Fintech is a hot space at present, with many companies entering the space and threatening financial services stalwarts. It is an interesting time to check on the progress of the first ever global fintech company, PayPal. The company was famous for its early leaders such as Elon Musk, Peter Thiel and Reid Hoffman, each of whom went on to make even bigger impacts in the world of technology.
I recently caught up with the company's chief information officer Bradley Strock, who has been in his role for three and a half years. We discussed PayPal’s transformation into a more customer-centric company, giving customers more choices of funding vehicles. We also covered how PayPal has successfully navigated the shift to mobile finance, resulting in a 50 percent increase in mobile payment volume in 2017. Strock covered his priorities of security, stability, enabling the company’s business strategy, and improving the company’s ability to effectively collaborate. Strock believes that PayPal will play a big part in offering better financial options for the two billion people globally without financial services.
In January of this year, Strock joined the ranks of board-level CIOs, as he commenced a directorship with $700 million revenue Elevate Credit, Inc., which provides online credit solutions to non-prime consumers, typically defined as those with credit scores of less than 700.
(To read an unabridged audio version of this interview, please click this link. This is the 26th interview in my board-level CIO series. To read the prior 25 including the CIOs of companies such as Intel, P&G, Biogen, Kroger, and Cardinal Health, please click this link.To read future articles in the series, please follow me on Twitter @PeterAHigh.)
Peter High: Could you provide an overview of your role as CIO of PayPal?
Brad Strock: Most people are probably familiar with PayPal. We operate in over 200 markets around the globe. We are on a mission to democratize money and have had a great deal of success over the last couple of years. 2017 has been a great year in particular.
For tech companies, the role of the CIO is a little different. My scope of responsibilities centers in two areas. One is what I call the more traditional, internal IT function, and this encompasses everything from our corporate networks, corporate data centers, and end-user devices, to most of the internal applications and services that employees use on a day-to-day basis.
The other half is the product development role for customer service. We service our customers globally. We take calls in 24 different languages over chat and email, and we manage the infrastructure and products that our customers interact with to solve their problems. In many cases, we have teammates who help them solve their problems. Those are the two parts of my role.
High: The product portion is the non-traditional aspect of your role as CIO. This gives you the opportunity to not only interface with the greater organization in fundamentally different ways, but also with PayPal's customers. Can you talk about that collaboration internally and externally and some of the nuances to the ways in which you do so?
Strock: This has been a journey. I have been at the company for seven years, and I have been in this role for a little more than three years. Since our split from eBay the last two or three years, the company has been transforming in a number of different ways. One of those important ways is around a desire to be a customer-centric company, and to be a customer champion. That is true for both our consumers and our merchants, as we have a two-sided network. We have two sets of symbiotic customers.
Over the last few years, we have been diligent about moving away from things that used to be central to our strategy and instead now asking, "What do our customers want?" Part of that process has been deep discovery work, where we sit with customers and understand their day-to-day pain points.
We come away from those experiences with incredible, strategic insights. One of the best examples of this was a decision we made almost two years ago to implement what we call “Choice.” Once upon a time when you interacted with PayPal, we tended to steer you towards and a bank ACH kind of funding vehicle. Our customers told us, "We want to be able to choose our funding vehicle and we want that to be persistent every time you use the service." That was ingrained in our strategy, and it was a strategic bet that we took. It has been a phenomenal success. It is one of the best examples to show that if you focus on what your customers want, what their pain points are, what they are telling you, and you find a way to solve that problem even if it goes against what you thought was the right business model for you, it is almost always the right way to go.
That is one of many examples where our teams are spending a lot of time directly with customers and trying to incorporate those learnings back into the organization. We are sending engineers and product people to spend time with customers. We are taking a cross-functional approach to really understand what customers want. That is a pretty significant shift for us, and we are starting to see how beneficial that can be.
High: Across your seven years, another big shift in user behavior has been the shift towards mobile. Could you talk about how you and your team have facilitated the development of mobile products?
Strock: A lot of businesses are seeing this, and we have been out in front of this for a number of years. In 2017 for example, our mobile payment volume in terms of dollars was up over 50 percent. That had been a customer-led trend for many years. People want to be able to use the mobile devices they carry around with them to be able to conduct the financial transactions in their lives. The more that we can make that seamless and easy and meet people where they are, the more we are going to have success. That is what we have seen.
For my team specifically, we have focused in the last year on how we make the customer service interaction more mobile friendly. Can we do things like Visual IVR [Interactive Voice Recognition], for example, where we are combining voice and a mobile experience to help people solve problems and do it as quickly and efficiently as we can? Ultimately, if they do need to speak with someone to solve that problem, can we make that seamless?
Mobile is ingrained in everything we do, and it has been for a while. We see that trend continuing into the future. It is a big part of what has been driving growth not just for us, but for a lot of businesses that are involved in commerce.
High: Mobile sounds like something that is on your strategic roadmap. Can you talk further about some of the things that are focuses of your current strategy?
Strock: I have three strategic pillars and a few foundations. Number one is “secure.” We are in a business that involves people's money, so security and safety is the most important thing we do.
The second is “stable.” We offer many services and capabilities not only to our internal customers, but also directly to our paying customers. People expect those capabilities to always be there. We work hard to provide a consistent experience across all environments. We are a complex company with complex infrastructure, so stability is our number two priority.
