Accelerating Digitization through Innovation and Automation
Speakers: Walt Carter, Chief Digital Officer & CIO, Homestar Financial Corporation
Here is the Transcript
You are listening to QA talks, a podcast for quality assurance executives implementing digital transformation in their organizations. In this show, we focus on the unique pitfalls inherent in quality assurance and quality engineering and how these executives are navigating them to position their organization for the future. Let’s get into the show.
Logan: Welcome back to QA talks. My name is Logan Lyles with Sweet Fish Media. I’m the host for today’s episode. I’m joined by two very experienced individuals for today’s episode. Our guest today is Walt Carter. He’s the Chief Digital Officer and Chief Information Officer at Homestar Financial Corporation. Walter, welcome to the show, Sir.
Walt: It’s good to be with you, Logan.
Logan: We’re also joined as a regular speaker on this podcast.
Cigniti Speaker: Thank you so much, Logan for hosting us and thank you Walt for being the podcast speaker today.
Logan: Alright, gentlemen. Well for listeners, a little bit of context on our two experienced guests today, a little bit more about Walt with more than 25 years in technology leadership roles. Walt specializes in aligning technology choices to business strategy and in driving results focused innovation. Before joining Homestar as Chief Digital Officer and CIO in March of 2018, Walt and his team implemented technology changes for Primary Capital Mortgage to drive 205% growth in organization volume in just over two years. Before joining Primary Capital Mortgage, his team at Generation Mortgage received accolades from the New York times, the Wall Street Journal Kiplinger’s, Bloomberg and MarketWatch for innovative use of technology as a key differentiator for their company. Walt is adept at working through complex business challenges and has successfully implemented several enterprise wide packaged software solutions. Walt is also a frequent speaker to professional groups on the topics of leadership, governance, risk management, as well as compliance. If you are a new listener to this show, you may be unfamiliar. He is an industry thought leader in software testing with over 20 years of experience to his name. He has strong expertise in setting up testing centers of excellence around test management, quality engineering, test automation, mobility, and functional testing. He is an experienced keynote speaker at several industry forums, workshops, and is also an award-winning CTO of Texas. He’s also been recognized as a top 100 CIO of pan India, two very experienced individuals today. So, let’s jump right in and start picking their brains, as I love to do here on the podcast on QATalks. Walt, the first question I’ve got for you is the key characteristics that you would suggest industry leaders really must adopt right now in the digital space to navigate innovation and embrace the change, especially in the finance sector in particular.
Walt: I’ve spent a lot of time thinking about this over the last 112 years, I think. One of the things that leaps out to me, especially as we come out of this, more or less global lock-down, we see the kind of civic unrest that we’re hopefully also go on a move through fairly quickly. But what we’re seeing a lot of impact on how we do business and how we think about customers, how we think about our employees. If you’re an industry leader especially in financial services – one, you got to recognize that we we’re an industry that’s ripe for disruption. There is a less than acceptable level of excellence when it comes to customer experience. Again, none of these are universals, it’s just observations and generalizations, but, the truth is we see that the industry leaders have got to have, I think, a lot more flexibility in their thinking than maybe we’ve seen in the last few years. If you think about banking as an exemplar of financial services sector, a lot of people have the button-down collars and the business suits still today in those environments. Yet the world is moving away from that kind of stodgy, old businessman presentation and into more, more of a fluid dynamic digital world. So, that willingness to explore that future and to look at what’s really happening in the changing as you move through the demographics, that more and more openness to technology, greater and greater expectations all the time that need to be met with how you engage your customers, how you retain your customers, how you support your customers through the journey, every step of the way in financial services, you’ve got to be building credibility, which means your technology has to work and deliver on the promise to the customer. That’s also true with regard to your employees. If you’ve got a bunch of employees that are frustrated because the tech is not supporting them in their role, then that’s going to create a bad customer service experiences for them, with their customers and therefore correspondingly, with the customers. So again, your industry leaders got to be willing to think through, and I’ve coined a phrase that I call listening down. Everybody is familiar with, listen up, Hey, listen up, listen up. And I think a lot of executives are really good at listening up. We’re really good at listening to the folks above us in the food chain or not as good as we need to be listening down. The people that are closest to the customer have great insights and times they have great insights about what potential solutions might be deployed or used, or at least the framing of a solution. I think our executives have got to be willing to humble themselves maybe as a right word. If not, I think at least be open to the conversations with the folks that are closest to the customers, gathering that critical information and being able to then turn around and deploy that information back out through the rest of the executive team to operationalize improvements in customer experience, improvements in employee experience and then improvements overall in delivery of the operational throughput. I think the biggest frustration that a lot of companies have is actually with their leadership, not being open to those kinds of conversations. So, I’m just going to recommend to all my fellow executives out there, we got to be a lot more open and transparent as we move into this future. Because the expectations are going to be hard to meet, if we’re close to input. I stop right there, Logan. What do you think about that?
