Banking As a Service with Green Dot’s Seth Ross

Seth Ross leads business development for Green Dot, a technology company-turned-bank that is leading the way in forging partnerships with tech companies like Apple, Stash and Uber. In this podcast, Ross explains how Green Dot makes this work, and what within the bank allows it to build and maintain relationships within a regulated framework. Ross began his career in the airline industry before moving to payments at American Express and then Green Dot. What ties it all together, he says, is the idea of network businesses, and coordinating the efforts of different businesses with different outlooks on the customer relationship.

Read the full transcript here:

Phillip Ryan [00:00:03] Hello, this is Phillip Ryan with CCG Catalyst here for another episode of Bank FinTech Fusion. I’m here today with Seth Ross, SVP of business development for Green Dot. And we’re upstairs from the chaos that is Money20/20. So welcome, Seth.


Seth Ross [00:00:17] Hey, Phil. Great to be with you.


Phillip Ryan [00:00:19] So you could have done anything in the world, Seth, and you chose to do financial services. What drew you to it? Was there a particular problem or issue that you thought you could solve or what was the attraction?


Seth Ross [00:00:31] So I actually came into the financial services world through a pretty roundabout way. I actually started out my career as a strategy consultant in the airline industry, interestingly enough. And I used to consult for airlines. I had the privilege of actually negotiating aircraft purchase contracts for a long time. I bought about 20 billion dollars worth of airplanes, which was a lot of fun. That job had me traveling around the world doing a lot of interesting work for that industry. And then my first foray into financial services was I moved over to American Express and I led their global airline strategy group and so worked with business leaders across the various business units at Amex. If you know anything about Amex, you know, they do a lot in the travel space. They have a large travel agency. They’re a huge merchant acquirer for airlines. And so they wanted someone who really understood that industry. And so I kind of got to bring my airline expertise to Amex and they taught me about financial services. And so I got a good broad view of both the issuer side and the merchant acquiring side at Amex. Uh, the problem that I set out to solve, you know, I think having grown up in the airline industry professionally, the airline business is ultimately it’s a network business and actually payments and financial services is also a network business. And so I think there are some really interesting parallels that were at play that just made things kind of click for me and made a lot of sense. And I think for me now at Green Dot, you know, I think, an inflection point of being able to transform how people receive financial services and how people do banking. And I think it’s just really exciting.


Phillip Ryan [00:02:37] I heard a fascinating statistic about airlines recently that the value of their rewards programs exceeds the market caps of the airlines themselves, which just struck me as amazing.


Seth Ross [00:02:48] That is pretty impressive. I’d say that was more true about 10 years ago since consolidation happened in the airline industry, their profit margins have gone up a lot. But that certainly was true for a long time.


Phillip Ryan [00:03:04] So you’re saying I’m 10 years out of date. What’s the most important lesson you’ve learned in your career either since you’ve been in financial services or or before?


Seth Ross [00:03:19] This isn’t really a financial services specific lesson for me, but I will say in particular, in the last couple of years, I used to think that business was about who had the best strategy, who had the best tactics, and that was what made you win. And I’m realizing now, at this stage in my career that actually business is a war for talent. The best people, the best talent wins and the best companies can attract the best talent and the best talent executes the best strategies in the best possible way. And so for me, that realization has been a real epiphany for me of just how I think about building a team, how I think about what we do as a company. And it really is about how do I get the best players on my team working with me.


Phillip Ryan [00:04:17] What’s the biggest challenge facing Green Dot right now? We’re going to get into a little later all the stuff that you’re doing.


Seth Ross [00:04:24] I would say our biggest challenge is one around education. So Green Dot has been around for 20 years. We really create, our founder, Steve Street was the innovative mind that created the whole concept of the reloadable debit card, which took a bank account and turned it into a consumer product you could buy off the shelf. And that was our core business for a long time. Our big challenge is one on education of helping people understand that while that is still an important part of our business and we still sell a lot of cards at retailers like Wal-Mart and CVS and Walgreens, we have this new business called banking as a service. And it’s an increasingly important part of what we do. And it’s really exciting. You know, we have tremendous partners like Uber that just announced a further expansion of that partnership, Apple, Intruit, Stash. And so the B2B aspect of creating custom banking programs is really unique. It’s a really unique part of what we do, and it’s really exciting. And I think people who have kind of followed Green Dot and who know Green Dot as prepaid cards hanging on J hooks, there’s still that education challenge for us to say, well, that is, yes, we do that. But we also do this other thing that is really exciting and is changing the landscape of banking right now.


Phillip Ryan [00:05:55] Green Dot is maybe the preeminent example of a bank working with fintechs. What is the key to working with fintechs effectively?


