboldnixdorf.com/personalization-store-one-future-retail/#.W1s8WtJKiUk https://blog.dieboldnixdorf.com/e-commerce-represents-major-gap-for-u-s-grocers/#.W1s8etJKiUk DN website: www.dieboldnixdorf.com COMMERCE NOW website: www.commercenow.libsyn.com Transcription: Amy Lombardo:                00:01                     In January of this year, Amazon shook up the retail space by introducing their own brick and mortar retail space, but did you know they added a twist? The entire store is check-out free. Consumers walk in, grab their products and go.                                                                                 With the use of an app, a combination of sensors and cameras, the store tracks the consumer's purchasers and charges their Amazon card when they walk out. It's the epitome of quick-and-convenient, and it's got a lot of retailers on edge.                                                                                 But, with every new innovation, there are other companies who are quick to reinvent the wheel. Now, Microsoft is designing a rebuttal to Amazon Go. While Microsoft has no interest in creating its own eCommerce platform or running a retail store, the tech giant is investing in creating cashier-less shopping technology and expanding its commercial cloud services to more retailers and businesses.                                                                                 Microsoft isn't the only company that's hopping on the Amazon bandwagon. Retailers across the globe are trying to implement Amazon-like qualities into their digital and physical marketplaces, but should they?                                                                                 In today's episode, I'll once again be joined by Dave Kuchenski, Diebold Nixdorf's Director of Retail Strategy and we'll discuss how the Amazon effect has feverishly gripped retailers and whether or not that's a good thing. I'm Amy Lombardo and this is COMMERCE NOW. Amy Lombardo:                01:54                     So, hello to our listeners. I am joined once again by Dave Kuchenski, the Director of Retail Strategy here at Diebold Nixdorf. He has also shared with me that he is a self-proclaimed Sonic the Hedgehog video game expert. Hi, Dave. Welcome back. Dave Kuchenski:               01:53                     Hi Amy. I'm glad to be back. I don't know if I'd call myself a video expert. My four-year-old kind of beats me every single time we play, but thanks for sharing that with everybody. Amy Lombardo:                02:04                     Yeah, no problem. That's what you can depend on me for. All right. In our last conversation, we talked a lot about the in-store shopping experience and the idea of having this connected consumer. I want to follow up with that discussion today and give some more specific examples, but to refresh the listeners' memory, we left off talking about this idea of the blind spot.                                                                                 I think of the blind spot as that spot you can't see in your rear view mirror or even a movie that was popular a couple of years ago, but when it comes to the retail world, can you talk to me about what the blind spot is? Dave Kuchenski:               02:47                     Yeah. There's this blind spot that physical retailers have that online retailers do not. If you think about online retailers and how they market to their consumers, they have visibility to me, as a consumer, a lot of times, we have profiles that are set up. They know how many times I've come back to a site looking at a specific item.                                                                                 There's personalized ads offers loyalty and they know who I am basically while I'm shopping on their site. They know my shopping history, what I've bought before, things that I like. There's this advantage that online shoppers have that physical retailers don't.                                                                                 When I step into a physical retail store, the customer's activity is unknown. The shopping history is not visible until after I check out. I've bought some item and I'm out the door. There's a little bit of an opportunity there to capture me by the mobile app, based on the purchased history at point-of-sale, but it's a vast difference between what online shoppers are actually able to do.                                                                                 The idea is what if we could change that blind spot and help recognize customers when they're coming into the store, help provide a more immersive experience that's personalized and make that interaction inside the physical store more valuable to the consumer. Amy Lombardo:                04:07                     Yeah, that's a good point, Dave, because think about your weekly grocery store ad that you get or like your home repair store. The same things are on sale to every single consumer, no matter age, demographics, whatever that might be, and that's a good point, if there could be a little more personalized.                                                                                 On that thought, talk to me a little bit more about how the physical retail world itself is changing and how retailers can look at ways to overcome this idea of the blind spot. Dave Kuchenski:               04:38                     We see retailers innovating in several different ways around their customer's journeys. We've kind of outlined this framework of five areas that our customers, retailers are innovating. The first being, experiential. Improved in-store experiences. They generate more satisfaction in the shopping journey. It's purely about customer enjoying their time in the store. Expertise, customer store alliance, subject matter experts to provide guidance on products. We see some innovation there happening with retailers enabling their in-store associates with technology. Showrooming. We see different store formats happening.                                                                                 Groceries are a great example. If they're not just necessarily doing these giant grocery stores anymore with thousands of products in them. They're doing these smaller format-type showrooms with more frequently purchased items, so that's one example. Then, we have store intelligence. Consumers generate data within the store, things that they look at, things that they buy. Retailers are constantly trying to find ways to collect different data points, become more intelligent about the activity that's happening in their store, and then utilize that to create better experiences, offer better products for the consumers.                                                                                 Then, the last one is supply chain and fulfillment. We see all these new fulfillment models. It started with Amazon and Amazon created all these warehouses. They were able to create two-day delivery. Now, we're starting to see these physical retailers come up with creative fulfillment models to be able to deliver more products, more efficiently to customers. Amy Lombardo:                06:15                     Dave, that last example about supply chain and fulfillment, are you saying that some retailers, if they can't meet that shipping quota, they're using some of their hub-to-warehouses to actually ship product out of versus standard warehouses? Dave Kuchenski:               06:29                     Yeah, they're actually viewing their physical stores as this network of warehouses, mini-warehouses. Things like ship-from-store. They'll get drivers to come pick up items that have been bought online, in the store, and then deliver them to locations.                                                                                 They're also thinking of things like buy online and pick up in store. Buy in store and ship to home. There's a lot of different ways that they can think about how products actually get delivered to-and-from the different retail locations. Amy Lombardo:                06:59                     Well, I guess that could be a good example, if you're buying something that's very heavy or very large and it wouldn't make sense to maybe put it on a truck or what that may be. Talk to me about some of the advantages of having ship to a store or pick up in a store, because to me, it almost would seem that it would be less convenient then. Like, what's the advantage to the consumer? Dave Kuchenski:               07:24                     Yeah, there are various reasons why consumers may want to pick something up at the store. Maybe I'd buy something online and indicate that I'm going to pay with cash in the store, so consumers come in and pay with cash, so that's kind of like the last mild problem that Amazon deals with. Amazon today, if I want to buy something with cash, I have to go purchase an Amazon gift card or fund it at different locations with the cash.                                                                                 Retailers have that ability. They have the cash ecosystem already in place, so that's kind of one advantage they have there, but there's various reasons why customers may want to come into the store. Maybe I need something that day, so I buy it online and I need to pick it up immediately. There's a lot of reasons why, I think consumers may want to utilize different fulfillment models. Amy Lombardo:                08:10                     But Dave, you had talked about the Amazon model and you're not able to pay with cash. Does that speak to the whole unbanked and underbanked story line? Is there research that shows that Amazon is losing out and needs to figure out something else different for their delivery model? Dave Kuchenski:               08:29                     Well, I don't know that it's Amazon losing out. I think Amazon is trying to capture those customers, that's maybe it's had difficulties in the past with. For instance, Latin America. Latin America's a very cash-based society. Amazon has traditionally had difficulty capturing those customers in that market.                                                                                 Utilizing different fulfillment models, collect on delivery. I have, say a UPS guy show up at a house and that UPS guy is then collecting the cash for the retailer. Amy Lombardo:                09:06                     Oh, okay. That's a good example. Yeah. That makes sense. Dave Kuchenski:               09:11                     Yeah, it's well-documented that Amazon has had difficulty capturing those unbanked consumers. I really think that's one area that physical retailers kind of have an advantage, especially ones with large footprints for consumers that are cash-based to come in and pay for their goods, using cash. Amy Lombardo:                09:30                     Right, right. Let's talk a little bit about loyalty. With nowadays, just all the options available on how you want to shop and when and where, is loyalty increasing for a retailer or could it possibly be decreasing based on that experience? Dave Kuchenski:               09:48                     Yeah. Loyalty's a difficult thing for retailers to achieve today. Many times, we see consumers being more loyal to brands than to the retailers themselves. Probably has a lot to do with Amazon offering such a massive breadth of product offerings.                                                                                 If I find a brand I like and their shirts fit me well, I'm going to continue to buy that brand for simplicity's sake, because I know it's going to fit and I know I'm probably going to get a great price from Amazon. Additionally, Amazon's able to offer me a significant selection of a given item and potentially brands that I've never heard of before.                                                                                 But, they're well-rated by other buyers, so I know they're going to be quality items. The curation of products is something that is changing and retailers are going to have to excel at and find the best products at the best prices to keep up with the Amazons of the world.                                                                                 So, we've all had that experience where trying to find some off-the-wall item that I have nowhere to buy that's around me, so I go on Amazon and you find 20 different types of that given item. That's a difficult thing for physical retailers to keep up with.                                                                                 I think providing product data to consumers, it's unbiased is a great place to start. If you think about the ways that retailers have approached their eCommerce in the past, a lot of time you get these review ecosystems and you kind of question whether or not they're completely unbiased and whether they're providing me data that is actually relevant.                                                                                 You kind of get that sense with Amazon. That the reviews are pretty much unbiased. You'll get occasions where the retailer, whoever's selling on Amazon may try to skew those reviews, but Amazon sorts through those pretty quickly. As a consumer, you kind of feel like the data that you get off Amazon, the product reviews, are pretty unbiased and reliable. Amy Lombardo:                11:37                     Okay. If I'm reading between the lines, I'm thinking you're going on Amazon and trying to find your son that cool Sonic the Hedgehog action figure because he wants to play the game with you. Dave Kuchenski:               11:50                     You're right, and they do. For whatever reason, they've kind of restarted the whole Sonic the Hedgehog TV series. But, they haven't put out the toys, so the only toys left for me to buy him are the $40 pack of collectible of Sonic the Hedgehogs that are extremely fragile and he just breaks on a monthly basis and I'm left with buying another $40 pack. Amy Lombardo:                12:16                     Find a game that is a little more like the characters a little more universally known. Dave Kuchenski:               12:22                     That's right. Amy Lombardo:                12:24                     All right. In your role, you spend time looking to leaders in the retail space and what they're doing and how they're innovating and how these answers can lead us to our own business model, here at Diebold Nixdorf. Let's talk about some examples of these companies that are doing it right. Dave Kuchenski:               12:43                     The first example's I'll give is Kroger. They're really do a lot of innovative things. They're the largest, I believe the largest grocer, if not one of the top three in the United States.                                                                                 