Logan: Absolutely. I love that phrase – Listen Down. It’s kind of caught my attention. Walt, what does he mean by listen down, but you did a great job of unpacking it there? Not only is it an antithesis of what we typically say, just, Hey, listen up. But it also paints a picture of a reality that we do tend to listen to those above us in the food chain is, as you mentioned. I’ve got a question for you here, just digital transformation comes up in every one of our conversations here on QATalks. It’s already been part of the conversation here. I’d love to hear from you, advice for those especially in the banking and financial service sector, some key best practices to highlight for implementing digital transformation practices in organizations right now specific to this sector we’re talking about today.
Cigniti Speaker: Absolutely, Logan. One of the topics that comes into the digital transformation as Walt also mentioned is about the automation aspect, right? How can we automate end to end process? How can we automate the business processes, right? Not just the regular functional automation. Now, newer ways of automation have come into the play, which is the robotic process automation, or talk about hyper automation or cognitive automation. So that’s one of the biggest, best practices this financial sector is going to go through in the areas of digital transformation that’s first. The second one is the artificial intelligence. We are seeing a lot of conversational chat bot. We are seeing a lot of these AI comes into the digital side of the bank, where they want to capture the end user experience in a lively way. They want to deploy bots to capture and to provide the best of the feedback whenever the end user comes in. Like for example, the stimulus package right now going on, a lot of financial institutions are deploying the chatbots through AI model to track the business, small business owners and employees and everyone to see how they can improve their digital transformation experience. That includes consumer experience, customer experience and conversational chatbot. Right? The third is about the cloud. We are seeing a lot of cloud migration happening, cloud implementations, a lot of these Azure and Google cloud, many of the cloud implementation that are happening. When you do that, you need to make sure that the data is protected. Cyber security is maintained, and your infrastructure is well maintained for those cloud implementations for your faster time to market, right? When you go through cloud, a lot of aspects of data need to be not rightfully captured. So, these are the three large trends while a lot of trends are there in the financial sector. That’s one of the early adopters in the whole of the industry, as much as tech industry do today to track their end user through their digital channels. But we are seeing these three as the prime importance for our end users.
Logan: That makes a lot of sense. Walt, I want to kick it back over to you to talk a little bit more about automation and digitization, especially in a financial or mortgage organization like yours. Can you talk a little bit about some best practices for really accelerating the use of automation and specifically what measures teams can follow to make sure that they’re tracking towards the results that they’re trying to drive?