The third priority is “strategic.” If we are being secure, and we are being stable in providing the services our customers expect, then the third priority is “How can we enable the company's business strategy? How can we enable the company to succeed? How can we enable our customers to succeed?” This is the place where we get to work on what some may consider the cool stuff.
A good example of this is collaboration. We are a global company with 60 physical locations and operations in 200 markets around the globe. We have developers in all these locations, which of course span many time zones. As I talk to other CIOs, a common theme I find almost everyone focused on is collaboration, and that is an area we are focused on as well. When I speak with other CIOs, the feeling is that, "I have pretty much every collaboration tool there is, but I do not feel like I have a strategy."
That made me realize that as a CIO organization, we should be enabling collaboration for the company. Technology can and should make it easier for everyone to collaborate and reach their full potential even though they are not in the same physical location. There are always going to be certain jobs that need to be together, but we have a lot of cases where people are not in the same location, yet we need to work together seamlessly.
I spent a lot of time this past year focused on this. I was not interested so much in what the tools should be, but I wanted to understand the user behaviors and needs. I went out in the field and conducted interviews to gain an understanding of the pain points of, say, developers versus a knowledge worker versus a teammate in a contact center. I then stepped back and said, "How can technology enable collaboration?"
We are midway through that journey. I have not found many if any, companies that cracked the code on that, so we are excited. It is a place where we can say to our IT teams, "This is something no one has figured out. Let us try to see if we can be one of the first to figure out how to do this."
High: You have had an interesting career, especially in financial services. You have worked for a lot of the stalwarts, such as First USA, which became Bank One which became JPMorgan Chase. You also have been part of major mergers at Bank of America. Now, you work for arguably the first and most famous of the FinTech disruptors. What was it like going from traditional banking behemoths to a much smaller and nimbler digitally native innovator in the banking space? How was that change for you both culturally and personally?
Strock: I thoroughly enjoyed my time at First USA, JPMorgan Chase, and at Bank of America. I learned a lot. My first few weeks at PayPal were a bit of a culture shock. It was a big change going from a large, established company with lots of processes and structure to an environment that operates much like a startup even though it was 10 years old.
While there was a bit of a culture shock, coming from a large, established bank has prepared me well for this role. At PayPal, we must balance the desire to move fast and be out in front with the fact that we are growing rapidly. We are getting bigger, and we deal with people's money. We need to have a level of control around how we balance those two and get the best of both worlds. For me, it has been beneficial to have that background.
It was a dramatic shift in terms of culture, but it has been great. I value having both sets of experiences. Before I even got into banking, I started my career as an engineer and then spent a lot of time doing financial work. I tell people that if I had not been on a CIO path, I might have been a CFO, which is sort of odd for most technologists.
High: That is right. CFO’s are usually the bane of the CIOs existence, right?
Strock: Yes. That said, I think having spent my early career doing M&A work and not in technology has been valuable for me. That was a great set of experiences. As I went along in my career, I realized I had a passion for technology. I would stay late at night playing around with things. It became clear to me that I needed to point my career more towards technology.
Some of those moves that I made into financial services were in part to move more into mainstream technology roles. When I mentor younger professionals, one of the key things I try to share is understand what your passions are and how you are wired. If you can bring alignment to that in your career, then that is the most important thing. That is more important than position and title and all that stuff.
High: We have already talked about a number of rising trends related to mobile, visual IVR, among others. What are some other technologies that are beginning to pique your interest?
Strock: The first is not necessarily a technology trend, but it is a trend that our company is built around, and that is financial inclusion. If you look around the globe, there are over two billion adults who do not have a bank account or access to financial services. As our CEO, Dan Shulman often says, "The less money you have, the more it cost you to use it."
We believe that through technology such as mobile technology, we should be able to bring financial access to more people. This has not yet happened, and we see a tremendous opportunity. Our company’s mission is around financial inclusion. As I mentioned before, it is important to me to understand the mission of the organization I am associated with and to believe in it.
To say our mission is that "We want to democratize money for consumers and for merchants, and we want to create a platform that allows them to do commerce and be successful," that is a cool and lofty mission. However, I think technology is the critical piece in enabling financial inclusion. We see it as the key to enabling it to happen whereas in the past, true financial inclusion was not possible.
Another trend I am focused on is [artificial intelligence], machine learning, and robotic process automation. We see huge opportunities around this trend. In any kind of business where you have high volume and complex tasks, the ability to apply machine learning and robotic automation is huge. Even though the technology is hyped right now, I believe that it can provide tangible benefits. I do not see AI as just a cost play, but, if we do it right, it can be of great benefit to the customer experience.
Our ability to solve problems more quickly and consistently translates into a better customer experience. Also, if we do it right, it will save expenses. Going back to the financial inclusion strategy, our ability to democratize money depends on our ability to be more efficient and offer financial services at a lower cost. It all fits together, but those are two trends that I would say we are focused on right now.
Peter High is President of Metis Strategy, a business and IT advisory firm. His latest book is Implementing World Class IT Strategy. He is also the author of World Class IT: Why Businesses Succeed When IT Triumphs. Peter moderates the Forum on World Class IT podcast series. He speaks at conferences around the world. Follow him on Twitter @PeterAHigh.