They've done a couple of things. We talked about store formats and showrooms. They've created their Fresh Eats market. It's small, convenience store. Smaller than their normal format. They offer a wide assortment of goods. Made-to-order food.                                                                                 They have comprehensive produce area, bakery in bulk section. These smaller formats. They offer a wider assortment of traditional, convenient store goods. That's one thing they've done.                                                                                 The other thing that Kroger's doing is we talked about product fulfillment. They've partnered with a company called ... I believe I have the name right. Ocado. Ocado's a fulfillment technology. They utilize technology to basically provide better store inventories to be able to enable Kroger to do their order online, deliver to my house, type of fulfillment models.                                                                                 Kroger's moving towards a model where you can order your stuff online and get it delivered to your house the same day. I think Kroger's doing an excellent job of innovating for traditional grocer. Amy Lombardo:                14:02                     Those smaller convenience stores that you were talking about, are those in lieu of or is it closing down the larger locations or are these new locations that are popping up to help with drive time or just traffic patterns? Dave Kuchenski:               14:18                     Yeah, it's a trend we've seen where supermarkets are downsizing their fleet of larger stores for these smaller footprints that are potentially a little bit easier to manage, more popular, and create that competitive advantage to be able to deliver the most common goods the same day, so doing same day delivery.                                                                                 I think it's something that is definitely going to be a trend with other grocers to help keep up. McDonald's is an interesting one. They've rolled out some new food kiosks. It's a really interesting change to a quick service restaurant model that has been around forever. It hasn't changed in my lifetime.                                                                                 You walk up to the countertop. You order your food. You stand there and wait until they bring it out and you go sit down at your table or you take it home, but they've adopted these kiosks.                                                                                 Now, you can walk in and order your food by that kiosk. You don't necessarily have to feel like your lack of decision-making is causing frustration on the person behind you because they have four to six kiosks in every location, so you don't feel rushed as a consumer.                                                                                 Chances are, you may end up buying more because you don't feel rushed and you can kind of browse the menu at your own pace. Once you make your payment at the kiosk, you pick up a table card and then go sit down and then, somebody brings you your food. There's Bluetooth built into those table cards so they know where you're saying.                                                                                 It's just a really interesting take on the traditional quick service model. I think it's something that really enhances that consumer journey for McDonald's customers. Amy Lombardo:                15:56                     Yeah, like upselling. The other day when I was using the kiosk and my daughter saw the slushy instead of the healthy juice box, I ended up having to get a slushy because it wasn't worth the complaining. Dave Kuchenski:               16:09                     Yeah, that's right. There's probably reasons that those kind of products are down at the bottom of the kiosk where kids can see. Amy Lombardo:                16:17                     I know, I know. That's smart marketing, smart marketing. How about an example about expertise? Is there one that lies in that portion? Dave Kuchenski:               16:25                     Yes. Several of the beauty retailers are doing an excellent job with this. Companies like Ulta, Sephora. They have these beauty technicians. They're enabling them with technology about me as a consumer, what I like, what I need. They're enabling their associates with things to be able to allow the consumer to virtually try on different products and see how it looks.                                                                                 I think Sephora and Ulta are great examples of enabling those subject matter experts in the stores to be able to better help serve their consumers. Amy Lombardo:                17:01                     Okay. Dave Kuchenski:               17:03                     I think Domino's is an interesting one. Domino's came out with great market earnings. Business models don't always have to be difficult. Things can be simple to make money. I don't know if you guys have ordered with Domino's lately, but they're basically an eCommerce company that delivers pizza or makes pizza.                                                                                 They know ... They capture me on my mobile device. They capture me online. The ordering process is really simple. When I place an order, you, as a consumer, get a time that your order goes in. You get a time that your order is finished cooking. You can see when your driver has left the store, when they're on route to your house, when exactly they're going to be there.                                                                                 I think that Domino's is an excellent example of a pretty simple business model. They make pizzas and they deliver them to their consumers, but they really transform themselves into an eCommerce company that utilizes things like data analytics and mobile to really drive a better experience for their consumer. Amy Lombardo:                18:06                     That seems interesting to go through all of that for a pizza, or salad, whatever it might be, for something that's a low dollar amount type item, but if earnings are well, then obviously, it's working, right? Dave Kuchenski:               18:22                     Yeah, yeah. Absolutely. I think they've done an excellent job of surpassing their competitors. Little pizza shops, they have difficulty keeping up with that because they can't invest in that technology to kind of really, I'll call it Uberize the pizza business. Amy Lombardo:                18:40                     Right. I want to keep going on this for a minute because you brought up something interesting, these mom-and-pop pizza shops. Within the small-to-medium business size market, are there maybe less costly or less time invasive-type things that those SMB market can look at reinvent themselves, based on what we've talked about here today? Dave Kuchenski:               19:06                     Well, I think what the small-to-medium businesses can do is, they can identify their pain points, because there's nothing that gets a consumer to stop interacting with your business like some significant pain point. Maybe it's a payment, maybe it's your menu and how you interact with your consumer by that menu. Are products difficult to find on your menu? Is your ordering difficult?                                                                                 I think that focusing on those little pain points and identifying them first off and then coming up with some creative way to solve that pain point is something that the small-to-medium businesses can do to really just create a positive interaction because that's going to keep customers coming back. That's going to create this word-of-mouth that is going to help your customer base grow.                                                                                 I think that the biggest piece of advice is just focus on those pain points and get rid of them. Utilize the things that are available to you. Your past customer shopping history is a good one that every retailer has small or large. I think that's good advice for SMBs. Amy Lombardo:                20:13                     Okay. That makes sense. How about store intelligence? Is there an example of store intelligence being used? Dave Kuchenski:               20:19                     Coop Italia is a great example. They created the store of the future. I think they launched it several years back. You can go actually and use it and people use it every single day. It's blending the digital and physical into one experience in stores. The products that are on their shelves, they use this technology to see what consumers are reaching for.                                                                                 Say, I pick up an apple or I pick up a banana. The digital signage within the store is changing based on what I touch and what I put in my cart. I may pick up a banana. I look at the digital signage. It tells me where that banana is from. It tells me the price, the nutritional information. They're really trying to blend the digital and physical space into one experience that is creating this more immersive-type of grocery experience. They can potentially utilize that data of what I've touched and felt. We talked about that blind spot and not being able to recognize consumers and what they're looking at, or what they're touching and feeling in stores.                                                                                 Coop Italia's doing a great example of collecting all those data points that consumers are generating and then utilizing that data to then potentially upsell or just create a better experience in general. Amy Lombardo:                21:36                     How else is store intelligence used? Is there other examples of that or is it just the idea of you're picking up a product? Like, are cameras being used to see what the consumer shopping or maybe the pattern of which they walk throughout the store? Dave Kuchenski:               21:53                     Yeah, there's several ways. Consumer tracking via cameras is one way to see where there's hot spots throughout the store. Consumers stand in this area more often than over here in this area. There could be various reasons why. It could be which signage is up, which products. It could be that people don't linger very long in the frozen section.                                                                                 There's various ways to capture that. There's actually some technology out there too that's utilizing lighting to be able to interact with the cameras on our phones. If I've got my phone out, they can actually track where consumers are moving to.                                                                                 It's evolving technology, but again, I think it all comes down to identifying a consumer, anonymously or not, watching them walk through the store, seeing what they're collecting, seeing what they're picking up, utilizing the different data points that are available to the retailer, and then that enables you to help remove that blind spot and potentially increase your conversion rate in store, raise your basket size, and then just increase your revenue in general. Amy Lombardo:                23:02                     Let's close out the conversation with just some best practices. Is there a sweet spot? Is there a secret sauce here that retailers need to be taking away from this conversation? Dave Kuchenski:               23:15                     I think the first thing is, retailers have an imperative to adopt to changing consumer expectations. Don't sit back and hope your loyal customers are going to continue to visit your stores. Delight them with new experiences and information they don't expect.                                                                                 You may wake up tomorrow and find that some other retailer has provided a unique enough experience to lure them away. It's really competitive out there. Physical retailers need to take a design thinking approach to solve consumers' needs.                                                                                 Consider your customer journeys. Evaluate their pain points they experience every day. What are the best products available to me? Am I getting the best price? Where do I find these items in store? How can we get customers in-and-out as quickly as possible? How can I utilize data about my customers to curate products and provide a better experience?                                                                                 I think there's a lot of different ways if you just think about the consumer and their needs, you can achieve a lot. Repurposing the physical space to kind of create a greater value to the consumer is just good business. Times are changing. Consumers' expectations are getting bigger, so it's important to evaluate what is valuable to your consumer and deliver on those expectations.                                                                                 It's going to be different for each retail vertical and each retailer in those spaces. So, begin with your customers' journeys and I think that's going to get you started down the right path. Amy Lombardo:                24:29                     Okay. Thanks, Dave, for being with me here today and to our listeners for tuning into this episode of COMMERCE NOW. To find out more on this topic, go to dieboldnixdorf.com and click on the link in the podcast show notes. Until next time, keep checking back on iTunes or however you listen to your podcasts for new topics from COMMERCE NOW.