Seth Ross [00:06:05] So that’s that’s an interesting question, I think there is a lot to it, um, I think fundamentally it’s about understanding. We, at Green Dot are pretty unique in that we started out as a tech company. We were founded as a tech company and a program manager, and then we bought a bank. And so it’s pretty unique that, know, we have that tech DNA and so we speak, tech versus other banks that are in this space, you know, they were always banks. And so it’s harder it’s not in their DNA to work at the speed of tech to do things like rapid prototyping and to, you know, the tech ethos of, you know, fail fast and move on and break things, being agile. That’s you know, that’s just not a typical bank approach. And so it’s really important that we you know, we really honor our tech DNA and we bring that to bear with our partners. And I think it creates a really productive relationship between us and our partners. So, you know, I think the key, what makes an effective partnership is a really good understanding of each partner and understanding their needs.


Phillip Ryan [00:07:24] And once you’ve decided that you’re going to partner with a particular company and I’m sure there’s a long process leading up to that, what determines success? How do you and the fintechs arrive at a decision about what will make this partnership successful?


Seth Ross [00:07:36] You know, we kind of pride ourselves in creating products that meet strategic goals for our partners. And each partner has its own specific goal that they’re looking for. So, for example, Uber, which we were just talking about, but, you know, the driver card product, the driver account product is really the purpose of that product is actually to drive loyalty and retention for their drivers that really make a fantastic experience for them. You look at Intuit, for example, we have the turbo card. You know, it was really about turning that relationship from a once a year at tax time relationship into something that would last year round. It would be an engaging, ongoing touch point with that user. And you look at Stash, it was about adding a whole new set of services to round out a financial picture for Stash users and to create this, you know, fantastically engaging new product for them. And so each partnership has its own reason for being and the metrics that are, you know, whether it’s driving loyalty, driving engagement, driving retention, those are tend to be the key things that are important for them.


Phillip Ryan [00:08:54] So Green Dot is a technology company, as you mentioned, that’s in its DNA, what currently developing technology. Do you think has the most potential to benefit either financial services as a space or you guys in particular? What do you what are you keeping your eye on?


Seth Ross [00:09:09] I do think we are just scratching the surface on AI. That probably you could probably give that answer, that same answer in 20 different industries, but I think it is going to be particularly relevant for financial services. I think it’s going to have implications around customer service. It’s going to have implications around fraud and risk management.


Phillip Ryan [00:09:31] Maybe every area of our lives. In fact, AI is going to play an incredible, incredible role.


Seth Ross [00:09:36] Yeah, totally, totally agree. So that’s probably the area that has tremendous upside opportunity.


Seth Ross [00:09:46] So Green Dot is taking the stage today with multiple partners here at Money20/20. And I think you’re involved in building those relationships. How do you go about building and maintaining those relationships with companies? What does that process look like?


Seth Ross [00:10:02] Well, it’s a long process. It’s a lot of patience, lots of patience. The way I organize my team, I have the belief that there is significant value in having people in business development. And that’s what I do who have deep understanding of particular verticals. And so I’ve got folks on my team that have deep understanding of the gig economy platforms. I have folks who are focused on investment adviser and wealth management. I have folks who are really thinking about the small business segment. It’s an area that we’re very excited about. And I think there’s lots of opportunity there. So what does the process look like? It’s a lot of, you know, going to conferences like this, sitting down, meeting with people listening and like really deeply listening to what are the challenges that they face, what are the things that they’re trying to achieve and then thinking about our assets and capabilities and think about how can we put that together to create something that meets their goals. You know, I say BD is really about listening deeply understanding a need and then tying it back to a set of capabilities and assets that we have that can then create something new for our partners. It’s really fun. You know, my job is kind of like we get to create new businesses with partners that are really exciting. So it’s a lot of fun.


Phillip Ryan [00:11:35] So last question. You came out of a regulated industry, the airline industry, and now you’re in another regulated industry, but you’re meeting with startups that are maybe not as sophisticated around the compliance and regulations aspect. How do you approach that topic? And how do you how work all that stuff out?


Seth Ross [00:11:54] I think particularly in Silicon Valley, you mentioned, you know, their philosophy is often you move fast and break things, and that’s not a philosophy that regulators appreciate. You know, I think it’s really just about being very open and very transparent. And, you know, we sort of position ourselves as a guide. You know, we’ve done this before. We’ve launched a lot of programs. We operate at scale. And we can really be a trusted advisor to fintechs and startups that are looking to grow into these new areas. We’ve got great relationships with regulators. You know, we stay up to date on all of the regulatory environment. And so I think it’s really just about being that resource for our partners and helping them guide, help guide them through the path.


Phillip Ryan [00:12:54] Seth thanks so much for taking the time today.


Seth Ross [00:12:56] My pleasure anytime.


[00:12:57] Thanks for listening to Bank FinTech Fusion.

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