Walt: Yes. The fundamental is trying to isolate, and really focused down to a really achievable value proposition. So, I need to understand with whatever change that we’re making, whatever new automation we’re introducing, what is the value that we’re creating or capturing better as we move through that change. There’s a lot of things that you want to look at. There’s a great book “The 4 Disciplines of Execution” by Covey. I think really opened some doors for me, which was really about what are the measures and very specifically, what are the leading indicators of whether this change is actually going in well and successfully, or is off the rails and off track and needs to be rescued or shut down. And then, having predefined notions around what are those leading indicators might tell you and what your response ought to be. I’ve seen a lot of companies go chasing lots of different things with regard to digital transformation. That is a high level, very abstract term versus, I’m going to go improve our performance on this particular throughput line about 5% over the next 90 days. So, I start to look for how will we know that we’re accomplishing that? And then if we’re not, what does that tell me? I need to do with regard to how I’m investing here. When you start thinking about the introduction of change in your organization, and I know organizational change management is a huge and very hairy topic in and of its own, right? But you got to be willing to go into the mind of the humans, the psychology of change. How do I get to what Simon Sennett calls, The WHY, right? Why, why do you want to help me with this project? Why do you want to change from what you’ve been doing to what we will be doing in the future, Right? What’s in it for each stakeholder, what’s in it for each participant. You almost have to go to that level in order to get this, seated correctly and get the people lined up, aligned and get the mission clarified. All of that, thinking about value first, how we’re going to measure what the leading indicators are, what are we going to do if they’re telling us things are bad, those are important things for leadership to contemplate and really isolate down to. Cause that provides the focus. If you don’t have the focus you wind up with scope, leap, scope creep, and you wind up with really very little to show for it. That’s why they say 70% of digital transformations are logged as failures. It’s because people haven’t focused down properly, I think. If you lead with, how am I going to know when I’m done? You win a lot of times.
Logan: Yes, absolutely. The book you referenced, there has been very instrumental in our own organization here at Sweet Fish. And I, personally, a big fan of the four disciplines of execution and the four DX model. It talks very much about that. It is taking these ambiguous goals and making them very concrete. When we said by this date, we’re going to put a man on the moon. There was no way to say – Hey, we either kind of did that. Or we didn’t, it was very clear cut whether we achieved that goal or not. We’re often very good at measuring those lagging indicators. Those things that tell us whether we performed well or not, but not calling out the leading indicators to say, are we on track, to get where we need to go? So, I couldn’t agree more with you there, Walt. for you, we’ve talked a little bit about automation and speaking to Walt’s point of going from kind of a larger topic and breaking that down to specifics. If you could talk a little bit about some emerging technologies from contactless transactions, RPA, we’ve already mentioned robotic process automation once in this episode and AI. Can you tell us a little bit about where you see the impact of some of these technologies as it relates to automation?
Cigniti Speaker: Absolutely. So on the technology or the process side, what we are seeing is the automation happens in the operation side of it with respect to the financial institution, so where we can efficiently improve the processes, wherever we see the highly manual and repetitive process and where there is a huge volume of transaction that’s happening and it is frequent and it runs every day, every week and on a monthly basis. And that’s an area where we are looking to automate. So, for me we have been automating from application side, now, the automation is shifting towards the operation side and anything to do with rule-based processes, right? In financial institution, you have a lot of rules, templates that are there, and it has a lot of decision making based on the standards and predictive rules. So, we are looking to automate that which is going to be a huge savings in optimizing their entire business process. Then wherever we see some high volume, and if there is anything that we could do to automate the stable processes and predictable outcome that eventually gives the bottom line value of operational cost reduction, those are some of the areas of candidates that we are looking to automate from a business process side. Why would we do that? We need to look at it, the processes in the holistic view, in the sense like when we need to look at what’s the inventory of those processes and how long it has been there, how stable it is and what is the volume of it. All of these are the characteristics that we look at doing the automation. When we do the automation, meaning we also need to look at if we can include AI into that artificial intelligence into that. We should also look at how to build a framework so that it is repeatable and reusable eventually in the long run.
Logan: That makes a lot of sense. Walt, was talking about some different applications of emerging technologies, especially in the realm of automation. Can you spell out some recommendations for folks, maybe calling out some of the challenges as well as the opportunities for in the day to day applying some of this technology and some of these different automation tools, what are some of the pitfalls? What are some of the opportunities for teams like yours in actually rolling out some of this tech?