Podcast Summary: Jackpotting, a sophisticated cyber-attack combined with the physical manipulation of an ATM machine, has been sweeping across Europe, Asia, and Central America for the past decade. It recently made its way onto US soil in early 2018. In fact, these hackers swept up 1 million before anyone caught on, and they’ve continued targeting banks and credit unions in small towns with lax security and outdated software. In January, two men were arrested for a jackpotting attacks in Rhode Island and Connecticut. Other attempts and attacks have been reported in the Pacific Northwest, New England, and along the Gulf. While it’s unclear just how much money has been taken in total, these attacks are still occurring, and they won’t stop any time soon. In this episode, we’ll be talking the “what, where, when, and how” of jackpotting, as well as how financial institutions can protect their ATM fleet - and their brand image - from damage. Resources: Blog: https://blog.dieboldnixdorf.com/dont-be-the-jackpot-protect-your-atms-against-evolving-attacks/ DN website: www.dieboldnixdorf.com COMMERCE NOW website: www.commercenow.libsyn.com Transcription: Amy Lombardo:                00:01                     It's early evening and a standalone ATM sits in the middle of a mostly deserted strip mall. A man in a technician's uniform approaches the machine. He pops the top hat without hesitation and fiddles with the hard drive, swapping it out for a new one. When his job is done, he replaces the components and walks away. A few minutes later, someone else walks up to the ATM. He mimes the usual actions of an ATM customer, punching in numbers on the keypad, inserting a card and then he waits. Within the next few seconds the ATM begins to spin. The machine spits out wads of cash, up to 40 bills every 23 seconds. Anyone bothering to pay attention might think it's this guy's lucky day. Others might think he's withdrawing his life savings. But anyone with security expertise will recognize this as exactly what it is, a jackpotting attack.                                                                                 Jackpotting, a sophisticated cyber attack, combined with the physical manipulation of an ATM machine has been sweeping across Europe, Asia, and Central America for the past decade. It made its way onto U.S. soil in early 2018. In fact, these hackers swept up one million before anyone caught on and they've continued targeting banks and credit unions in small towns with lax security and outdated software. In January only two men were arrested for a jackpotting attack in Rhode Island and Connecticut. Other attacks and attempts have been reported in the Pacific Northwest, New England, and along the Gulf. While it's unclear just how much money has been taken in total, these attacks are still occurring. And they won't stop any time soon.                                                                                 In this episode, we'll talk about what, when, where, and how of jackpotting as well as how financial institutions can protect their ATM fleet and maybe even important, their brand image. I'm Amy Lombardo and this is Commerce Now. Hello and welcome to Commerce Now, your source for fin tech conversations along with emerging trends in the banking and retail industries. Today I'm joined by Scott Harroff, Chief Information Security Architect with Diebold Nixdorf. So, hey Scott. Thanks for joining me today. Scott Harroff:                     02:26                     Good morning, thanks for inviting me. Amy Lombardo:                02:28                     It's always great to talk to you. So, today we're going to talk a lot about jackpotting and I want to start the conversation with just where did the term jackpotting come from. The only meaning I know of the word is something good, usually when someone wins the lottery. So what does jackpotting mean here in terms of security references? Scott Harroff:                     02:51                     Jackpotting came about back in the 2010 timeline from a conference that's called DefCon. Once a year hackers and white hats and gray hats all get together and they present to each other for several days over a week in Las Vegas and one of the presentations was delivered by a speaker by the name of Barnaby Jack. And what Barnaby essentially did is he took an ATM and he brought it up on stage and after doing a whole bunch of research before the conference he found several vulnerabilities inside the ATM software stack. And by exploiting those vulnerabilities, he was able to make the ATM essentially jackpot itself and dispense all of its cash on the stage in front of the audience members. So, it really is kind of a term for ATMs dispensing all of their cash that came about as a result of Barnaby Jack's jackpotting speech during the DefCon Conference. Amy Lombardo:                03:46                     Ah, so there you go folks. If you're ever watching Jeopardy or some other trivia show and you're asked who originated the term jackpotting, now you'll know, courtesy of Scott Harroff himself. So, when a jackpotting attack occurs, is it something that happens immediately? You're giving this example of Barnaby up on stage and he did it real time but do these attackers carry out their mission immediately or is it something that maybe happens hours, days later? Scott Harroff:                     04:24                     What we're seeing in the United States is the attacks are occurring very soon after the software or the tool is deployed at the ATM. Although they could visit the ATM and they could set the ATM up hours or days or weeks in advance, in the U.S. what we're seeing is they set the machine up and then very quickly after that they go through the process of making the ATM dispense all of its cash and then they leave. Amy Lombardo:                04:53                     Got it, and it's usually with another individual, right? It's not a one person attack because someone's probably monitoring some software in some remote location and then there's said attacker who's walking up and taking out the cash, right? Scott Harroff:                     05:13                     Well, it theoretically could be just one person if the one individual had the right tool and they understood how to use the tool and they were working all by themselves, a lone wolf, if you will. Then, yeah, absolutely one person could do it but what we're typically seeing is this is an organized crime ring activity. These are individuals that come in from Venezuela and Mexico and they work in groups. So, we typically have two or three individuals working together in any one attack. We have what we call the cash mule and that's the person that shows up at the ATM and their job is simply to be at the ATM and to take the cash out of the ATM, put it in a bag and then leave.                                                                               We have another individual called the tech and the tech is the technical person who arrives at the ATM prior to the cash mule. And what their job is, is to analyze the ATM to determine how the ATM's configured and then determine what the appropriate tool or technique is to use to jackpot that particular ATM. We also have what we call the operator. The operator is the person that, in some of the attacks, needs to authorize the software prior to it being able to be used at the ATM. They're typically remote and typically they're called on a cell phone to give the access codes to activate the software. And then what we've been seeing recently is we have what we call a surveillance team.                                                                                 In much the same way that you would think about spies and counterspies working with or against each other, these are individuals that show up and while the people are physically at the ATM doing whatever they're doing, they're a little bit away from the actual scene and they're watching what's going on at the scene. They're watching what's happening around it. So if a consumer were to drive up to the ATM or if a police car were to pull in the parking lot, it's this person's responsibility to tell the other people that are at the ATM, hey, there's a police car coming, hey there's a customer coming, you need to leave and then they're watching the scene once they're gone. They say okay, the coast is clear, come on back, you can continue your job. Amy Lombardo:                07:33                     Wow, that sounds quite complicated just to get notes out of an ATM here. Is a jackpot attack, is it a one and done or could you go and, based on the amount of notes that the ATM can dispense at a time, or is that the way it's hacked, so it just that threshold is completely removed, and it'll just empty the ATM at once? Scott Harroff:                     08:03                     Again, there's a variety of different techniques that we've seen used. One of the techniques would require the person to use what we call a black box and if they were using a black box they'd physically gain access to the inside of the ATM to disconnect the dispenser from the CPU in the ATM then connect it up to the black box and the black box would send some commands to the dispenser and if the dispenser wasn't configured correctly, that would start the dispenser into a cycle of continuously dispensing notes. So, you have the ATM physically opened, out of service, with a black box connected and it's pretty much go as quickly as you can, get as much as you can and if somebody's interrupting you, you just take your black box and cash and you leave. The ATM is left in an out of service situation so that would be one approach in one extreme, if you will.                                                                                 The other side of it would be where software is used to actually put the ATM into a mode where it can be switched into and out of service. So, the software would be able to be controlled remotely. You'd use something like a wireless USB dongle that would provide keyboard and mouse functionality and then the tech would be somewhere in the parking lot or in near proximity of the ATM and they'd be sending commands ... okay, dispense your cash and that would start. The cash mule would start taking all the cash out of the ATM and then the technician would see somebody pulling up behind the cash mule and then send commands to the ATM ... go back in service and now the in service screen would appear, the consumer would use the ATM, it'd look completely normal, it would provide them exactly the transactions that the consumer wanted and then the consumer drives away. The cash mule comes back and then the technician remotely says, okay, I want you to start dispensing cash again. And again it starts dispensing.                                                                                 And we've actually had video from customers where the person that's at the ATM doing the cash removal had been interrupted three or four times and as consumers came up and used it, it looked normal. Cash mule came back, did their thing, another consumer came up, the cash mule left and again, the consumer comes back. We've actually seen it go through cycles where they'll spend over an hour being interrupted and getting the cash out of the ATM while other people are there using the ATM. Amy Lombardo:                10:24                     Wow. So these criminals are pretty daring in those types of examples that they're going back and forth there. Scott Harroff:                     10:32                     Actually they're really, really daring. We've got one example out in California where the folks jackpotting the ATM were actually in a big box retailer. So, imagine that, you're right at the ATM, right in front of the entrance, and right over your shoulder to the right hand side is all those cash registers, all those customers checking out, all the store people operating the cash registers and you know, somewhere there's all these cameras that are watching for shoplifters and things and in the middle of all that, we had a group of individuals literally jackpot the ATM while the store was open and all that was going on. So, yeah, really bold and daring. Amy Lombardo:                11:15                     All right, I don't know if I can say this on this podcast but that's a little [inaudible 00:11:20] there. I mean, my goodness. Scott Harroff:                     11:24                     Yeah. And you know they're not wearing masks, they're not wearing disguises. It's like you and I just walk up to an ATM and pretend we're technicians servicing the ATM and take all the cash right there in front of all these people and all those video surveillance things going on so, yeah, it's pretty aggressive sometimes. Amy Lombardo:                11:44                     All right, so listeners, just for the record, don't look up Scott and I and look what we look like on LinkedIn, and think we're going to be jackpotting ATMs. All right, let me get back to my questions here. I've got a lot here for you. You mentioned some examples here in the U.S., but are we finding these attacks all over the world because I could have sworn a colleague mentioned to me once that maybe jackpotting even started in Russia or am I just thinking of something totally not related? Scott Harroff:                     12:18                     No, you're actually correct. No, you're spot on. It's a global thing. It's been going on for many, many years. It's relatively new to the U.S. We actually have a security alert from one of our competitors that they published in the 2016 timeframe warning their customers that their ATMs were vulnerable to these attacks. Our first record is competitors ATMs being attacked in 2016. We actually didn't see anything happening on our equipment until the 2017 timeframe and then they were in the U.S. hitting large ISO, an ISO is a deployer of ATMs for a third party. So, if you didn't want to own and operate your own ATM, but you wanted to have your logos on the ATM so your consumers could use them, that's what an ISO is. They deploy ATMs on behalf of somebody else. They focused in on this ISO pretty heavily from the spring to the fall of 2017 and then once that ISO did a good job of counteracting the vulnerabilities on their fleet, the bad guys were forced to expand out and go after other folks' ATMs. So, that's when we started seeing it move off that ISO on to other customer's ATMs and at that point we started sending out security alerts, doing customer awareness training and letting them know, hey, if you haven't done A, B, C, D, F, G to protect your ATMs, it's a really good idea to start working on that right now. Amy Lombardo:                13:45                     Got it. Are there certain types of ATMs or maybe even locations that they're at that seem to be more vulnerable than others? Scott Harroff:                     13:56                     You know, that's a really good question. The commonality here is ATMs need to have up to date firmware, up to date software, up to date configuration settings and good physical security. So, theoretically any ATM running what's called XFS, XFS is the middle ware layer that sits at the operating system level and it kind of acts as the intermediary between whatever your terminal software stack is like Agilis or Vista or pick your software stack and the operating system. It kind of translates what the terminal software stack wants to do and the commands for the devices. And that's an open standard, it's published on the internet. So, if you could use this uncommon tool called Google and you did a search for XFS specifications ... Amy Lombardo:                14:51                     What's that? Scott Harroff:                     14:52                     Never been there. You could actually Google for the XFS specifications for the dispenser and you could find out what you need to do in order to tell XFS how to operate the dispenser. Or, if you're a little bit more lazy and a little bit less creative, you could actually Google for applications that do test dispenses on the internet and then that would actually give you the actual software itself to interact with XFS and to make the machine dispense cash. Any ATM running a common software layer called XFS is theoretically vulnerable to this. Now, if you've got XFS up to date, firmware up to date, and configuration setting up to date, again, you add layers of defense to protect you and slow the attacker down. But, really almost any ATM running that layer is vulnerable.                                                                                 Then again, you move on to ATMs that might not run XFS, some really low end cash dispensers that you might see in gas stations or maybe convenience stores, they don't run XFS but, again, the attackers have stolen ATMs and have analyzed how they work and then found attacks that work against non-XFS ATMs as well. I would pretty much say any ATM is vulnerable but then we gotta talk about the likelihood of attacking an ATM successfully is. So, if you've got an ATM that's sitting in the middle of a branch and you've got all these branch people around the ATM, the doors are locked from 5:00 at night to 8:00 in the morning, the chance of somebody walking into that branch while all those employees are there and spending an hour jackpotting the ATM and removing handfuls of cash, time and time and time again, really low probability. Could it happen? Yeah. Is it likely? Not so much. So, we'd put those into what we call a low risk category.                                                                                 An ATM that's in a drive up configuration where the key to the ATM's computer is exposed to general public, we'd put that into a medium risk category. An ATM that is on premise, maybe in a vestibule, maybe in a corner of a branch parking lot, again, without good security would be a medium risk. And then a high risk ATM would be an ATM that's off site. So let's say it's in a university, let's say it's in a public building somewhere, maybe it's in a college campus, maybe it's in a gas station or a convenience store. Those are high risk and, again, the highest risk would be an ATM that would, believe it or not, be in a shopping mall. We had a lot of attacks occur where an ATM was literally on site in a shopping mall with all those people moving around the ATM, the jackpotters right there jackpotting the ATM. So, from lowest risk to highest risk, that's kind of what we've seen here in the U.S. Amy Lombardo:                17:44                     Huh. Okay. Yeah, you would think it would be the other way around with the shopping mall example but in reality you're not, as a consumer, looking for that. You're going on with your day to day activities. Are ATMs the only system or device that can get jackpotted? Could a kiosk that dispenses money be vulnerable to this? And I'm thinking back to the grocery store example that you gave me earlier on. Scott Harroff:                     18:17                     Absolutely. Any device that has a reward whether that reward is I get cash or whether that reward is I get credit card data that I can then sell on the dark web or I can use myself to clone cards and go redeem by using a stolen pin and a stolen card number somewhere else, any device that has value to organized crime or an attacker would be subject to these attacks. Amy Lombardo:                18:44                     So, jackpotting is not just getting some sort of notes out of an ATM, it ... to your point here, it could be data as well. Am I understanding that right? Or did I just take you down a rabbit hole? Scott Harroff:                     19:01                     No, so jackpotting, in the way we're talking about it, typically occurs at ATMs. That's the way that the media has been presenting this. This is the way all of the experts have been talking about it. When they say jackpotting these days, what they typically mean is somebody at an ATM stealing cash from an ATM but you could take the concept and extend it. You'd have to be pretty brazen but what if I were to somehow put malware onto a casino's gaming machine. What if, as opposed to getting cash out, what I do is I get a jackpot on my casino machine and it just gives me all the coins that are in there. What if somehow I manipulate that into sending the signal back to the main system that says person at this machine just hit the jackpot and they won the $5 million dollar grand prize. You could extend this concept into a lot of other areas but typically it's around ATMs. Amy Lombardo:                20:01                     And in that instance, consumers, anyone who's listening Scott Harroff will be visiting Las Vegas in two weeks. Just kidding, just kidding. All right, let's shift the conversation into talking a little bit about preventative measures and what a financial institution can do to be the most prepared for these types of vulnerabilities. Can you just walk us through steps a bank should take and really that process, how complicated it could be or maybe not? Scott Harroff:                     20:41                     Sure, absolutely. The first thing I want to bring about is that there's a lot of different scenarios that can lead up to a jackpot, a lot of different techniques, a lot of different tools. One of the biggest misconceptions is some institutions that haven't had an in depth discussion, they kind of think a jackpot is a jackpot. It really, really isn't. There's many different vectors that could lead up to a jackpot scenario. You could remotely get into an unprotected ATM across the network and jackpot it, for example. But most of the time it involves being physically close to the ATM. Again, we have some attacks called man in the middle attacks and what that means is somebody gets between the ATM and the host and they, on the network, change the traffic, so the ATM thinks that the host is telling it to do things that the host really didn't tell it to do. So, that's a remote attack as well.                                                                                 It could happen at the host, it could happen between the host and the ATM or it could actually happen on the network cable that goes right into the ATM itself so, that's an attack that has a proximity kind of affect to it. But the most common attack is an attack that involves getting into the computer area of the ATM. If you have an ATM that is, again, in a branch lobby chances are no one's going to go in there and try to jackpot that machine. They're going to look for something's that's maybe a little easier, maybe a little less risk. An ATM that has a lock that's exposed to the general public, if you will, is really the first main indicator of an ATM you should be concerned about and especially if that lock hasn't been changed from the factory configuration.                                                                                 