Walt: So I think the answer to that is you really have to go through, and pick the right tool for the right job. I think that’s the fundamental, I’ve seen a lot of projects go off the rail. Because if we picked the wrong tool for that particular job, but we didn’t know it at the time, because we hadn’t done the detail work that we needed to really flesh out what that value proposition was that I talked about earlier. I’m doing some work right now with RPA and I think our industry, mortgage industry is right for RPA. It’s a great way to do several things all at once. One of the biggest challenges to your question has been getting the requirements from the people, working on the processes would the box that you can deploy now. I don’t necessarily need to sit side by side with somebody and watch them work or, go through the traditional requirements, elicitation process. I just turned the box where this and find out what’s going on and then start to look for paths that I can automate quickly and easily with the bots. So, RPA is one of those, machine learning and AI, I’ve experimented with, AI from Watson at IBM a little bit with Einstein on my Salesforce instance. I haven’t really done a whole lot with true ML or AI in my own shops, but I have learned a lot from being on an AI and an applications AI group here in Atlanta, where we pulled in people that were doing real AI projects and trying to figure out how in the heck did they do that. So, there’s a lot of greatness there. A lot of opportunity as he mentioned. I just think, for a lot of us, that one seems like it’s really still pretty abstract, whereas RPA seems like it’s right in the sweet spot. There are some other things that we’re doing that I think are pretty interesting too. I’ve got a cutting-edge data fabric solution that gives me some extra measures of data privacy and, and it also gives me some attribute access control capabilities that are really exciting. So again, when you start thinking about, well, what are the challenges, the challenges are I need good clean data. I need it normalized so that I can monetize it and operationalize it. RPA helps me with that. I need to know if I have permission to use that data in certain ways, my data fabric solution will give me that Meta DNA, not just metadata. I’m looking at factors like that have been challenges in the past. How do I overcome those with the new, more modern tools. I’ve rolled out ThoughtSpot for my organization as a BI tool. And I think at ThoughtSpot as the current next gen solution for data visualization and data aggregation, and it lets me operationalize my data from multiple data stores very quickly and very efficiently. It puts the users in control with essentially a Google type of query interface. Again, the goal was not for me to become the keeper of all the data and the manager of a whole team of data scientists. It was really to turn the data loose in a way that the teams that are using it could actually benefit from that. So, I know I’m kind of dancing around here, but it’s all connected in my mind into what are you really trying to do as a Chief Information Officer or Chief Data Officer or Chief Digital Officer is really to make things simpler, right? It’s really to simplify and rationalize just like we do in math to get to something that basically people can use and will use to make life better for customers and employees.
Logan: Absolutely, I love that. Again, we come back to the focus on the end results that we’re trying to achieve with the application of this technology. Walt, I’m wanting to come back to something that we mentioned at the start of the episode, when you were at Primary Capital Mortgage, you were in charge of some projects that led to some phenomenal growth for the elements that you can share. I would love for you to talk a little bit about that project, how that transformation happened, any of the challenges that you think other listeners of the show here could be able to learn from based on that experience that you went through first-hand.
Walt: I would tell you that, the biggest challenge is really not with the technology. The biggest challenge is getting the user community and the teams in the business to embrace the change. So, I’ve spent a lot more time trying to figure out how do I unlock the potential for the psychological part. What I call is overcoming the organization’s psychological inertia to change. Our industry is also one of those where essentially, it’s assembly line, we have a mortgage assembly line. We gather documents from our borrowers. We collect those documents, give them to the underwriter. The underwriter usually asks for more documents from the borrower to validate either the property value or the ability to pay. Then we move it to the closers, get everything lined up for the settlement attorneys, settlement attorneys, then do the closing. Then we get the note and all of the post-closing stuff, the lockdown with insurance, for the different programs that your mortgage could be part of, like minus part of a VA insurance pool, right. And then we package all those loans up. So, in the secondary market to the mortgage backed securities investors out there, and that’s how we cashflow the business. So, when you think about it like an assembly line, then you start thinking, well, I could automate a lot of that, right? With RPA and some of these other tools, OCR scraping, information out of docs as they come in through the portal, putting that information in the correct and normalized view in the origination system makes all of this so much better and easier, but then you find out people don’t really want that, right? I like the way we’ve been doing it, we’re good at what we do, and I don’t really want to change. So, getting through that last little bit there, it turns out to be the hardest part of the project. It’s not turning on the programs or configuring the programs or even doing the custom build work that you sometimes have to do. It’s really about unlocking the user’s desire to actually use that change to their benefit and seeing it as a benefit. I almost think I need a mini sales team in it to help me with that, because most IT people, frankly, are not native salespeople. So, when you start thinking about things that way, I think those are the challenges. What we were able to do was, frankly, we started to look at, okay, what do we have?