So, if your ATM has exactly the same lock as your bank, or your credit union down the street who's a competitor, you know, you're probably vulnerable because, well, if the key that opens your ATM opens 20 or 50 or 100 or 1,000 other ATMs from competitors around you in the state, that's really the first major weakness that they look for. Today if they show up and they put the key in and the key doesn't turn, you know maybe they could pick it, maybe they could force it open but what they're really looking for most of the time in the U.S. attacks we've seen so far is an ATM where the lock is just in the factory configuration. You put a key in you can buy off of eBay, for example, you turn it and it opens. That's the first step. The second step is really, what if when I open that door an alarm goes off. What if I now think that for whatever reason, I've just tripped something, am I going to stay there when an alarm's going off and try to perform this jackpot? Probably not. Maybe I'm really, really aggressive and I do but chances are, if the top hat were to open and an alarm were to go off, the bad guy's probably going to leave quickly.                                                                                 Having that alarm there, if you open the door and if you don't put in, for example, a four digit disarm code to turn off the alarm and the alarm starts going off, that's another layer of protection that would prevent the bad guy from probably staying there and jackpotting it. And then the next step is making sure that the ATM software stack is up to date. Making sure that the communications between the CPU and the dispenser are appropriately configured. Making sure that all of the different details around the software security and the configuration of the ATM are up to date, those things all added together can either significantly slow down the attacker to the point where they're probably not going to get any cash or only a little bit before somebody shows up to intercept them or maybe prevents them all together. Those are the kind of things you really want to do is adding these layers of physical security and information security controls to the ATM to make sure that you've really slowed somebody down or you've stopped them all together. That would be what I would be looking at doing. Amy Lombardo:                24:48                     Got it. And is there a way that a financial institution can actually tell when this might be happening? Is it just as simply as what you were talking about, an alarm going off? Or is there some sort of software that they can actually tell? Scott Harroff:                     25:07                     Actually the physical security of the top hat area and the chest, having sensors that noticed that somebody's doing something they shouldn't be doing is a really good first layer of defense but as you pointed out there's also software on the ATM that could notice that something's occurring that's not normal. For example, my dispenser was unplugged from my CPU. Well, how many times does a dispenser disconnect itself from a CPU in a normal ATM? It really doesn't so if you have software that watches for that, that could be a detection mechanism that says hey, I want to now respond to this or another good example might be how often does your hard drive physically unplug itself from an ATM while it's up and running normally? Well, the answer is it doesn't ever disconnect itself while the ATM is up and running normally. So, again, having software that watches for something like that would aid you in detecting that something unusual is occurring and you probably want to have your physical security people log into their cameras or DVR's, look to see what's going on or maybe even send an alert to a security monitoring system so that a third party could actually respond on behalf of the bank and send somebody out to check out the ATM. Amy Lombardo:                26:23                     Got it. As we close out the topic for today, what did I miss, Scott? Is there other recommendations that you would give here or, really, I didn't miss anything. It's really you. Anything else that you would just add to this conversation of just kind of in closing here? Scott Harroff:                     26:42                     Absolutely, I think one of the things that most financial institutions in the United States haven't really done a thorough job of yet is assessing their fleet and really looking at them from the perspective of which of my ATMs are at the highest risk. Which of my ATMs are not at risk at all? And then looking at those ATMs and saying okay, this is a high risk ATM, which vectors would work at my ATM and basically doing an internal analysis of how could my highest risk ATMs be attacked. What do I need to do with my ATM vendor to try to now counter these different attack vectors and make my highest risk ATMs as secure as they can be from these attacks? I really think that we've got some financial institutions that have done a very good job of assessing their fleets. They've done a good job of remediating their open vulnerabilities but I think there's far, far too many customers out there that haven't gone through and done that work and they're actually still vulnerable to these attacks when the bad guys come back next time. Amy Lombardo:                27:52                     Okay, okay. So, obviously that would be our plug there to talk to someone like yourself or an account rep at Diebold Nixdorf to get more information. Scott Harroff:                     28:04                     Yeah and again, this isn't really a Diebold Nixdorf problem although our ATMs, if they're not properly set up and configured and protected, they are vulnerable. NCRs are vulnerable, your Tritons, your Tranaxs, those other ATMs are vulnerable as well. Again, I just want to make sure we close with this, this isn't really a Diebold Nixdorf problem although this is a Diebold Nixdorf doing the podcast. It's really an industry challenge and everybody needs to be diligent. As long as you own a machine, that's loaded with cash, you need to be concerned about this risk. Amy Lombardo:                28:37                     Yeah, that's a great point and a great way to close this. So thanks, Scott, for being with me here today and to our listening for tuning into this episode of Commerce Now. To learn more about jackpotting or how you can better defend your ATM fleet against evolving attacks, log onto DieboldNixdorf.com. Until next time, keep checking back on iTunes or your favorite podcast listening channel for new topics on Commerce Now.    

Podcast Summary: Physical storefronts are evolving. Our notions of the traditional brick and mortar store are fading into antiquity. It seems like every day we’re hearing about retail giants like J.C. Penny’s, Sears, Kmart, Toys R. Us, and others either are either shuttering their stores or going out of business altogether. For those consumers who enjoy heavy doses of nostalgia, it can be a bit depressing to see these retail stores sitting vacant. Most of us can remember when malls were the go-to hangout spot, when we ran rampant with friends, window-shopping and spending hours loitering in food courts. Others can remember lazy Sundays travelling from store to store with our parents to get all of the household necessities. Now, we can get everything delivered through the click of a mouse, a tap on a screen, or even by simply saying it aloud to our smart devices. So what does this evolution mean for consumers? What does it mean for retailers and brands? How can shops keep up with the ever-shifting digital market, especially when they’re competing with juggernauts like Amazon? In this episode, we will discuss some of these questions and more. Resources:  Blog:  Personalization and the "Store for One" Future of Retail: https://blog.dieboldnixdorf.com/personalization-store-one-future-retail/#.W03xD9JKjIU DN website: www.dieboldnixdorf.com COMMERCE NOW website: www.commercenow.libsyn.com Transcription:   Amy Lombardo:                00:00                     Physical storefronts are evolving. Our notions of the traditional, Brick and Mortar branch is fading away. It seems like every day we're hearing about Retail Giants, like Walgreens, Sears, and even recently Toys R Us, are either downsizing their stores or going out of business altogether. For those consumers who enjoy heavy doses of nostalgia, like myself, it can be a bit depressing seeing these retail stores sitting vacant. Most of us can remember when malls were the go-to hangout spot where we ran into friends, window shopped, and spent hours loitering in the food courts. Others can remember lazy Sundays traveling from store to store to get all the household necessities. Now we can get everything delivered through the click of a mouse, a tap on a screen, or even by simply saying it aloud to our smart devices. What does this evolution mean for consumer? What does it mean for retailers and brands? How can shops keep open with the ever shifting digital market, especially when they're competing with Juggernauts like Amazon?                                                                                 Today, I'll be speaking with Dave Kuchenski, Diebold Nixdorf's Director of Retail Strategy, about the life, stagnation, and evolution of the physical store and how retailers can move with the ebbs and flows of the digital tide. Through all this, one thing remains certain, Brick and Mortar isn't dead, it's just changing. I'm Amy Lombardo, and this is COMMERCE NOW.                                                                                 Welcome to COMMERCE NOW, your source for Fintech conversations, along with emerging trends in the banking and retail industries. Hey, Dave. Thanks for joining me. Dave Kuchenski:               00:00                     Hey, Amy. How are you? Thanks for having me. Amy Lombardo:                01:54                     Okay, let's get started here in the conversation. In today's ideal consumer experience, it seems like many businesses, whether you're B2B or B2C, are emulating Amazon. I almost think Amazon is that cool kid in high school that everyone wants to be like. They always have the cool trends right away, and they're always on the cutting edge. Talk to me a little bit about that. Can you explain opportunities retailers are looking at via the Amazon model, and how they could inject themselves into the digital ecosystem? Dave Kuchenski:               02:28                     Yeah, sure, Amy. A lot of things have changed today. I think we're seeing really four major impacts to retailers. And I think the first thing is that technology is changing very, very rapidly. We just did an analysis of the Gartner Hype Cycle, and we looked at technology as it was in 2003, and technology as it was predicted in 2017. And the interesting thing is back in 2003, there were a lot less technologies back then and those technologies, a lot of them were backend type of technologies. As you look at today, you got things like machine learning, AI, things that are directly affecting the consumer. It's a bit of a change. Technology is evolving much faster today. It's not like it used to be, where pace of change was slower, it was all about product placement and price, and inventory management. The landscape is changing today, very, very quickly. Amy Lombardo:                03:33                     Okay. Tell me a little bit about these technologies, and how they are influencing consumer behaviors? Dave Kuchenski:               03:42                     Yep. For the last, I'd say 10 years, it's been about the mobile device. It's not only the mobile device today. The mobile device is still the primary point of interaction for the consumer. It's the key driver to almost everything we do today. We're all attached to it. It's not only that anymore. It's voice controlled speakers, it's connected appliances, Smart TVs, digital watches. Even our cars are connected now and interacting with our phones. All of this creates new opportunities for the retailer to be connected. And its new opportunities to engage consumers. This gives brands and retailers more opportunities to inject themselves into the digital ecosystem, and earlier in the purchase journey. No longer is the predominant purchase journey started in the store. Being greeted by a staff member, because of this digital disruption, we're speaking to Alexa, or to Google, our TVs, our watches, as we browse, research, engage, purchase. The journey starts well before we ever set foot across the line of the physical storefront. Amy Lombardo:                04:55                     Okay. With these different types of technologies and where the consumer is starting this journey, how easy then, is it to deploy this type of technology today? Does it exist on a mass market scale? Dave Kuchenski:               05:11                     Yeah. Obviously, Amazon has resources that the average retailer doesn't. They run a massive, one of the largest, if not the largest, cloud business out there. They have processing resources that most retailers don't. What I think is important for retailers to do, is to focus on their consumer journey's and then apply technology to that consumer journey. A lot of people, they look at technology and they focus on the technology first. I'm going to go deploy a CRM, or I'm going to deploy a mobile application. Without ever thinking about the impact to the entire journey. I think it's important for retailers to sit down, look at their consumer journeys, and then figure out what technology should I use to enable that consumer journey and deliver the best experience possible to my consumer. Amy Lombardo:                06:03                     I was having a discussion with one of my colleagues yesterday and we were talking about the balance between what the consumer demands and then how the technology keeps up with it. You were talking about the fact that it's not just, let me introduce them technology, but find out about the consumer behavior first. On the flip side, we talk to so many organizations that are all about the consumer experience, but they can’t possibly execute it because their technology is still so many years behind, or it's not set in a way that it can be easily refreshed. Can you talk to me about that a little bit? Are you finding that here in your work with retailers? Dave Kuchenski:               06:49                     Yeah. Legacy technology is always a hard thing to overcome. What I think is most important is to start with, what are the biggest pain points in my customer journey. Start with that mapping. Start with what is the experience that I'm delivering to my customer. Find that pain point and then figure out, what is the technology that you may need to implement to alleviate that pain point, or at least make it better. I think taking a step back, and looking at that customer journey, I think is the most important thing. Amy Lombardo:                07:24                     Right. Dave Kuchenski:               07:26                     Shopping behaviors are changing rapidly today. No longer is the day where consumers are coming into the stores completely uneducated. There's a lot of independent product research that's happening. Consumers come into the store and they're more educated than they ever were. You have access to things like Amazon reviews, or Google reviews, mounds of product research done by independent companies. That behavior is changing. A lot of manual tasks are becoming digital. Take the traditional shopping list, for example. Why wouldn't I save myself time capturing a hand written version into an electronic format? Or better yet, reusing portions of that list that I buy regularly? Or capturing these list via voice assistant? Or even uploading these to my personal self-scanning system when I enter the grocery store? There's a lot of things that consumers used to do, that they aren't doing anymore.                                                                                 Social interaction with brands. This is another dynamic that's really changing the way that retailers behave. The social interaction through Instagram or Snapchat, or pick your favorite social media, is creating this new ecosystem or platform for retailers and brands to interact with their consumers. It's almost, the way I used to find out about a product was through a commercial on TV or an ad in a magazine. Today, I can interact directly with the brand and then brands also have these Ambassadors of the brand that are thought leaders out in social media that represent different products and brands. The dynamic between the brand and the retailer, and the consumer, is evolving significantly. And then the final thing, technologies influencing expectations as we talked about a little bit. No longer is the two day delivery cycle short enough. Consumers want products that day. They want it, even though I've ordered it offline, I expect it to be there by eight o'clock the next evening. And this is really impacting retailers and how they think about delivering experiences to consumers. Amy Lombardo:                09:40                     Right. You gave a great example about the grocery store. I think about the fact that I buy milk and bread, and those lame sugar infused yogurt tubes for my kids every week. Why am I not just automatically having that in some sort of checklist? Dave Kuchenski:               10:00                     Yeah, yeah. Amy Lombardo:                10:01                     Right? Dave Kuchenski:               10:01                     Yeah, definitely. You can definitely utilize technology as a consumer to be more efficient. That's for sure. Amy Lombardo:                10:06                     Yeah, okay. I want to go now to the online versus the in store shopping experience and just how those two types of shopping engagements, are looking like in today's day and age. Dave Kuchenski:               10:27                     Yeah. Yeah. We talk about Amazon Go and how big of an effect that that's had on retailers, but I think obviously the online shopping journey has impacted in store shopping more than we can even realize. Expectations are different, journeys are different. When I visit a website or even the social media that we talked about, online retailers are aware of that. They know what I'm looking at. They know how often I visited their site. They're capturing data through things like my IP address, or whatever that data is that helps identify who I am and why I'm visiting their site. They're using that, and it's a major advantage for them to be able to deliver ads and offers, make product recommendations based on my shopping history. All the way through me reviewing the purchases that I just bought, and them being able to come back and say, “Hey. Since you purchased this and you really enjoyed it, you might like this as well.” That's a huge benefit to online shopping.                                                                                 The in store shopping, traditionally there's been this blind spot. We call it a blind spot. From product discovery, through research, through browsing the store trying to find what I want, retailers don't know who I am, physical retailers don't know who I am, why I'm there, what I'm there to buy, what I've picked up and put in my cart, or maybe put back. They find out what I purchased after I go and complete that purchase and they get data about that visit. They have no opportunity to capture me in the store. Those in store advertisements are just general to consumers. They're not targeted to me and my specific needs. I think that's the big difference between online shopping and in store shopping. It's something we've thought about a lot and how we can potentially overcome that. Amy Lombardo:                12:32                     This blind spot concept, it's interesting to think about because you're right. You walk into any type of retail establishment, and to your point, it doesn't matter what demographic you are, they're just assuming that you want to buy that milk, that bread, or that lame yogurt infused tube. Okay. Are there recommendations of how to remove this “blind spot??” Dave Kuchenski:               13:01                     Yeah, I think so. It starts with how do you begin to identify consumers. Things like utilizing the mobile device in store, coordination with mobile applications, and things like beacons and try to identify who a consumer is, what they're relationship is with you. It's really about creating a deeper, more dynamic relationship with that consumer as they shop. And then the better you get at those customer journeys the better you get at applying the technology, the more efficient the retailers going to become at being able to potentially remove that blind spot. Amy Lombardo:                13:41                     Could you see that these physical establishments, the in store shopping experience, could actually have the reverse effect of what it has right now, and actually grow and return back to popularity? Dave Kuchenski:               13:55                     Absolutely. I think there's a ton of examples out there. We're going to get into this in the next podcast. But, there's a ton of examples of retailers that are using their Brick and Mortar footprint as an advantage in different ways. There's always going to be this need of consumer wanting to go in and touch and feel an item before they purchase it. Retailers are leveraging that. The more dynamic you can make that shopping experience, as I'm touching and feeling things, providing me with information about products, that's a really interesting concept. Used to be retailers would base their product selections on good, better, best. And then they would price them as such. I think that is changing. Retailers are having to think about what are the best products that I can put in my stores because consumers are more educated. They know that products have a material defect to them. And putting out a cheap product and expecting that consumers are going to buy it nowadays, doesn't always fly.                                                                                 Retailers are thinking about their stores as fulfillment centers. This network of mini warehouses that could potentially enable them to do same day delivery within a few miles. There's a lot of examples of that out there. I think it's getting creative with how you think about your Brick and Mortar footprint, because there's examples out there in the market of both. Retailers that think about their Brick and Mortar footprint as traditional stores, and they remain that way. And I think if you look out in the market, those retailers are really struggling. And then you look at retailers who are thinking about their stores as more dynamic, the role of the store is changing and those retailers are really starting to thrive. Ulta is a great example. They just released earnings a few weeks back, and they've shown significant growth. They're looking at things like picking up products in store that were ordered online, or buying something in store and having it delivered to the house. Fulfillment through the store itself. That's a great example of a company that is truly rethinking their consumer journey and is thriving in their earnings because of it. Amy Lombardo:                16:30                     Right. Okay. I think this is a good place to stop in the conversation today, and Dave, you made my plug already for our next podcast, and how we'll jump into more of these examples of these retail giants and how they're finding different ways within their channels to compete. Thanks to the listeners for joining us for COMMERCE NOW, and subscribe to our podcast or find more information at DieboldNixdorf.com. Thanks for listening.