How can we leverage what we have better? How can we use emerging things that don’t create massive conflict for the current stack and improve our position quickly and easily, right? So, we start looking at tools like ThoughtSpot, tools that could help us very quickly, move data forward, get better decisions faster for our sales team and our operators. We can start to explore new markets and is our penetration into this marketing market working for us. Are we seeing engagement with new realtors, seeing clean loans coming across from those realtors, how soon? Looking at those leading indicators that we were talking about from the four disciplines book, and really trying to figure out what can we do to help our people get excited about using technology to grow this business. It caught fire for us in a lot of places and don’t get me wrong. I built a closing portal in Salesforce that would allow for a virtual closing and I wanted to throw it away because I couldn’t get my own team to line up and use that closing portal. It was just too cumbersome to log into yet another portal for them. Today, 10 years later, we’re looking at everybody in the world because of the lockdown, wants to do as much of this mortgage settlement process in a virtual environment as possible. So, guess what, we’re building any closing capability. So, none of this stuff is super hard in some ways, and none of it is super easy either on the people side, but, you just got to think through, and, I call it over communicate, you just got to over-communicate – here’s what we’re doing, here’s why we’re doing it, here’s when we hope to be done. Can you guys help us get done by them?
Logan: And here’s when we’re going to tell you this again, probably because, as you mentioned IT having to put the sales hat on a bit, those of us who have been in sales know that you don’t just tell someone something one time, right. Just like, as a parent, you don’t tell your kid something one time and okay. That’s some kin, but I, that goes to your point about over-communicating right, Walt.
Walt: Yes. That’s really the secret sauce right there. The repetition of the message is the core leadership function, and then I think updating with repetition of the message is the foundational work that you have to do as a leader to get your technology rolled out properly.
Logan: Yes, absolutely. I love that you brought that home with, because we could talk about, Hey, it’s all about user adoption. And it just sounds like this vague idea, but your specific story there of building a virtual closing portal, then that no one used until people were ready for it just really brings that point home. I want to come over to you as we kind of talk about where organizations, people in the technology really intersect. Can you talk a little bit about the intersection of organizational goals as well as the digital capabilities and how your team at Cigniti is helping customers align those? Because as Walt has been talking about, if the application of technology doesn’t line up with the end user experience, it doesn’t line up with the organizational goals, then things are oftentimes going to fall very flat, right?
Cigniti Speaker: Yes. In fact, what mentioned is about data fabric and data privacy, ThoughtSpot, many of these are digital play. Digital transformation is getting into the next level and organization is looking to evolve themselves as a digital player than just a legacy player. Especially with this Covid situation, the digital has come to the number one priority, right? So, with respect to the CEO, CIO or everyone, they are talking about digital. How can I make my system digital, contact less and making sure that the end user gets it on their smartphone? At Cigniti, we are also aiming towards moving our organization towards the digital. So as much as we shift ourselves from testing to a quality engineering, we are shifting towards the digital assurance side as well, and to see how we can help clients when they migrate from cloud digital is a broader spectrum of all the technologies. It includes cloud, it includes AI, it includes Blockchain, it includes RPA, you name it, all those next gen technologies. You call them as digital because that’s where you’re automating many of the processes in a digital way. We are evolving towards that journey, and most of our resources are trying to get into the digital certifications such as Azure is one of it says, Scaled Agile Framework, AI certification, RPA certification, many of those certification and tools and technologies that we are adopting today to meet the world in the digital scenario.