Podcast Summary: Consumers continue to increase their digital footprints and more personalization, but at the same time less invasion into their privacy. In this podcast we will dive into how organizations can maintain the consumer's privacy while still utilizing personalization in marketing tactics. Resources: Blog: https://blog.dieboldnixdorf.com/personalization-vs-privacy-balancing-act-retailers/#.W0Zc-NJKjIU DN website: www.dieboldnixdorf.com COMMERCE NOW website: www.commercenow.libsyn.com Transcription: Introduction: Amy:                                     00:16                     Hello, and welcome to Commerce Now, your source for fintech conversations, along with emerging trends in the banking and retail industries. I'm your host, Amy Lombardo. Amy:                                     00:25                     In today's topic we'll discuss how consumers continue to increase their digital footprints, and demand more personalization, but the same time, less invasion into their privacy. In this podcast we'll dive into how organizations can maintain the consumer's privacy, while still utilizing personalization in marketing tactics. Amy:                                     00:46                     Today, I'm joined by two members of Diebold Nixdorf's Legal and Compliance department: Lisa Radigan, Chief Ethics and Compliance Officer, and Stefan Limbacher, Global Data Privacy Officer. Each will share their input and perspective on this relevant and timely topic: Personalization Versus Privacy. Amy:                                     01:05                     So thanks for joining me today, Lisa and Stefan. Stefan:                                 01:09                     Thank you for having us. Lisa:                                       01:09                     Thank you, Amy, it's great to be here. SECTION 1 –WHAT DOES GDPR STAND FOR? / WHAT IS GDPR? Amy:                                     01:11                     Okay, so, let's jump into the conversation. Let's start at the highest level what GDPR stands for. There's so much buzz, whether your business is B2B or B2C around balancing that right level of data gathering with then the data privacy. So look at any recent news coverage you see, or even check your own personal email and you can't avoid all the privacy policies or opt-ins that are hitting your inbox. Amy:                                     01:35                     So, Lisa, can you tell me what exactly is GDPR? Lisa:                                       01:38                     So, GDPR is the General Data Protection Regulation. It's an EU law that really is designed to harmonize a number of EU laws that has existed for quite some time. And to provide a standard across, EU countries, that gives consumers and anyone who has any kind of personal data some additional protections around how that data is used. So it's really just a, a universal framework to provide some consistency. But it will of course impact all companies who end up touching personal data that goes through the EU in any way. Amy:                                     02:22                     Okay. And we see the news, we hear the buzz that consumers are uneasy about the means that marketers are using to acquire information about them. So it's important to know what material they're willing to provide to get these personalized communications. Amy:                                     02:38                     So with that said, why do you think consumers are more willing to share information with certain organizations over others? Stefan:                                 02:46                     Data is being regarded as the oil of our age. So, people will become more and more aware of its value. And I think the key thing is to create an environment where people are confident that their privacy is being protected. If you create an environment like that, then, people will be more willing to share private information. And it will be easier for business to gather information required for them. Stefan:                                 03:18                     So I think this is a target that can be achieved by these new laws, these new privacy laws which are popping up all over the globe at the moment. Amy:                                     03:29                     Okay, thank you. So, the GDPR was effective May 25th of this year in Europe. How do you feel the GDPR is effecting the balance between personalization and privacy here in the US? Lisa:                                       03:43                     So, it's interesting you say it was effective on May 25th, that's partially accurate, it's actually been in place since April of 2016, but it will be applicable starting on May 25th in Europe, which basically means starting on May 25th, companies really need to be fully ready for all of the different ways in which GDPR will be applicable to them. Lisa:                                       04:08                     So at Diebold Nixdorf, we actually kicked off our program to get GDPR ready about two years ago, because there's really quite a lot of work that we've been doing and that a number of companies are doing and will continue to do to make sure that we're compliant with GDPR. Lisa:                                       04:26                     GDPR will impact the US because lots of data from the US flows through Europe, or into Europe somehow. And so really it's becoming just the gold standard on how companies deal with and manage data that crosses their systems. You know, the world is a small place anymore, and lots and lots of other countries around the world, including, frankly, in the US, are adopting similar rules, similar regulations to what the principles of the GDPR require. Lisa:                                       05:03                     For instance we're really taking the view that the GDPR while applicable in Europe, we really view it as the standard that we will use globally and you know, I think lots of companies will end up doing the same, because the flow of data simply is difficult to stop at the borders of Europe. Amy:                                     05:24                     Got it. So you said that from your opinion this could become the global standard. So do you see it cascading to other areas of the world? Stefan:                                 05:33                     Yes, actually, I think it's happening right now. So if you look into what's going on in Latin America, and in Asia Pac-Pacific, there, currently is legislation being drafted that picks up on a lot of issues that are dealt with in the GDPR. And, I think this is a process that will be even accelerated by incidents like, Cambridge Analytica. So, data privacy is on people's minds and as you said rightfully in the beginning, you know, people are bombarded with emails around this, and, yeah, I think the sensitivity is at a peak at the moment. Stefan:                                 06:15                     Global legislation that is coming into place is picking up on GDPR and that is also one of the reasons why Diebold Nixdorf has chosen GDPR to be its gold standard for its global data privacy program. SECTION 2: HOW COULD GDPR AFFECT BANKS AND RETAILERS? Amy:                                     06:37                     Okay, got it. So, let's switch gears and talk a little on how GDPR effects banks and retailers. So we talked about earlier how organizations should have in effect a robust data privacy approach. So what is the policy if there is a security breach under the GDPR? Lisa:                                       07:00                     Under the GDPR there are lots of rules around what you need to do around data breaches. There's the so-called 72-Hour Rule, which basically means you have to inform data protection authorities or potentially even some data subjects if it's a potentially relevant incident that's occurred. Lisa:                                       07:23                     Data breach notification rules have been around for quite some time, both in Europe and in the US. Lots of US states have these obligations where companies are required to notify when a breach occurs. Lots of companies, including ours, have now established formal breach notification policies to make sure that if a breach occurs that it's escalated appropriately within the organization and is dealt with quickly so that we can adhere to these really quite stringent notification laws. Amy:                                     08:05                     Okay. So let's talk a little bit about how businesses actually compile the data on a consumer. Are there best practices to get the most information out of a consumer but without offending them? Stefan could you comment on that? Stefan:                                 08:23                     There are a couple of principles that you need to adhere to. So, the general principle of data privacy is that you're not allowed to process it unless you have a legal reason to do so. For example: Consent or contracts or compliance with a legal obligation or legitimate interest, so you need to be aware what is your legal basis. That is key. Stefan:                                 08:57                     We’re analyzing every instance where we are touching personal data and we're determining what is our legal basis.  Secondly you need to consider the principle of the data privacy by design. So, that means that you may only process the data which is absolutely required for your goal, and you can't collect any useless information. So you have to focus on what you really need, and what, what fits your purpose. Stefan:                                 09:31                     As a fair point, you need to delete data which is no longer required and you need to have in place an eraser or data erasure process that ensures that you're not accumulating data which is no longer required. So, coming back to your question, it's the wrong question, "How can I collect as much data as possible?" That is actually already not in line with the spirit of data privacy. You should ask, "What actually do I need?" And only limit yourself to that data which is actually required for your purpose. Stefan:                                 10:10                     I think when you do that you'll have a different experience yourself processing the data. And if you convey that to your, customers and if your customers can feel that and this is your prime directive when you process data, then I think they will be more willing to give you the data that you actually require. Lisa:                                       10:33                     And if I can just jump in quickly on, on this point, too ... I think in terms of best practices for how can companies really deal with and manage data and personal information that they're coming across? I think the key, really, to any compliance program, and certainly to anything around data privacy is to make sure that your program is not static and it needs to continue to evolve and continue to grow and change as the business changes, as the needs of particular data changes. Lisa:                                       11:05                     And I think the GDPR is really quite focused on that, to make sure that you're collecting data for a specific purpose and you're using it for that purpose and you're really evaluating, "Okay, why do we need this? Is there a better or more efficient way to get it? Should we be deleting it at different times?" It really forces companies to think hard about their programs and not just to have it be, you know, "We've put in a policy and it sits on a shelf and nobody's touched it for years." Lisa:                                       11:39                     You have to really engage in the topic and it has to be sort of top of mind for people as we continue to go forward. I think Stefan's absolutely right; data is (Laughs) by far going to be kind of the oil of our age. And making sure that we're taking care of it appropriately is really one of the things that GDPR is concerned with. Amy:                                     12:04                     Okay. I actually wanted to drill into something that you had mentioned, Stefan. But is there a way you could give me an example of what a legal obligation is? So you had mentioned that you can collect the data if it's part of a legal obligation. Can you share an example of that? Stefan:                                 12:23                     So for example, if you’re an employee of a company, the company is collecting your data that is in connection with fulfilling its contract with you. So it can make payments, for example, to you. Once you're terminated or once that labor agreement was terminated, you no longer have that, contractual obligation to have the data. Actually you would then need to delete the data. Stefan:                                 12:50                     There is in many countries a legal obligation to keep data on your employees for a certain amount of years. So, the authorities can check that proper tax payments have been made, and Social Security payments have been made. So there are sometimes legal obligations to keep data. Amy:                                     13:11                     Okay, that makes sense. Thank you for that. Amy:                                     13:14                     So Lisa, as we've discussed, consumers continue to use new forms of technology, and they have this overarching expectations of organizations. So, one for the business to better understand them as individuals, but then also to protect their privacy. So can you tell us a little bit about what are some steps organizations can take in regards to the personalization aspect? Is there a way to strike that perfect balance? Lisa:                                       13:43                     Yeah, I mean, I think when you look at kind of the goals of personalization and privacy it seems like they could be potentially contradictory, but really the key to companies