Logan: Yes, absolutely. I really appreciate those thoughts there. Walt, as we round out the conversation today, I want to touch briefly on the tail end of our conversation on cyber security. As we talk a little bit about digital disruption, that can definitely introduce new risks. So as you think about that for your organization and you share with listeners today, can you talk a little bit about some of your top priorities to limit both short term and long term risks when it comes to cyber security, and advice for other leaders out there today?
Walt: I’ve been pretty hard-headed lately about, I want to be a secure and safe place to transact, especially in the mortgage industry where everything that the successful identity theft needs is in the closing packet. We have a copy of your driver’s license, your social security number, your tax records, your bank statements, your income statements. You got it all right there in one spot. So, locking that down and making sure that we’re not exchanging information across on secure means it’s paramount for us. As you look at all that data and, managing the hold that data and our regulatory environment essentially says, I have to hold on to any information about a borrower’s loan for seven years after the last transaction on that loan. If we serve as a loan for 30 years as a servicer, then I still have to hold on to that information for seven years after that, just in case. So, it’s effectively infinite responsibility for the data. We get audits by the regulators in all of the States that we operate in. Plus, many of the federal agencies that have oversight. At any given time, I’ve got to be able to pull all of that data and represent it properly to those auditors. I can’t just put it in deep storage forever and really lock it away. I’ve got to make sure that it’s accessible. This creates some really interesting challenges for us. That’s one of the reasons why I went with the prove ops solution on the data fabric. It’s why I’m going to attribute based access control. If people look like they have the right credentials, but they’re not coming in from the right equipment, from the right location, I can start to limit access to data for them based on the attributes that I’m seeing coming across. The goal is not to over complicate things. That’s the other side of this. It’s kind of the balance of the coin. If you think about user experience, employee experience, right on one side of the coin and security on the other side of the coin, I can’t separate them. They both have to be together all the time. I found that it’s a lot easier for me to think my way through delivery of solutions and augmentation of existing solutions. When I think that way about the cyber security aspect.
Logan: Absolutely. I just love that visual because I think we can get caught up in thinking about one side of things or the other but looking at them that you can’t really separate them. They are on opposite sides, usually being more secured in packs, they user experience in a negative way and in general, but how do you balance those two as, as with most things that are, are difficult, it requires somewhat of a balancing act. Well, this has been a fantastic conversation. We’ve covered a lot today. So, I imagine there may be listeners who have a follow–up question or two for you, or maybe just want to stay connected with you for the future. If they want to do that, what’s the best way for them to reach out or stay connected with you?
Walt: I’m on LinkedIn, it’s Walter G. Carter is the extension on that. And then probably the easiest way is to find me on Twitter at @walt74. I’m always looking for interactions with folks, especially folks that are thinking deeply about the future and thinking deeply about how we actually get technology solutions delivered successful. So, it’s been a pleasure talking with you. Logan, greatly enjoyed the conversation.
Logan: Absolutely. Hopefully we’ve given listeners some things to think about when it comes to technology and the future, as you just said. For you for any listeners. This is their first time maybe hearing episode with you and they want to stay connected with you as well. What’s the best way for them to do that.
Cigniti Speaker: I’m connected with the LinkedIn I’m active, I’ve been sharing industry best practices, I’m myself, write articles and publish them as well. So, looking forward to connecting and thank you so much, Walt. You’ve been awesome today. And thanks Logan for moderating this,
Logan: Gentlemen, thank you again so much for sharing from your number of years of experience in the industry for folks listening to this, if you’re not yet subscribed to QA talks, make sure you hit subscribe and get access to future episodes. You can also go to cigniti.com in the resources section. You’ll find all of the episodes of QATalks there that you can easily find and read some of the written content that go along with these episodes and go deeper as you continue to learn and improve as a professional. Gentlemen, thank you so much for joining me on the show today. This was a fantastic conversation.
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