managing and handling their data that they receive from their customers appropriately is to make sure that the consumer or the customer are really in the driver's seat. That the consumer knows the data that's being given to the company. That they have control over how that data is used. They give really, an informed consent around, how that data will continue to be used in the future, and that they know where that data is going. Lisa:                                       14:29                     We really think that data privacy is going to ultimately drive quite a lot of innovation around this. I think if you go back, you know, three, four, five years ago, the goal was really just gather as much data as you possibly can about people, or gather as many people's data as you can and try to then send out marketing materials or whatever you're going to use that data for. I think going forward the focus will need to be certainly on making sure that you have the right data from the right people, which ultimately will then allow you to really target people who may want to actually use your products or purchase your products. Lisa:                                       15:11                     So, I think it's ultimately going to drive quite a lot of innovation. Hopefully that will be innovation that's beneficial not only for the company who's collecting the data, but ultimately for the consumer as well to make the ways in which they're engaging with an organization much more, productive and meaningful to the end consumer. Amy:                                     15:38                     Yep, and that makes total sense in this age of innovation and technology advancements and we're in a world where digital engagement is really paramount to the day-to-day operations of global organizations. So Stefan, do you see that the GDPR and any future mandates could affect the digital ecosystem? Stefan:                                 15:59                     Let me take an example: So at the moment, you're getting all these emails from companies making you aware that you need to opt-in to receive future information from companies. The marketing guys of those companies, they will hate this, because, the information you're sending out, the newsletters you're sending out, they will lose a lot of reach when you're asking for an opt-in from consumers. Stefan:                                 16:29                     But in the end when you do that you will focus on those consumers that are actually interested in receiving your email, because they actively said, "Yes, I want to get this information. This information is useful for me." And, I think in the end you, you might lose 80% of addressees of your newsletters, but in the end you can focus on those 20% for which the information is actually relevant and that I am actually going to use the information. Stefan:                                 17:02                     So, I think the businesses will need to learn that data privacy is not about the amount, it's not about the size of your database, it's about the quality. And also, when you're developing products it is really focusing how can I achieve the most with the least amount of personal related data. Amy:                                     17:27                     You're so right, Stefan, because I am one of those marketing guys or gals, I should say, that has a challenge here, and has to figure out how do we find that balance. And, you're right, the people that want to engage with you, they will be okay with selecting that opt-in, because obviously they find value in what you are providing to them. Lisa:                                       17:50                     Its gonna be a painful process for sure, and I think we're already starting to see that. But I think ultimately at the end of the day, you're going to be connecting in much more meaningful ways. Both from a company perspective and from and end consumer perspective. Amy:                                     18:05                     Exactly. And that touches the whole concept of connected commerce providing these personalized and meaningful touchpoints in a way that a consumer wants to engage. Amy:                                     18:15                     Okay, so do we feel that consumers could become fearful of technology that requires personal data sharing? Lisa, what do you think on that? Lisa:                                       18:26                     I think certainly, that's an increasing threat. I think it's something that everybody thinks about when they, you engage with companies that collect personal data. I mean, we've seen in the news, Cambridge Analytica, and similar-type, organizations that are using and leverage personal data in a way that maybe people didn't know about, didn't understand. It allows for targeting of consumers in a way that people don't understand. Lisa:                                       18:58                     I think also, continuing to educate consumers and to make consumers feel comfortable through transparency really, on how their data is actually being used will ultimately, hopefully (Laughs) eliminate some of those fears. That’s what various privacy initiatives like GDPR, like a number of state and federal laws in the US, and a number of laws around the world are really aiming to get at. Lisa:                                       19:32                     It’s not about, you know, sort of everybody crawling back under a rock and reverting to, (Laughs) paper. Uh, everybody understands and acknowledges that we live in a digital and a connected world, and there's a need to exchange data. But with that, there's really a need to make sure that people have knowledge and understand how that data is being used, and how that data is being shared. So, I think there's certainly fear that's out there and you can open any newspaper and see how some of that fear is manifesting itself. Lisa:                                       20:12                     But, as we kind of continue to move forward and more of these data privacy laws are enacted around the world, I think it's driving that level of transparency that will kind of put power back in the hands of consumers and allow companies who need to use that data to use it in a much more meaningful and effective way for their own customers. Stefan:                                 20:38                     I think that there's a basic suspicion, it's also because it shows that people are getting more aware of the importance and the incident around Cambridge Analytica clearly shows where that can go wrong, and there can be really some impact. Stefan:                                 20:55                     There was a time, like, 10 years ago, when people said that we are actually living in a post-data privacy era, because people were publishing everything on Facebook. And were shameless with their uttermost secrets. And I'm seeing a shift now, and, and perhaps there is also a kind of overreaction there. But I totally agree with what, what Lisa said, I think education, getting an awareness, and you know, being suspicious is good. But if you have the means to reach a protection which is useful for you as a consumer then, I think there is also a benefit there. Lisa:                                       21:39                     And you're talking to two lawyers, so we're suspicious by nature. Amy:                                     21:42                     (Laughs) Right? Lisa:                                       21:42                     (Laughs) Amy:                                     21:46                     Okay, for my last question, can we close with: What are some tips you can offer organizations to help them comply with GDPR? I'd love to hear really what you both think to close out the topic. Stefan:                                 21:59                     Of course this is very, um, highly valuable IP, which we come by (Laughs) ... Amy:                                     21:59                     (Laughs) Lisa:                                       22:03                     (Laughs) Stefan:                                 22:03                     You need to be on a very high level, otherwise we would need to charge. Amy:                                     22:08                     Right (Laughs) ... Stefan:                                 22:09                     I think the first thing is you need to be aware of your role if you're a data controller. What this actually means for you. What that means for your organization and for the infrastructure you're using. Lisa, what would you like to add? Lisa:                                       22:29                     Yeah, I mean, I think what's going to be key as we continue to go forward and we move beyond May 25th, you know, lots of companies have really been working towards this get compliant with GDPR by May 25th, and it's become this date that everybody kind of thinks about and knows about. Um, and as we continue to move forward, what I think is going to be important is making sure that you're staying vigilant around data privacy, and that your program continues to evolve and change and that you're kind of constantly looking at, "Okay, what is the data that we're processing? How are we processing it? How are we informing people? Do we have the right level of consent? Do we need to, to look at this again?" Lisa:                                       23:17                     And that continuous process of risk assessment I think is going to be critical as we continue to move forward. Again we've really moved light years past the days when we can just sort of say, "Yeah, we have a privacy notice, and, um, we don't have a great handle on how we manage things. But we've got a privacy policy, so all is good." I think we have to continue to, to look at and monitor both as a company for our internal employees, as well as companies that touch consumer data in any way, or, just their basic customer data. Making sure that we're really continuing to evaluate that and how we use it is going to continue to be critical as we move forward. Amy:                                     24:01                     Okay, great. Stefan:                                 24:04                     Also I think it's also important to understand that data privacy has got a purpose on its own. So, if you just see it like that, and you just check boxes, then it's really just a waste of time and paper. I think data privacy is a tool to serve your customers in a better way. It’s a tool to get aligned with your suppliers for example, to serve your customers in a better way and that way, I think its teamwork. Stefan:                                 24:33                     And, um, I think if you embrace it as a chance to create a better customer experience then there will be a real benefit. Exit/Closing: Amy:                                     24:46                     Got it. Well on that point we can end the discussion today. Thanks to Lisa and Stefan for being here. And to our listeners for joining this episode of Commerce Now. Amy:                                     24:57                     To find out more about Personalization Versus Privacy, go to DieboldNixdorf.com, or click on the link in the podcast show notes. Until next time, keep checking back on iTunes for new topics on Commerce Now.  

Here is the link to the full NPR episode Amy reference's if you are interested, it is fascinating!Listen in as Amy shares questions we explore to uncover and challenge our expectations, how to recruit the body to change patterns, Safety vs. Security and more!No matter the form of her offering, whether she is playing the role of yoga teacher, strategic entrepreneurial consultant, life coach, writer, public speaker, vlogger, or wellness counselor, Amy Lombardo’s intention has always remained the same; create a space for people to connect to their own inherent wisdom, and magic will happen.   Also a dedicated Karma Yogi, deeply committed to the yoga of service, Amy co-founded of Karma Krew, a yoga-based non-profit that sustains a nationwide grassroots network of socially conscious yoga studios and practitioners in over 50 cities, and 4 countries.  In her latest venture, her vlog, Confessions of a Warrior Woman, Amy hones in on her passion for women’s empowerment, providing her audience with real life examples and heart-felt, practical advice on how to embrace their vulnerabilities as some of their greatest strengths. Her weekly videos are watched regularly by followers in over 12 countries. To learn more about Amy and her various offerings, please see www.truenaturewellness.com or www.confessionsofawarriorwoman.com. 

Here is the link to the full NPR episode Amy reference's if you are interested, it is fascinating!Listen in as Amy shares questions we explore to uncover and challenge our expectations, how to recruit the body to change patterns, Safety vs. Security and more!No matter the form of her offering, whether she is playing the role of yoga teacher, strategic entrepreneurial consultant, life coach, writer, public speaker, vlogger, or wellness counselor, Amy Lombardo’s intention has always remained the same; create a space for people to connect to their own inherent wisdom, and magic will happen.   Also a dedicated Karma Yogi, deeply committed to the yoga of service, Amy co-founded of Karma Krew, a yoga-based non-profit that sustains a nationwide grassroots network of socially conscious yoga studios and practitioners in over 50 cities, and 4 countries.  In her latest venture, her vlog, Confessions of a Warrior Woman, Amy hones in on her passion for women’s empowerment, providing her audience with real life examples and heart-felt, practical advice on how to embrace their vulnerabilities as some of their greatest strengths. Her weekly videos are watched regularly by followers in over 12 countries. To learn more about Amy and her various offerings, please see www.truenaturewellness.com or www.confessionsofawarriorwoman.com.